Great. Another SUV. Just what the world needs.

Acutally, it's what the world wants, says Audi worldwide product planning manager Frank Herrman, here in dusty, smoggy Beijing for the global reveal of the all-new Q5 soft-roader. "Consumers still want SUVs," he says. "The segment is growing very fast, and all over the world. We think it's the segment that has the biggest potential growth."

he Greater Los Angeles Auto Show held in Detroit in January 2006 saw a dazzling display of the 2007 CX-7 SUV Mazda model, which uniquely combined the design of a sports car with the amenities of an SUV. The new model dawned new standards in automotive design. While Mazda chose to chase new frontiers in design, Chrysler adopted retro design for crafting its 2004 model bringing back the older delight. It designed the vehicle with a blunt and heavy front, marking a significant departure from the old models, yet managing to bring back reflections of the celebrated old favourites. In addition, short front and rear hangs complemented the rear-wheel-drive guts.

Brand differentiation is assuming paramount importance on account of the maze of numerous models being produced by the auto industry. Therefore, over the years, apart from focusing on exteriors, other aspects like, interior, safety features, electronics and fuel efficiency are becoming integral to the design of automobiles.

Exteriors Delights

Sleeker exteriors have replaced the rectangular exteriors of yesteryears. The cars have angular forms with a focus on sidelines. Colour choice has also come to the rescue of designers to help them differentiate the products. For instance, the Renault Vel Satis has a unique chocolate brown body while the Ferrari offers a range of warn silver colours.

Different shapes of the headlight and the grill are also used to create brand differentiation. The Hyundai Portico has used the strategy effectively by its narrow, askew headlights and a curved grill. The concept is found used in the Alfa GT’s front design with its chrome-plated grill.

Interior Comforts

Discreet interiors are preferred with leather and wood trimmings, enriched with upholstery reflecting a high quality workmanship. The Infiniti Coupe has focused on the trend by using Washi aluminium rice paper trim.

Taking the comfort to the next higher plane, models like t he 2007 Ford Expedition have ensured better communication between passengers from first to third row by using improved materials in the carpet and other features. The SUV provides more insulation behind the dashboard and door panels, thick glass and a steady roof panel, thus preventing itself from blocking the sounds.

Enchanting Electronics

Another arena of contemporary design is that of automotive electronics. Today, electronics account for 40% of the cost of the automobile. The original mechanical or hydraulic systems, which used to control braking, steering etc. have given way to Electronic Control system (ECS) to perform these functions.

The 2007 Sentra’s car key is equipped with an intelligent wireless system that connects with the technology in the car and enables the driver to start the car without having to put the key in the ignition. A blue tooth hands-free phone system with controls on the steering wheel gives the driver the flexibility to lower the music volume during a call. The system provides storage of numbers, allow them to be recalled with a voice command, and also let the audio messages recorded using a voice pad.

Some of the car audio systems have options of using CDs and MP3 discs and allow the user to plug in their personal music system like iPods etc. Other electronics advancements include GPS, satellite radio, DVD/video screen, automatic climate control, and gas-mileage-monitoring features.

Safety Priority

In the luxury segment, the multilink suspension system in the Lexus460 is redesigned to include Vehicle Dynamics Integrated Management (VDIM). The VDIM mechanism enables the user to foresee a potential skid or slide.

The SUV sector faces a challenge in developing adequate precaution against collision and resulting side impact. SUV providers have incorporated stan dard dual-stage front driver and passenger-advanced airbags with an option of two rows of side-curtain airbags, as well as driver and front-passenger seat-mounted side airbags. In line with the trend, The Toyota FJ Cruiser provides the Toyota Star Safety System that includes Vehicle Stability Control (VSC), Traction Control (TRAC), an Antilock Brake System (ABS), Electronic Brake Force Distribution (EBD) and Brake Assist.

The Road Ahead

The threat of gradual depletion of oil resources and pollution issues have led to the development of cars with fuel cell technology. Leading auto companies including General Motors, Honda, Volkswagen, Toyota and Nissan have manufactured t he new generation hydrogen cars . The cars power the engine using fuel cells that bind oxygen and hydrogen to create an electrical current . The process reduces local air pollution and reduces reliance on oil.

Customer preferences for cars that blend with their personality have been a growing trend. Concept cars are now regulars at motor shows. Driven by Internet boom and need for personalised products, designers are creating vehicles tailor-made to customers desires. The “ life vehicle" concept cars - Sea, Wave, Dunes and Blizzard, were launched by Suzuki aiming customers with an adventurous spirit. The VW GX3, from Volkswagen has been designed as a three wheeler that seats two people and is targeted at the California commuters.

The automobile designers have a daunting task ahead with the emerging demand for intelligent cars. The aging population around the world and growing concern for environment will be the driving factors for automobile designers. To cater to the first category, designers have developed intelligent cars incorporating traffic information, personalised displays, inter-vehicle communication, easy-to-operate controls and head-up displays.

In the days to come, automobile designers will have to continuously strive to meet the dynamic needs of customers through constant innovation in terms of fuel efficiency, comfort, styling and entertainment. Innovation, is the silver lining on the troubled automotive horizon.

That's quite something coming from a company that has a range of cool, nice to drive wagons that are doing great business in Europe. But Herrmann insists the SUV is still the auto industry's hot ticket, despite the growing concerns over global warming and tough new fuel consumption standards that are just around the corner.

Why? He says customers like the high seating position, the all-wheel drive capability, and the multi-functional seating and load package. Uh, yeah. But can't you get most of that in a tall-ish wagon? With better gas mileage?

"The difference between the wagon and an SUV in terms of fuel consumption is not so big," says Herrmann. "And we are working on things to bring the consumption down." More critically, says Herrmann, it seems an SUV can be many things, from a sport coupe (BMW X6) to a retro off-roader (Toyota FJ Cruiser) as long as it has that high seating position, all-wheel drive, and multi-function interior. But a wagon is a just a wagon.

While the U.S. is initially getting only one powertrain spec when the Q5 arrives early next year - the 3.2-liter V6 with a six speed auto - its A4/A5 derived architecture means it offers some interesting alternatives. Yes, the 4.2-liter V-8 from the S5 fits under the hood, says Herrmann. But the Q5 will also be sold in Europe with Audi's four cylinder turbodiesel hooked up to the new seven speed DSG transmission.

So will we see more SUVs from Audi? A Q3, for example, that's smaller and even more fuel efficient? Herrmann says there are no plans. But he admits the company has been studying the idea. "There's a trend towards smaller cars and smaller engines," he says, implying a smaller SUV is therefore a logical extension.

After all, it's what the people seem to want.

RFID in Automotive Industry - A Future outlook

The agreement on a widely accepted RFID standard in the automotive industry could suddenly trigger a domino effect and would, as such, define the tipping-point of a large-scale RFID introduction in the automotive industry.

The automotive industry operates in an environment with strong global competition. While on one hand new car sales have remained static in the triad markets for ten years, on the other hand the vehicle manufacturers (VM) have increased the number of different models and variants of their brands. This has resulted in a decrease in the economies of scale on the production side. Consequently, vehicle manufacturers and their suppliers are struggling to save costs.

At the same time, the automotive industry, which is facing new regulations and constantly changing automotive markets, is investing in new technologies like Radio Frequency Identification (RFID):

• New regulations, such as the End-of-Life Vehicle (ELV) Directive or the Block Exemption Regulation (BER) of the European Commission
• Emerging customer demands, such as new and better services after new car purchase, e.g. faster spare parts supply
• Increasing importance of the aftermarket, especially the spare parts business

The ELV regulates the take-back and recycling of used cars, costing the vehicle manufacturer about 4,000 EUR for a single car, which is close to the average return on a new car sale. As currently investigated by a EU research project (PROMISE) RFID could be used to identify the used materials and parts in a vehicle to advance the decomposition of a car and to save money.

The BER replaces the former quota arrangements between VMs and parts suppliers. Suppliers are allowed to sell spare parts as “original parts” in the free market today, which makes it more difficult for the VMs to differentiate between the “branded parts” and the parts supplied by the licensed dealer network.

The industry has to satisfy emerging demands from their customers for new and more value added services such as telematics, entertainment, vehicle financing and faster after sales service etc., in order to retain their loyalty. But often the focus of vehicle manufacturers is not clearly in line with the end customers or the automotive aftermarket. The OEMs focusing on optimizing their supply chain on the production side are consequently neglecting entering the aftermarket. The European spare parts market itself has a volume of 44 billion EUR at consumer prices. Today, the free spare parts and wholesale market excellently use this strategic misperception of vehicle manufacturers. Bearing in mind that the average life span of personal cars in the market is still increasing (at the moment the average life span is about 7 years in Europe), there will be a much higher demand for spare parts, repair and service in the next few years. While an MIT study shows that for every 1,000 vehicles produced, there is an average of 10 million USD of revenues in spare parts sales, new car sales are decreasing hand in hand with an over production of cars worldwide.

From our perspective, vehicle manufactures and suppliers are facing six strategic challenges to their supply chains:

• Customer Focus: To maximize the value creation, manufacturers in the automotive industry have to look for new ways to offer more and improved services to their customers.
• Demand Chain (shift from push to pull) : To be able to quickly respond to customer orders, manufacturers are shifting their production planning from long term production planning to flexible short term planning.
• Mass Customization: More and more customers order their new cars that come customized to their requirements. The number of variants and the related complexity of in-house logistics and assembly processes are increasing with every new model. The challenge is to achieve high process flexibility and additionally maintain an efficient supply chain that supports Just-in-Time (JIT) and Just-in-Sequence (JIS) manufacturing.
• Outsourcing: VMs continue to outsource upstream activities to suppliers and logistics service providers (LSPs). The result is a downward shift along the automotive value chain. To maintain visibility and control over the supply chain the requirements for information exchange are increasing.
• Lifecycle Compression: The lifecycle of vehicle models is decreasing. This means that there is less time to set up or change production layouts and logistic processes.
• Total Quality Management: While laws enforce h igh quality, customers are also expecting the same. To ensure the safety of cars, new laws require the documentation of certain assembly processes and traceability.

Consequently, there is a demand for more real-time information about processes and products, accurate data, handling efficiency, unique identification and the elimination of manual handling in the supply chain.

RFID technology will help collecting accurate and reliable data and therefore enables the producers to have a supply chain with higher transparency. One outstanding result will be the elimination of the “Bullwhip Effect” (build up of inventory because of uncertainty). Additional benefits of RFID in the automotive supply chain are:

• Local supply chain process control
• Asset management
• Reduced counterfeits
• Reduced delivery time of spare parts
• Improved vehicle end-of-life management and after sales and service.

In the closed loop systems (possibility of multiple use of a single tag) RFID is already in use. The well-known example of container tracking and management clearly shows the value of RFID applications for the automotive supply chain. The payback period is less than one year and a positive return on investment of more than 350% is generated within three years of implementation (Soreon Research). For closed loop systems, there is no initial need for an open and global standard. For the use of RFID in internal operations and 1:1 relationships with suppliers, the number of users/participants is small enough for the automotive industry to develop its own data structures to manage the number range for their applications.

In contrast to closed loop systems, RFID applications in open loop systems such as the automotive aftermarket require an open and global standard in order to guarantee interoperability on a global scale. To meet the demands of the emerging laws and regulations (e.g. the European Commission), the vehicle manufacturers will have to establish an open standard. In addition to that, while an open and global standard like the EPC already exists, the huge number of users, associations and manufacturers present all over the world make it unreasonable an costly to develop and manage a proprietary standard.

The use of an open and global standard in open loop systems will lead to decrease in costs of hardware and software (tags, readers, etc.) supporting the selected standard. From a mid-term perspective, it would then be reasonable to use the same equipment, and possibly use the same standard (because subscription/license fees are already paid) for closed loop systems. This would save additional costs for RFID adoptions.

A path-breaking approach was made by the Automotive Industry Action Group (AIAG) (USA) in cooperation with EPCglobal and ISO with a strong involvement of Michelin. Known as B11, this standard allows managing tire information while enabling two distinct numbering formats, either EPC or ISO based, using a single RFID tag and a single data-structure. This solution could work for other automotive applications as well, such as the spare parts market (existence of licensed dealer network and retail), where the coexistence of various numbering formats is important, but only one technical implementation can be afforded.

Today, RFID applications in the automotive industry are still rare and primarily focused on closed loop systems. In order to unlock the benefits of RFID in open loop systems, such as establishing more efficient aftermarket services, interoperability among various players of the industry has to be enabled through a standard. The agreement on a widely accepted RFID standard in the automotive industry could suddenly trigger a domino effect and would, as such, define the tipping-point of a large-scale RFID introduction in the automotive industry.