Analysis: Why car makers are casting aside old rivalries

Old rivalries in the world of car making are falling away as companies start to work together to bring down the enormous cost of developing electric cars and autonomy. In June,Toyota said it was hooking up with Subaru to develop a new electric platform that will first spawn an SUV. Mazda has since said it’s joining the programme, while Toyota is also working with Suzuki and Daihatsu on a smaller electric car platform. Ford and Volkswagen’s wide-reaching deal is also one of the most extensive and potentially fruitful collaborations yet. BMW and Jaguar Land Rover (JLR), meanwhile, are working together on electric drive units to take advantage of economies of scale. It goes on. BMW and Daimler are collaborating on autonomous driving technology and have also pooled their mobility services, such as car sharing. Volkswagen and Ford have joined forces on autonomous car development via Ford’s Argo AI operation, while Honda has linked with General Motors with a similar aim to make autonomous driving a reality. Partnerships are nothing new, but the rush to link up now is to spread the risk of investing billions into technology like electric cars when demand is still uncertain. “Makers are realising they’re having to get serious about EVs, but EVs are a difficult business case,” said Tim Urquhart, principal analyst at IHS Markit. “You have to find alliances to generate economies of scale.” The “massive investment” needed in an EV platform required a new way of thinking, Toyota said in a statement announcing development of its e-TNGA architecture. Both it and Subaru “choose a business model that goes beyond convention”, Toyota said. Car makers have a choice. Spend a fortune on a dedicated EV platform that reduces complexity, offers advantages like extra cabin space and might save money later. Or develop a platform that saves money by being flexible enough to incorporate all drivetrains but is ultimately compromised. The Volkswagen Group is gambling that the expense of creating the MEB electric car platform will be recouped by supplier and manufacturing efficiencies, offsetting the huge cost of the batteries. That gamble relies on the Volkswagen Group achieving its predicted annual sales of over a million via its brands in only a few years. “The risks attached to this are huge, in our view,” Max Warburton, an analyst at Bernstein, wrote in a recent report. “VW has the potential to lose significant amounts of money.” Having Ford as a customer will cut those risks. Even better is to split those risks with a partner, as Toyota is doing with Subaru and Mazda. Would the customer even notice all these shared parts? Unlikely, reckons Urquhart. “People are increasingly not going to care what’s underneath any more,” he said. “Exterior style, the latest infotainment, self-driving technology – all these will be more important to them,” he said. If car makers are not going to end up as merely hardware providers to Google, Apple or whatever tech company comes along next to transform the driving experience, they need all the money they can get to develop this tech themselves. “All the car makers are investing in CASE (connected, autonomous, shared, electric) and it’s going to take a lot of money out of the business until they can generate profits, so right now they are trying to further outsource to preserve cash,” said Francisco Riberas, CEO of chassis and body parts supplier Gestamp. Despite the aggressive moves to spread the financial burden, buyers will have to brace themselves to pay more for cars. As the PSA Group’s CEO, Carlos Tavares, put it earlier this year: “Everybody needs to realise that clean mobility is like organic food: it’s more expensive.” Nick
Origin: Analysis: Why car makers are casting aside old rivalries

Analysis: why the public is split on speed limiters

The recent burst of publicity around the mandatory introduction of speed limiters on new cars from 2022 has certainly brought them to the attention of car buyers. But how will they be received? Are they seen as a brilliant safety initiative that will save lives or an Orwellian intrusion adding to the danger of our roads by taking control away from the driver? Market research firm Simpson Carpenter questioned more than 1000 car buyers on behalf of Autocar to find out. Supporters of speed limiters outnumber opponents by two to one: 49% are in favour of speed limiters, while 24% are opposed. But those with strong feelings on an issue are always the most vocal and here the gap is much narrower – 18% are strongly in favour while 12% are strongly opposed. Support for speed limiters is strongest among women and those intending to buy a hybrid or electric car next time. The most strongly opposed are those whose car has an engine size of 2.0 litres or bigger. Among this group, there are as many opponents as supporters (39% in each camp) and opponents are nearly twice as likely to feel strongly about the issue as supporters. Reasons given spontaneously for favouring speed limiters focus on the expected improvement in road safety and the reduction in the number of people speeding. Among supporters, those intending to buy a hybrid or electric car next time round are much more likely to point to road safety and reducing accidents as the reasons for their support. Older drivers are more likely to cite the reduction in the numbers speeding. Questioned in more detail, a strong majority of car buyers agree that reducing speeds will be good for the environment and will save thousands of lives each year. Nevertheless, there are major reservations: more than half think that drivers are better than technology at deciding on the right speed. Nearly half (47%) think speed limiters are a major intrusion into personal liberty and 41% believe they’ll cause more accidents than they prevent. What is remarkable is the stark difference in opinion between those in favour and those opposed to speed limiters, particularly in relation to their safety benefits and their intrusiveness. Nine in 10 of those in favour believe speed limiters will save thousands of lives each year. In contrast, more than eight in 10 of those opposed believe speed limiters will cause more accidents than they prevent. Almost nine in 10 opponents see them as a major intrusion into personal liberty, with as many as six in 10 feeling very strongly about their intrusiveness. The bad news for the industry is that many new car buyers plan to take avoiding action. Half of those against speed limiters say they will delay their next purchase so they can keep on driving without restriction and a further 30% say they will buy used rather than new. Even among those in favour of speed limiters in principle, nearly one in four will seek to avoid them. The good news is that one in four of those who support speed limiters say they would now be more likely to buy a new car. However, the net effect looks like being another drag on new car
Origin: Analysis: why the public is split on speed limiters

Analysis: why Vauxhall’s Luton plant has a bright future

Britain’s biggest commercial vehicle plant, Vauxhall Luton, last month started production of a new Vivaro van as part of a £100 million investment under new PSA ownership that secures 1250 jobs. The new van provides Luton with long-term security, gives a huge vote of confidence in the plant’s ability to adopt PSA manufacturing and quality standards and potentially opens up opportunities to build other vehicles based on the PSA EMP2 platform, which also underpins the Vauxhall Grandland X. “This is a very, very important investment for Vauxhall,” said plant director Mike Wright. “In less than two years, the workforce has turned this plant into one of PSA’s ‘European champions’. The amount of change at the plant has just been huge.” Such accolades are particularly crucial when you consider how under threat Vauxhall’s other major plant – Ellesmere Port – has appeared to be in recent months. Five years ago, Wright guided Autocar through a tranche of £168m of investment that put the revamped Gen-3 Vivaro into production under GM ownership in conjunction with Opel and Renault, securing the Luton plant to 2025. Now it’s all change after PSA bought Vauxhall/Opel in March 2017, with the Vivaro name switching to the design that serves as the Citroën Jumpy/ Dispatch, Peugeot Expert and Toyota ProAce Verso. Like the outgoing Vivaro, it’s front-driven, but, being based on a platform that also supports SUVs, has refinements such as a multi-link rear axle, a more complex electrical system and a panoramic roof option for passenger versions. Switching to the new platform has required significant changes to the Luton plant layout. The bulk of the investment – £65m – has gone into a new, heavily robotised body-in-white assembly plant for the new platform. To accommodate the new line, Vauxhall cleared out a cavernous 8000-square-feet underground car park and installed 300 new robots plus assembly jigs and mechanical handling gear capable of pushing out 24 chassis platform underbodies every hour. “With a lot of blood, sweat and tears, we’ve transformed this space and installed and commissioned a whole new chassis line in just 12 months,” said Wright. This might just be a record for a new assembly plant body shop, the urgency of PSA to speed up the turnaround providing the impetus. Such speed of delivery is possible since the line at Vauxhall replicates the one installed at Sevel Nord, PSA’s van plant at Valenciennes in northern France. Luton is now part of PSA’s ‘van cluster’, led by Sevel Nord, and featuring Luton, Sevel Sud in Italy and Gliwice in Poland. Quality is benchmarked against Nord and, on our visit, Citroën and Peugeot vans are in production as a quality yardstick. Operations at Luton have been simplified by bringing in kits of pressed body panels from Sevel Nord’s suppliers, although this has diluted local content to 22% – below the 40% that it was under GM. Vauxhall hopes to raise the local content in future. With panels coming in from France, Luton’s ageing press shop is quiet for now. The speed of the model changeover at Luton allows insufficient time to build new body dies, which typically takes two years. Previously, the press shop was fully occupied stamping out panels both for Luton and Renault’s Normandy van plant. Replacement work might include panels for the PSA family of vans. As well as the new platform bodyshop, the Luton plant has reorganised its flow of parts and assembly to use two floors instead of three, dedicating the ground floor solely for assembly and final trim. A conveyor moves platforms from the new underground welding line to the first floor where the bodies are built up, before dropping down to the ground floor. Machines are crammed in to these new areas as PSA cracks the whip to improve workflow and shrink the production line footprint, one of its production efficiency measures. Body assembly starts when body panels arrive in trucks from France, crated in sets of 18 and paired left/right to ensure full sets. After being loosely ‘tabbed’ together they move into assembly, where 128 new robots are deployed on bodyside welding alone. Sparks fly, as usual, in the body-framing welding station, which is also new, and is the centrepiece of the plant. Usefully, more automation has raised output, and by mid-2020 Vauxhall plans 90,000 to 100,000 units per year, considerably more than the 60,000 annually under GM. At 100,000, the paint shop will be at full capacity. PSA has introduced innovations in final assembly, too, notably a new automated parts handling system dubbed the ‘supermarket’ that automatically loads components into bins to be delivered line-side by a fleet of 19 robotic, automatically guided vehicles (AGV). This reduces line-side clutter at the 200-plus final assembly stations, essential because the new PSA van offers more build variations, requiring more parts at each station. A spin-off from this extra complication is a
Origin: Analysis: why Vauxhall’s Luton plant has a bright future

Analysis: Why new car buyers are ditching diesel for hybrids and EVs

It’s hard to believe that just two years ago, almost half of the new cars sold in the UK were diesel. In May 2017, in the first of a series of powertrain studies done for Autocar, market research firm Simpson Carpenter forecast that within three years diesel sales would fall to 23% of the total new car market – a prediction that was met with some scepticism at the time. But now, two years on, diesel sales in the first quarter of 2019 have fallen to just 27% of the new car market. So far, the main beneficiary has been petrol. While buyers expressed an intent to buy hybrid or electric, the relative shortage of available models has limited alternatively fuelled vehicles to just 6% of new car sales. Simpson Carpenter’s most recent research for Autocar suggests the move away from diesel will continue, with just 18% of car buyers – new and used – now expecting their next car to be diesel. The main shift from diesel is in the new car market, where the proportion of people intending to buy diesel next time is down from 23% in 2017 to just 14%. During the same period, the number of new car buyers expecting to buy a hybrid or electric car has risen from fewer than one in four to more than one in three – growth likely to continue as the choice of models increases. Even in the used car market, diesel’s popularity continues to wane. Only 21% now intend to buy a diesel next time – just 2% more than those who say they’ll opt for a hybrid or electric car. The very small number of used hybrids and electric cars on the market means a big imbalance between supply and demand for different powertrains. However, petrol car sales are likely to remain healthy for some time. Although one in five of those with petrol-engined cars say they will defect to hybrid or electric next time round, these losses will be largely mitigated by almost one in three diesel owners who plan to switch to petrol. Another nail in diesel’s coffin is the increase in the numbers of current owners who reject the fuel outright. One in five diesel owners now reject the fuel and will no longer even consider it for their next car. These gradually increasing levels of rejection continue to be driven by two core concerns: the environmental effects of diesel and concern over future resale values of diesel cars. The only area in which diesel seems likely to retain a significant foothold is with larger cars. Among owners with cars that have engines of 2.0 litres or more, over half will consider diesel next time, with more than a third picking it as the engine type they’re most likely to buy. Conversely, there seems to be no future for diesel among smaller cars. Why are car buyers turning their back on diesel?
Origin: Analysis: Why new car buyers are ditching diesel for hybrids and EVs

Analysis: What went wrong at Ford’s Bridgend plant?

Ford’s closure of its Bridgend engine plant ends a chapter that began at the peak of the brand’s popularity in the UK in the 1970s and reflects current changes in car buyer’s tastes, misdirected product planning and pressure to electrify its fleet to hit EU CO2 targets. The Bridgend closure will be devastating for the 1700 employees but it will also hit a further 5000 or so in the wider economy. “We fear the knock-on effect and it will be substantial,” said Tim Williams of the Welsh Automotive Forum, an alliance of car industry businesses in Wales. There is a glimmer of hope in the shape of Aston Martin’s St Athan plant, 12 miles to the south-east, but the chances of Ineos taking space to build its Grenadier 4×4 at the Ford site have now faded. Aston now represents the future for the car industry in Wales. It built its first DBX crossover at St Athan last week, with recruitment for 550 new assembly staff due to start in September. “I’m sure we will have plenty of applications from the Bridgend area,” said an Aston spokesman. Suppliers to Ford will also be affected, although few major component makers are local. Block castings, for example, are trucked in from Ireland and the plant has an extended supply chain stretching onto mainland Europe. Despite the drawn-out supply chain, potential customs delays and sterling weakness, Ford has denied a link to Brexit in its decision to shut Bridgend in September 2020. So what caused the plant’s closure? Dr Peter Wells of Cardiff Business School lists several contributing factors, the key ones being sales and market related: “The Dragon engine (the 1.5-litre three-cylinder petrol engine used in the Fiesta ST and Focus) is not selling as well as hoped, Ford is running the plant well below capacity and it needs to make cost cuts.” As with all mid-market brands, Ford’s sales have been squeezed and in Europe have fluctuated in the past decade between 1.75 million and 1.33m, recovering to nearly 1.6m now. Market share has almost halved in the past 30 years – from around 11% in 1990 to 6% in 2018. “Ford’s market share in Europe is the same as BMW’s, yet it can’t command premium pricing, so it is having to find cost cuts,” said Wells. Intended to replace the four-cylinder Sigma engine launched in 2011, the Dragon engine arrived just as Ford faced having to invest in hybrid and battery powertrains and while its cheaper, more frugal 1.0-litre engine is on the rise. “Ford’s product planning has just gone wrong,” said Wells. The Dragon has too large a displacement for the non-ST Fiesta and the Ka+, while the three-cylinder 1.0-litre engine built in Romania and Germany has become the core petrol engine for the Fiesta and Focus ranges. The 1.0-litre is also available in 138bhp form, closing the gap to the 148bhp Dragon. Other models that could have taken the Dragon, such as the C-Max and B-Max, are being discontinued and the new Puma crossover is arriving at a time when plug-in and mild hybrids are the essential powerplants. Ford’s new hybrid powertrain is based on a high-efficiency Atkinson combustion cycle, which, Ford says, makes hybridising the Dragon uneconomic. This is a very rapid fall from grace for a brand-new design that went into production only last October at a cost of £100m. It is likely to finish its third and final full year at around only 80,000 units – a third less than the 125,000 capacity at Bridgend. Given the plant built 701,000 engines as recently as 2014, this proved a fatal drop in output. Even from the start, Ford could see threats to its Dragon investment. The plan from 2015 envisaged 250,000 units a year and £181m of investment, yet two years later, that evolved to just 125,000 units with investment of £100m. Product planning dictated much of this revision: the Dragon couldn’t be slotted straight into Ford’s larger models because they were designed around four-cylinder engines. Although the Dragon will continue to be needed, it will be supplied from lower-cost Mexico and/or China in two plants already tooled to build it. Of course, other factors are at play. Bridgend’s contract to build Jaguar Land Rover’s AJ V8 and V6 petrols will finish just before the plant closes. Of the 650,000 units built at Bridgend in 2016, around 145,000 were JLR engines. JLR is replacing the V6 with a straight six. At one time, the new six was rumoured to be going into Bridgend onto the line that once built the ‘SI6’ 3-2-litre six fitted to some Land Rover and Volvo models. But those plans have changed, too, and instead JLR’s new six will be built in Wolverhampton and the V8 could come from BMW. Ford will maintain diesel engine production at Dagenham and engineering at Dunton in Essex, so it is hoped the closure of Bridgend is the last adjustment to its UK footprint for now. How Bridgend came to be When plans for a new engine plant in Bridgend were announced in 1977, Ford was riding high from many years of UK and European
Origin: Analysis: What went wrong at Ford’s Bridgend plant?