Hi, I’m Michael Banovsky. I’m an automotive journalist based in Canada but write for a few US-based publications as well. Not that the program gave anything away, but I’m going to talk a little about the automobile’s past, some of the present challenges in the auto industry, and how we can look to the future to solve three key problems:
The first is that the country needs to use less energy -When I say energy, it’s not necessarily just improving fuel consumption of new cars. It’s also education in how people drive and how people consume everything from electricity to plastic water bottles.
-In highway driving, only 20 per cent of the energy produced by the engine is being used to drive the vehicle…in city driving, it’s 13 per cent.
The second: we need to engineer a sustainable automotive market -Not just vehicle sales, but long-term residual values, and to keep parts and service departments alive — and mechanics working.
Third, we need to create a sustainable automobile manufacturing industry -That’s a huge challenge, because I agree that auto workers need to earn a living, but the fact is that “a living” represents a much different labour rate in other parts of the world.
So: Let’s look to the past and present…and see if the future can help these challenges.
I can tell you the story of the automobile in five words:
We got bored with walking.
So much so, that the earliest years were filled with incredible advances in innovation and manufacturing, advances that we still feel today.
The pace of automobile development was incredible until the First World War. Don't forget that there was always innovation at the beginning of the car, with steam and electric cars being very popular.
Actually, if you’re tired of hearing about the “innovative” Chevrolet Volt, there were even hybrids in the early years of the car…
In Germany, self-taught engineer and inventor Ferdinand Porsche — yes, that Porsche — showed, in 1901, the Lohrer-Porsche Mixte. It had four electric motors mounted in the wheel hubs, powered by batteries and a small generator…so basically the Chevrolet Volt, only 100 years earlier.
Auto manufacturing captivated businessmen and inventors across the world, and from 1896 to 1930, there were about 1,300 auto manufacturers in the US alone. Compare that with today,
now there are only three major “American” car companies, comprised of 13 brands in total. So that’s what happened to the inventors. But what about…
Electric cars? After all, electric car sales topped those of gasoline car sales up until about mid 1910. They died off for a few reasons;
-The electric starter made gasoline cars faster to start,
-After the First World War, petroleum fuels were in plentiful supply because the manufacturing processes for petroleum had been refined during the war
-And despite owning three Detroit Electric vehicles, Henry Ford used his perfected assembly lines to pump out car after car powered by gasoline…
So in 1907 Ford broke 10,000 cars made…
then over 100,000 six years later in 1913 (also the first year of the assembly line),
and topped a million in 1921.
So modern manufacturing and the dominance of gasoline-fuelled vehicles led to this magical era, **from basically when the car was created to around the 1973 oil crisis,** where people desired features, performance, and year-on-year changes to their cars.
The effect was that horsepower rose each year, weight rose each year, more roads were built, and automotive subcultures like hot rodding emerged.
Consumer, why bother asking for a car fuelled differently when gas is so cheap?
Manufacturer, why bother making a car that would suit different type of fuel? And who cares that you’re paying your workers, in some cases, double the wage of a comparable factory job, when demand is outstripping supply?
Government, why bother assessing environmental impact when you: a) have a pretty much guaranteed supply of oil from Saudi Arabia b) had little indication that the country’s energy addiction was harming the environment?
Don’t forget, the hole in ozone was \"verifed\" in 1976
Onto today. In the US alone, there more than 200 million vehicles.
…which is about the same number as the number of albums Madonna has sold worldwide.
So it’s not surprising that to make all of these vehicles move, we have to talk about oil:
According to the CIA world factbook, the US consumes about a quarter of the world’s oil production per day, with 70% of that going to fuel vehicles
And of the fuel the US uses, 60% is imported from other countries. As a result, the lawmakers are turning to increased fuel efficiency to wean us off from the oil addiction…
Just last Friday, the U.S. Transportation Department mandated the first passenger car fuel economy increase since 1975, requiring the 2011 fleet wide average to improve to 27.3 MPG — 8 percent above the 2010 model year requirement of 25.3 MPG But before May, the government must decide whether or not to give California and 13 other states permission from the EPA to impose a requirement of a 30% decrease in tailpipe emissions by 2016. If that regulation passes, it would have the effect of a fleet wide fuel economy of 34.5 MPG by 2015.
The problem with tightening environmental controls is that people have started keeping their vehicles longer.
Which means fewer newer, “greener” cars sold.
According to J.D. Power and Associates, the average age of vehicles *traded in* at U.S. car dealerships in February was 6.1 years old, up from 5.6 years a year earlier.
Estimates show that U.S. auto sales for March will decline about 43 per cent from a year ago, with forecasts showing an adjusted annual sales rate of 8.6 million vehicles. By comparison, there were 16.1 million vehicles sold in the U.S. in 2007.
Let’s see if I can make the situation even worse.
Globally, automakers have the capacity to produce about 94 million vehicles per year,
but that’s 34 million more vehicles than consumers want to buy…which works out to be about 100 assembly plants too many.
And the majority of that excess is handled by US automakers…which means more layoffs of skilled factory workers and a shifting of production to countries where labour is inexpensive
So: if people are purchasing fewer new cars, who funds the R&D departments to make all of those shiny, fuel-efficient ones we were promised?
Well, I think the answer is that we don't need the R&D departments at major carmakers as much as we think. There’s an increased desire to not only help the environment, but also to make do with what we have.
Besides, the average age of cars on US roads are 9 years old — even if every new car sold, we’d still burn through fuel at a prodigious rate — and make little dent in improving emissions. I see three trends developing quickly…
First, eco modding thanks to the Internet and increased discussion about making cars more efficient and reducing your environmental impact, people have started to do things like this:
One 1992 Honda Civic hatchback owner decided to get crafty and build aerodynamic components for his car. The result? A claimed 95 mpg at 70 mph.
But a japanese firm, mooncraft umetsu, sells a wind tunnel-honed kit for the Prius that takes efficiency to the next level. The important thing? People are paying to make their vehicles more efficient.
Up to $40,000 more efficient, in this case. This is LincVolt, Neil Young’s 1959 Lincoln convertible that likely struggled to get 10 mpg when new.
But thanks to a modern, diesel-electric powertrain conversion — it’ll do about 100mpg — and has been entered in the Automotive X-Prize competition.
My electricity bill gave me a great idea:
But what about eco-modding vehicle software? The number of electric components in modern cars has increased by 50% in the last FIVE years alone.
Why not have trip computers that send consumption to a central database? Not to track your movements, but to give you detailed comparisons with people who also own your make/model/year/etc of car. -would certainly help show people how better - or worse - their driving habits are in regards to fuel efficiency
Second, upgradeability I see dealerships retrofitting soy-based plastic fenders, more fuel-efficient engines, and the like. I also see individual engines getting certified by the EPA. If a new car costs $30,000, and you're close to paying off your 6-year-old model, why not dump $5000 into it to not only make it significantly greener — but drivable for another five years? What’s going to make this happen?
Right now, Modifying cars for performance and appearance is a huge business in the US. The Specialty Equipment Market Association’s (SEMA) 7,000 members peg theirs as a $36 billion industry. I think it’s only a matter of time before the numbers work out so that they will tap Tier 1 and Tier 2 automaker suppliers to handle increased demand for ecological aftermarket parts. What does this mean? From the latest SEMA newsletter, John Waraniak, SEMA vice president of vehicle technology, said: “Successful manufacturers will rely more on flexible global platforms and the aftermarket to reach new markets and quickly address fragmenting market segments with increased personalization and lower costs” In other words: You make the cars, we’ll make them to people’s tastes and save you money at the same time.
Out of increased demand for aftermarket parts that boost efficiency, I see small, local injection-moulding plants, composite, green plastics plants popping up around the country. Or for high-end or expensive weight reduction kits, moulded, painted carbon fibre factories are possible. A perfect use for skilled auto workers not needed by carmakers. If you know the make/model/year of car you drive and the colour you want, you could even buy them online and have your new, green, panels shipped to your dealer for fitting. Don’t forget, the body of a conventionally-constructed car is 40% of a vehicle’s weight. Cost? For comparison, a whole set of body panels costs for a Smart about $1000 right now.
Even more extreme, some coachbuilders at the turn of the century used fabric liberally for bodypanels, but those cars tended to rot. The BMW GINA, however, utilizes all the benefits of modern fabrics and features active aerodynamics that are built into the structure of the car. Go faster, and the car’s surface changes to better slice through the air. Cooler? It only takes about two hours to completely skin the car. Don’t forget that very little of a vehicle’s strength is due to its skin.
And, if eco-modding takes off, dealerships would need less space; they’d stock more body panels, engines, and parts than complete cars,
Third: long-term ownership. I see eco-modding and upgradeability making vehicles that people don’t only need to keep longer, but want to keep. According to an article by the Associated Press, Consumers are already starting to see vehicles as long-term investments, and goes on to explain why, with the credit market in shambles, leases no longer allow people to drive a new vehicle for US$200 or $300 a month and repeat the cycle every few years. People are taking better care of their old wheels instead.
In the article, they talk about a family who’s eyeing up a $34,700 Toyota Highlander hybrid. But instead of giving in to the impulse, the family spent about $1,000 last year on car maintenance, including four new tires, a few oil changes and regularly scheduled tuneups.
Quote from the family: \"We're holding on until the bitter end,\" Davies said.
So what now? Auto parts stores such as AutoZone Inc. have seen rising sales. Probably Julio’s auto parts, as well.
Dealers make your money from the service department anyway. So if business shifted from selling new cars to upgrading older ones, you’d still make money on the servicing. But as a result of more shop work, new vehicles would have to be maintained in less time, likely taking lessons from motorsport. -WRC rally cars can have their clutches changed in about three minutes…
-while Audi’s R8 race car could have the entire rear end of the car — transmission, suspension, bodywork — swapped in four minutes.
In conclusion, I think that the present problems the US auto industry faces — with high energy usage, manufacturing costs, and a dwindling sales market, can be mitigated quickly by these new technologies if the nation realizes that the changes must come from business advances and consumers buying “green” upgrades — not from legislation.
Low-emissions and fuel economy standards are great guidelines, but it may take ten years or more to realize these gains — consider that the average age of vehicles on the roads in the US today is 9 years old and is increasing.
I don’t know if we can afford to wait nearly ten years for everyone to buy newer, greener cars - an absolute eternity considering how rapidly the automotive industry is changing.
Denver Green Car Presentation
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[photo: michael banovsky]
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