Ten Trends That Are Steering The Auto Industry's Future
200. That's the number of new and updated cars that are scheduled to debut over the next twenty-four months. You don't really want to read about every reskin or 5-hp bump, so we've filtered that list down to the twenty-five cars you most need to know about. Much of our information is hard fact, while some of it is educated guesswork or pure conjecture. We have included a "speculation meter" for each car to indicate what's what. Here, then, is the scoop on the cars you will be hearing a lot about over the next two years.
This is the fourth of four articles that appear in our June 2012 print issue. On Monday, we told you what to expect from American automakers and Tuesday we told you what to expect from their Asian counterparts. Here, European bureau chief Georg Kacher identifies the forces driving what we drive.
1. Car design's programmatic cul-de-sac
If possible, please turn around.
Bruno Sacco for Mercedes-Benz, Walter de'Silva for Alfa Romeo, Claus Luthe for BMW -- those were the days. In 2012, it is very difficult to compile a list of brands that offer compelling design across the entire model range. Aston Martin, Kia, and Land Rover do better than most, but the big names slip up at an alarming rate. Why? Primarily because eye-catching ornamental and decorative elements have taken priority over style and proportion. Common stylistic incongruities include garish LED fireworks; a glut of gaudy, in-your-face grille treatments; cutlines seemingly created under the influence; and a messy mix of chrome, all-black accents, and matte paint. Since every brand religiously enforces its own style compendium, the end result is more often than not a generic body shape casually dressed up with a dozen brand-defining must-haves. Even yesterday's greats have lost the plot: BMW has embarked on an unpredictable, hit-or-miss course; Audi has chosen a strangely static, one-look-fits-all, cookie-cutter approach for its sedan and crossover lineups; and Mercedes swapped graceful timelessness for flamboyant superficiality. Back on track are Cadillac and Volvo. Volkswagen is all about straight-edged, functional, and nice-to-touch design. GM has finally managed to fuse style and design, but Ford keeps devaluing its classy exteriors with flashy, pachinko-style cockpits.
2. Size doesn't matter
How the premium brands plan to conquer the mass market.
Prestige is more important than ever, but thinking big is no longer a key to success. Quite the contrary. For example, Mercedes-Benz will stuff S-class ingredients into smaller new models such as the 2013 A-class, the 2014 four-door CLC coupe and its frivolous wagon sidekick, and the 2015 CLC compact crossover. Audi is about to put the finishing touches on the A3 sedan (see facing page), and BMW is developing a taboo-breaking, front-wheel-drive platform that will yield the 1-series GT, touring, and commuter minicar for Europe. The big challenge for all three carmakers is to make sure that the more affordable fresh metal earns enough cash to fund technology for the more profitable but increasingly complex upmarket brand-shapers.
3. The empire no longer strikes back
The Japanese car industry needs a fundamental rethink.
Although the Fukushima tragedy hit Japanese automakers hard, mother nature's ire has little to do with their decline. Among the true culprits are a saturated home market that refuses to grow, wafer-thin profit margins in North America, a lack of investment in China before the boom began, and no firm foothold in prospering South America. As a result, all makes except Toyota, Nissan, and Honda are strapped for cash and hunting for international alliances. Subaru is on a drip-feed from parent company Fuji Heavy Industries, Mitsubishi would have disappeared long ago without the support of the bank of the same name, Suzuki's hasty alliance with VW has led the brand nowhere (except to court), and Mazda is without a partner in an increasingly competitive environment after its divorce from Ford. Where do the big three -- Toyota, Nissan, and Honda -- stand? Toyota piled up enough reserves in better years, Nissan went to bed with Renault, and Honda is cultivating its crumbling underdog image. But even the market leaders are guilty of building anonymous cars let down by boring design, ho-hum interiors, and indifferent dynamics. What Japan needs are new star cars like the Toyota Prius, Nissan GT-R, Mazda Miata, and Mitsubishi Lancer Evo -- as well as one or two generations of really desirable volume models.
4. Going from strength to strength
How Hyundai and Kia intend to shake up the middle ground.
Last year was a rebound season even for former ailing giants like General Motors, but the Koreans made monumental gains by securing solid double-digit growth rates in just about all the major markets, including Western Europe, which is particularly tough to conquer. As a result, Hyundai and Kia climbed to the number-five spot on the list of the world's largest car manufacturers. At the same time, profits reached record heights -- Hyundai alone earned well over $7 billion. After selling 6.6 million vehicles in 2011, the Koreans intend to pass the 7.0-million-unit barrier this year. While most rivals sit on two, three, or even more mothballed plants, the Koreans cite capacity constraints as their main growth inhibitor. After having previously established links to Mazda and Mitsubishi, the dynamic duo is now a self-sufficient enterprise that runs its own steel works, banks, battery production, and alternative-energy providers. Design, engineering, and quality get better with every model change. The only area that still needs improving is vehicle dynamics. Inspired by Mini, Kia is contemplating turning the next-generation Soul into a family of lifestyle-oriented runabouts while Hyundai prepares to take on Lexus with a full range of luxury cars.
5. The urge to merge
The cooperation carousel is gaining momentum once again.
Straightforward mergers like the Fiat/Chrysler deal are the exception to the rule. In nine out of ten cases, the link automakers seek is a project-related cooperation. While Daimler and Renault exchanged shares to cement their partnership, GM bought a seven percent stake in PSA (Peugeot-Citroen) to help its new French ally fund the first joint ventures. Trouble is, although synergy helps to cut costs, it doesn't create higher combined sales volumes. And when both firms share the same strengths and weaknesses, the trip from the altar to the divorce court may be shorter than anticipated. That's why the GM/PSA link makes less sense than the BMW/PSA engine program or the proposed alliance between Fiat/Chrysler and a top-secret Asian nameplate (did someone say Mazda?). The premium brands in particular are always eager to connect with a make that promises high volume and attractive economies of scale. Audi is taking full advantage of the mildly tweaked low-cost components provided by parent-company VW. Mercedes is about to start using small engines supplied by Renault. In return, Mercedes will let Infiniti use its B-class matrix. Further out, Mercedes, Renault, and Nissan plan to pool their small-car architectures and increase aggregate output to 1.5 million units a year. BMW is building engines with PSA, has agreed to swap diesel know-how for hybrid technology with Toyota, and is talking to GM about joint fuel-cell and range-extender activities.
6. Sooner than we think, HAL takes the wheel
The creepy facets of autonomous driving.
Artificial intelligence at the wheel of a car may sound like science fiction, but the reality of unmanned driving began eight years ago when a bunch of computer-controlled prototypes gathered in the Mojave Desert. Today, California and Nevada have a set of rules to govern robotized motoring, and Google has a fleet of cars that steer, brake, and accelerate automatically. Production may still be more than ten years away, but the first partially autonomous automobiles will be available much sooner. Equipped with radar, sonar, cameras, and lidar technology (laser-based light detection and ranging), these intelligent machines might actually be market-ready long before the product-liability and user-acceptance issues have been resolved. Autonomous driving is the next big thing on the way toward the ultimate goal of total accident avoidance. Picture the situations that require automatic steering and brake inputs: closely packed convoys running at speeds of up to 80 mph, automatic lane discipline, self-acting lane changes, autonomous passing, oncoming and cross-traffic monitoring, traffic-light and right-of-way recognition, and "landing strip" navigation that uses roadside QR codes to neatly transition a mixed-mode vehicle to autonomous mode.
7. Starting up is hard to do
The newest crop of carmakers struggles to survive.
Tesla and Fisker need all the support they can get, because establishing a new automobile brand is an arduous task -- especially when your groundbreaking, upmarket hybrids are repeatedly short-circuited by economic hiccups. At the low-tech end of the table, the ultrabasic Tata Nano hasn't sold well in its Indian home market. Qoros, a partner of Chery, is the latest Chinese manufacturer claiming it has a car that can compete in major export markets. Coda is still struggling to get its modest EV into gear, and Next Autoworks has withdrawn a loan application to the Department of Energy, putting an end to its dream of an energy-efficient, U.S.-built econobox. In Europe, Venturi and Mindset are among the most prominent startups whose fate is in limbo. Such struggles don't come as a surprise in an age of consolidation when even big names like Oldsmobile, Plymouth, Saturn, and Saab have bitten the dust. The fact is that none of the newcomers has yet made a lasting impact on an increasingly demanding and volatile market. Why? In some cases, the selling proposition is not sufficiently unique. In others, the cars aren't competitively priced. In all cases, distribution is a very tall hurdle. And the competition never sleeps...
8. Reduce to the max
How downsizing is going to change the character of the automobile.
Downsizing is not just the flavor of the moment, it's the flavor of the decade, in all price and size classes. For Bentley, downsizing means using a V-8 instead of a W-12. At Mercedes, V-6 volumes will eventually dwarf the V-8's. BMW continues to phase out the legendary straight six in favor of more efficient four-cylinder engines. VW and Ford have already started, in some markets, to replace the long-running four-cylinder with more frugal three-cylinders. To save fuel, every second cylinder is switched off under part throttle. For exactly the same reason, weight will be significantly reduced across the board. To reach this end, lighter materials, more efficient assembly techniques, modular architectures, and miniaturized electric motors, A/C compressors, and starter batteries will be used. Thanks to advanced onboard electronics, innovative fuel-saving driving modes -- such as coasting at idle speed and energy recuperation -- will become commonplace. Engine-related efficiency enhancers include variable compression ratio and valve control, variable displacement, a camshaftless engine with electromagnetic valve actuation, higher injection pressures, sequential turbocharging, reduced friction, lighter valvetrains, and innovative combustion-chamber design.
9. It takes more than merit
Why alternative-propulsion systems are falling behind schedule.
Does the success of alternative propulsion depend solely on the strength of the engineering concept? The answer is no. These are the unresolved questions affecting nascent green technologies: Are purchase price and running costs subsidized? Can batteries be charged with low-cost off-peak electricity? Is the manufacturer carrying the risks related to battery performance and battery life? Is leasing (vehicle and/or batteries) an option to buying? Is the vehicle eligible to use HOV lanes and special designated parking spaces? How long before a nationwide network of quick-charge stations will be in place? What's being done to boost the underdeveloped hydrogen infrastructure? When will the next generation of batteries come onstream -- and how much more powerful, lighter, and smaller are the new lithium-oxygen cells going to be? Is induction charging a realistic technology? What are the chances of the battery exchange system pioneered by Better Place gaining widespread acceptance? Can a full hybrid be the answer -- or is it just an overpriced interim solution? Is a range extender a worthy alternative, or is it more prudent to wait for a plug-in hybrid? Do electric vehicles make sense only in an urban environment? And the major question: as far as the true environmental impact goes, is an electric power point really greener than gasoline or diesel?
10. Big Brother is back
Superclever new driver assistance systems are a blessing and a curse.
When Mercedes introduced traction control back in 1987, many enthusiasts were outraged by this act of spy-in-the-cab incapacitation. Twenty-five years later, you can't buy a new car that's not fitted with stability control -- and we wouldn't want to. There's no doubt that modern driver assistance systems are here to stay. Electrification will soon further underline the significance of the little black box, which is indispensable in coordinating multiple propulsion sources, let alone controlling traction, stability, and vehicle dynamics through electronic torque vectoring. In addition to familiar computerized helpers like brake assist, automated parking, blind-spot assistance, and active cruise control, we're about to experience fresh wizardries such as lane-discipline assist (which automatically follows the road), congestion assistance (self-acting braking and acceleration at speeds of up to 40 mph), main beam assist (its dynamic LED light pattern avoids oncoming vehicles), adaptive ride comfort assistant (a pair of cameras scans the road and modulates damper action), and anticollision assistant (via active steering). A brave new electronic world? Perhaps. But no chip-controlled overkill would be complete without the progressive tanning assistant that replaces the cabin light with an ultraviolet bulb capable of providing that coveted "weekend in the Bahamas" look in the time it takes to complete the morning rush-hour crawl.