16 May

The Automotive Industry – A Look Ahead!


Last week I had the opportunity to attend the 10th International CTI Symposium USA for Automotive Transmissions, HEV and EV Drives: http://www.transmission-symposium.com/usa/symposium-2016/ It was my first time attending the event; and it was a great opportunity to learn more about transmissions and how technology, social and economic trends are affecting the automotive transmission market. I’ve always been fascinated by automatic transmissions as just an amazing piece of engineering. After attending the CTI Symposium it’s obvious there is still a lot of engineering work to be done.

I’m not sure if the average car buyer knows (or cares), but the transmission is going through changes. For example, just a few years ago most automatic transmission had four speeds (reverse, low, drive and overdrive), whereas most new cars today have the same number of positions on the shifter with a six speed transmission. The two additional gears were added to further optimize fuel economy; and are calibrated based on the specific engine and vehicle application. Coming soon we’ll begin seeing 8, 10 and 12 speeds. However, one theme of the symposium revolved around the “electrification” of the automobile; and based on what I heard, it sounds likely that 10 years from now most new cars will be some kind of “Hybrid” operating on part gas and part electricity, if not completely electric. For transmission folks that’s important, because a pure electric vehicle doesn’t use the same type of transmission as a gas engine.

The most significant changes in the automotive transmission market may be driven by social trends. Don’t hold me to exact dates and percentages, but something I found interesting was that in the last 25 years or so, the number of 18 year olds with a driver’s license has gone from approximately 80% to 60%. Kids just don’t care about driving as much as they used to, because the mobile phone has made it easier to connect with their friends without leaving home, more people are living in urban areas where mass transit is available and ride sharing companies like Uber are making it easy to get where you need to go without the cost and burden of owning your own vehicle. It will be very interested to see how this plays out over time.

Of course, the government is also playing a role in the transmission technology race. In fact, one of the main drivers for transmission technology is what we refer to in America as the Corporate Average Fuel Economy (CAFÉ) and Green House Gas Emissions regulations that have been established by the government. There is a long way to go for all car companies to meet the requirement in place for 2025; and there are stiff penalties for non-compliance. However one of the many challenges that automobile and transmissions manufacturers have is that they are trying to build and develop products for a global market using a common platform to leverage economies of scale, but there is no common international tests and requirement, so they end up with, in one example, over 40 variants of the same basic product, which drives complexity and cost. Unfortunately, as one panelist said, there is little hope in expecting all of the governments to work together and come to an agreement on a basic standard anytime soon; and the cost of that bureaucracy must ultimately be passed on to the consumer.

As always things boil down to time and money; and in the case of the automotive transmission market one of the main economic factors that drive consumer car buying decisions is the price of fuel. If gas stays around $2.00 like it is now consumers will be less concerned about fuel economy. That’s important, because at the end of the day, regardless of what the automakers, transmission manufacturers and governments want, companies have to build products that people like and buy.

And somehow we made it this far without talking about Autonomous Drive! One thing is certain: the Automotive Industry is going to change pretty dramatically in the next 10 years, so buckle up your seat belt and enjoy the ride.

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