US Auto Greening lends opportunity for Mexican engineers
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By Graeme Stewart
Mexico’s auto industry must be ready to take advantage of the greening of its US counterpart to continue its progress in the global market.
That was said by Bruce Belzowski, Assistant Research Scientist at the University of Michigan’s Transportation Research Institute, at Mexico’s Auto Industry Summit held recently in Leon, Guanajuato.
Speaking on Challenges and Opportunities Facing North American Auto Manufacturers, Mr Belzowski told delegates: “Greening of the US auto industry means that in Mexico there will be more sophisticated vehicles being manufactured in their plants, so they will need to be prepared for a higher level of manufacturing complexity.”
“It also means that Mexican engineers have an opportunity to develop new technologies that can support the auto manufacturers and suppliers in a way that might not have been available in the past.”
“Both groups are looking for new ideas for improving emissions and fuel economy and anyone with a good idea will get a hearing with the auto manufacturers and suppliers.”
“Finally, there are specific skill sets such as controls engineers, programming, battery technology and system integration engineering that are in demand, and if Mexico can produce engineers with these abilities, the global manufacturers and suppliers will hire them.”
Mr. Belzowski added that he had every confidence in the Mexican auto industry to rise to the challenge saying: “The auto industry in Mexico is in a very good place, has shown that it can meet challenges placed before it and, with careful guidance from management and the undoubted skill and dedication of its workforce, can take full advantage of the Greening of the US auto industry.”
He explained to his audience that the first signs of the greening of the US auto industry began in the 1970s with the Clean Air Act of 1970 followed by the setting of Corporate Average Fuel Economy (CAFE) in 1975.
In the 1980s and 90s, there were stagnant fuel economy standards but strong emissions regulations and, in the 2000s, the Environmental Protection Agency (EPA) was given authority to regulate CO2 emissions and the Obama administration combined expansive R&D with new CAFE regulations for 2016 and 2025.
On top of all that, Fuel Economy is regulated by the National Highway Safety Administration and the EPA through the CAFE regulations and the regulatory goals include 34.1 miles per gallon in 2016, 38.9 miles to the gallon in 2020 and 54.5 miles per gallon in 2025.
Emissions are regulated by the EPA, with goals of 263 CO2 grams per mile in 2016, 250 in 2020 and 163 in 2025.
He said: “Specific vehicle models have a ‘target’, not a ‘standard’ and compliance is based on fleet-wide average for each OEM – attribute based standard differs by class, such as passenger cars and light trucks, and different fleet compositions change the average required level - LT share and distribution of sales by footprint.
“Standards provide flexibility, as specified in statute, which means that manufacturers can add technology to vehicles or shift product mix, can bank and borrow credits, transfer credits between fleets and trade credits.
“And, of course, the Government requires that OEMs pay fines for any failure to comply.”
Mr. Belzowski said those standards have led to stiff challenges for auto manufacturers and asked: “Will standards affect product cadence?
“Big technology application is limited to redesigns and we have to ask if they are currently frequent enough to meet the pace of increasing CAFA standards? How will those changes impact global platform development cycles, technology availability, allocation of engineer resources, stranded capital etc?”
And, he asked, how will the new vehicle market respond to increases in prices?
He said: “Price increases may lead to a shifting distribution of fuel economy/costs among models and classes and may change the fleet mix – for example, the PC/LT ratio – for constrained OEMs. Also, it has to be asked if a price increase would increase the length of ownership or would it impact on the used car market? And what about alternative fuel adoption rates?”
He said the predicted price of unleaded regular gas for 2016, 2020 and 2025 is expected to rise 23 per cent, 40 per cent and 67 per cent respectively from 2012, meaning a respective cost of $4.22, $5.05 and $6.0 and that experts expect growth in the use of ethanol, diesel and compressed natural gas by 2025 for passenger cars and light trucks.
He added that the US has not quite reached the average price per gallon of fuel where fuel economy becomes a primary concern in new vehicle purposes but predicted: “At $4.85 per gallon, consumers will make fuel economy a primary concern in new vehicle purchase.”
He also said that by 2025, the decrease in spark-ignited powerplants was predicted to drop to slightly more than 50 per cent for passenger cars while hybrids and advanced diesels increase their share. And light trucks, hybrids and advanced diesels would increase their share of powerplants in 2025 at the expense of spark-ignited engines.
Mr Belzowski also spoke of Powertrain Strategies, defining them as: “Plans that auto manufacturers and suppliers make to fulfill their goals, be they to meet Government regulations or provide a competitive advantage for their vehicles in the marketplace.”
He said that the alternative Powertrain Industry was in its infancy, which meant that anyone who could develop new technologies to support the Greening of the industry could become a global leader.
He said: “Manufacturers and suppliers do not have all the answers to the variety of new technologies needed to support the Greening of the industry. They need help in advanced R&D across a number of electronics areas like controls, batteries, programming and systems integration.”
In conclusion, Mr Belzowski said: “Eventually, those advanced technologies will make their way into the vehicles now being assembled in Mexico and workers will need to be able to contribute to new manufacturing processes for those vehicles. I have no doubt they can do so successfully.”
Mexico’s auto industry must be ready to take advantage of the greening of its US counterpart to continue its progress in the global market.That was said by Bruce Belzowski, Assistant Research Scientist at the University of Michigan’s Transportation Research Institute, at Mexico’s Auto Industry Summit held recently in Leon, Guanajuato.
Speaking on Challenges and Opportunities Facing North American Auto Manufacturers, Mr Belzowski told delegates: “Greening of the US auto industry means that in Mexico there will be more sophisticated vehicles being manufactured in their plants, so they will need to be prepared for a higher level of manufacturing complexity.”
“It also means that Mexican engineers have an opportunity to develop new technologies that can support the auto manufacturers and suppliers in a way that might not have been available in the past.”
“Both groups are looking for new ideas for improving emissions and fuel economy and anyone with a good idea will get a hearing with the auto manufacturers and suppliers.”
“Finally, there are specific skill sets such as controls engineers, programming, battery technology and system integration engineering that are in demand, and if Mexico can produce engineers with these abilities, the global manufacturers and suppliers will hire them.”
Mr. Belzowski added that he had every confidence in the Mexican auto industry to rise to the challenge saying: “The auto industry in Mexico is in a very good place, has shown that it can meet challenges placed before it and, with careful guidance from management and the undoubted skill and dedication of its workforce, can take full advantage of the Greening of the US auto industry.”
He explained to his audience that the first signs of the greening of the US auto industry began in the 1970s with the Clean Air Act of 1970 followed by the setting of Corporate Average Fuel Economy (CAFE) in 1975.
In the 1980s and 90s, there were stagnant fuel economy standards but strong emissions regulations and, in the 2000s, the Environmental Protection Agency (EPA) was given authority to regulate CO2 emissions and the Obama administration combined expansive R&D with new CAFE regulations for 2016 and 2025.
On top of all that, Fuel Economy is regulated by the National Highway Safety Administration and the EPA through the CAFE regulations and the regulatory goals include 34.1 miles per gallon in 2016, 38.9 miles to the gallon in 2020 and 54.5 miles per gallon in 2025.
Emissions are regulated by the EPA, with goals of 263 CO2 grams per mile in 2016, 250 in 2020 and 163 in 2025.
He said: “Specific vehicle models have a ‘target’, not a ‘standard’ and compliance is based on fleet-wide average for each OEM – attribute based standard differs by class, such as passenger cars and light trucks, and different fleet compositions change the average required level - LT share and distribution of sales by footprint.
“Standards provide flexibility, as specified in statute, which means that manufacturers can add technology to vehicles or shift product mix, can bank and borrow credits, transfer credits between fleets and trade credits.
“And, of course, the Government requires that OEMs pay fines for any failure to comply.”
Mr. Belzowski said those standards have led to stiff challenges for auto manufacturers and asked: “Will standards affect product cadence?
“Big technology application is limited to redesigns and we have to ask if they are currently frequent enough to meet the pace of increasing CAFA standards? How will those changes impact global platform development cycles, technology availability, allocation of engineer resources, stranded capital etc?”
And, he asked, how will the new vehicle market respond to increases in prices?
He said: “Price increases may lead to a shifting distribution of fuel economy/costs among models and classes and may change the fleet mix – for example, the PC/LT ratio – for constrained OEMs. Also, it has to be asked if a price increase would increase the length of ownership or would it impact on the used car market? And what about alternative fuel adoption rates?”
He said the predicted price of unleaded regular gas for 2016, 2020 and 2025 is expected to rise 23 per cent, 40 per cent and 67 per cent respectively from 2012, meaning a respective cost of $4.22, $5.05 and $6.0 and that experts expect growth in the use of ethanol, diesel and compressed natural gas by 2025 for passenger cars and light trucks.
He added that the US has not quite reached the average price per gallon of fuel where fuel economy becomes a primary concern in new vehicle purposes but predicted: “At $4.85 per gallon, consumers will make fuel economy a primary concern in new vehicle purchase.”
He also said that by 2025, the decrease in spark-ignited powerplants was predicted to drop to slightly more than 50 per cent for passenger cars while hybrids and advanced diesels increase their share. And light trucks, hybrids and advanced diesels would increase their share of powerplants in 2025 at the expense of spark-ignited engines.
Mr Belzowski also spoke of Powertrain Strategies, defining them as: “Plans that auto manufacturers and suppliers make to fulfill their goals, be they to meet Government regulations or provide a competitive advantage for their vehicles in the marketplace.”
He said that the alternative Powertrain Industry was in its infancy, which meant that anyone who could develop new technologies to support the Greening of the industry could become a global leader.
He said: “Manufacturers and suppliers do not have all the answers to the variety of new technologies needed to support the Greening of the industry. They need help in advanced R&D across a number of electronics areas like controls, batteries, programming and systems integration.”
In conclusion, Mr Belzowski said: “Eventually, those advanced technologies will make their way into the vehicles now being assembled in Mexico and workers will need to be able to contribute to new manufacturing processes for those vehicles. I have no doubt they can do so successfully.”
