Industry News
News for 22nd April 2008
TRW Systems wins Queens Award for exports
A Peterlee, Co. Durham subsidiary of TRW Automotive Holdings Corp., TRW Systems Ltd, which operates an occupant safety
systems plant, has received a 2008 Queen's Award for Enterprise,for increasing its exports by 77% in the last three years. The Peterlee plant manufactures crash sensors and the electronics that control airbags and seatbelts and has created an additional 180 jobs in the last three years.
Other 2008 Queens Award winners in the automotive sector are Cummins’ Darlington engine plant, JCB’s parts & accessories business, Land Rover (for both export growth and the Terrain Response system, and Diamond Consulting Services, for its ‘Idris’ vehicle detection products.
(www.queensawards.org.uk)
Connaught to increase retrofit LCV hybrid kit production
Connaught Engineering says its Hybrid+ energy saving technology for light vans got a welcome boost from its launch at last week’s CV Show, where the company took firm orders and reported "unprecedented levels of interest" from large national and international companies as well as small fleets operating in the UK.
Connaught will now increase production of the Hybrid+ units by 20% at its South Wales plant to cope with demand created at the Show. Its retrofit kit costs £2,750.00 to install and can be fitted to all major van makes.
Delphi's emergence from Chapter 11 may need foreign investment – SupplierBusiness.com
With Delphi's emergence from Chapter 11 now delayed for months, SupplierBusiness.com’s weeky Insight newsletter reports that the Detroit rumour mill is churning about which companies could emerge as the saviour of the world's former largest automotive supplier, in view of the credit crunch having reduced prospects of alternative private equity investment.
Appaloosa Management, the leader in a planned US$2.55bn investment, and five other investors, terminated its agreement on April 4, saying Delphi hadn't met specified conditions, which Delphi disputes. The Appaloosa-led private equity group had argued that tighter GM involvement in Delphi's re-emergence from Chapter 11 was contrary to Delphi's stated goal of reducing its reliance on and exposure to GM and developing broader relationships with other vehicle manufacturers.
Now cash-rich automotive companies, especially European suppliers, are being mentioned as possible Delphi suitors. One name in circulation is the Russian Oleg Deripaska, who last year acquired a US1.54bn stake in Magna International, owns the Russian GAZ (and LDV) and last year made a bid for Chrysler. Some analysts are speculating that a Chinese or Indian buyer could emerge.
While it tries to obtain additional funding to supplement a contribution from former parent GM, Delphi has asked a U.S. bankruptcy judge for permission to refinance and extend loans which were due to expire by 1st July to the end of 2008. More help from General Motors may be needed, in the form of forfeiting some cash and preferred shares, and taking on more of Delphi’s pension liability.
"Our expectation is that GM and Delphi will develop an alternative plan that results in Delphi becoming a bit more attractive to outside investors, likely at a higher cost to GM," wrote Deutsche Bank AG analyst Rod Lache in a note to investors.
(SupplierBusiness.com Weekly Insight, 21 April)
EU Transport Arena 2008 conference/expo opens
Yesterday in Ljubljana, Slovenia, The EU Commissioner for Science and Research Janez Potočnik opened the Transport Research Arena 2008 Conference and Expo, together with Radovan Žerjav, Slovenian Minister for Transport. This four-day event brings together over 1,000 CEOs and senior executives from EU road transport industries, national and EU administrations, infrastructures operators, public and private R&D organisations, as well as users’ associations.
The event showcases new policy developments and technology breakthroughs which will contribute to make road transport greener, safer, smarter and more user-friendly.
Stressing the need for coherent strategies and strengthened cooperation between all concerned actors, Commissioner Potočnik declared: “Europe’s goals for smarter, safer, greener and more competitive road transport are among the most ambitious in the world. To succeed, we need a systemic approach, linking vehicles, infrastructures and users, and a resolute joint commitment from all concerned stakeholders. I believe this 'system' approach is best undertaken through collaborative research across national borders and a coherent implementation of policies and resources.
"We will succeed only if investment and coordination go hand by hand. This is the road towards a real 'integrated transport system' - a system we will be proud of.”
Announcing the event, the EC acknowledged that the automotive industry already spends more in R&D (circa €20bn/year) than any other European industrial sector. At the same time, the European Commission has allocated over €4 billion to road transport research in the current EU Framework Research Programme (FP7).
TRA 2008 is jointly organised by the European Commission, The European Road Transport Research Advisory Council (ERTRAC) and the Confederation of European Directors of Roads (CEDR). Among issues addressed at this year’s conference are urban mobility, new engines and power trains, alternative fuels, hydrogen technologies, future vehicle concepts, “smart” cars, intelligent logistics, active and passive safety, improving infrastructures in new Member States, noise abatement, emissions reductions, and the low carbon transport economy.
The 2008 YEAR Awards, an FP7 project coordinated by University College Dublin, recognize outstanding R&D projects in six categories submitted by engineering graduates from across Europe, and will be presented by Commissioner Potočnik.
For Transport research see http://ec.europa.eu/research/transport/index_en.cfm
For the TRA Conference see http://www.tra2008.si/
For the YEAR Awards see http://year.fehrl.org/
Dutch Tier 2 cable maker to close Vigo plant
Because Draka’s main automotive customers (Tier 1 harness suppliers) in Spain are relocating their production facilities to low labour cost countries in North Africa and Eastern Europe, the Dutch company announced yesterday that it has decided to close its factory in Vigo, which is part of its Automotive & Aviation division.
The factory makes electric cables, supplying Tier 1 harness manufacturers, and employs around 100 people. The end of production will happen “in the following months”.
Draka is due to hold its AGM on 24th April.
US scientists devise method for on-board H2 reformation and carbon capture for cars
Research by two scientists from the George W. Woodruff School of Mechanical Engineering at Georgia Institute of Technology in the U.S., suggests that it is feasible to capture and store CO2 emissions at the point of generation from widely distributed, small energy-producing sources, such as vehicles and diesel generators, which account for about two thirds of global CO2 emissions.
The Georgia Tech team’s goal is to create a sustainable transportation system that uses a liquid fuel and traps the carbon emission in the vehicle for later processing at a fueling station. The carbon would then be shuttled back to a processing plant where it could be transformed into liquid fuel. Currently, Georgia Tech researchers are developing a fuel processing device to separate the carbon and store it in the vehicle in liquid form.
The research was published in the journal Energy Conversion and Management, and was funded by NASA, the U.S. Department of Defense NDSEG Fellowship Program and Georgia Tech’s CEO (Creating Energy Options) Program.
“Presently, we have an unsustainable carbon-based economy with several severe limitations, including a limited supply of fossil fuels, high cost and carbon dioxide pollution,” said Andrei Fedorov, associate professor in the Woodruff School of Mechanical Engineering at Georgia Tech and a lead researcher on the project. “We wanted to create a practical and sustainable energy strategy for automobiles that could solve each of those limitations, eventually using renewable energy sources and in an environmentally conscious way.”
Little research has been done to explore carbon capture from vehicles, but the Georgia Tech team outlines an economically feasible strategy for processing fossil or synthetic, carbon-containing liquid fuels that allows for the capture and recycling of carbon at the point of emission. In the long term, this strategy would enable the development of a sustainable transportation system with no carbon emission.
Georgia Tech’s near-future strategy involves capturing carbon emissions from conventional (fossil) liquid hydrocarbon-fueled vehicles with an onboard fuel processor designed to separate the hydrogen in the fuel from the carbon. Hydrogen is then used to power the vehicle, while the carbon is stored on board the vehicle in a liquid form until it is disposed at a refueling station. It is then transported to a centralized site to be sequestered in a permanent location currently under investigation by scientists, such as geological formations, under the oceans or in solid carbonate form.
In the long-term strategy, the carbon dioxide will be recycled forming a closed-loop system, involving synthesis of high energy density liquid fuel suitable for the transportation sector.
Georgia Tech settled on a hydrogen-fuelled vehicle for its carbon capture plan because pure hydrogen produces no carbon emissions when it is used as a fuel to power the vehicle. The fuel processor produces the hydrogen on-board the vehicle from the hydrocarbon fuel without introducing air into the process, resulting in an enriched carbon byproduct that can be captured with minimal energetic penalty. Traditional combustion systems, including current gasoline-powered automobiles, have a combustion process that combines fuel and air — leaving the carbon dioxide emissions highly diluted and very difficult to capture.
“We had to look for a system that never dilutes fuel with air because once the CO2 is diluted, it is not practical to capture it on vehicles or other small systems,” said David Damm, PhD candidate in the School of Mechanical Engineering, the lead author on the paper and Fedorov’s collaborator on the project.
The Georgia Tech team compared the proposed system with other systems that are currently being considered, focusing on the logistic and economic challenges of adopting them on a global scale. In particular, electric vehicles could be part of a long-term solution to carbon emissions, but the team raised concerns about the limits of battery technology, including capacity and charging time.
The hydrogen economy presents yet another possible solution to carbon emissions but also yet another roadblock — infrastructure. While liquid-based hydrogen carriers could be conveniently transported and stored using existing fuel infrastructure, the distribution of gaseous hydrogen would require the creation of a new and costly infrastructure of pipelines, tanks and filling stations.
The Georgia Tech team has already created a fuel processor, called CO2/H2 Active Membrane Piston (CHAMP) reactor, capable of efficiently producing hydrogen and separating and liquefying CO2 from a liquid hydrocarbon or synthetic fuel used by an internal combustion engine or fuel cell. After the carbon dioxide is separated from the hydrogen, it can then be stored in liquefied state on-board the vehicle. The liquid state provides a much more stable and dense form of carbon, which is easy to store and transport.
The Georgia Tech paper also details the subsequent long-term strategy to create a truly sustainable system, including moving past carbon sequestration and into a method to recycle the captured carbon back into fuel. Once captured on-board the vehicle, the liquid carbon dioxide is deposited back at the fueling station and piped back to a facility where it is converted into a synthetic liquid fuel to complete the cycle.
Now that the Georgia Tech team has come up with a proposed system and device to produce hydrogen and, at the same time, capture carbon emissions, the greatest remaining challenge to a truly carbon-free transportation system will be developing a method for making a synthetic liquid fuel from just CO2 and water using renewable energy sources, Fedorov said. “The team is exploring a few ideas in this area,” he added.
(andrei.fedorov@me.gatech.edu., www.gatech.edu/newsroom/release.html?id=1707,
Private equity groups invest in Th!nk Global’s North American market entry
The private equity firms Kleiner Perkins Caufield & Byers and RockPort Capital Partners are joining with the Norwegian electric car manufacturer Th!nk Global to set up Think North America in California, it was announced there yesterday. Kleiner and RockPort have already invested in Th!nk Global, and each firm will hold 25% of the new company.
SsangYong plans 20 new models in five years - including diesel hybrids
The SAIC-controlled Korean SUV brand SsangYong – currently being completely re-launched in the UK – has announced plans for new models due for production over the next few years. From 2009 through to 2014, SsangYong will invest more than €1.9 billion in 20 new models based on five different platforms, with five new engines and all with monocoque construction. SsangYong’s new diesel hybrid technology, unveiled at last month’s Geneva Motor Show, is likely to feature in the new model line-up, with a claimed potential fuel efficiency improvement of 30%.
Paul Williams, managing director of British distributor Koelliker UK, says: "I have been able to see some of the new models and although I can’t reveal any details, I’m very excited about what’s coming. It’s unlikely that all 20 will be appropriate for the UK, but it will mean a wider and more attractive range with much greater choice for customers. There will be different body styles and engines including passenger cars that will enable us to compete strongly in new market sectors."
SsangYong’s ‘soft’ diesel hybrid technology applies a 30kW electric motor to the diesel engine, with a 340V high-voltage battery supplying electric power. A Torque Split Device (TSD), independently developed by SsangYong, is also applied to combine or cut off the power of the e-motor.
According to test results to date, the fuel efficiency of the SsangYong diesel hybrid shows an improvement of around 25% in comparison to existing vehicles of the same class. There is a reduction of around 10% in nitrogen oxides and around 15% in particulates. (SsangYong says the testing process used to date does not reflect ‘normal’ driving.) SsangYong expects that the completion of the development of a diesel hybrid car will allow for a reduction in exhaust CO2 emissions of at least 50%.
The diesel engine’s compression ratio has been reduced for hybridisation, the number of injection holes of the injector increased, and the fuel’s multiple-injection system has been applied to reduce combustion noise.
In the UK SsangYong is best known as a specialist 4x4, SUV and MPV manufacturer with the Kyron, Rexton and Rodius line-up, but SsangYong recently launched a new luxury car (the Chairman) as a direct competitor to BMW and Mercedes in the South Korean market.
JAMA confirms date of 2009 Tokyo Motor Show
The Japan Automobile Manufacturers Association, Inc. has announced the dates for the 41st Tokyo Motor Show in 2009. The show will be held as in 2007 for 17 days, from Friday, October 23 to Sunday, November 8, 2009 (open to public from Saturday, October 24).
The venue will be Makuhari Messe, Chiba city. The length of the show, 17 days, is the same as the previous show (2007) and is the longest for any international motor show ‘sanctioned by’ the Organisation Internationale des Constructeurs d'Automobiles.
GM, SAIC & Tsinghua University open new Beijing Automotive Energy Research Centre
General Motors’ CEO Richard Waggoner and politicians opened a new Energy Research Center in Beijing over the weekend. The China Automotive Energy Research Center (CAERC) will be jointly operated by GM, Shanghai Automotive Industry Corp Group (SAIC) and Tsinghua University.
It will be the first professional research institution in the area of automotive energy in China and will support the development of a Chinese national automotive energy strategy. GM and SAIC will jointly invest more than US$6 million within five years in the centre.
The establishment of CAERC came six months after GM announced to set up another, $250m fuels-based engineering centre in Shanghai in October.
(Source: news.xinhuanet.com, Shanghai Daily)
Ford to launch Focus ECOnetic at Eden green car show
The lowest-emissions version of Ford's Focus is to make its public debut at The Co-operative Insurance Eden Sexy Green Car Show from May 23-31 at the Eden Project in Cornwall.
The UK launch of the low-emission ECOnetic represents something of a coup for the “world's foremost green motor event” at the Eden Project. With a 1.6-litre diesel engine, the car produces 115g of CO2/km and offers combined fuel economy of 66 mpg.
Co-Operative Insurance details eco motor policy's environmental credentials
David Neave, Director of General Insurance at The Co-operative Insurance, which is sponsoring the Eden Project’s Sexy Green Car Show on May 23-31st, voiced his pleasure at Ford’s decision to launch the Focus ECOnetic at the event, before going on to give details of how CIS is seeking to ‘green’ the administration of motor insurance.
Mr. Neave said in a release yesterday, “When we launched our eco motor insurance product in 2006 we reinforced our own commitment to tackling climate change and at the same time looked to the motor industry to produce greener vehicles, which would ultimately provide consumers with more choice.”
The Co-operative Insurance Eco motor insurance product includes the following features:
- Offsetting 20% of CO2 emissions for every vehicle insured under the Eco Insurance product through direct funding by CIS.
- Premium discounts for ‘greener’ cars.
- An ‘environmental backed’ claims service.
Co-Op Insurance Services (CIS) pays appointed repairers to ensure that they recycle materials like used oil and old bumpers; this will eventually include the environmental disposal of 'end of life' vehicles and the recycling of parts.
When a part is repaired that would otherwise have been replaced, CIS pays the repairer half the retail price of the equivalent new part. In 2005, parts repaired realised cost savings of approximately £54,000.
Customers whose vehicles are at least three years old, and so badly damaged that it would not be economically viable to repair them using new parts, are given the option of having the vehicle repaired using recycled parts. As a financial incentive, CIS will waive any policy excess (typically £150) that customers would ordinarily have been expected to pay. All used parts are 'cosmetic only' (e.g. no suspension or brake parts are involved). Recognising the increased administration involved in sourcing recycled parts, CIS pays appointed repairers 65% of the retail cost of the equivalent new part.
CIS has a requirement that appointed repairers are correctly registered with their local authorities under environmental legislation, something which also indicates the quality of the management at the garage. CIS refunds an 'Environmental Charge' of 1% of labour cost to each garage. CIS was the first insurer to pay appointed repairers such an Environmental Charge.
CIS has a relationship with an organisation called First Step Trust which recently opened a parts depolluting/recycling plant in Salford close to CIS’ Manchester HQ.
GfK studies UK replacement car tyre market with NTDA
The UK tyre industry has, says the National Tyre Distributors Association, always suffered from a lack of availability of reliable statistics and market data, but the market research firm GfK has now produced the first in a series of regular reports, designed to provide definitive information on retail sales of new tyres for the first time.
The report divides the market into three distinct channels; national multiples (retailers with over 100 branches), regional multiples (10-99 branches) and independents (1-9 branches). GfK gathers and analyses sales data from thousands of participating depots every month.
The analysis has now been carried out for six months and GfK estimates the total new tyre replacement market figure at 28.4 million units. (Retail sales of car, 4x4 and light commercial tyres, new tyre sales only.)
NTDA Director Richard Edy says: "The amount of detail available in the reports is astonishing; from basic information, such as market share by channel, GfK can drill down to provide such information as market share by brand, by tyre or rim size, by aspect ratio etc. Plans are in place to provide breakdowns by region - and, because the report is produced monthly, subscribing companies can identify trends and use the knowledge to increase profitability."
CAP says technology and rapid depreciation increase motor insurance write-offs
Their growing technological sophistication, coupled with increasingly rapid depreciation, means cars involved in relatively minor collisions are more likely to be written off than ever before, said used car values specialist CAP and motor repair experts at the recent RISC conference focusing on increasing accident repair costs.
Air-bags and air conditioning systems top the list of features which are making even relatively minor collision damage increasingly uneconomical to repair, thanks to the more rapid depreciation of vehicles in today’s market.
CAP Operational Development Manager Mark Norman told the recent annual Refinish Industry Survey Conference (RISC) that despite their superiority in terms of engineering, performance and overall quality, today’s used cars are worth significantly less in real terms than their equivalent models more than a decade ago.
He said: “A three-year-old Ford Focus 1.6 LX today is worth exactly the same in pound notes as a three-year-old 1600 LX Escort was 12 years ago. Even though all the technological features such as ABS, full electric windows, remote central locking, air conditioning, air-bags and generally superior engineering and quality, make it a far superior car, the used car buyer is paying less in today’s market than for the car it replaced.”
RISC conference director Quintin Cornforth mentioned that typical collision repair costs have risen dramatically thanks to SRS (Supplementary Restraint System) parts and air conditioning components.
Taking a two-year-old Ford Mondeo 1.8 LX as an example he revealed the extent of increased costs to rectify a relatively minor front corner impact, causing some damage to the nearside front chassis rail. The repair to a 1996 model year car, without airbags and air conditioning, would cost £3,865 - or 52% of the car’s value. The same work on a 2006 model year car totalled £5,856 - or 88% of the car’s value.
Details of the RISC 2008 conference notes are available from www.risc2008.com/
R.L. Polk: U.S. hybrid registrations continue to rise
U.S. registrations of new hybrid vehicles rose to 350,289 in 2007 - a 38% increase from 2006, according to the automotive data suppliers R. L. Polk & Co. The Toyota Prius continued to lead the segment with 179,178 total new registrations - 51.2% of the total hybrid market, which in turn represented around 2% of the total light vehicle market.
Polk's analysis shows that buyers of specific hybrid models predominantly come from the vehicle segment shared by their new hybrid purchase. In 2007, 55% of new hybrid buyers previously had a medium size car, medium size SUV or small car model. These segments represent most of the volume in the hybrid category.
- J .D. Power has forecast that diesels and hybrids will account for 17% of U.S. new light vehicle demand by 2015. The share of hybrids should rise from 353,000 units/2/2% market share in 2007 to 7% in 2015, while diesel trucks and cars should achieve a 10% share, up from 3.2% last year.
Brilliance China returned to black in 2007
The Chinese car and minibus manufacturer and BMW JV partner Brilliance China Automotive Holdings’ 2007 consolidated net sales including its several assembly and component subsidiaries were RMB14,149.1 million (US$1,857.5 million), a 34.9% increase over 2006.
The improvement was primarily due to increased sales volume for Shenyang Automotive's Zhonghua cars and minibuses.
Cost of sales increased by 31.0% y/y to RMB13,049.1 million (US$1,713.1 million), again primarily due to unit sales growth, although the average unit cost for both the Zhonghua cars and minibuses decreased. The group’s overall gross profit margin improved from 5.0% in 2006 to 7.8% in 2007.
Subsidy income increased from RMB50.2million (US$6.3 million) in 2006 to RMB140.1 million (US$18.4 million), mainly due to a new Chinese government grant to a Brilliance subsidiary.
The group recorded net income of RMB86.1 million (US$11.3 million), compared with a loss of RMB385.1 million (US$48.4 million) in 2006. Mr. Wu Xiao An, Chairman, saidm ''I am pleased to report that the Group has achieved its goal of returning to profitability in 2007 after experiencing two years of losses attributable to equity holders of the company.”
Renault’s first-quarter revenues rose 4.2% to €10,203m
Renault has reported revenues of €10,213 million in the first quarter of 2008, up from €9,793 million for first-quarter 2007 on a consistent basis. The vehicles and sales financing divisions made positive contributions of 4.2% and 3.9%, respectively.
Vehicle sales revenues grew 4.2% year-on-year to €9,697 million in the first quarter on a worldwide sales increase of 6.5% in the same period, 'dampened' by an unfavourable exchange rate. The Sales Financing subsidiary, RCI Banque, contributed €506 million to revenues, up 3.9% on a consistent basis. This positive trend resulted from a 2.85% increase in average loans outstanding, together with an increase in average interest rates over the period.
Renault said its Dacia business remained “on excellent form with a sales leap of 71.2%”; production lost during the strike at its Pitesti plant in Romania did not impact on Q1 figures, since it began in the last week of March – and was settled last week.
Kia customers targeted in e-mail scam
Kia Motors (UK) Ltd., has issued a warning to its customers and to other motorists that unscrupulous individuals are perpetrating an e-mail scam hiding behind the brand. E-mail recipients are being advised that they have won a major prize in an e-mail lottery and are invited to provide various personal details including bank details so that prize money of up to £750,000 and a free car can be awarded to them.
The contact details include the name The Kia Company and e-mail and telephone numbers in the UK.
Stephen Kitson, Communications Director of Kia Motors (UK) Ltd., said: "We have never run and e-mail lottery, we are not running an e-mail lottery and we are unlikely ever to run an e-mail lottery."
