Biker16 Posted May 14, 2007 Share Posted May 14, 2007 Forecaster: Development of vehicles leaving U.S. Country's share expected to be less than 10% by 2013 Brent Snavely | Automotive News May 14, 2007 - 1:00 am Downloads: PDF DOCUMENT: R&D: Global Shifts DETROIT -- By 2013, vehicle development for more than 90 percent of new cars and trucks will take place outside the United States, according to the automotive research firm CSM Worldwide Inc. And as those global product development trends play out, automakers and suppliers will move more decision-makers to the parts of the world where the automotive industry is growing, industry professionals say. Michael Robinet, vice president of global vehicle forecasts at CSM in suburban Detroit, presented his forecast last month at a seminar here sponsored by the Original Equipment Suppliers Association. While the presentation was geared toward giving advice to suppliers, the forecast also exposed powerful global automotive trends that challenge Michigan as it seeks to remain the industry's decision-making center. Australia's Holden Captiva is essentially the same as the Saturn Vue. North American relevance "As the Detroit 3 continue to globalize their development efforts, the new investment by Toyota, Hyundai and Nissan in Michigan is welcome but will not completely replace the shifted volume," Robinet said in an e-mail to Crain's Detroit Business after his presentation. "An additional effect is that suppliers with development resources to support the Detroit 3 in Michigan may have to shift some of these to other regions." Robinet said primary vehicle development includes design decisions surrounding a vehicle's structure, chassis, engine, powertrain and building process. Robinet forecasts that by 2013, the volume of Asian-developed vehicles will grow 54 percent. Over the same time, output of North American-developed vehicles is expected to fall 40 percent. Robinet said North America is becoming an automotive market that will mostly conduct secondary vehicle development. For instance, General Motors' 2008 Saturn Vue is basically identical to Europe's five-seat Opel Antara and Australia's Holden Captiva and was mostly developed in Korea with other work occurring in Europe and North America. The Vue was then adapted for North America. "I feel vehicle development is changing in Detroit and probably is moving more toward a market for finished vehicle development," Robinet said. Robert Chwalik, principal of PRTM Management Consultants in Waltham, Mass., echoed Robinet's conclusions when he presented the results of a survey of 50 U.S.-based automotive suppliers. PRTM's survey revealed that most suppliers project little if any growth in engineering employment in North America. Instead, those suppliers plan to hire more engineers in talent-rich countries such as India and in regions with lower labor and operating costs. Chwalik said suppliers surveyed expect to increase their engineering staffs by 10 percent to 20 percent per year in India and China through 2011. The Opel Antara is an adaptation of the Holden Captiva for Europe. Need for mergers? Tim Leuliette, who recently became co-chairman and co-CEO of Asahi Tec Corp., referred to CSM's product development forecasts in an April speech to illustrate why Metaldyne Corp. agreed to be acquired by Asahi Tec in January. Leuliette said the $1.2 billion acquisition quickly boosted Metaldyne's Asian presence and access to decision-makers there. "As a supplier, we need to put our assets where the action is," he said. "That's where the development cycle is, that's where our engineering awards are given, that's where we must be." For several years Michigan development officials have tried to blunt the state's diminishing manufacturing jobs by positioning the state as the brains of the automotive industry or the place where functions such as research, design and engineering will remain. Doug Rothwell, president of Detroit Renaissance Inc., acknowledged that the global product development trends outlined by Robinet pose a challenge. But he said it is a challenge Michigan can meet. "I think that it's no surprise that the industry would need to go to where the market is, and increasingly … they will try to make sure they are in tune with those markets," Rothwell said. That means those companies will be increasing engineering design and capabilities in those markets, he said. Rothwell said the automotive industry as a whole is growing. Indeed, CSM projects that the global automotive industry will grow from 62 million cars and light trucks this year to more than 80 million by 2013. "What we have to do is just make sure we grab a percentage of that market share," Rothwell said. "We are not going to grab all of it, but, nevertheless, the depth of auto engineering talent in southeast Michigan is so great that we should be able to provide some of the services that those global markets need." Thomas Manganello, a founder of a new automotive industry association called MichAuto, said Robinet's forecast underscores the need for groups to work together to preserve Michigan's automotive industry. "As China and India explode, there will be major (r&d) and design work in those locations, as there should be," Manganello said an e-mail. "But, does that signal the demise of Michigan as a global hub? Not if we do things right. That is what MichAuto is trying to bring focus to." Some r&d stays home Plenty of r&d work is staying in Michigan. For example: * In 2005, Toyota Motor Corp. spent $150 million for nearly 700 acres near Ann Arbor, Mich., to create an r&d center that will employ 400 by 2010, adding to the more than 500 employees Toyota has in the Ann Arbor area. * A hybrid-vehicle development center, launched in 2005 in suburban Detroit, is a partnership among General Motors, DaimlerChrysler AG and BMW that is developing Two Mode hybrid transmissions. * In the fall of 2005, Hyundai Motor Co. opened a 190,000-square-foot, $117 million r&d center near Ann Arbor. Dave Cole, chairman of the Center for Automotive Research in Ann Arbor, agrees that the dynamics are changing. But he argues that a lot of product development will remain in Michigan. "What everybody is doing is divvying up the (development) task on a worldwide basis," Cole said. Under the old model, automakers designed and built entirely new vehicles in a single region, Cole said. Now automakers such as GM coordinate development on a global basis, and common parts are used for different models. Even Robinet and Paul Haelterman, vice president of CSM's global advisory services, say Michigan has a chance to grab additional r&d projects, especially as Indian an Chinese companies look to establish a presence in North America. But they stress that the dynamics are changing. "There is still going to be a ton of product development going on here, and this is the only place in the world where everybody is in this one area," Haelterman said. But to win new development projects, he said, Michigan's economic development agencies and associations need to coordinate a message targeted to suppliers and automakers seeking to expand in North America. Said Haelterman: "These development agencies need to do a better job of knowing who they should specifically go after." 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Ford Jellymoulds Posted May 14, 2007 Share Posted May 14, 2007 (edited) Forecaster: Development of vehicles leaving U.S.Country's share expected to be less than 10% by 2013 Brent Snavely | Automotive News May 14, 2007 - 1:00 am Downloads: PDF DOCUMENT: R&D: Global Shifts DETROIT -- By 2013, vehicle development for more than 90 percent of new cars and trucks will take place outside the United States, according to the automotive research firm CSM Worldwide Inc. Robinet forecasts that by 2013, the volume of Asian-developed vehicles will grow 54 percent. Over the same time, output of North American-developed vehicles is expected to fall 40 percent. PRTM's survey revealed that most suppliers project little if any growth in engineering employment in North America. Instead, those suppliers plan to hire more engineers in talent-rich countries such as India and in regions with lower labor and operating costs. Chwalik said suppliers surveyed expect to increase their engineering staffs by 10 percent to 20 percent per year in India and China through 2011. Tim Leuliette, who recently became co-chairman and co-CEO of Asahi Tec Corp., referred to CSM's product development forecasts in an April speech to illustrate why Metaldyne Corp. agreed to be acquired by Asahi Tec in January. Leuliette said the $1.2 billion acquisition quickly boosted Metaldyne's Asian presence and access to decision-makers there. Rothwell said the automotive industry as a whole is growing. Indeed, CSM projects that the global automotive industry will grow from 62 million cars and light trucks this year to more than 80 million by 2013. Thomas Manganello, a founder of a new automotive industry association called MichAuto, said Robinet's forecast underscores the need for groups to work together to preserve Michigan's automotive industry. "As China and India explode, there will be major (r&d) and design work in those locations, as there should be," Manganello said an e-mail. Plenty of r&d work is staying in Michigan. For example: "What everybody is doing is divvying up the (development) task on a worldwide basis," Cole said. Even Robinet and Paul Haelterman, vice president of CSM's global advisory services, say Michigan has a chance to grab additional r&d projects, especially as Indian an Chinese companies look to establish a presence in North America. But they stress that the dynamics are changing. "There is still going to be a ton of product development going on here, and this is the only place in the world where everybody is in this one area," Haelterman said. You may e-mail Brent Snavely at bsnavely@crain.com YOU ARE FIRED WE HAVE FOUND A CHEAPER, SORRY I MEANT found SOMEBODY MORE TALENTED IN INDIA TO DO YOUR JOB. Fords new cutting edge line-up for 2014. Ford can't lose now if they listen to Biker 16 or CSM Worldwide Inc with these cars above, but you cant takes either of them too seriously. Ford have the best automotive Engineers in the World, it just that nobody listens to what the buyer wants anymore at Ford, very unwise as the buyer buys. Edited May 14, 2007 by Ford Jellymoulds Quote Link to comment Share on other sites More sharing options...
Biker16 Posted May 15, 2007 Author Share Posted May 15, 2007 bump Quote Link to comment Share on other sites More sharing options...
mkaresh Posted May 15, 2007 Share Posted May 15, 2007 Ford have the best automotive Engineers in the World, it just that nobody listens to what the buyer wants anymore at Ford, very unwise as the buyer buys. Agreed that they've failed to understand the market. But what's your evidence that Ford's engineers are the best in the world? Frankly, engineers are talented in any of these companies. But individual talent isn't as important as how well the company is organized and run. I wrote a Ph.D. dissertation on how automakers waste the talent of their people. And they'll likely keep doing it till they're out of business. Whichever exec has the biggest bonus check in the end, wins. Exec sum of the report I gave GM: http://www.truedelta.com/execsum.php I talked to Mark Fields briefly in Chicago, and suggested he take a look at this two-pager. But he was much more concerned about learning which Ford engineer told me I'd captured what life was like within Ford as well. Seems he already knows everything there is to know. Very disappointing. Quote Link to comment Share on other sites More sharing options...
g48150 Posted May 20, 2007 Share Posted May 20, 2007 We're the largest market of vehicles in the world. Even though China is going through a "growth" period, fear not, the Chinese Government just doesn't know what kind of monster it has yet in GM, Ford, and Toyota. Once the Chinese Government figures out what's going on, this rapid growth is buh-bye!!! I could be totally wrong and this could be what overthrows the Chinese Government, but the internet didn't do it, so why should cars. Once HUGE mistake companies make is using non-regional designers for regional products. Toyota is no exception, look at the prev-gen Avalon, that thing sucked balls, this gen Avalon is much better thanks to the traitors, I mean erm friends, in Ann Arbor. Trust me, we'll always be the largest consumer market, thus we'll have the clout for design jobs, and thank god, I am one of those white collar peons, buy Hyundai, the other asian meat. Quote Link to comment Share on other sites More sharing options...
dave9991 Posted May 20, 2007 Share Posted May 20, 2007 (edited) I doubt General Motors will have a very dominant position in China in the next 10 years, look at the studies and you'll find that they are becoming increasingly more reliant on SAIC, while SAIC has publicly stated that they intend to become a top 10 automaker in the next 10 years which would be in direct opposition to GM. Honda and Toyota unfortunately are in the best position due to the way they setup their JV's to suceed in China. The biggest thing GM can do is restructure their supply base as fast as possible, and begin working on developing a sub-$10,000 vehicle (I believe they have started this) that can compete in Africa, India, China, and the Middle East. Regional jobs are a very small percentage, and increasingly companies are outsourcing it, or deleting it. It is all about maximization. Currently a number of those engineering jobs that just got "eliminated" at the Big 3 have simply been outsourced (that includes to other locations in the United States). Plus you only need maybe a team of 100 skilled designers, marketers, combined with outsourced target market specific advertising to create a regional product. The product platform will be designed by the sub-group with the highest skill set in that area, and simply customized to fit a regional match, and the platform cost will be distributed across a set of models at a plant that can produce anytime of model. Chery can just as easily knock out your regional job. They plan on selling a sub $10,000 vehicle in the next 2 years, which absolutely no advertising, so they have no overhead costs projected. That is a scary thought, and if you think that they cant make a good quality car you are in for a surprise. Chery Interior Edited May 20, 2007 by dave9991 Quote Link to comment Share on other sites More sharing options...
g48150 Posted May 20, 2007 Share Posted May 20, 2007 (edited) Regional jobs are a very small percentage, and increasingly companies are outsourcing it, or deleting it. It is all about maximization. Currently a number of those engineering jobs that just got "eliminated" at the Big 3 have simply been outsourced (that includes to other locations in the United States). Plus you only need maybe a team of 100 skilled designers, marketers, combined with outsourced target market specific advertising to create a regional product. Well I'm in that small percentage, you very much. The number of currently eliminated jobs at the Big 3 got canned in the name of globalization. The way it works is yes, there is one platform Virginia, but no it doesn't fit every market for what is cost effective to sell it towards. On a lighter note, dave, when you do finally buy that Chery that you've always been dreaming about, try and buy parts for it in this country... Chinese Government Gets in Buyout Mania Well I didn't figure Chinese Democracy would start for awhile, cars DID do what the internet couldn't... Edited May 20, 2007 by g48150 Quote Link to comment Share on other sites More sharing options...
mkaresh Posted May 21, 2007 Share Posted May 21, 2007 We're the largest market of vehicles in the world. Even though China is going through a "growth" period, fear not, the Chinese Government just doesn't know what kind of monster it has yet in GM, Ford, and Toyota. Once the Chinese Government figures out what's going on, this rapid growth is buh-bye!!! I could be totally wrong and this could be what overthrows the Chinese Government, but the internet didn't do it, so why should cars. I think the Chinese government knows exactly what's going on. I haven't seen any signs that they're not entirely in control. GM, Ford, and Toyota can easily be pitted against one another. That's how the Chinese government forced them all into JVs in the first place. Quote Link to comment Share on other sites More sharing options...
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