2014 South Carolina Automotive Summit

Transcription

1 2014 South Carolina Automotive Summit New Directions Dr. Jay Baron President & CEO Center for Automotive Research February 19, 2014

2 Name a product? Which consists of nearly 30,000 parts, Can be assembled at the rate of 1 per minute, 16 hours a day days a year Runs for several years, most of the time without a single manufacturing defect? Is from the largest manufacturing sector in the U.S. economy. This accomplishment by the auto industry to execute mass production has become the norm.

3 Manufacturing Efficiency Excellence is now the Standard Taiichi Ohno: Toyota Production System Global Supply Chains Flexible Manufacturing & Industrial Robotics Global Platforms Digital Engineering & Manufacturing Interchangeability

4 Average Age in Years Average Vehicle Age 11.5 Average Age of the Light-Duty Vehicle Fleet Vehicle quality and reliability have risen steadily

5 New Vehicle Price Changes (YOY Change)

6 Automotive Impact 50 States (why states want the auto industry in their backyard) 8 million private sector jobs $500 billion annual compensation $70 billion personal tax revenue U.S. automotive industry s total U.S. operations, including: Vehicle development Production Parts manufacturing Sales and service of new vehicles Source: CAR 2010

7 Distribution of the North American Automotive Industry Estimated 470 automaker facilities, and 7585 supplier facilities in the United States 2012 Source: CAR / BLS 2012

8 Southern Automotive Research Alliance (SARA) The Southern Automotive Research Alliance (SARA), administered by CAR will examine the critical success factors necessary for continued global automotive investment growth within the southern U.S. automotive manufacturing region. This study will seek to address the common challenges and identify actionable recommendations in order to attract new foreign investment.

9 Southern Automotive Research Alliance (SARA) Alabama Kentucky Louisiana Mississippi South Carolina Tennessee

10 Announced Automaker Investments in the SARA Region and Mexico: Investment Totals South: $6,176 Million Mexico: $9,476 Million GM, Spring Hill - $443M Nissan, Decherd - $50M Toyota, Huntsville - $230M Honda, Lincoln - $373M Mercedes, Vance - $2,070M Hyundai, Montgomery - $173M Elio, Shreveport - $100M Ford, Louisville - $621M Toyota, Georgetown - $392M GM, Bowling Green - $135M VW, Roane - $40M BMW, Spartanburg - $900M Hyundai, Tijuana - $131M Ford, Hermosillo - $1,300M Chrysler, Saltillo - $1,249M GM, San Luis Potosi - $251M Nissan, Canton - $73M Kia, West Point - $100M Toyota, Pendergrass - $350M GM, Roswell - $26M Porsche, Atlanta - $100M Nissan, Aguascalientes - $2,057M GM, Silao - $549M Mazda, Salamanca - $500M Automotive Compensation (Hourly) USA: $37.38 (2012) MEX: $7.79 (2012) GM, Toluca - $751M VW (Audi), San Jose Chiapa - $1,300M Sources: CAR, BLS, CRS, USTR, SICE VW, Silao - $118M Honda, Celaya - $1,270M Free Trade Agreements United States (14 FTAs, 20 Countries) NAFTA CAFTA Agreements with Australia, Bahrain, Chile, Columbia, Israel, Jordan, Korea, Morocco, Oman, Peru, Singapore, and Panama Mexico (13 FTAs, 45 Countries) NAFTA EFTA Northern Triangle Agreements with Central America, Chile, Colombia, Costa Rica, European Union, Israel, Japan, Nicaragua, Peru, and Uruguay

11 What Companies Want: SARA Highlights Mexico: pros and cons Growth opportunities: capacity Tooling Decision making Global, U.S., North/South Need for speed non-political entity in south Costs - Incentives, training, taxes, Workforce Work skills Pipeline, internships R&D - Synergies, basic (home) vs. development (de-centralized)

12 Challenge: Logistics emerging as a primary factor for location decisions Developing and enhancing freight and logistics industries has become a leading edge economic development strategy Added network capacity has not kept pace with demand for trade Over the past 30 years, highway miles have increased by 5% while VMT has doubled; rail line track has decreased by 35% though railroads haul 70% more freight than trucks haul Other parts of the country are planning or already operating logistics hubs The Alliance (Texas) Columbus Heartland Corridor Norfolk Southern Rickenbacker Intermodal Terminal North Baltimore, Ohio CSX Northwest Ohio Terminal Will County, Illinois CenterPoint Intermodal Center Kansas City BNSF Intermodal and Logistics Park Source: Gateway Cities Council of Government

13 Automotive Innovation Old News: Manufacturing efficiency Competitive costs Technology generator Quality products Cool products Economic development What s coming next?

14 Historical Trends: Horsepower, Weight and Fuel Economy Comfort/convenience (music, powered accessories) Safety (crashworthiness, airbags) Emissions reduction Increased power Fleet Average (approx.): 1980: 23 mpg 2012: 28 mpg

15 Volcanic Eruption of Epic Proportions

16 Powertrain Technology Dilemma New Technologies = Huge Risk Ironically, there are too many technology options CAFE & Safety driving innovation Goal: 0 fatalities due to crash Mobility concerns (congestion)

17 Non-Compliant Vehicle Fleets (CAFE) A fleet is defined as domestic passenger car, import passenger car, or light truck for a manufacturer Credits earned through compliant fleets may be used to offset non-compliant fleets 5 Credits can be carried forward or backward from the MY 0 MY 2008 MY 2009 MY 2010 MY 2011 MY 2012 MY 2013 Credits can be sold from one manufacturer to another

18 The New Big-3 Technology Shock! Materials Potential growth of 100,000 jobs for mobility by 2025 Powertrain Connectivity

19 Growth in Electronics (>40%) An average vehicle contains around 60 microprocessors to run electric content four times as many as a decade ago. More than 10 million lines of software code run a typical vehicle s sophisticated computer network.

20 Intelligent Mobility

21 Convergence and Automated Vehicle Forecast Significant research for 5 years Converged applications using both sensors and communications more likely in 10 years Automated vehicles likely in 10 to 20 years Source: CAR, 2012

22 Lightweighting Material Architectural Strategy All technology pathways anticipate lightweighting The monolithic car with one dominant material is: Easier to design, and Easier to manufacture, but Not optimum for reducing mass and cost Ford 2015 F-150 Aluminum body & bed Steel frame Future Steel Vehicle 35% reduction in body mass Aluminum Intensive 45% reduction in body mass Composite Car - 55% reduction in body mass Source: Center for Automotive Research

23 Mass Reduction Cost of Competing Material Implementations NOTE: Assumes no reduction in vehicle size Small levels (1%) of mass reduction may be achieved through material substitution at little to no cost penalty 20% mass reduction potential with AHSS BIW structure and Al closures and chassis 25% mass reduction is possible with an aluminum intensive vehicle Largest potential for mass reduction is in BIW and closures CFRP BIW structures combined with aluminum can achieve a 35% reduction in vehicle mass CFRP at today s price (~$12 per pound) comes at a considerable cost penalty A reduction of CF price (~$5 per pound) could present an opportunity for CFRP (excluding manufacturing constraints) Source: Center for Automotive Research

24 Lightweighting High Strength Steel, Aluminum & Composites Take on the Heavyweights

25 Key Material Trends (Next 10 years) Increased use of ultra high strength steel for structural components around the safety cage to prevent intrusion Aluminum use for chassis and exterior panels is increasing Fiber reinforced plastics (glass and carbon) for structural components are still several years away from high volume production Joining complexity: more laser welding, fasteners and adhesives Structural Adhesive

26 Powertrain Diversity and Convergence today evolving future (electric) gasoline gasoline diesel gasoline diesel Alternative fuels HCCI diesel Alternative fuels EV / range extender EV - battery EV (battery / fuel cell) EV / fuel cell hybrid hybrid EV / range extender HCCI = homogeneous-charge compression ignition Source: Robert Bosch LLC 26

27 Powertrain Forecast Advanced gasoline engines & transmissions dominate thru 2020 (95%) Gasoline direct Injection, forced induction, discrete and continuous variable valve lift 8/9 speed transmissions, CVTs But Diesel will increase from 1% in 2012 to 2.5% HEV will also grow slightly from 3 % to approximately 4%. PEVs will struggle Alternative fuels will continue to be niche Conventional SI technologies are only effective until about Then diesel and electrification have to play a key role to meet standards. Diesel emissions will limit them. Electrification will require infrastructure and government incentives. These are declining in Europe right now and uncertain in the U.S.

28 Annual Gallons Saved per MPG Improvement Gallons of Gasoline Saved for Incremental Improvement in Fuel Economy Gallons 200 Gallons 100 Gallons 60 Gallons 40 Gallons 28.5 Gallons Miles per Gallon 600 gallons 200 gallons 100 gallons 60 gallons 40 gallons $3.50/gal = $2,100 $3.50/gal = $700 $3.50/gal = $350 $3.50/gal = $210 $3.50/gal = $140 $6.00/gal =$3,600 $6.00/gal =$1,200 $6.00/gal =$600 $6.00/gal =$360 $6.00/gal =$ gallons $3.50/gal = $100 $6.00/gal =$171

29 Summary: Technology Implications Greater influence of regulatory agencies affecting products, costs and performance NHTSA and EPA and CARB affecting products and customer demand Enhanced crashworthiness and crash avoidance (ADAS) Uncertainty over electrification and advanced technologies (fuel cells) requiring incentives and infrastructure Customer acceptance of specific technologies Stop/start, coasting DCT NVH tradeoffs (materials, LRR tires) ADAS Acceleration turbo lag, higher RPMs Rate of obsolescence increasing due to technology Vehicle complexity and vehicle packaging (of technologies) Powertrain (and fuels) diversity. Downsizing and boosting. Designing vehicles for the drive test cycle (highway, city, off-road, towing, ) Electronics (ADAS, telematics, HMI) Complexity over hybrid technologies, PHEVs and BEVs Fuel economy labeling inaccuracy Variation of performance increases as FE increases Costs and complexity to repair and recycle Higher cost vehicle and technologies Greater software content (powertrain controls, ADAS, etc.) Specialty repair stations (more certification) Longer repair times

30 2014 South Carolina Automotive Summit Thank You Dr. Jay Baron President & CEO Center for Automotive Research February 19, 2014