449 Harding Industrial Drive, Nashville, TN 37211
January 20, 2015
Dear customers and friends,
The 2015 North American Int...
449 Harding Industrial Drive, Nashville, TN 37211
Observations from the floor of the 2015 Detroit Auto Show…
Make no mista...
449 Harding Industrial Drive, Nashville, TN 37211
All in all, there were also plenty of new cars to see. Here are some hit...
449 Harding Industrial Drive, Nashville, TN 37211
No, the Detroit Auto Show is not as sexy as Tokyo or Frankfurt or even L...
449 Harding Industrial Drive, Nashville, TN 37211
Tesla Motors CEO and founder Elon Musk has gained major influence in the...
449 Harding Industrial Drive, Nashville, TN 37211
Some final random thoughts…
General Motors CEO Mary Barra spoke to the W...
449 Harding Industrial Drive, Nashville, TN 37211
Ford GT
449 Harding Industrial Drive, Nashville, TN 37211
The Chevy Colorado, Motor Trend 2015 Truck of the Year
449 Harding Industrial Drive, Nashville, TN 37211
Toyota FT-1 concept
449 Harding Industrial Drive, Nashville, TN 37211
Nissan Titan XD
449 Harding Industrial Drive, Nashville, TN 37211
The Buick Avenir concept
of 11

NAIAS-2015

Published on: Mar 3, 2016
Source: www.slideshare.net


Transcripts - NAIAS-2015

  • 1. 449 Harding Industrial Drive, Nashville, TN 37211 January 20, 2015 Dear customers and friends, The 2015 North American International Auto Show (NAIAS) is underway here in Detroit, and once again there is plenty of focus on advanced technology, alternative powertrains, new concepts, and the key business issues facing the automotive industry today. Again this year the show reflected upbeat enthusiasm. With good reason, as 2014 light vehicle sales in North America – pushed by a 10% gain in December – grew to 16.6 million units. That’s an increase of nearly 6% from 2013 and the highest overall volume in nearly a decade. Forecasts for 2015 are projecting results that will likely approach 17 million units. Presented here are my observations of the show and perspectives about the state of the industry. We acknowledge the complexity of the automobile business and the continued challenge of the current economic surroundings and global socio-political uncertainty facing OEMs and suppliers today. But we also reflect the strong optimism we saw from the floor of the show this week. Please note our point of view and we welcome your comments and feedback. Phil Biggs Chief Business Development Officer NeXovation phb@nexovation.com
  • 2. 449 Harding Industrial Drive, Nashville, TN 37211 Observations from the floor of the 2015 Detroit Auto Show… Make no mistake, the Google car is real. The buzz at the Detroit Auto Show was all about self- driving cars. Since launching its first concept and prototype in 2006 Google has been rapidly making progress with its development of the self-driving car. Back then, armed with a $2 million grant from the Department of Defense and its own private funds, they simply modified a few Prius and Acura cars with their experimental driverless technology. They pushed for and received legislative permission to test and operate first in Nevada, and then soon after Florida, California, and Michigan followed suit. Today the Google car offers a technology mix that includes sophisticated sensors, long-range lasers, data transfer devices, vector tools, full GPS software with geometric and semantic information, and Lidar, the technology that measures distance by illuminating a target with a laser and analyzing the reflected light. Lidar is now the primary method Google uses to create the autonomous driving experience. No longer just retrofitting other cars, Google today is building its own self-driving podmobile – albeit tiny and slow – but they admit they may need an assist from global automakers to complete the “complex process.”Dieter Zetsche, CEO of Daimler Benz, and Carlos Ghosn, CEO of Nissan, both spoke of their own self-driving car projects. Zetsche believes that “cars will turn into mobile homes in the very best sense of the word. They will be exclusive cocoons on wheels that enable people to do exactly what they need or want to do. This is the redefinition of automotive luxury.” Google has a smartteam out in Mountain View, CA…smartenough to realize that between safety and regulatory requirements, cost containment goals, and design hurdles it makes sense to seek some help. Venerable system suppliers such as Continental, Bosch and LG are doing just that, and Google realizes partnerships with the automakers themselves might not be a bad idea either. Google's self-driving car team is based mainly in Silicon Valley, but vehicle prototypes are being built in Livonia, MI. At $75,000 alone to install the Lidar capability, cost is no trivial matter and Google’s decision to locate in the heart of the traditional industry will undoubtedly improve technical, time-to-market and cost decisions as they eventually reach commercialization phase. Chris Urmson, Google Car director, told the World Congress last week, "You forget just how complicated building cars is and how much engineering effort, thought and design it takes, how smart the people are that are able to pull this off...at scale, every day. I think anyone who looks at Silicon Valley as the only place that innovation happens is dead wrong." So contextual awareness does matter to the Google thought leaders, perhaps just as much as to the autonomous car itself. As Business Insider reported, “Google has developed the most radical idea about transportation since the car replaced the horse, when a car driven by a human decisively beat the horse ridden by a human. Now if the Google Car future comes to pass, the car driven by a human will be beaten by a car driven by a computer.” We’ll see about that. Stay tuned.
  • 3. 449 Harding Industrial Drive, Nashville, TN 37211 All in all, there were also plenty of new cars to see. Here are some hits and misses… Among the new debuts, the Ford GT was the talk of the show. As people walked up to the GT they generally thought they were looking at a Lamborghini or Ferrari. Peter De Lorenzo, of the Auto Extremistblog wrote: "If it weren't for the Ford GT, the show would have been Sleepy Town." That’s a bit unfair although admittedly the Volkswagen Golf, the Motor Trend Car of the Year, didn’t have anybody doing backflips. Despite its technical and functional appeal, the Golf was a bit underwhelming and left show-goers scratching their heads. Even the Motor Trend editor gave a lukewarm review: “While we admit that the 2015 Golf won't make the average freeway-goer take much notice, the devil's in the details.” Perhaps it was a miss because it didn’t have the kind of “sizzle” most award-winners have shown previously. But the Hyundai Santa Cruz concept was cool-looking and wowed everyone. Dave Zuchowski, CEO of Hyundai North America, said he hopes that the Santa Cruz will be a “millennial magnet” and even attract Baby Boomer small truck buyers in the spirit of long-ago Chevy El Camino and Ford Ranchero. A tall order, yet “old-school” throwback marketing works when the product is really good, and the Santa Cruz certainly looks good enough…if it ever makes it to production. Because of lower gas prices, trucks are on everyone’s radar this year, and Chevy Colorado, the Motor Trend Truck of the Year, and the new Dodge Ram Rebel didn’t disappoint. The new Toyota Tundra and Nissan Titan XD drew mostly raves, and the Ford F-150 Raptor is truly capable of broadening the truck market while transforming the truck segment’s look and image to woo many potential new truck buyers. All in, there was a wealth of escapist as well as utilitarian offerings. Other notable debuts included the stunning Acura NSX, the impressive 640-horsepower CTS-Vfrom Cadillac in the ever-growing luxury segment, and the overhauled Chevy Volt in the alternative powertrain segment. As Dr. Dave Cole told me, “This industry has made a profound jump in design, quality, and performance. It’s very difficult to find something here you don’t like…everything is well built and stylish.” NAIAS puts the spotlight on Detroit. According to the Detroit Chamber of Commerce,the 2015 Detroit Auto Show's regional economic impact will top $400 million for the first time since 2008. In those dark days, there were fewer automakers showing new cars, and some threatened to not even come due to the deep recession. This auto show is a strong socio-economic indicator of how things are already improving in Detroit. Tom Walsh of the Detroit Free Press reported that Friday’s Charity Preview raised more than $5 million, “boosting the total donations for children's charities to more than $100 million since the Detroit Auto Dealers Association began the black-tie gala in 1976.” With the Motor City only recently emerging from bankruptcy, the auto show acts as an economic bandage this time of year.
  • 4. 449 Harding Industrial Drive, Nashville, TN 37211 No, the Detroit Auto Show is not as sexy as Tokyo or Frankfurt or even Los Angeles…but it remains the most important car show destination in the world because of nearly 600 vehicles on display and more than 50 debuts and unveilings. With eye-popping muscle, concept and niche specialized products on display, NAIAS is helping Detroit turn the corner towards recovery. As Walsh wrote, “What better way to kick off the rebirth of the much-maligned Motor City than with the Cobo Center looking better than it has in forever, welcoming 5,025 journalists from 60 countries.” Add to that the sales growth and profits realized throughout the automotive value chain “as consumers enjoy plunging gasoline prices and low-interest loans” and you have a recipe for a good kick-off to what is expected to be a terrific year for the industry. Gathering information about Baby Boomers, Millennials, and women is a daunting task… Whether it comes from product specialists on the auto show floor, market intelligence teams operating out of corporate headquarters, or social media interaction minute-by-minute, the automakers are serious about better understanding the ever-changing and fickle expectations of car buyers all around the world. Gathering, disseminating and applying consumerpreference data is a huge challenge…complicated by the how market segmentation continues to shift continually. It’s a chess game as OEMs continue to sub-divide demographic segments to make an ever- complex design-to-cost business case. All this is done to lure new car buyers with sexy styles, colors and technologies aimed at desirable demographics: the aging Baby Boomer, women, and the elusive millennial car buyer. Even with excellent U.S. growth over the past three years, to be sure there are factors preventing an all-out boom in car sales: Millennial lifestyles keep younger people avoiding car purchases as they use public transportation and other ride alternatives such as Uber and Zipcar. Coupled with this lack of interest is sluggish job growth and stubborn economic uncertainty which is causing many to stay away from dealer lots as some consumers just don’t have the confidence to make a purchase.Finally, R.L. Polk confirms that the average age of all light vehicles on the road today now stands at a record high of 11.5 years, which should prove greater pent-up demand but in reality means that consumers are now waiting longer before they buy. But that’s not deterring the automakers. Last year the Hyundai Genesis was unveiled to compete in the highly-competitive luxury segment and features all-wheel drive…aimed at women drivers who want safety with good looks “priced thousands less than snobbier Euro-competition,” said USA Today. Meanwhile, the VW Beetle Dune is aimed at “progressive” Millennials, the Mercedes- Benz CLA is targeted at “successful”Millennials, and the sleek new Lincoln MLC cross-overutility vehicle is aimed squarely at recent Baby Boomer empty nesters, who desire style and more flexible space than a sedan. Talk about micro niches…the segments just keep getting skinnier!
  • 5. 449 Harding Industrial Drive, Nashville, TN 37211 Tesla Motors CEO and founder Elon Musk has gained major influence in the auto industry. Elon Musk spoke to 1400 opening-day World Congress attendees and there’s little doubt that he is currently thought of as the industry’s resident “rock star.” Most would agree he is a formidable thought leader if not a car guy, and while he has been deemed controversial in the past, today he has become a bold voice in the industry. Musk talked about plans to launch a cheaper Model 3 version of his $75,000+ Model S sedan. His Model 3 is slated to be on the market by 2017, and Musk revealed that overall Tesla is projecting sales of 500,000 electric vehicles (EVs) by 2020, and he fully expects to sell 2.5 to 3 million by 2025. “The need for sustainable transportation is incredibly high. Even in the face of massively declining oil prices I think it only becomes more urgent that the industry advance its development of electric vehicles. Sooner or later we will go fully electric…and sooner will be good for the world,” Musk claimed. Never mind that demand for EVs is nowhere on the minds of the average consumer, and the Tesla business model has neither proven that it can effectively build millions of electric cars nor shown itself ready to turn a profit until 2020 at the earliest. His key prescription for success is to drive down overall battery costs “by means of our Giga factory concept. If that doesn’t work, I should be fired.” Musk talked about establishing “our retail foundation with our own Tesla stores before reaching to other dealer options.” However, his national direct sales channel is unlikely to materialize due to strictstate-by-state dealer laws governing new auto sales, making it extremely difficult for Tesla to leap this hurdle to market. He admitted that Michigan and Texas are his “test cases” on the path to a direct distribution, Amazon-like success story. Musk asserted “Electric vehicles are simply a fundamentally better architecture,and the traditional OEMs should consider building more EVs too.” In a perfect world he’s right. But with dealer- distribution obstacles, uncertain production methods, a take-rate that hovers below 2% among U.S. consumers, and prices ranging 35-40% higher than traditional cars, it’s no wonder that there is negligible demand for EVs. When you add to this the significant business risks in fully integrating an EV infrastructure, plus proving out untested warranty liabilities, the road ahead is not a clear path. And, of course the incidents of car fires aren’t helping. Whew. Did we mention gas prices have dropped? Nevertheless, most of the automakers have a considerable stake in seeing the EV succeed, and there is no discounting the sheer optimism and vision Musk brings to the auto space. Musk, an outer spaceenthusiast, concluded, “Mass optimization by order of magnitude is a lesson I learned when comparing space exploration and rocket science to building electric cars.” Even when his non-traditional business case is difficult to explain to the accountants, it’s hard to fault the unbridled passion of a rocket guy…
  • 6. 449 Harding Industrial Drive, Nashville, TN 37211 Some final random thoughts… General Motors CEO Mary Barra spoke to the World Congress Wednesday and reaffirmed how she and the GM leadership team spent 2014 changing cultural behaviors in response to the ignition switch recall fix. In regard to safety standards, Barra said that GM has moved from “resiliency to resolve in our efforts to avoid those product quality failures in the future.” Today there are new sign-off procedures, new quality integrity processes, and key safety protocols in place, and safety is now benchmarked against aerospace and Nuclear Navy standards. Barra also talked at length about the vigorous new GM product queues. She believes the stunning new Buick Avenir concept is “buildable” but understandably wouldn’t commit time-wise. Cadillac is moving its sales and marketing functions to NYC in order to differentiate itself as a luxury brand, but there will be continual and necessary interaction with GM HDQ in Detroit and GM Proving Grounds in Milford. Barra, who once was plant manager of the legendary GM Hamtramck plant, spoke with an authentic sense of commitment to transformation and excellence when asked about the next few years and as she reflected on her 35 years with the company. And, as someone who just tries to live as an everyday Detroiter, she said “my kids aren’t interested in what I do as CEO of General Motors…they grade me on how well I do as a mom.” A sincere, humble and compelling leader. Today automakers are faced with complicated systems integration issues and must manage complex supply chains and resource shortages worldwide with a shrinking pool of talent. The key to continued success is how OEM engineering teams support individual field teams to address mounting plant readiness and product launch readiness challenges. All of this in light of the fact that fewer Millennials are seeking engineering professions and more Baby Boomers are retiring. In this context, the product development call of duty is clear: to closethe gap between engineering requirements and commercially viable new applications that deliver real aspirational value to car buyers worldwide. Not for the fainthearted as 2015 forges forward, but it’s inspiring how the auto business takes on a moving target every day and success is found only in the rear-view mirror in such a fast-changing industry. Tennessee Governor Bill Haslam was seen touring the media preview opening day of the show. Always approachable, always in search of new ways to promote his state. The Governor and his team are actively helping Tennessee schools place greater emphasis on STEM (science, technology, engineering and math), and he’s creating innovation zones to generate new R&D platforms. Tennessee leads the country in workforce development re-training programs, and Governor Haslam is way out in front in managing these critical efforts.
  • 7. 449 Harding Industrial Drive, Nashville, TN 37211 Ford GT
  • 8. 449 Harding Industrial Drive, Nashville, TN 37211 The Chevy Colorado, Motor Trend 2015 Truck of the Year
  • 9. 449 Harding Industrial Drive, Nashville, TN 37211 Toyota FT-1 concept
  • 10. 449 Harding Industrial Drive, Nashville, TN 37211 Nissan Titan XD
  • 11. 449 Harding Industrial Drive, Nashville, TN 37211 The Buick Avenir concept

Related Documents