The North American International Auto Show was opened in Detroit on January 9th, 2012.  In comparison to earlier shows, Detroit revealed greater optimism in the automotive industry, following the crippling recession of 2008-2009.  LMC Automotive (formerly JD Power Automotive Forecasting) released its Q4 2011 sales forecast, showing US light vehicle sales rebounding for 2010 and 2011.  However, with the arrival of Volkswagen at Chattanooga, Tennessee, and the growth of Hyundai in the US, such as the Elantra winning the 2012 North American Car of the Year Award, the Detroit-based auto makers face stiffer competition to regain their market shares in their home markets. 

Compact Luxury – The New Battleground
While light truck sales have recovered, the North American market is seeing a particularly faster growth in compact models.  This will result in higher production volumes for them.  According to LMC Automotive, the C-Segment will see the largest unit increase in production from 2011 to 2018, followed by the D-Segment, while the A- and B-Segments will see fastest percentage rise.

• The Show’s top launches were the Cadillac ATS sedan, the Dodge Dart sedan and the Buick Encore compact crossover. 

Not only do the above models come from the compact segments, two of them come from luxury brands.  As many North American consumers downsize, in order to lower their fuel consumption, they still demand a high level of comfort and convenience in their future vehicle purchases – and with this, electronics demand in the North American market will continue to grow.

• The Cadillac ATS aims to compete against more successful German branded sedans, in particular the BMW 3-Series.

Fuel Economy
Growing demand for fuel economy will also result in the adoption of direct injected gasoline engines across the industry, as on the Buick Encore and the Cadillac ATS.  The Dodge Dart, however, will come equipped with the new Tigershark gasoline engine, developed with FIAT’s MultiAir exhaust gas recirculation (EGR) and variable valve timing (VVT) technology, although MultiAir is expected to be deployed on gasoline direct injected engines in the future. 

Ford has made major strides in electrifying the powertrain with the announcement of its roll-out of stop-start systems, starting with the 2013 Ford Fusion.  Ford’s common platforms will also enable its customers to opt for electric, hybrid and plug-in hybrid versions of various models, such as the Ford Focus compact and C-MAX compact minivan.  The GM eAssist mild hybrid system has already been offered on the 2012 Chevrolet Malibu, so perhaps the Buick Encore will follow suit? 

And there may be the possibility that Honda and Toyota may assemble hybrid models in the US – following the unveiling of the Acura NSX sports car equipped with new all-wheel drive hybrid powertrain technology, the auto maker announced that development and future production will occur at its Marysville, Ohio, facility.  The Acura ILX compact sedan also featured a hybrid concept.

• Should tensions in the Arabian Gulf escalate, then demand for hybrids will rise rapidly in the short term.  However, auto makers must bear in mind the revisions to the CAFE mandate, such as proposals by the Obama Administration to raise the level to 54.5 mpg (4.3 l/100 km) by 2025, a level that will certainly require more powertrains to be electrified in the long term, especially if the model segment mix remains unchanged.  An an example of making hybrids more affordable for wider consumer adoption is the Toyota Prius C compact ('Aqua' in Japan).

Comfort and Convenience
Despite their size, the new or recently-launched compact models have many features that would only be offered to larger segments.  Examples of these luxury features include passive keyless entry and start systems (PKE), dual-zone automatic HVAC (heating-ventilation-air conditioning) systems as standard, electric parking brakes (EPB), RLT (rain-light-tunnel) sensing for automated lights and windshield wipers and electrically-adjustable, heated and ventilated seats. 

• Examples of compact models with PKE that are assembled (or will be assembled) in North America include the Acura ILX, the Cadillac ATS, the Chevrolet Cruze, the Dodge Dart, the Hyundai Elantra and the Nissan Tiida.

Infotainment
Consumer demand for connectable systems for smartphones and the use of the Internet as a gateway to various features has led to the development of new all-encompassing, software-based infotainment systems.  The launches at Detroit are no exception, which will further lead to growing electronics demand for Bluetooth, voice control systems and HMI systems controlled by color displays and touch screens. 

• Examples of new infotainment systems include Cadillac CUE, Chrysler UConnect, Ford SYNC, Hyundai Blue Link and Toyota EnTune.  The Cadillac ATS and Dodge Dart are equipped with large color touch screens.

Safety
As side airbags become mandated in North America, the focus for safety applications in new models has been advanced driver assistance systems (ADAS). 

Blind spot detection (BSD) and rear cross traffic assist (RCTA) have been key additions in the North American market, as consumers there tend to drive into perpendicular parking spaces and need assistance when backing out of them – the new Cadillac ATS and Dodge Dart will offer radar-based systems. 

Front windshield camera-based systems offer greater value-for-money, offering both distance warning and lane departure warning (LDWS) from the same module – the Cadillac ATS and the Buick Encore are likely to offer the same Magna-supplied system, as already being offered on some GM crossovers. 

Other features making a greater appearance in North America will be adaptive front-lighting systems (AFS) and high intensity discharge (HID) headlamps, as well as head-up displays, as on the Cadillac ATS.  In line with the Kids & Cars mandate, the HMI displays enable the Cadillac ATS and the Dodge Dart to play back park assist cameras.

Implications
According to the latest (January 2012) edition of Strategy Analytics’ Automotive Electronics System Demand Forecast (2009 to 2018), North American demand for the above applications will grow the fastest, mirroring the trends seen at the Detroit Show.

• Among the fastest growing applications were Collision Warning (+26.9 percent CAAGR by $M value), Passive Keyless Entry (+15.8 percent) and Engine Control (+14.9 percent).

Despite vehicle downsizing, demand for automotive electronics in the North American industry remains strong.

The Automotive Electronics System Demand Forecast 2009 to 2018 – January 2012 Update, can be downloaded at: http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=6985.

Updates on the following databases will be published in February / March 2012:
- ADAS Supply & Fitment
- Advanced Entry and Start System Supply and Fitment
- EV/HEV Technologies Supply & Fitment
- Hybrid Technologies Legislation/Support

Strategy Analytics has recently updated its Advanced Entry and Start System Supply and Fitment Database.  It revealed increased interest for Passive-Entry-Go (PEG) systems in the emerging markets, in particular from Chinese car makers following model launches at the 2010 Auto China (Beijing) show.  The updated Advanced Entry and Start System Supply and Fitment Database is now available from the Strategy Analytics website.  The new entrants in the Advanced Entry and Start System Supply and Fitment Database include various new models launched at the 2010 Auto China show.

• BYD’s new models have been deployed with PEG systems.  They include the electric minivan E6 now being offered to fleets, and the gasoline-driven G3 compact sedan.
• Geely also announced on May 02, 2010, that its new Emgrand EC8 mid-size sedan, among its new model line-up, will come with a PEG system.

Furthermore, joint venture car makers linked to global OEMs are also offering PEG systems, as well as other electronic systems.

• The deployment is not confined to high segment models like the Buick LaCrosse luxury sedan, but also the compact segments such as the Chevrolet Cruze.  Both models are assembled in China by Shanghai-GM.
• The Chevrolet Cruze is also being assembled in India and Korea by General Motors.  The PEG feature will also be offered to these markets, thus enabling a greater spread for PEG systems.

This strategy is in contrast to previous models assembled and sold in emerging markets, namely to reduce specifications in order to be more affordable.  The average Chinese consumer is not only more discerning than before, but has a higher disposable income and greater willingness to purchase vehicles with more features.  Recent information on the Chinese automotive market is available from the following Strategy Analytics reports,  Chinese OEMs: Rapid Advance In Quality Bodes Well For Automotive Electronics and Chinese OEMs Fast Catching Up On Powertrains.  Further updates in the Database include more car models assembled in Korea with PEG systems fitted.

• Renault Samsung Motors has PEG on its models, based on common platforms with the Renault Laguna and Nissan Teana.
• New models from the Hyundai-Kia group with PEG systems include the YF generation (MY 2010) Hyundai Sonata being assembled in Korea and in the United States.

Penetration rates and demand levels of PEG systems by region, and other types of entry systems, is available from the Strategy Analytics Automotive Electronics System Demand Forecast 2008 to 2017: Main Data Tables.  Finally, Delphi launched its new key fob in April 27, 2010 at the 2010 SAE World Congress.  It boasts two-way communication to approximately 1 kilometer (3,333 feet).  Using Bluetooth connectivity with the driver’s mobile handset, much of the vehicle’s systems can be controlled remotely through applications downloaded on to the mobile handset.  Near Field Communication (NFC) enables similar functionality for the European market.  Delphi’s new two-way communication fob can enable the driver to:

• Discretely locate the vehicle, with additional GPS support if beyond the 1 km RF range.
• Remote readings of vehicle diagnostics and thus provide warnings should the vehicle need servicing or repair.
• Remotely control infotainment systems prior to entering the vehicle, such as selecting radio channels.
• Remotely control operation of the doors, seat positions, sunroof and windows.
• Remotely start the HVAC system, to cool or to warm up the cabin, with temperature read-outs.
• Remotely start the engine to defrost windows and windshields.
• Warn of doors being left unlocked, and of the sunroof and windows being left unclosed.
• Warn of intruders either in the cabin or in the near vicinity of the vehicle through exterior and security cameras fitted to the vehicle.
• Warn of low fuel levels and low tire pressures, as well as electric vehicle support.

Further information on PEG systems is available from the Strategy Analytics report, Vehicle Entry and Go: Passive Systems Set To Challenge RKE, while information on the Delphi fob is available from the Strategy Analytics Automotive Blog, Delphi Smart Key Fob Enables App Access Without Subscription.  Model availability for PEG systems is beginning to expand beyond the mature markets and beyond the luxury segments.  This could lead to greater volume demand and result in lower cost and widespread demand for Passive Entry systems. 

• At present, the higher costs in purchasing PEG systems over the standard Remote Keyless Entry (RKE) systems has precluded widespread uptake from consumers.

As for two-way communication fobs, this is yet another functionality where the mobile handset has made in-roads into the automotive space.  Development of these systems has only just started, but in the future such systems will surely make an impact on the automotive industry.  Further information on mobile phones in the automotive space is available from the Strategy Analytics Automotive Blog, including articles such as InkaNet – Mobile-Based Infotainment Comes To Chinese Autos.