Chrysler presentations
4th November 2009 18:48

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

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Peugeot BB1
2nd November 2009 14:26

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.

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Ford's UAW dissidents
30th October 2009 9:47

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

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Autonomous cars?
26th October 2009 18:23

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

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The small car challenges ahead
26th October 2009 12:47

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

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