Opinions differ on presence of OEM dichotomy

  • 14-Apr-2010 04:12 EDT

“Environmental concerns and customer wants and needs can be met concurrently,” said John W. Juriga, Director of Powertrain, Hyundai-Kia America Technical Center Inc. “The successful companies will find balances to these solutions.”

The SAE 2010 World Congress panel discussion surrounding the OEM dichotomy (or lack thereof, according to one panelist) of striking a balance between fulfilling customers’ desire for fun-to-drive vehicles and the need to meet environmental and fuel-economy requirements had many panelists calling for evolutionary change as opposed to revolutionary change as a way to satisfy the parties involved.

As stated by John DeCicco, Senior Lecturer, School of Natural Resources and Environment, University of Michigan, “To make progress more rapid than a more evolutionary, historically consistent pathway is going to require higher costs or some tradeoffs.”

In a time of buyers expecting more for their money than ever before, the notions of higher costs and tradeoffs are not welcome ideas to anyone in today’s marketplace. John W. Juriga, Director of Powertrain, Hyundai-Kia America Technical Center Inc., believes success can be achieved simply by striving for both environmental and corporate sustainability concurrently.

“When we ask a customer to try and choose between these attributes of quality, safety, and value of fuel efficiency, we’re asking the customer to make decisions that they shouldn’t have to try and choose between,” Juriga said. “There’s not really a dichotomy in the market. From our standpoint, we see the need to embrace improved fuel efficiency as an indisputable social good that is the right thing to do for all customers and for the environment.”

DeCicco takes a more grounded approach, believing confronting tradeoffs is inevitable. “I think we all know we can’t sell tradeoffs,” he said. “The challenge then is managing expectations, realizing that there isn’t going to be a free lunch if we’re going to stay within our cost envelope and a manageable-risk technology path.”

One way of meeting customer expectations, according to panelist Roger A. Clark, Senior Manager, Energy Center, General Motors, is by finding synergistic interactions that address both fuel economy and customer wants. He points to addressing aerodynamic drag as an example of such a synergistic interaction.

“If we improve the drag coefficient, we make the vehicle more efficient when it moves through the air. That improves performance [and] fuel economy,” he said. “But if we simply make the vehicle smaller, that also improves aerodynamic drag, it improves fuel economy, but now you’ve got a smaller vehicle so you might not be able to fit as much passenger space inside.”

In a time of limited resources, manufacturers are forced to be selective of where they invest and choose the most cost-effective, highest-benefit technologies before investing in technologies that are more risky or costly to implement on a vehicle-by-vehicle basis. Clark pointed to a study that showed that the on-road vehicle population of the U.S. will soon be replicated in China and India by 2030, and 500 million new vehicles will be needed to satisfy this demand.

“If we want to sustain a profitable automotive sector in this country, we need to make sure that we are producing products that are globally acceptable, not [just] regionally acceptable,” said Eric Fedewa, Vice President, Global Powertrain Forecasts, CSM Worldwide. “We need global products that can be sold on the global market.”

According to Hyundai-Kia’s Juriga, the issues being faced today are not the result of a lack of technology. “The technology is out there, we just need to know how to apply it properly to the customer’s needs,” he said.

GM’s Clark placed emphasis on making sure the technologies are affordable as a way of achieving long-term success.

“As gas price goes up, people are going to have less to spend on their vehicle, not more,” said Clark. “The bottom line is we’ve got to make hybrid technologies affordable, we’ve got to make electrification technologies affordable. So we’ve got to strive for that urgently and continue to work together as a community.”

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