David Leggett's automotive industry blog - from just-auto.com

BMW in Russia

Thu, 19 Nov 2009 15:32:00 GMT

BMW's sales and marketing man Ian Robertson was characteristically upbeat yesterday at the annual BMW press dinner (at Claridge's in London; good opportunity to catch up with a few people). He talks a good game. BMW reacted early to the downturn, he says, by cutting production and that has left it in good shape for the downturn. And it's doing well in the places that are growing, especially China and India.

I got the chance to ask him about the Russia market after dinner. He reckons there could be a sharp rebound and that he's hearing optimism that it could come back pretty quickly when things start to improve next year.

It's a tough place for all this year though, and the latest market data gave little cause for cheer for anyone. Mind you, BMW brand sales are only down 16% at 13,200 units in the first ten months - in an overall car market down 51%.

Another talking point on the night was BMW's sponsorship of the London 2012 Olympics. There was much speculation on which other OEMs would have seriously bid for that 'Tier One Automotive Partner' position and also who might have been most crestfallen not to have been successful. One or two might have thought that the idea of a fleet of hybrids moving athletes around would have been a winner...

UK: Olympics ice the cake as BMW weathers the economic storm

Green Cross Code? Tufty club?

Thu, 19 Nov 2009 14:36:00 GMT

I guess we've moved on from the days when kids could be given simple messages about how to cross the road (the few that is, that get the chance to actually use their legs and mental faculties to walk from one place to another and not glide above it all from the rear of an SUV or minivan). Yep, it has to be more sophisticated now if you really want to connect with da kids. So the UK government has commissioned an online game that is heavy with metaphorical messages about the need to be careful when crossing things. I guess it all helps, so I applaud the initiative. Here's hoping that it makes a connection with the young children it's aimed at (and that they are not all way too busy with the latest Call of Duty). While we're on the subject, is the Green Cross Code man (the original guy, I believe, also donned Darth Vader's cloak and mask in Star Wars) still going? And what happened to that amiable and wise squirrel called Tufty?

Can Brussels broker a deal?

Wed, 18 Nov 2009 15:00:00 GMT

I think I said just after GM had decided to hang on to Opel/Vauxhall rather than offload to Magna, that the politics is far from over.

GM's acting head of European ops Nick Reilly is clearly doing the rounds with a begging bowl to see what state aid/loan guarantees are going to be forthcoming from national European governments where there are plants/jobs at stake.

He appears to have pressed the right buttons in the UK, but that was always a case of pushing at an open door given what went before when Magna was in the Opel frame.

Affable Nick, an ex-Vauxhall man, saves the day and gives a slightly desperate British government a small crumb of positive industrial/economic PR. Sounds like he knows how to choose his words very carefully. There's 'a chance' to save more jobs at Vauxhall than under the Magna-led proposal. It's all mights and maybes, the unions and workers no doubt wondering where it could yet all end up.

And no, he says, turning to a broader European audience, we don't want an unseemly beggar-thy-neighbour 'bidding war' with national governments on state aid that could end up upsetting Brussels again. Well, actually maybe we do want that because we're happy for European taxpayers to give us a helping hand and the bigger the better, but we don't want Brussels then stamping all over it on competition grounds.

Hang about, maybe we can get Brussels to act as an honest broker for a collective deal that still gives us pretty much what we want? I'll just carry on fanning the flames for a little while longer by emphasising the importance of state aid and stressing that nothing is yet cast in stone. Let's keep those cheque-books nice and handy.

Yes, as the EU says, economic criteria is very important. But we seem to be very much in the realm of politics and there's still a lot to be decided. Don't be surprised to find that 'affable Nick' was not all that he seemed. Someone somewhere isn't going to like that new Opel/Vauxhall business plan when it finally emerges. Will that plan adhere 100% to business principles or will there be signs of political fudging?

And can Brussels actually broker a deal of some sort next week? Maybe all sides should realise that now is the time for consensus and for GM's European business to be given a chance to be run as a business.

EU: EU to host Opel/Vauxhall meeting

Happy Birthday Disco...

Mon, 16 Nov 2009 18:05:00 GMT

Land Rover's Discovery was launched twenty years ago today. So, just after the Berlin Wall had come down enabling half of Europe to stretch its legs in unfamiliar territory, us Brits could tackle the tricky terrain of the Tesco car park in a Land Rover that wasn't designed for ease of mucking out (Defender) or as an accessory for the affluent county set (Range Rover). And it did indeed help to define a rapidly expanding mid-range SUV segment.

Here are a few lesser known Disco factoids with which to impress your friends:

The first Discoverys shared their headlights with the Freight Rover van, and shared their rear lights with the Austin Maestro van. Very early examples were built with tail-lights carrying the Austin-Rover logo.
Among the options of the first Discoverys was a shoulder bag trimmed to match the seats of your vehicle which could be attached to the centre console. These bags now command quite a high premium with Land Rover enthusiasts, Land Rover says. Nice.
The original project code name for Discovery was Project Jay. This was because of the naming policy put in place by Alan Edis to enhance prototype secrecy - projects were named in alphabetical order, following bird and animal themes.
Discovery was the first Land Rover programme to fully utilise CAD technology. The exterior of the Discovery was fully surfaced in CAD to enable prove out models and tooling to be created. The interior was created in a wire frame format in CAD.

Market feedback at design stage

Fri, 13 Nov 2009 18:03:00 GMT

I came across an interesting exercise by Audi earlier. It tapped into its facebook community for thoughts on the design of cars being produced as part of a competition. Apparently, the feedback from people who cared about the brand enough to be a part of the Audi Facebook community was pretty useful. I know it was only a competition, but is this a precursor to something like that maybe happening on real designs? Who's going to be first? It is probably something that you would want to manage very, very carefully though (how many BMW owners back in 2001 would have given Bangle the thumbs-up for the 'Bangle-butt' on the new 7? - some designers may not be too keen on this sort of thing).

One other thought - this design competition thing that the LA Show organisers do ahead of the show is a shrewd move. I can recall past competitions; there is usually something to grab media attention because brands like Audi sense a fairly easy PR opportunity and a way to deliver some creative fun for young turks in the design department.

It also pretty effectively lets people know that the show is coming in a way that no number of email mailshots can. Would the LA Show organisers now like to email me concerning my complimentary flight (from London) and lodging arrangements - thanks.

US: Audi utilises social media for LA design competition

Converting ICE cars to EVs

Thu, 12 Nov 2009 17:19:00 GMT

I can see why Iceland might work well for electric vehicles. The population is not huge and it's fairly concentrated. I believe they generate their electricity from fully renewable sources - mainly geothermal. They are sitting on a lot of hot rock. The economy is bust, but maybe that would help to make them very interested in importing less oil.

So the deal REVA has done with a local company that will help with charging infrastructure is maybe not all that surprising.

But what about this element? 'In addition to importing new EV models to Iceland, NLE is also working on developing systems to convert the current internal combustion engine (ICE) car fleet into Electric Cars.' The mind boggles. They certainly don't lack ambition over there.

Disposing of all those replaced ICE engines for the whole fleet might be tricky. Not much of an aftermarket. There could be unwanted stockpiles of the things forming, like little terminal moraines, just outside Reyjavik, an unsightly reminder of a dirtier automotive age. Maybe that's why the place is called 'ICE-LAND' (sorry).

To be serious for a second, anyone out there got thoughts on this sort of conversion work at volume and making it commercially do-able? Sounds like a non-starter but I have been around long enough not to necessarily discount anything, however outlandish sounding.

ICELAND: Northern Lights Energy and REVA sign agreement

Porsche defends Cayman

Wed, 11 Nov 2009 08:38:00 GMT

Here's a strange one I have come across. Porsche is apparently aggressively defending the 'Cayman' trademark. As well as being a Porsche model name, the name is also in use by a firm that makes those funny plastic sandals with holes in them - Crocs. Sounds like a few lawyers will be racking up the fees. Follow the below link for more.

Top marks to the person who posted this caustic response to the Porsche action:

What people/lawyer/companies tend to forget, is that a trademark does not remove a name or word from being used in the English language (or any other for that matter). Will Porsche bring suit against Grand Cayman and the rest of the Cayman islands? What about the amphibious Cayman, can you sue an animal?

Yes, maybe they should take a step back and just relax a bit over such trademark use over at Zuffenhausen. If they want to get all worked up in the legal dept., there are probably more important fish to fry, you would think.

Porsche vs. Crocs.

Ford and Volvo Cars

Tue, 10 Nov 2009 10:40:00 GMT

Seeing the just released pictures of the new S60 this morning has got me thinking. I wonder if Ford may decide to hang on to Volvo Cars after all? Why? Because it is a valuable asset and maybe, just maybe, some at Ford will take the view that there is now no need to sell it (Ford making good turnaround headway lately), that Volvo can be returned to profitability on a reasonable timescale and that ultimately its technology specialisations and engineering architecture sharing with Ford make it preferable to hang on to it.

The brand's supporters in Dearborn may feel that the situation has changed now that Ford is on a more solid financial footing and automotive demand prospects globally are looking up.

Volvo is also a highly respected global premium brand. Exchange rates and unfavourable model cycles - as well as market geography and the recession - can explain a lot of what's gone wrong with Volvo profitability in recent years.

I am just speculating, of course. When I met with Mr Mulally recently, he was pretty enthusiastic about One Ford and the rationale behind focusing on a core brand. Fair enough; it has delivered results. And that was a very good bit of business offloading JLR for a few billion just before the recession hit. Along with the assets mortgaging, he seems to have a good sense of timing on the big financial transactions. I asked him about Volvo. He gave a straight bat answer and a few days later Ford said Geely is a preferred bidder.

This is what Lewis Booth said in a statement at that time: "Any prospective sale would have to ensure that Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core 'One Ford' strategy."

"Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand. But there is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions."

Much work to be done, eh? I bet.

Mr Mulally also highlighted the fact that Ford has continued to invest in Volvo - as evidenced by the new S60.

So sell the brand and technology to a Chinese firm or hang on and realise a return from all that investment in a 'soft premium' brand that comes with positive eco/safety values and potentially very good margins. We are at the low point in the economic cycle. In five years time, hanging on to Volvo might look like another smart bit of business.

I wouldn't mind betting that Ford could 'do a GM' and say it has decided to hang on to Volvo Cars after all. But what's the mad rush? A few more months of uncertainty in Gothenburg before finally and dramatically 'coming to the rescue' might also yield plenty of goodwill from both workers and management in Sweden (not to mention the Swedish government). Swedish stakeholders may well conclude that it is 'better the devil you know'.

For Ford, talking to Geely in advanced discussions over Volvo might uncover some interesting insight into its strategic aims, also. Bonus points.

As I say though, and to be absolutely clear, I am only speculating.

SWEDEN: First images of all-new Volvo S60

Still fragmented Europe

Tue, 10 Nov 2009 10:02:00 GMT

Following GM's decision last week to hang on to Opel/Vauxhall rather than sell to a consortium led by Magna, the fallout continues. But the fallout is not exactly unexpected. After the initial and predictably strong political reaction, especially in Germany, there's the realisation that people have to deal with a new set of circumstances to get the outcomes they want - or the 'least bad' ones.

Restructuring was coming down the tracks anyway, whoever eventually owned Opel/Vauxhall. Is GM's plan going to be much different from what Magna was preparing? The differences are maybe less than many people were thinking. Magna was playing the politicians to some degree, to win support for its bid in Germany. It played that game very well.

And now, GM will be looking very carefully at how it approaches relations with national governments in Europe, especially Germany, where half of Opel/Vauxhall 50,000 strong workforce is based. Be careful not to take all of what you see in the press at face value.
If you were at GM and planning to visit Berlin soon to lay out a new business plan, you might want to stoke the cost-cutting fires up a bit before rocking up with a few olive branches for Mrs Merkel. Shut Bochum? No, where did you hear that? We just want to resize the plant for new market conditions and modernise it...

That things are so highly politically charged for GM is a consequence of having a multi-national footprint in Europe. The European Union, you see, is still - in reality - a rather fragmented place. There's a duality to the 'European project' that the Opel/Vauxhall saga has amply demonstrated. Sure, there's never been a shortage of grand designs and ideas aimed at consolidating European political unity - the Lisbon Treaty is the latest example - but when push comes to shove, competing national interests come to the fore.

What's best for Opel/Vauxhall from a business perspective has been rather lost in the political horse-trading on which plants and jobs might go under restructuring. Look across the EU and you'll see very big differences in the way countries are run, lifestyles, cultures, the way that economies function, levels of taxes and so on. Is that a good thing? In some ways yes, in some ways perhaps not.

But when fundamental national interests or jobs are at stake it's pretty clear that, in Europe, the business case for a particular course of action may be subject to a good deal of political interference coming from nation states.

GM does eleventh hour U-turn on Opel/Vauxhall sale

Psst! Want an airbag?

Mon, 09 Nov 2009 10:47:00 GMT

I have just read a curious item about an aftermarket trend in Malaysia. The Perodua Myvi is apparently being targeted by thieves after its airbags. The Malay Mail says it has learnt recently that syndicates have been stealing airbags, the single most expensive part in the car's cabin - in order to resell them in the black market to unscrupulous parts dealers.

Customers can install 'second hand' airbags from unauthorised dealers that massively undercut official prices - RM1,000 instead of RM5,000 for a pair. The newspaper points out that there are dangers with these aftermarket airbags (probably procured from dodgy sources); they may not function, may deploy at odd times or could explode and injure the installer.

The report goes on to say that 'this thieving trend is that it is not difficult to do for those with the expertise'.

Thieves with the technical know-how could apparently open up the Myvi hood easily, short-circuit certain equipment and gain access through all the vehicle doors. From that point onwards, stealing the airbags is a breeze, the Malay Mail says.

Perodua has come up with a solution and has fixed anti-theft features on new cars coming out next year. Older models would, however, need to return to service centres for an upgrade. You'd think the thieves might want the whole vehicle, but maybe they have established a nice little 'closed loop' earner sticking with the airbags.

BYD takes a charger hit

Mon, 09 Nov 2009 10:15:00 GMT

China's BYD is an up and coming automaker with considerable expertise in the area of batteries. It's a big supplier of lithium-ion batteries to cell phone manufacturers - in fact that was where it started and where its core business was before it picked up assets off the shelf from a failed firm to get into autos.

The firm's CEO has made some pretty bold assertions about how quickly it can expand in autos and where it will be in a few years time. Some critics have accused the firm of talking things up. But they have persuaded a certain W. Buffett to be a significant investor, so there must be some validity to the relentlessly upbeat talk. And there is now a BYD hybrid on the Chinese market and it seems to have got off to a good start.

But there has been a slight wake-up call (sorry, can't resist that) for BYD on the cell phone front. Nokia said on Monday it would replace 14 million chargers made by BYD saying the chargers could fall apart.

Nokia said BYD would cover all costs from replacement. An average charger sales price to phone manufacturers is apparently around $1.

"The plastic covers of the affected chargers could come loose and separate, exposing the charger's internal components and potentially posing an electrical shock hazard if certain internal components are touched while the charger is plugged into a live socket," the Finnish firm said. Ouch.

Sounds like Nokia is wasting no time in letting the world know where responsibility for this one lies.

Some related BYD news: Wang Chuanfu, founder and chairman of BYD is first on the Forbes China Rich List 2009, up from 23rd place last year, according to the list released in Shanghai on Thursday.

Chrysler presentations

Wed, 04 Nov 2009 18:48:00 GMT

Is Chrysler really going to fly in partnership with Fiat? It is perhaps coming off a low base where it has been stuck with the wrong products at the wrong time - and a poor image (the latest US sales weren't great). But Marchionne reckons the cost-cutting - under Cerberus - has at least given it a shot to succeed at a lower breakeven point. Add in the manufacturing and distribution synergies to come that are made possible by working with Fiat and there is at least hope.

I was in Auburn Hills recently and someone remarked that everyone there is now having to get used to new culture again after the changes of the last decade. But I got the impression it's seen as a very positive experience, the chance to be creative again in a flatter organisation. One thing about this new culture under Marchionne: there's an openness about the approach. I think the below link will work for you as well as me; some interesting presentations there on product development and steps taken to improve Chrysler processes in quality, in particular.

Chrysler business plan presentations

Opel/Vauxhall - the final twist?

Wed, 04 Nov 2009 15:06:00 GMT

I can't help wondering if yesterday's GM announcement that it wants to retain Opel/Vauxhall really is the final twist. Has a piece of the jigsaw that we don't yet know about just fallen into place? Are some old private equity 'friends' in a position to help with capital for restructuring in return for some equity in GM Europe?

GM in the driving seat with an acquiescent investor partner simply eyeing a return on investment with maybe even a buy-back option for GM in, say, three years when everything is looking a whole lot better on the Opel/Vauxhall finances?

It's just a thought, but if something like that were going on in the background, it probably would have not been announced at the same time as yesterday's announcement for reasons of political sensitivity. Better to say that GM simply prefers to retain Opel than that it is also actually planning on giving a significant stake to, say, RHJ which is making a billion dollars immediately available for essential restructuring and investment. That news might be better to break to governments after the Magna-deal-off fuss has died down a bit and a new business plan is available.

Look, there have been so many twists in this saga I can't help inventing my own.

COMMENT: GM looks to the future over Opel/Vauxhall

Peugeot BB1

Mon, 02 Nov 2009 14:26:00 GMT

Later this week there's an 'exclusive' reveal at a London hotel of the Peugeot BB1 concept (think 'bubble-car' with electric drive, scooter-style handlebar instead of steering wheel) that was shown in Frankfurt last month. The project is not for production, but the fact that the electric vehicle is going on a special parade suggests that PSA is serious about investigating the urban niche for such a vehicle. There is a dedicated website, too.

It is an intriguing concept. The electric motors are in the wheels. Peugeot says its father is a scooter and its mother is a car. If this really is something for 'the future' of urban transport, how far away is that future? Could a productionised version of this concept be five years away? Ten? What about a small and very efficient conventional engine for such a vehicle in order to get the cost down? Oh, yes, that'd be something not unlike the Smart or Toyota's iQ, then.

Shifting centre of gravity for auto industry

Mon, 02 Nov 2009 13:56:00 GMT

Official data suggests that the US economy moved out of recession in the third quarter. While that may be a step in the right direction, deep concerns remain over the outlook. The economic uptick thus far has been led by the federal government stimulus (including cash for clunkers) and an inventory effect. The positive impact of those things will be on the wane next year and the outlook on unemployment is stubbornly bleak.

It looks like US consumers will remain reluctant to spend next year - especially on big ticket items like new cars. Indeed, there is a broad industry consensus that 2010 will be another tough year in the US automotive market, with light vehicle sales staying under 12m units. Cash for clunkers will have taken some sales from next year and the underlying fragility of demand was confirmed when sales turned down so sharply in September.

And debate will continue about the extent to which the US market may have permanently shifted down from the underlying pre-crisis trend which permitted annual peaks to the tune of 16m-17m units, fed by easy credit and big incentives.

Even if some degree of pent-up demand is building, it's hard to see it becoming effective demand quickly on the basis of the projected economic backdrop. It's looking increasingly certain that the market recovery path in North America will be a gradual one and that companies should plan for that.

I guess it's cold comfort, but things could be worse: at least the US economy is growing again. The challenge for US policy makers is to maintain momentum while keeping the budget deficit under some sort of control. If interest rates head up too quickly, fragile confidence could quickly ebb.

The anaemic recovery in prospect for the US continues to contrast with developments in China, where the economy is surging on the back of a highly effective government stimulus package, the Chinese government especially anxious about the wider social implications of any prolonged economic slowdown. The Chinese authorities also have plenty of money in the bank to carry on supporting the domestic economy for a long time to come. Will they? You betcha. People putting down payments on new cars and TVs tend not to be manning the barricades.

As that Chinese car-purchasing pie continues to grow, how much share will Western firms have? Or, more accurately, how much share will they be permitted to have as their usefulness as automotive technology donors - via joint ventures - declines? In that quest they will be helped if Chinese consumers evolve to a level where they are prepared to pay a premium for the Western brand; the local JV partners are developing their own brands, but they also recognise that Western brands carry value in the market.

Foreign players in China will also likely be under growing pressure to demonstrate 'usefulness' to their increasingly technically competent local partners, whether it is advanced technology transfer, strong domestic sales or assistance with Chinese firms' internationalisation strategies. JV relationships in China may move up a gear for some. Others may leave.

But a new phase is coming. Strategies for China will become increasingly important as the global economic centre of gravity continues to move towards East Asia. The latest evidence points to an acceleration in that trend.

Ford's UAW dissidents

Fri, 30 Oct 2009 09:47:00 GMT

There was more good news for Ford on the product quality front in the US this week from Consumer Reports which confirms the strides in build quality/reliability made in recent years. And Alan Mulally is right to accentuate the positives in Ford's corporate performance. There are some encouraging signs of progress. But there could be a UAW sting in the tail as an agreement between Ford and the UAW leadership faces ratification.

Some at the UAW, it seems, are certainly getting the message that Ford is different and hearing the positive noises coming out of Dearborn. However, they are then making the connection that Ford doesn't need the same concessions as those given to GM and Chrysler. That's dangerous thinking that could tempt Ford to greater outsourcing to maintain cost competitiveness.

Ford's relative success in Detroit terms is just that. Yes, it has stayed out of Chapter 11 and is forging a strategy to get back to full-year profitability in 2011. But it isn't quite there yet and 2010 won't see a sharp bounce-back to the US auto market. It will be a slow recovery, subject to uncertainties over what happens to the global economy.

Where do you want to be in five or ten years time? This is an industry with too many players, global overcapacity and some relatively new entrants from emerging markets coming up fast.

In many parts of this industry - and especially in the US - we're still in a recession-induced crisis, even if it's not as bad today as it looked a year ago. It's still not over and anyone who thinks that we're getting back to the 'good old days' could be in for a rude awakening.

US: Six Ford plants nix UAW concessions

Abu Dhabi F1

Thu, 29 Oct 2009 19:06:00 GMT

I'm not a massive fan of Formula One, but I occasionally get sucked in, for one reason or another - the technology, the politics, the drivers, the money, race drama etc. Good to see old stager Murray Walker is still as enthusiastic as ever, these days doing a video blog for the BBC. I really enjoyed his Abu Dhabi preview - below link. Abu Dhabi, eh? How times have changed. Apparently they don't appreciate the Flintstones in much of the Middle East, but the people of Abu Dhabi do. (I heard Dawn French crack that joke.)

My Abu Dhabi Grand Prix preview

Autonomous cars?

Mon, 26 Oct 2009 18:23:00 GMT

Advances in modern technology are making many things possible. Mostly, the enhancements to the way we lead our lives that are made possible by technological wizardry are a good thing. Sometimes they are not.

I don't much fancy giving up control of my car in order to be driven in autopilot inches from the car in front in a road train. Being in the slipstream like that might conserve fuel, but it doesn't sound like fun does it? Yes, we do get in planes that 'fly by wire' and cruise control is generally a good thing, but moving at speed inches from the car in front, trusting the technology to that extent, sounds hairy to me.

Okay, let's assume I'm being a bit of a wuss and that this is something that simply takes some getting used to and that eventually you are quite comfortable with it. There's something else to consider: just think of the legal issues regarding responsibility for the vehicle. The half-and-half solution in which you cede control of your car for part of the journey is particularly muddled. Imagine the fun and games at the 'transfer' moments.

'Autonomous vehicles' in the way Robbie G describes it, sounds like a complete non-starter to me.

Surely the research would be better applied to intelligent shuttle buses that are an extension to public transport systems, leaving the private car alone?

Sure, we've all been on journeys when we'd prefer to take our hands off the wheel and read a newspaper. I am not disagreeing with that. I quite like taking the train sometimes. I have been on buses before. I like driving cars, but long journeys on motorways can be draining. Driving a car in a congested city is rarely fun. This technology would be far better taken to its logical conclusion - the vehicle takes you from the start of the journey to your destination.

The technology underlying autonomous vehicles can take us a massive step further by adding door-to-door transportation in a specially designed and dedicated vehicle (it wouldn't even need a steering wheel and would be designed to be in passenger, not driving, mode all the time - so you could have an interior especially designed for that).

At a stroke the legal issues associated with losing driver control of a private car are gone. In this scenario the vehicle and the infrastructure is provided by a public transportation authority. That would also probably reassure people that there were reasonably robust systems in place to make the technology reliable. There would undoubtedly be huge economies of scale in buying and running a fleet of these things.

The vehicles could also be calibrated to journey demand for maximum operational efficiency. If eight people are headed in a certain direction, an appropriately sized vehicle rocks up outside the door, alerting your cell phone when it is in position. Vehicle occupancy should be relatively high - no more big buses with one or two people on them - making CO2 output per head lower. A smart operating system is permanently calculating optimal passenger pick-ups and drop-offs. In this scenario, the technology basically replaces buses with smaller and more efficient units better calibrated to passenger journeys and numbers. No more buses running in packs or getting rained on at the bus stop.

Okay, I hear you ask, have you been on a typical city bus lately? After you have successfully dodged the knife wielding hoodie, ignored the random musings of the swaying drunk and avoided the fresh chewing gum stuck to the floor, that seat on the bus isn't such an attractive place.

True. But you could always be in control and take the car, instead. The choice is yours.

GOLDING'S TAKE: Legal pain when the road train takes the strain

Lotus proActive

Mon, 26 Oct 2009 13:13:00 GMT

The latest edition of the newsletter we put together for Lotus Engineering is out. There's an interesting piece on a range extender engine Lotus has developed specifically for series hybrids, as well as a useful summary of a seminar looking at low carbon technologies. Also included is an interview I did with Oskar Goitia from Mondragon's automotive division. I found some of the history behind the Basque-based workers' cooperative particularly fascinating.

Lotus proActive

The small car challenges ahead

Mon, 26 Oct 2009 12:47:00 GMT

I was in Detroit last week and I had a number of conversations in which the subject of small cars cropped up. It's a subject that is getting considerable attention at the OEMs and major suppliers in terms of anticipating future market trends.

While there is a general consensus that car market segmentation globally is shifting toward more efficient and 'smaller' cars, there is considerable uncertainty about the pace of downsizing, how it will actually play out in particular markets and ultimately what it means for the auto industry.

The thing is, while passenger vehicle market segmentation across the world may be undergoing a degree of convergence, there are still some pretty big differences out there.

Those big differences in vehicle operating environments and lifestyles have fed through to the supply-side, with volume and cost per unit figures for major model offerings and market segments looking very different on either side of the Atlantic. Production cost economics is of particular importance in the mass-market segments where the volume brands are active and where cars are commodity-type products (a BMW, by way of contrast, is a 'world car' in the sense that it sells on its same specs in all markets - its European product characteristics also constituting a positive attribute in non-European markets).

There is a price-point at which, say, a typical C-segment car may work in Europe that doesn't apply to North America where those same consumers will naturally be in a bigger car with a lower retail price. If consumers equate value with size then a highly contented small car may be an uphill struggle to sell profitably in the US, even if consumer demands are changing (at the margin).

Market segmentation differences can mean that the 'same car' (quite possibly with a different body style mix, for starters) offered in Europe and North America by a volume maker will be selling to a different demographic. In that case, it will require a different interior spec and how far do you go to customise the car to local market conditions with adjustments that take account of homologation rules, radically different driving styles, engine preferences and so on?

At some point the spec changes mean that it becomes more economic - and I haven't even mentioned exchange rates in that respect - to simply do a different car for different markets, with heavily localised production.

And even in places like Europe there is the thorny question of how you build small cars - which inevitably come with relatively thin margins - with increasingly highly specified content more cheaply over time so that you can make a profit on selling the things.

We heard a little bit last week about how Nissan is planning to engineer its B-segment small cars to make them easier and cheaper to build, while also making them more attuned to local market conditions and 'high-end'.

Making 'small' cars profitably will be a big challenge for the auto industry as consumer downsizing continues. Manufacturing economics - alongside a changing vehicle operating environment - will take the industry so far. There is also the small matter of persuading customers that less really can mean more.

EXCLUSIVE: Secrets of Nissan's new lightweight global small car revealed