The Hindu Business Line : Global Automotive Industry — Frugal engine...                                 http://www.thehind...
The Hindu Business Line : Global Automotive Industry — Frugal engine...                                   http://www.thehi...
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Automotive: Innovative Frugal Engineering Holds The Key

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Avenues for Indian engineering innovation in the global automotive industry.

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Automotive: Innovative Frugal Engineering Holds The Key

  1. 1. The Hindu Business Line : Global Automotive Industry — Frugal engine... http://www.thehindubusinessline.com/2009/05/06/stories/2009050650... Spark -Fuel Efficient Car New Hyundai i10 Kappa Rising fuel cost Worries you? Spark Produces Now With Automatic Transmission.Get Business Daily from THE HINDU group of publications best Mileage in its Class Maximum Power With Maximum Mileage www.ChevySpark.in/Test-Drive Hyundaii10.co.in/ExploreNow Wednesday, May 06, 2009 ePaper | Mobile/PDA Version | Audio | Blogs Opinion - Automobiles Home News Update Global Automotive Industry — Frugal engineering holds the key News Front Page Today’s uncertainties in the auto industry provide a great window of opportunity for Indian frugal Corporate engineering to show the way forward. ACHAL RAGHAVAN takes a look at some potential avenues Markets for innovation. Info-Tech Marketing Money & The global automotive industry is in the throes of some fundamental structural changes. GM’s CEO, Banking Mr Rick Wagoner, has stepped aside at the US government’s request. Chrysler has filed for Agri-Biz & bankruptcy, and is preparing for a “shotgun wedding” with Fiat. Toyota and Daimler have posted Commodities losses. Given the importance of the automotive industry with respect to jobs, many governments — Industry & led by the US — have rushed to provide large bailout packages . Global sourcing strategies are being Economy re-examined. www.Hyundaiverna.co.in Ads by Goooooogle Logistics Demand-capacity mismatch Government Opinion Car manufacturers worldwide are saddled with excess capacity. The total global capacity for light Corporate Stories in this Section vehicles was 87 million in 2008, with actual utilisation at 76 per cent. Excess capacity stood at a Protectionist code Results whopping 21 million vehicles last year. This is expected to worsen to 29 million vehicles in 2009. The Columns global automotive industry just cannot expect to reach long-term financial viability unless chunks of NGOs in agriculture States capacity are taken out permanently. This is an extremely painful process involving huge human and Web Extras financial costs. But the industry may not have a choice. Global Automotive Industry Index — Frugal engineering holds Archives Heading for global ‘Big Six’? the key Features A large-scale consolidation of the global industry is a possible scenario, where auto companies merge Friedman vs Keynes with each other and reduce surplus capacities, leaving a total of (say) six giant companies to meet the Investment global demand. External sector World eWorld This hypothesis has been around for a while, and there has been much speculation on which among Employment issue Brand Line the current players would survive in the long term. In the extreme condition, would GM, Ford and Mentor Chrysler merge (or be forced to merge by the Government), to form “US Auto, Inc.”? Will Toyota, Life Hyundai and Volkswagen (VW) turn out to be the other front-runners in this global race? Will the Brand Quest Chinese government force the formation of a consolidated “United China Auto”? What about India? The New Would Tata or Mahindra expand aggressively and become truly global auto giants? The possibilities Manager are many. BL Club Smartbuy Short-term schemes Books To entice customers into buying a new car, Governments are trying out new incentives. The German government, for example, is offering car buyers €2500 for scrapping their old cars and buying new Stocks cars that are more fuel-efficient. This has already shown strong results, encouraging the US government to look at a similar “cash for clunkers” scheme. Quotes SE Diary In such cases, the car industry is happy, and so is the new car buyer; but the economic merit of such Scoreboard schemes is questionable, considering the waste involved in crushing cars in working condition to Open-End Mutual lumps of scrap. Fund These cars are typically nine-10 years old, with many years of useful life left in a majority of the Cross Currency components. The term “clunker”, therefore, is more a mindset than physical reality. The fuel-efficiency argument is also not tenable, since it takes large amounts of energy and fuel to Rates manufacture a new car in the first place. If we take the US, Europe and Japan, their approach to car-making has so far been the opposite of “frugal”. More than 40 per cent of the cost of today’s typical car is accounted for by electronic Shipping hardware and software. In 1996, the typical car had six electronic control units (ECUs). By 2008, this had grown to 70. Ports The typical modern car has more lines of software code written into it than the F-22 Raptor, the most advanced jet fighter in the US Air Force today. Simultaneously, the role of the driver has been downgraded. More and more of the control of the car Archives has been handed over to onboard computers, under the pretext of ensuring safety. Yesterday Cars are being made more and more “intelligent”, with the ability to “see” what is ahead and behind; Datewise recognise objects such as pedestrians; know when the car is drifting across lanes, and correct the Resources drift; “read” speed limit and other warning signages; and so on. The driver is now increasingly being In Focus driven by the car. In Depth Events 2007 Future of frugal engineering Today’s uncertainties in the auto industry provide a great window of opportunity for Indian frugal engineering to show the way forward. Here are some potential avenues for innovation: Design ‘upgradeable’ green cars in which the engine and drive train can be unplugged and replaced at the dealership with newer and more fuel-efficient modules (including alternatives such as hybrids). This is somewhat like upgrading your faithful home PC with a faster processor, leaving everything else intact. The cost of this “upgrade” will be a fraction of the cost of a new car. Group Sites This will be bad news for the auto industry, but great for the owner and society as a whole. The energy spent in manufacturing this “upgrade pack” and the corresponding global warming impact will The Hindu be far less than that for making a new car. If the car manufacturers won’t play ball, independent The Hindu engine and drive train manufacturers can step in. This solution is far superior to the short-term “cash ePaper for clunkers” approach. Business Line Business Line Downsize the cars without losing out on interior space. The Nano has already shown the way. Build ePaper impact (crash) strength into the car through clever structural engineering, thus countering the “small Sportstar cars are unsafe” argument. Concurrently, replace large US-style engines, which have been designed Frontline for power and speed, with smaller engines. Lower cost, less fuel consumption, less material usage, The Hindu less pollution, and reduced global warming — how can you lose? eBooks 1 of 2 7/29/2009 2:12 PM
  2. 2. The Hindu Business Line : Global Automotive Industry — Frugal engine... http://www.thehindubusinessline.com/2009/05/06/stories/2009050650... The Hindu Images Ruthlessly strip out all the unnecessary hi-tech electronics from the car, and give control of the car back to the driver. Less software will lead to more alert and engaged driving, less warranty claims, and a 20-30 per cent lower initial purchase cost. Expecting the driver to keep his eyes on the road, and drive safely at reasonable speed, is not asking for much. Engage the customer in active and collaborative dialogue while designing the car — ask what he (or she) really wants from the car. Do not unilaterally stuff the car with features which cost lots of money. “Unbundle” the package, and let the customer choose the additional features, based on clear cost data. Co-create value with the customer, and get off the “we engineers know best” syndrome. The timing is right for Indian creativity and innovation to make a mark. The future of the global automotive industry might well pivot on it. The Italians are known for their design flair (Fiat, Lamborghini, Vespa); the Germans for engineering excellence (Mercedes, BMW); and the Japanese for foolproof reliability (Toyota, Honda). It is time Indians created and occupied a new position — “best value” — before they lose their frugal skills to increasing personal affluence. (The author is a Bangalore-based strategy and business excellence consultant in industry. blfeedback@thehindu.co.in) Related Stories: Auto makers enter new fiscal on a positive note Auto sector weathers slowdown blues in 2008-09 More Stories on : Automobiles Article E-Mail :: Comment :: Syndication :: Printer Friendly Page The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home | Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line 2 of 2 7/29/2009 2:12 PM

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