Auto Alert - November 2017

Auto Alert -  November 2017

Hyundai’s Bakkie is Go.

Hyundai Motor has confirmed to the international media that it intends to launch a pickup truck on to the North American market. This decision has been taken by the South Korean manufacturer in view of the general market drift away from sedans that was highlighted in last month’s Auto Alert, and its own declining share of the key North American market. Hyundai total sales in the United States were reportedly down by 11% year-on-year through July, while Sonata volumes were off by 30% over the same seven-month period. An eleven percent improvement in equivalent SUV sales over this period was not enough to cancel out the brand’s total deficit, but it has given a clear indication that Hyundai needs to adjust its model mix to retain overall market competitiveness.

There had been earlier indications that the Hyundai family was seriously considering an entry to the pickup (bakkie) market. In 2004, Kia exhibited its Mojave pickup concept at the Chicago Auto Show, using the contemporary Sorento SUV as a base. This concept was of fairly conventional appearance, but it was stressed at the time that Kia did not have a suitable American facility to build such a vehicle, so the showing was clearly just intended to gauge public interest. More recently, at the 2015 North American International Auto Show in Detroit, Hyundai revealed the Santa Cruz crossover truck concept. This differed entirely from the earlier Kia effort, with Hyundai stressing that this vehicle was not intended to be truck-like, having no strong emphasis on ground clearance or towing capacity. Based on the Tucson crossover-utility platform, the small pickup concept was said to be aimed at “younger buyers” than the latest generation US-market “compact pickups”, typified by the Chevrolet Colorado. Features of the Santa Cruz included aggressive styling, an extendable tailgate, a 2,0-litre turbodiesel engine, upright hexagonal grille, honeycomb headlamp projectors, and rear-hinged doors.

It appeared that Hyundai, following very extensive research, was looking at a new market niche, more closely related to the crossover utility (CUV) segment than any genuine truck category. It was clearly aiming at recreational, rather than business use, and at buyers who would be attracted to a basic CUV package with an open load box. At the time, we found this somewhat puzzling, but subsequent events in the global pickup market suggest that Hyundai was onto something, with a similar direction being followed by Mercedes-Benz with its X-Class double-cab spin-off from the Nissan NP300 one-tonner. The reveal of two X-Class concepts in Stockholm last October left no doubts that M-B were looking to create an SUV-type market position for this pickup model, with more emphasis being placed on the private use element than traditional pickup “workhorse” values.

In mid-March at the Geneva Motor Show, Fiat revealed a similar philosophy with its Fullback Cross derivative of the Mitsubishi Triton-derived Fullback one-ton pickup model. As we noted in our report of that event, the increasing use of pickup derivatives for private transportation purposes has been evident in South Africa for some time, with bakkies often outselling the most popular passenger car models in the local market. With this trend now becoming more evident on a global scale, we look forward with great anticipation to the appearance of Hyundai’s final design for this new model, and discovering whether it is to be offered on the broader global market.

Goodbye, Aurion.

The 2013/14 announcements that Ford, General Motors and Toyota were to cease vehicle manufacture in Australia within three years caused considerable consternation in that country. Apart from serious ramifications for regional economic activity and employment, this situation would lead to the demise of several unique vehicle models including the Holden Commodore and Ford Falcon rear-wheel-drive sedans, and a number of their spun-off siblings, including SUV’s and pickups. Many of our readers are sure to be familiar with these Ford and General Motors products through the derivatives have appeared from time to time in our local marketplace, but the unique Toyota models built in Australia are probably less well known outside of that country. Nevertheless, their imminent disappearance is still newsworthy.

Goodbye, Aurion.

For the record, Toyota commenced Australian assembly at Port Melbourne in April 1963, this being the growing Japanese manufacturer’s first off-shore vehicle production operation. By 1994, more than a million Toyotas had been produced at that location, but starting in that year, the entire operation was progressively relocated to nearby Altona. Toyota models that have been built in Australia over the past half-century include the Tiara, Corona, Crown, Corolla and Camry, as well as Holden Nova-badged Corollas for General Motors. More recently, production has been concentrated on the Camry, and derived Aurion sedan models, with more than half being exported, but Toyota Motor Corporation Australia management had become concerned over the prospects of reduced export business after Camry entered Chinese production in 2006. These concerns revolved mainly around the volatility of the Australian Dollar in relation to its US counterpart, versus the comparative exchange stability of the Chinese currency.

The Aurion, which incorporated design features tuned to Australian market requirements, was built on the Camry front-wheel-drive platform. The model first appeared at the 2006 Melbourne motor show, and chalked up more than 110 000 unit sales in Australia during its eleven-year lifetime, with a further 70 000 units being exported. The basic drivetrain specification included a 268 hp (200 kW) 3,5-litre quad-camshaft V-6 petrol engine driving through a 6-speed automatic transmission. The last production Aurion rolled off the Altona production line at the end of August, 2017, with final Camry Hybrid and Camry petrol-engine production run-out scheduled for September and October, respectively. Australian buyers looking for a V-6 engined larger sedan will, in future, need to consider the imported all-new Camry model which was set for local release in November.

The final total of Camry production in Australia ran to more than 2,1 million vehicles in six product generations, of which some 1,2 million were exported, which was reported to be more than any other vehicle produced by that country’s automotive industry. The model range also chalked up 24 consecutive years as Australia’s best-selling midsize car. The country’s surprising failure to sustain a viable motor manufacturing industry following a 90-year history in this area of activity should be of particular concern to other countries where automotive production is still an important player. In 1989, Australia had moved away from earlier stringent vehicle local content requirements, leaving local manufacturers Ford, GM-Holden and Toyota to build the larger passenger car, sports utility and pickup models historically preferred by Australians. Unfortunately, increasingly expensive fossil fuel and changing global trends tended to swing Australian buyers away from the unique local products towards smaller, more fuel-efficient imported vehicles, which, in some cases, were sold through the same distribution channels as the indigenous models. The problem was then further exacerbated by shrinking potential export opportunities for the unique Australian products, in the wake of the 2008 global financial crisis.

The salutary lesson here is that any country’s continued participation in vehicle manufacturing has to make economic sense to the global group, or groups, controlling its local operations. Ford’s quoted experience that Australian manufacturing costs were twice those of Europe, and nearly four times the Asian equivalent, was the most important contributory factor to its decision to exit production “down under”. The unique nature of the Australian models also limited options to procure key global componentry from cheaper offshore sources, exacerbating the problem. Once Ford announced its decision to pull out, fears that the resulting impact on the viability of critical local component suppliers would lead to the closure of the two remaining local manufacturing operations, proved to be well-founded.

South Africa’s motor industry is one of the most important elements of this country’s industrial patchwork, reportedly accounting for approximately 30% of its manufacturing output. Total employment numbers more than 90 000 people, and outputs contribute substantially to both the country’s domestic economy and export earnings. But, the clear message from Australia is: “If the positives do not add up, the motor industry, irrespective of history, will pack its bags and move out”. The recent announcement of General Motors’ withdrawal from local manufacturing and the market bears this out. The fragility of OEM commitment to off-shore industrialization needs to be borne in mind by both the South African government and organized labour in their interactions with the global motor industry.

Paccar’s New Transmission.

Over the past two decades, a very significant fundamental change has emerged in the American truck building industry. Previously, a selection of outsourced driveline aggregates, supplied by product specialists Cummins, Detroit Diesel, Caterpillar, Eaton/Fuller, Spicer, ArvinMeritor and Dana, was to be found in the vast majority of American heavy commercial vehicles, but after European groups Daimler Trucks and Volvo took control of American brands Freightliner, Western Star and Mack, the situation started to change. The parent manufacturers were clearly intent on extending their “vertically integrated” in-house driveline component sourcing philosophy to the American brands, in order to spread the amortization of development and production costs across the largest possible global volume footprint, and to take increased control of their aftermarket and parts business.

Paccar’s New Transmission.

While all this was going on, the only remaining US-owned and controlled truck manufacturing conglomerate, Paccar, was making its own plans to adopt an “in-house” engine supply strategy. Following its takeover of Dutch manufacturer DAF Trucks in 1996, Paccar inherited a substantial engine design and manufacturing capability, dating back to the license manufacture of Leyland diesel engines in the 1950’s. DAF had incrementally developed its own designs, incorporating turbocharging and intercooling, as the demand for higher outputs grew. At the beginning of 2007, Paccar announced a new $US 400 million powertrain manufacturing and assembly facility, plus technology center, in Columbus, Mississippi, to build MX-Series 9,2 and 12,9 litre engines, for fitment to its American-built Kenworth, and Peterbilt vehicles. Stateside production of these power units commenced in 2010, and they were offered as an optional alternative to bought-in Cummins units.

During August, 2015, PACCAR revealed that the 100 000th MX-13 engine had been produced in North America, while the 50 000th MX-powered Kenworth truck was handed over to operator UPS at a ceremony in Kirkland, Washington. These announcements indicated that Paccar was achieving considerable domestic American success with the marketing of its in-house driveline components. In October, 2016, Paccar launched its own proprietary drive axle, so it only needed the introduction of an in-house transmission to complete the ultimate objective of vertically-integrated driveline availability for its Kenworth and Peterbilt truck brands. In August, 2017, that objective was realised with the introduction of Paccar’s own branded “Automated Transmission” for medium and heavy-duty trucks.

The quotation marks in the preceding sentence are intentional, and highly significant. While other manufacturers persist on using the contradictory appellation of “automated manual transmission”, abbreviated to AMT, for their two-pedal gearchange systems, Paccar insists that its design is “designed from the ground up as an automated transmission”, thus eliminating any inherited functionality from a manual alternative, and achieving what is claimed to be the lightest heavy-duty transmission on the market. This new 12-speed unit is reportedly the result of a three-and-a-half-year joint development collaboration with driveline specialist Eaton, who commenced series production of the transmission at their San Luis Potosi, Mexico plant in October, 2017.

Paccar’s 12-speed is rated for 510 hp/1 850 lb. ft. torque inputs and is cleared for operation at Gross Combination Mass ratings of up to 50 000 kg. Features include lightweight aluminium construction, electronically-controlled pneumatic actuators, column-mounted shifter control, forward and reverse creep functions, skip-shifting functionality, automatic neutral selection when the park brake is applied, 5 year/750 000-mile warranty, 750 000-mile oil change intervals, twin countershaft design, fluid pressure detection with limp-home mode to protect the gears and shafts, and a protection system for the no-maintenance clutch. Initially, this transmission will be paired through tightly integrated electronic communications with Paccar’s MX-13 engine, and from early 2018, also with the smaller displacement MX-11 power unit.

The launch of this component suggests that the revolution in North American truck manufacturing philosophy has nearly come full circle. Although some bought-in powertrain options remain, there is strong evidence that the operator community has increasingly bought into the “vertically integrated” specification profile. It is doubly significant that the US-controlled Paccar group has come so far in the process, as it could have been rationally expected to stick with the historic pattern. The arguments in favour of more widespread cost amortisation, and greater control over parts merchandising were clearly too strong to be ignored.

Nissan Turns Over a New Leaf!

In last month’s column, we expressed the opinion that a steady global transition to electric vehicle propulsion now seems inevitable. While this process may evolve through a variety of configurations, including hybrids, range extenders, plug-in charging technology and fuel cell-powered systems, the eventual outcome will be vehicles that differ very substantially in their technical detail from the vast majority currently seen on our roads. As we have pointed out earlier, electric vehicles are nothing new, with battery-powered and wire-connected electric vehicles having been around since early in the 19th Century, but the advent of viable and practical hybrid driveline models led by the Toyota Prius in 1997, sparked much new thinking in the areas of configurational and component design, which is still evolving as we write.

Nissan Turns Over a New Leaf!

We are still not sure of the true cost of these new technologies, and we noted that, in 2006, Nissan’s then supremo and heir to the Renault throne, Carlos Ghosn, expressed the opinion that petrol-electric hybrid vehicles made little sense because of their high cost. However, in 2009, the same Carlos Ghosn surprised us by presiding over the announcement of Nissan’s Leaf all-electric car. So, while hybrids were “out”, all-electric zero emission models were apparently “in”. Our initial confusion over the seeming about-face was reinforced by the styling of the first Leaf which was bland and underwhelming to say the least, and seemed to suggest an almost begrudging “toe-in-the-water” attitude to the technology. Was Nissan just putting in a marker to assure observers that it was not ignoring the emerging trend towards alternative drivetrain thinking?

This proved not to be the case. Subsequent events proved that Nissan did, indeed, have a high level of commitment to the Leaf, together with rolling out of the recharging infrastructure needed to make it a viable choice for commuters. By September, 2017, more than 283 000 of the original 80 kW Leaf cars had been sold globally, and the model had accounted for 31,7% of all electric vehicles sold in the United States since market entry in 2010. This was somewhat less than the 200 000 unit per annum production target mentioned at the Leaf’s first showing in 2009, but a significant volume, nevertheless. However, it had become apparent from the simultaneous success of considerably more visually appealing competitive models such as Chevrolet’s Volt and Bolt, and BMW’s i3 and i8, that styling did count on EV’s, and the second generation Leaf model announced in September 2017 presented a and much improved and more appealing appearance.

In addition to looking much more attractive, the new Leaf displays numerous technical advances and features developed as a result of experience with its predecessor. These include a 241 km operating range (up from 172 km), adaptive cruise control, lane-keeping assist, single-pedal braking and acceleration, intelligent lane intervention, lane-departure warning, intelligent emergency braking, blindspot warning, rear cross-traffic alert, intelligent around-view monitor, automated parallel and lot parking assist, increased battery energy density, and a 147 kW powertrain. Time to full battery recharge is quoted as 16 hours on a 110V electricity supply, or 8 hours on 220V, while an 80% recharge is claimed to be possible in 40 mins. Styling and convenience features include a V-motion grille, LED headlamps, available two-tone paint scheme, and flush-design infotainment screen.

With automotive industry commitment to electric vehicles growing daily, we can expect regular news of new entities and relationships being formed to exploit the situation. During September, it was announced that the Renault-Nissan Alliance and Dongfeng Motor Group Company Ltd. have formed a new joint venture to co-develop and sell electric vehicles in China. To be known as New Energy Automotive Company, Limited (eGT), ownership of the joint venture is split in the ratio Renault 25%, Nissan 25%, and Dongfeng 50%. This JV will design a new EV with intelligent interconnectivity, using an A-segment SUV platform, using EV technologies and cost-effective car design experience from the Alliance, and competitive manufacturing costs from Dongfeng.