Idhaya – Engineering & Technology Blog, Industrial & Mechanical Engineering Information

Automobile production has grown from an industry of small companies that made simple carriages to the international corporations that now mass-produce advanced and reliable automobiles across the globe. Innovations and changes in any industry take time to hold ground, require the participation of the consumers, and have to deal with the government regulations. New technologies can be applied to one area at a time and the practical implementation requires many processes. As regards the automobile industry, any part or a new component for its full development may take a long time. Processing may involve years to incorporate new concepts into a practical use-able model. Time is required for multiple reasons such as, for designing, building and even for installation of production tools and then testing the new systems using mock ups. In preproduction vehicles to see what happens to overall performance, it takes additional time to monitor the pros and cons of the product.

Automobile companies and corporations are focusing and responding to the many sectors of this industry in quite an effective manner. The emerging fuel-consumption and air-quality demands are on the rise and need innovations. Diesel engines, catalytic converters, electronic fuel injection, turbochargers, high-strength steels, aerodynamic bodies, front-wheel drive, and other technologies are introduced to cut and maintain operating costs. Industry developments of the late 1990′s focused on joint international ventures among the strongest companies and global expansion into new markets. Globalization has made it increasingly difficult to identify an automobile as the product of one company or country. At the beginning of the 21st century, the trends of global manufacturing changed with new technological methods. Computerized auto designs are producing splendid results and the search for alternative fuels and more efficient automobile designs is a subject of hot pursuit.

In the auto industry, researchers analyze market trends, consumer surveys, and buying patterns to determine what consumers want, and then suggest what kinds of cars to make. Before a new car is built, it must be researched, designed, and developed into a workable product. The designers work to shape new ideas into tangible parts or products. Engineers adapt existing parts for the new model and draw up new plans for a custom-built working example of a new design and so manufacturers build a few prototypes before they set up a factory to build the new car. Product planners monitor the process along the way and make sure that an approved new car program finishes on time and more over within its permissible budget. However, technology is still moving at a great pace and microelectronics seems fully incorporated in the future automobiles and may become as commonplace as radios once were. On-board systems are becoming available that enable drivers to find destinations through voice-activated navigation or make cellular calls using the computer. These computers can access the Global Positioning System or GPS and display maps to help drivers avoid congested freeways and find better routes to destinations.

In the future vehicles will be made of different materials such as improved plastics or composites that will reduce car weight, provide fuel economy, allow smoother surfaces and shapes that are more complex, better management, easy controls and safety in cases of crash.

An important driving force to develop chemical industry is the need of chemicals to improve agricultural and industrial products and people’s daily life, which depends on chemistry, physics, mathematics and other various engineering techniques. Among all these disciplines, chemistry keeps the closest relationship with chemical industry and it is the base of chemical industry’s development. Once, disciplines like “industrial chemistry”, “applied chemistry” appeared and played a certain role in developing chemical industry. In addition, capital construction of chemical industry can not leave civil engineering and electrical power engineering. Chemical machinery can not leave mechanical engineering and all sorts of metal materials including stainless steel and special steel. What mechanical engineering pays most attention to is the reliability under high temperature and high pressure which means the probability of the systems, equipments and elements to realize required functions under specified conditions. As the equipment production of modern chemical industry tends to be in a large size with a single set, it is pretty important to study the probability.

The control of chemical process can not leave electronics, computers and automation. All the theories and instruments can not only be applied to production process, but also solve various problems about development forecast, decision making and operating management. In 1980s, many advancing sciences like micro electronic techniques and biotechnologies in new technological revolution made higher requests on chemical industry, which finally promoted chemical industry’s further development.

Micro electronic techniques develop computers, microprocessors and information technology. The application of large-scale and super-large-scale integration in micro electronic techniques puts many new requirements on chemical industry. For instance, chemical industry must produce hyperpuregas, pure water, optical resist, liquid crystal, caustics, dopant and adhesive and so on for micro electronic techniques. Hyperpuregas used in micro electronic techniques includes both common gases like oxygen, hydrogen, nitrogen, carbon dioxide and argon and many other nonexistent gases in nature like borane, boron trichloride, dichorsilane and carbon tetrafluoride. The purity of these chemical products extremely influences the finished product ratio of semiconductor. Finished product ratio can reach 10 percent if industrial gas is used in the process. While if gases with impurity level less than 10 parts per million and some corresponding high purity chemical reagents are used the process, finished product ratio can reach 70 to 80 percent.

Biotechnology has been widely used in chemical industry. In recent years, biotechnology has begun to make use of immobilized cells to produce acrylic amide through vinyl cyanide. In addition, enzymes especially immobilized enzymes have also been used to produce organic products. It is effective to apply biotechnology to chemical industry, for the application can be of small investment, less energy and pollution. Many materials like interferon, insulin and monoclonal antibody which are rather difficult to obtain through conventional methods in chemical industry can be produced through biotechnology. Biotechnology comes up with many new requirements for chemical engineering and a new discipline named “biochemical engineering” has appeared. Biochemical engineering is to study biological catalyst, biochemical reaction engineering and new type unit operation. Nowadays lots of achievements in this field have been obtained.

Subject: work together and face challenges together! Concept of sustainable development strategies, promoting the development of the modern chemical industry!

Purpose of the conference: the chemical industry has become a modern society, one of the most important industry, are faced with energy, resources and environment crisis. “Fifth China-US Chemical Engineering, Environmental Protection and Biotechnology Exhibition and Conference,” The purpose is: to enable academic scientists and industry engineers to share experiences, exchange ideas, new viewpoints, and research and all other areas of chemical engineering problem; discuss the challenges and practical solutions to be effective, highlighting “sustainable development” theme of the meeting. Fifth China-US Chemical Engineering, Environmental Protection and Biotechnology Exhibition and Conference will provide a good platform for China, the United States and other countries and regions to work together.

To accomplishing this will be: understand the development of the window shows the chemical industry; cultivation of China’s chemical industry Economy Development boosters; participation and integration into the Chinese chemical industry, the best way; to build production, management, sales and consumer interactive bridge; display themselves and develop themselves, an excellent opportunity to meet the self; build corporate image, cultivate Brand, promote enterprise product positions; exchange information, communication industry, a feel, look for business opportunities, the main channel; build unity, cooperation, fair competition, mutual benefit and common development platform.

Approved by: The People’s Republic of China Ministry of Science and Technology

Authority: CAST Supporters: China Chemical Industry in various professional committees, provincial and local Society

Organizer: Asia Pacific League of China Chemical Industry Institute of Chemical Engineering American Chemical Society

Supporters: China Chemical Industry in various professional committees, provincial and local Society

Overseas support: A PC ChE members of the group of the International Chemical Union International Institute for Environment and Development International Council of Chemical Associations

International Society of Chemical Ecology International Association of Asian Chemical Corrosion of Chemical Engineering North American Union

Film Society of North America-wide Chemical Engineering Union, the European Chemical Industry Council of Europe

Russia, N. D. Zelinsky Organic Germany GBM Chemical Society Chemical Manufacturers Association of Canada

Sponsor: Pine Si Feike International Exhibition (Beijing) Co., Ltd.

Sponsor: Advertising Co., Ltd. Tianjin New Division

Overseas Group Exhibition: WW PP RC CHEMTECH SECRETARIAT M. UMBCOR, INDIA

Official website: www.apcche.siteem.com

Schedule: report (exhibit): 11-12 October 2009 Opening: at 9 o’clock on the October 13, 2009

Academic activities and exhibition: 13-15 October 2009 closing and moving out: at 16 o’clock on the October 15, 2009

Xu Yan U.S. Financial crisis Since September 2008 Since the outbreak has spread to the world, forming the world’s financial crisis. Although the financial crisis on China’s economy had some impact, but the impact of the crisis on China is limited, controllable. Financial crisis to some extent inhibited the growth of Chinese economy, but on the other hand, the outbreak of the financial crisis, the world prices of energy and resources downward trend, China can use the world’s energy and resource prices lower this favorable opportunity for economic development. The Chinese government has taken measures to cope with external shocks, efforts to maintain economic stability, financial stability, capital market stability, the Chinese government is also working to speed up production and sales within the foreign trade enterprises innovative docking mechanism to further prosperity of the domestic consumer market, stimulate domestic demand.

Is facing many difficulties and challenges, but in the current financial crisis, China’s chemical industry has a major development opportunity:

First, the development of China’s domestic chemical industry is better overall environment, the product market potential; Second, the policy of stimulating domestic demand for the chemical industry to develop new markets; Third, the chemical industry globalization, the international chemical industry in China management created the conditions for the acceleration of global economic integration, international cooperation in the form of a more diversified, raw materials procurement and product sales channels expand, expand overseas markets for the Chinese chemical industry, to participate in international competition and provide favorable conditions for the vast stage; Fourth, the possibility of introducing technology to further increase, with China’s chemical industry, the continuous emergence of new scientific research results, the continuous improvement of production levels, continuously enhance enterprise competitiveness, market share continues to expand, foreign technology to China The transfer has also begun its growth trend; fifth, raw material prices, investment in fixed assets for production and created good conditions. Weakening global economic situation, international oil prices continued to dive, not only that, domestic and foreign chemical raw materials, steel, cement and other commodity prices continued to fall, the decline in prices of raw materials for the chemical industry’s production and reduce costs of investment in fixed assets created good condition.

“2009 Asia Pacific International Chemical Industry Exhibition”, “the sixth Sino-US Chemical Engineering Forum & Exhibition”, “the sixtieth anniversary of the founding of the outcome of Chemical Industry Exhibition” will be effective reorganization of resources, focus on the new display equipment in China Chemical Industry and technology products for scientific research institutions, production enterprises, traders and end-consumer customers with a technology transfer, financing, trade, exchange of learning platform, designed to further stimulate domestic demand to help you achieve a new round of trade and cross docking.

—- Asia-Pacific International Chemical Industry Exhibition: Asia-Pacific region’s largest chemical organizations in the exhibition organized by the Conference, with a fixed number of well-known corporations and professional development experts to come;

—- The fifth China-US Chemical Engineering, Environmental Protection and Biotechnology Exhibition and Conference: Chinese Chemical Society one of the key activities, ACS (American Chemical Society American Chemical Society) has more than 160,000 members, is the world’s largest technology association, and is the world’s leading provider of authoritative scientific and technical information to one, ACS walking around the front of the global chemical industry and is the world chemists, chemical engineers and related professionals, the first base;

—- Sixtieth anniversary of the founding of the outcome of Chemical Industry Exhibition: Ji, 60 birthday, focus on displaying the founding of 60 years, especially since the reform and opening up 30 years the chemical industry in China made great achievements in the modern chemical industry cluster in China the latest equipment, technologies and products;

—- School Si Feike International Exhibition: through with many international trade association (Association) resources of good cooperation, the three activities combined in one, and expanding the scale of the exhibition, by

Spring Festival eve Zoomlion independent research and development, with fully independent intellectual property rights HTH60T Slip Form Paver, Paving the field trials a success. The hot discussion in the industry caused by the good news in a number of custom exclusive China Slip-form Paver market “cake” to listen to international manufacturers, but can not help a bit Xin Chan. The “Caterpillar”, “Elephant”, “Komatsu”, “liebherr” who dominate the world of construction machinery industry is concerned, turning a blind eye “in conjunction”, “Trinity,” “mountains and rivers” It’s a few vigorous China’s face, which is equal in the self-deception, because these young “Made in China” is the “world to create” an integral and important member of the family brand.

“The East is Red” heart palpitations “China’s Wolves”

There is no doubt that those who have been called “The East is Red” world-renowned manufacturers will not see that the end of last century due to Zoomlion successfully developed and led the scale of manufacture with independent intellectual property rights of concrete pump, so that was originally from overseas Corps dominate the pattern of the Chinese market collapse.

It goes without saying Zoomlion successfully developed China’s first passenger line bearing layer of paving for the construction of modern equipment with independent intellectual property rights — Slip-form Paver occasion, that is, sliding share of foreign brands machine shop area of road construction in our country was shaken when the monopoly position. Even more gratifying is that, as the “Changsha to create” a lot of high-tech products with independent intellectual property rights in the world, especially Europe and the United States mainstream market step by step, and then have a mobile cranes and tower cranes and revision of international standards for decision-making power, the world’s manufacturing predators suddenly found that “Chinese Wolf” came.

In Changsha, the world would not dare to look down upon the “Chinese Wolf,” with independent intellectual property rights covering the largest construction machinery, biological medicine, new materials, tobacco, food four major areas of Zoomlion, Broad Air Conditioning, Sany Heavy Industry, mountains and rivers Smart, Bo-Yun is one of the outstanding new material, due to the growth of a source of intellectual property products, which are known as China’s creation. In Europe and America, the Middle East and other critical market, which is different from the clothing, shoes, hats, toys, small appliances and other traditional “Made in China”, but to influence the industry’s brand name for itself, the stage is a challenge to technology, the more the peak of the collar, shadow frequent flash in the world’s top trade show, the world’s top 50 list of construction machinery.

“Wolves surgery” and “Patent pool”

“China’s Wolf” The core competence is the outcome of independent research and development and its follow-up forces on how? According to Municipal Intellectual Property Bureau of Statistics, in 2006, Changsha, mainly from the four pillar industries of domestic patent applications reached 4714 last year, for 4735, which is equivalent to two years, the amount of patent applications Changsha, ten years from 1991 to 2000 patent applications the amount of the sum.

Reflects the strength of patent Changsha in 2006, 2475, for the province’s patent application for the year 69.2%, accounting for the city’s 52.5% of the amount of patent applications, higher than the national average doubled over the same period, ranking the country capitals City forefront; 2263 patent applications last year, accounting for 46.9% of the amount of patent applications, higher than the national average of 20 percentage points over the same period. The past two years over the same period the total invention patent applications accounted for 50.1%, which is the city’s “15″ period of 1.23 times, as the history of Changsha, the fastest-growing period of invention patents. At the same time, Changsha relying on independent intellectual property rights to cultivate well-known trademarks in China has reached 23, ranking the provincial capital cities in the world, central and western cities in the first.

Patent Family public Quefei lone warriors, as original “patent pool” to form alliance deductive “Wolves technique”, so that the outcome of intellectual property-rich area, Changsha unique scenery. Among them, the domestic industry’s first patent pool – Patent Protection Association of China Intellectual Property Alliance, hollow floor industry, especially concern.

Has a hollow floor area of 5000 a number of patents (including patent number 3600) in Changsha star light building materials Co., Ltd. is the industry sponsor of the patent alliance with the chief and its own 81 member units. The past two years, the Union use of intellectual property protection laws, crack down on infringement, the nationwide launch dozens of pieces of patent rights protection litigation, patent infringement indemnity 20 million yuan, became the successful application of intellectual property rules to defend a model of industrial development, while making international competitors because of fear in the intellectual property, “under fire”, stop at the Chinese market outside.

The Chemical Industry constitutes the companies that make chemicals for industrial as well as some other use. There are largest corporate producers worldwide, with plants in legion countries.

Chemical Industry carries large number of employee, result the large database so it is very much necessary of ERP software for Chemical Industry for rapid growth of the company.

Like other industry Chemical Industry is also possesses many departments like Purchase department, Sales department, Production department, Financial Accounting etc.

Eastern Software Systems offering ebizframe ERP for Chemical Industries, specially designed ERP for chemical manufacturers company offers maximize manufacturing assets, minimize operating costs, and provides the tools you need to gain control and full control of decisions on orders, inventory, production, and distribution, many Alerts on Dashboard. Improve the Ability to Achieve Operational Excellence with ERP for Chemical Manufacturers.Based on our best performance on chemical industry and highly qualified engineers the ebizframe ERP solution can be implemented within few months time, no matter how big the company size.Company improves productivity, increase sales & revenues and improves customer service.

EASTERN SOFTWARE SYSTEMS Pvt. Ltd. A premiere IT Products and Services Provider has provided advanced ERP solutions to over 600 clients.

Ebizframe (Name of ERP software provided by Eastern Software Systems) has been successfully implemented across various industry verticals including Chemicals, Engineering, Auto Ancillaries, Textiles, Hospitality, Mining, Retail, FMCG etc.

Eastern Software Systems Pvt Ltd is CMM Level 5 Company and ISO 9001: 2000 Certified also offering Offshore Development and Support and Total IT Outsourcing.

Some of the most common engineering positions include computer engineering, civil engineering and electrical engineering.

Chemical Engineer

Chemical Engineers work to combine both Chemistry and Engineering in an intelligent way in order to closely study the production of chemicals.

Environmental Engineer

This is quite a varied role and requires experiences in several different fields including Biology, Engineering, Chemistry and a knowledge of the environment.  An Environmental Engineer spends their time monitoring air and water pollution in order to be able to design recycling plans to conduct research on hazardous waste control.

Industrial Engineer

The main role of an industrial engineer is to ensure that companies and organisations produce their products in a safe, fast and reliable way.

Marine Engineers

This is a very demanding but interesting role which can result in a very rewarding and varied career in the Engineering industry.  The main responsibility of a marine engineer is to make, build, create and design waterborne vehicles such as aircraft carries, submarines, tankers and ships.

Cost Engineers

The main goal of a Cost Engineer is to use their knowledge to predict and deliver projects costs.  A Cost Engineer has the ability to accurately estimate a budget for a project and ensure that projects are kept within the agreed budget.

Some of the tasks that a Cost Engineer might be involved in include predicting how much resources, allocated time and money a project will need to function effectively.  Candidates wishing to advance into this role must arm themselves with an in depth knowledge of the Engineering Industry.  They must also have the ability to make the appropriate links between science and business delivery.

Project Managers

This is a standard role that is essential to the Engineering Industry and a successful project manager can play a significant part in the success and completion of an Engineering project.

Project managers have the ability and authority to plan, control and organise the smooth running of industrial processes.  Therefore they must have proven planning and organisational skills.

Some of the main responsibilities of a Production Manager in the Engineering industry are making sure that projects are cost effective and working to budget, putting together production timetables, quality control, picking and maintaining equipment and looking out for training needs.

Automobile industry : Disruptive technologies are the need of the hour !

 

                                           SUNIL KEWALRAMANI                  April 28, 2009

 

 

Hearing the new, more aggressive restructuring plan offered by General Motors reminds one of the scenario for mankind jokingly foreseen by Woody Allen. “One path leads to despair and utter hopelessness. The other, to total extinction. Let us hope we have the wisdom to choose correctly.” If – and it is a big if – the plan is accepted by debtholders, they will be taking a disproportionate hit compared with other principals. Only shareholders will fare worse – although unbelievably GM’s shares soared 20 per cent.

Under the plan, the union-run healthcare trust would exchange half the cash owed to it for shares, making it a substantial shareholder in a restructured enterprise. GM’s scheme also assumes another $11.6bn in cash from the Treasury. In addition to the $15.4bn of loans received, part of this would be retired in exchange for half the carmaker’s equity. These two steps would give unions and Treasury about 89 per cent of the company, even before private debtholders are taken into account. GM envisions some $27.2bn of that debt being converted to equity, giving holders another 10 per cent of the company.

Whatever happens, shareholders will be either wiped out or nearly so. Even a minimal recovery depends on debt-holders taking a bigger financial hit than the union. Assuming unsecured lenders accept, the restructuring plan would create a much less indebted but also far smaller GM with about 40,000, or a third fewer, US workers, and four core brands with a little over half today’s number of dealerships. This makes sense, as do shedding Pontiac and plans to axe Saturn and Hummer. Someone has to pay. More government cash may be needed to avoid Chapter 11. A bankruptcy restructuring may be messier and less pleasant for dealers, workers and suppliers – but more equitable

Detroit Three have their back against the wall

The market capitalisation of General Motors is now below that of Mattel, the maker of Match-box toy cars.  Once industry leader, GM, now finds Toyota’s market value, at $ 145 Billion, now 25 times greater than GM. 

As a poor strategy, the Detroit Three focused on high-margin gas-guzzling sports-utility vehicles and pick-up trucks, which have now lost charm as oil prices have ventured, however temporarily, into unchartered territory. The Three also failed to control labour costs and have not built flexible assembly lines. As a desperate move, Ford has sold its flagship brands Jaguar and Land Rover to the TATAS.  Credit is the automobile industry’s lifeblood and today, the drying up of credit has hit carmakers’ financing arms such as General Motors’ GMAC and Ford Credit hard.   Detroit’s producers are seeking to tap into federal bail-out funds for their financial arms, alongside a $ 25 Billion low-cost credit line to retool old factories.

 

Germany’s Big 3 also face significant  headwinds; devise counter-strategy :

Volkswagen, Daimler and BMW have acquired a reputation for offering cars with cutting-edge technology.  They are however heavy gas-guzzlers and heavy emitters of carbon dioxide. The trio have now decided to launch electric cars, to desist demand destruction due to high oil prices impacting revenues.  Daimler plans to offer Mercedes-Benz S400 hybrid in 2009. However, the luxury sedan will be out of reach but for the more affluent.

 

Europe too catches the slowdown flu :

Sales in the European union HAVE fall 8.3 % compared with last year. Italy was down 20 %, Spain by 31 % and Ireland 49 %. The Italian group Fiat is to stop production at most of its domestic factories in late 2008 for 3 weeks with hundreds of workers laid off temporarily.  Renault is already cutting 6000 jobs round Europe and Peugeot is cutting fourth-quarter production by at least 20 per cent in France.

 

China’s automobile industry too hits a slippery path :

After stunningly rapid growth in the domestic car market—34 per cent in 2006 and 24 per cent in 2007, year-to-year passenger car sales rose an anemic 14 % in the six months to June 2008.  Possible reasons include the almost 70 % decline in Shanghai’s stock market since its peak in 2007, reducing car buyers’ disposable income. Tight government monetary policy has meant fewer purchases of high-end business vehicles.  According to auto consultancy JD Power, China “could be on the brink of a significant pause in demand growth”.  Only the government’s $ 600 Billion stimulus packaged has saved the scene in 2009, and somewhat restored in China’s automobile market. With the world economic outlook still uncertain, it may be quite some time before the third largest world economy returns to more solid growth.

 

Although fuel prices are subsidized in China, sometime back China did hike fuel prices to reflect market reality but this had only a marginal impact on sales : for the average consumer, it added only Rmb100 ($ 15) to monthly operating expense. This, when weighed against the Rmb150,000 average cost of mid-sized vehicle, was not termed demand-destructive in China.  Yet, faltering world economic growth is beginning to hit hard as China is essentially an export-driven economy. This, coupled with uncertainty over whether oil prices will remain at the levels they are at present, could cause some buyers of sub-compacts to defer purchases and compel consumers to look for more fuel-efficient cars.

 

French car market is turbo-charged by cheaper, cleaner cars :

Renault and its French rival Peugeot-Citroen, assisted by government incentives to produce cheaper, cleaner cars, have already started utilizing government incentives to turbo-charge their offerings.  The ‘bonus-malus’ tax system introduced by the French government under President has stimulated purchase of small cars.

 

The Japanese Four got their strategy right

Honda, Toyota, Nissan and Hyundai steadily captured the bulk of the market in compact cars and SUVs, known as crossovers.  Nissan plans to launch an electric car powered by a lithium-ion battery in Japan and the US in 2010.  Mitsubishi is offering MiEV, its version of the electric car, in Japan by 2009.  Nissan believes that the batteries it is developing with NEC will give its car a range of 160km and be 80 per cent rechargeable in 20 minutes. The range could increase to 300km or so within a few years.

 

In her book ‘The End of Detroit’, Micheline Maynard observes that “with their efficient development methods, their focus on manufacturing and most important, experienced engineers in critical management jobs, the foreign companies never forgot that they were in business to develop top-quality cars and trucks that appealed to customers, as opposed to rental-car models and government fleets”.

 

Toyota’s Prius charges ahead

The Toyota Prius, a petrol-electric hybrid vehicle, finds demand far in excess of what it can supply. The delivery time is anywhere between 6 weeks and four months, indicating that Toyota has stuck the right chord with its customers.  Toyota could foresee consumers’ long-term falling out with fossil fuels, and as the pioneer, had sold its first Prius in 1997.

 

Every battery in a Toyota hybrid is made at a factory in Shizuoka, Japan, by Panasonic EV Energy, a joint venture between Toyota and Matsushita Electric, holding company of Panasonic. The factory has an annual capacity of 500,000 nickel metal hydride battery packs a year, acting as a natural ceiling.  Honda has sold 52000 units of its singly hybrid model, a Civic sedan, in 2007 and plans to offer a new hybrid-only five-door that will have an initial annual sales target of 200,000 units, gradually extending upto 500,000 units by 2010.

 

Honda first car-maker to offer hydrogen-powered car FCX Clarity :

FCX Clarity of Honda is the first hydrogen-powered car whose only exhaust pipe emission is water.

 

General Motors to build world’s largest rooftop solar power station in Spain

Its Zaragoza factory in Spain, which produces about 500,000 cars a year, will be covered by 183,000 square metres of solar panels.

 

   Chevrolet Cobalt and Pontiac G5 to General Motor’s  rescue

   At a time when General Motors is trimming capacity and chopping jobs across North America, Lordstown, Ohio is set to hire 1400 workers for a third shift. The plant owes its good fortune to building the sporty, fuel-efficient Chevrolet Cobalt and Pontiac G5 cars.  While demand for big sports-utility vehicles and pick-up trucks are on the decline, Cobalt sales jumped by 18 per cent in the first five months of 2008.

 

GM collaborating with dozens of utilities for its Chevrolet Volt and Saturn Vue electric cars

  Both industries have a lot riding on the success of plug-in cars that will run largely on electricity, with gasoline or other fuels filling a supplementary role. It is collaborating with utility majors American Electric Power Co., Austin Energy, Consolidated Edison Inc., Dominion Resources Inc., Duke Energy Corp., DTE Energy Co., Edison International, New York Power Authority, PG&E Corp., Progress Energy Inc., and Public Service Enterprise Group Inc. The Chevy Volt is designed to run at full speed for at least 40 miles solely on lithium-ion batteries. Auto makers need the cooperation of utilities since they control the new technology’s primary fuel—electricity—and must make sure that the vehicles’ recharging processes must mesh with the electricity grid and don’t inadvertently undermine grid reliability.  Intelligent embedded software will ensure recharge at most optimal time and price.

 

The ‘Jatropha’ Factor :

Gujarat-based Central Salt and Marine Chemicals Research Institute (CSMCRI) is assisting Daimler Chrysler, M&M and GM in using Jatropha as an alternative fuel in their futuristic engines. Diamler’s Jatropha plantations across Gujarat and Orissa are already in their fourth year.  GM on the other hand has made a first-phase investment of $ 0.5 Million to get biodiesel derived from Jatropha tested in six of its vehicles at CSMCRI’s facility at Bhavnagar in Gujarat, India.

 

BMW and Fiat enter into  strategic alliance :

The two are exploring links between Alfa Romeo and the Mini small car brand. BMW already has an engine agreement with France’s PSA Peugeot-Citroen. Fiat has as many as 29 alliances with competitors to reduce R&D costs. After Fiat withdrew Alfa Romeo from the US in 1995, BMW would help reintroduce it.

Alliances are a significant cornerstone of strategies of most car companies today.  BMW and arch-rival Daimler are jointly cooperating with General Motors on hybrids to further their joint interests.

 

India’s rise as the ‘small car hub’ of the world

  Small cars account for 71 % of Indian car market; the corresponding figure in China is 33 %. In September 2008, Maruti’s export sales rose significantly to 6318 units from 4362 units in last year.  Cumulative exports grew 25% to 30,235 vehicles from 24,236 vehicles for the period April-September 2007.  Maruti currently exports Alto, M800, Omni, Wagon R and Zen Estilo to non-European markets such as Chile, UAE, Algeria and East Africa. The year-end launch of its new compact ‘A-Star’ should provide further fillip.  Nissan plans to buy 50,000 A-Star compact cars from Maruti and export to markets in Europe. Bajaj Auto’s exports grew 43 % to 68,572 units in September 2008 as compared to 48,048 units in September 2007.    Hyundai, aided by high demand for its new i10 compact,  continued to be the leader with export kitty swelling from 9508 units in September 2007 to 23911 units in September 2008.  Hyundai exports 40 % of its small car production in India; ‘Santro’ is sold as ‘Atos’ in 97 countries.  TVS Motor reported 40 % growth in exports at 13036 units during September 2008, as compared to 18229 units in the same month last year. 

 

Car penetration in China and India low compared to Developed nations

The car penetration rate in USA is 600 cars every 1000 people.  In Europe, it is 300 cars every 1000 people (since the public transportation infrastructure is more efficient than in the USA). In China and India, it is about 30 cars every 1000 people.  Thus, as these economies grow rapidly, there will be greater demand for cars to ensure mobility.

 

Hyundai’s i10 and Santro are quick to react to the need of the hour :

Launched to challenge other cars in the market, such as Maruti Wagon R, Zen Estillo, Tata Indica and Chevrolet Spark, the two models of Hyundai—i10 and Santro have enabled Hyundai to clock 39 % growth in sales in the domestic passenger car segment over the period April-June 2008.  The i10 model might further affect Maruti and Tata sales as Hyundai has launched its compressed natural gas (CNG) variant and launced the liquefied petroleum gas (LPG) variant in end-2008.  Recently, in tune with changing times, Hyundai launched a new version of the i10 powered by a 1.2 litre Kappa engine whose double overhead camshaft would enable the engine to run at higher speeds. The Kappa engine is being manufactured at Hyundai’s engine and transmission plant in Sriperumbudur and its remarkable fuel-efficiency will significantly raise the bar in the segment.

 

65 % of Maruti Suzuki’s Swift and Dzire are diesel variants :

The growing trend towards diesel is forcing Maruti to launch diesel and petrol variant of Splash hatchback.  Whereas more than 75 % of Tata Motors’ Indica and Indigo sell the diesel versions, more than 65 % of Hyundai’s Verna and Sonata’s sales comes from the diesel counterpart.  Also on the diesel track are  Mahindra’s Logan and GM’s Optra.

 

M&M to speed up e-vehicles, launches CNG variant of Bolero :

M&M plans to launch an array of alternative fuel variants including CNG and hybrid versions of its flagship SUV Scorpio and that of its one tonner pick-up vehicle Bolero.

 

Tata Nano to crank out 30 % more fuel-efficient CRDi diesel engine :

Tata Nano will sport the world’s first 800 cc, turbo charged CRDi diesel engine. The small diesel engine will have fuel injection systems developed by Bosch.  Rest of the diesel engine platform will be developed by Tata Motors and German powertrain maker FEV.  Tata Nano will be the world’s first 800 cc, turbo charged, CRDi diesel engine.  While Bosch is working on the CRDi system for the Nano, Honeywell Turbo India is working on the turbo charger, thus providing a unique fuel-efficient buying proposition.  The 1.3 liter Fiat multijet CRDi engine that Suzuki has used on its Swift is the smallest diesel engine in India thus far.

Tata Nano is beefing up the low-cost car with fitments such as air bags, better designed interiors and engine options to make the Nano export-quality. Tata Nano’s unique fuel-efficient engine and ‘bottom-of-the-pyramid’ pricing of $ 2200 makes it a unique customer-centric proposition and a disruptive technology which when replicated across engine classes, has the capability to transform the way we move, the way we go to work, and basically the way we live our lives.  After making its mark on the domestic scene, Tata Nano has its eyes on the world small car market.  Tata Motors, which plans to deliver its first electric car by the end of this fiscal, has tested Indica platform for the vehicle.  The company is working on five prototypes of electric vehicles.

During September 2008, Tata Motors has launched three new fully loaded variants on its popular Tata Indigo CS range.  The new variants are the petrol GLX model and two diesel LX models—in the Turbo-charged diesel with intercooler and direct injection common rail engine options. Bajaj launched the new Platina 125 cc with the Digital Twin Spark-Swirl Induction or DTS-Si engine during September 2008.  TVS Motor broadened the horizons of its TVS Scooty with the launch of Balancing Wheels, a unique and innovative product that can be effectively fitted on to the Scooty. This indicates how automobile manufacturers are resorting to disruptive innovations to keep their revenue stream flowing.

 

The car industry is leanly managed with high fixed costs and relatively less flab.  This is the sign of the industry’s competitiveness since carmakers have steadily improved their vehicles’ quality in recent years while barely increasing their prices.  For example, despite large improvements in performance, Porsche’s flagship 911 model has been priced virtually the same in real terms since 1992, according to EurotaxGlass, the publisher of Glass’s Guide, the UK car buyer’s handbook. 

 

Disruptive technologies possible in China and India

Most of the developed nations have their past legacy.  They also have their interests and resources to protect.  For example, most have inflexible assembly lines and labour contracts which they cannot terminate except at a steep cost. Thus, they keep defending their gas-guzzling vehicles, and are not customer-centric.

 

On the other hand, China and India, have the advantage of being in virgin territory with not much of past legacy to haunt them.  They have the advantage of being able to experiment with disruptive technologies, especially in an era of high crude prices.

 

Amazingly, unlike the developed nations, most of the focus in China and India is on the high input costs, high interest rates and falling demand.  Commodity prices and interest rates have begun to retreat of late.  Yet, there is little appreciation of how disruptive technologies can bring about a revolution in the way we travel to work and do things.

 

The real disruptive innovations are more likely to take place in Silicon Valley, Bangalore and Chennai rather than in Detroit where car-makers have their legacies and interests to nourish and defend.  High oil prices, although temporarily acted as a dampener for the automobile industry, has come as a blessing in disguise for India in its endeavors to become the “small car hub of the world”.  While the rest of the automobile world is scaling down capacities, Hyundai, for example, has started in India third shift operations in mid-September 2008 as compared to the originally planned October 2008 to meet soaring demand for i10 in domestic as well as overseas markets.  The rest of the world has already benefited by bringing out fuel-efficient innovations to transform the landscape of the world automobile industry.

 

Thus, disruptive technologies seem to be the need of the hour.  Supply-side management rather than overly focusing on the demand side, seem to be the key factors that will reverse the gloom that has descended on the world automobile industry and usher in an era of growth and prosperity in the commuting world.

 

 

Sunil Kewalramani is a Wharton Business School MBA and CEO, Global Capital Advisors. 

The history of automobile industry began in the early 1769, with the inventor Nicolas J. Cugnot who French engineer was found out the first vehicle that run on roads. This automobile was steam powered, three wheeled military tractor. This vehicle had a small range of distance covering capacity, which could run only for a maximum of fifteen minutes. They also required a sufficient starting time. However they were not fit to run on roads due to the bulk load of the steam engines. The steam engine driven automobile was first designed by Oliver Evans in the US.

Internal combustion engine based car powered by fuel gas came into existence in the year 1806. In 1838, Scotsman Robert Davidson invented the first electric locomotive that run on an average speed of 4 miles per hour.

Lack of fuels discouraged the manufacture of combustion engine based automobiles. Then the internal combustion engine automobile which used oxygen and hydrogen mixture came into existence with the Swiss engineer Francois Isaac de Rivaz. Later, automobiles which run on hydrogen came into existence in 1826.

The first man to produce automobiles was Karl Benz in Germany in the year 1888 under license from Benz. How ever the Duryea motor wagon company was invented by brothers Charles and Frank Duryea.

By 1990 various national automobile industries emerged in countries like Belgium, Germain and Nagant. With that the export industries started their work in Paris, cars and trucks were exported to other countries like Tunisia, Egypt and Iran. Though, there were breakdowns, fuel was not sufficient. Proper roads to run cars were very less. Later after 1960, automobile industry seemed more integrated with high technologies, where Japan was a serious car producing country.  

The major change after that was the design of automobiles with safety means. More safety and security features came into existence after 1960. By 1964, the most famous Pony car was manufactured, which is known as Ford Mustang of the present era. More other cars were manufactured after that.

The only country to dominate the automobile industry in the history was the US, with no recognized competitors.

However, other automobile industries from countries like Japan and other European nations which are known as technologically advanced countries started with their momentum slowly and increased their automobile industry productions after the Second World war in 1945. Within short time, the US automobile industry was piled up with the foreign automobiles of Japan and Germany.

The automobile trends reveal one thing clearly that, in the developed countries like US, the production of automobiles is stagnating due to global depression and fall of car markets. The global economic crises on the other hand, led to the complete halt to the production of cars with the reducing car buying demands. Many countries switched to more economical fuel saving cars in this period. Whereas, in developing countries like India and Brazil, the increase as well as the demand in the automobile production owing to the domestic needs is gaining popularity which is the key factor for its growth.