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

From the model launches in 2010, Passive Keyless Entry (PKE) systems are increasingly found in compact models outside Japan.

• Ford in Europe have launched many compact models, such as the Fiesta, with its "Key-Free System".  Ford in North America will follow suit with the MY 2011 Fiesta and MY 2012 Focus.
• The Nissan Juke is a compact SUV assembled in the UK - the Tekna trim level comes with the "Intelligent Key" system. 
• The Volkswagen Golf comes with "KESSY" - the system only activates on the front doors in order to lower cost. 

Evidence of this trend, over the past year, can be seen in the latest Strategy Analytics "Advanced Entry and Start System Supply and Fitment Database": http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=5942. This shows that certain OEM and supplier strategies aim to spread the availability of PKE, in the hope of raising volumes and lowering cost through economies of scale. And in assisting cost reductions, suppliers, both at system and at semiconductor level, aim to integrate components and functionality in order to reduce module size.

• TRW launched a module that can combine the RF functionality for a PKE system with that for a Tire Pressure Monitoring System (TPMS).  The latter system is mandated in many markets, thus the module can offer additional functionality at minimal cost.
• Atmel has integrated the immobilizer functions onto the same chip for a PKE system, as well as transceiver ICs integrating remote start and TPMS functions.
• Continental and Kathrein have developed an integrated antenna for all kinds of features, such as radio and navigation, as well as PKE.
• Maxim's MAX1441 touch sensor IC has 5 passive components instead of the 16 used by competitors. 

Furthermore, some RKE designs are using push button engine starts as a base for their PKE designs:

• The MY 2009 Audi A4 has a slot with which the RKE fob is pushed further in to start the engine.  Slots for PKE systems are used when the battery in the fob is depleted.
• Established brands with this kind of RKE system, and can also come with similar PKE systems, include BMW, Mercedes-Benz, Renault, Volvo and the Volkswagen Passat.  Some of these models may have a separate starter button for both RKE and PKE systems.

But despite this, almost all PKE systems are offered as an additional cost option to the consumer and because of its higher cost, few are deployed.

• According to Strategy Analytics, only 8.1 million units of PKE (equating a penetration rate of around 11 percent) are being deployed for 2010.

Forecast data can be found in the "Automotive Electronics System Demand Forecast 2008 to 2017: Q3 Update": http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=5815.   Strategy Analytics believes that further cost reductions are needed before PKE can see widespread deployment.

TRW has announced the establishment of its second North American Driver Assist Systems Engineering Center at the Company's Livonia, Michigan headquarters. The new engineering center will focus on the development and testing of advanced radar applications to support TRW's North American customers.  http://www.prnewswire.com/news-releases/trw-establishes-driver-assist-systems-engineering-center-in-north-america-69750272.html  Strategy Analytics has been noting increasing interest in Advanced Driver Assistance Systems (ADAS) in the North American market  and sees the move as part of TRW's aim to broaden its portfolio of products away from more commoditized areas such as braking, steering and suspension systems – areas that have been badly hit by the recession.  The reasons behind TRW's move are: 

• The company has a strong presence in airbags,  seat belt systems and chassis electronics , all mature areas where growth is flattening but all being foundation elements upon which to build an ADAS business.
• Raising new business, particularly high-end automotive systems that command better profit margins and potential expansion of sales across OEM platforms.
• North America is a key market for ADAS adoption:  U.S. authorities typically have a higher propensity to mandate vehicle safety system implementation than other regions - the latest is the forthcoming NHTSA mandate on backing-up systems based on the Gulbransen "Kids and Cars" bill;  There is growing consumer awareness;  There is increasing ADAS deployment by North American  vehicle  OEMs  - that include the new Ford "Cross Traffic Alert" radar-based system, which enables drivers to monitor their blindspot when changing lanes and when backing out of parking spaces.
• Growing moves towards "sensor fusion", namely to combine input from different sensor types, in order to enhance the performance of ADAS systems.  Such systems that could see the benefits of "sensor fusion" include ACC (Adaptive Cruise Control) and PCS (Pre-Crash Safety) , as cameras are deployed for object classification while radars are deployed for accurate, long-range, all-weather object detection.  The sensor fusion approach requires much development to achieve commercial and performance optimization, hence the new TRW radar design center will make collaborative developments with its earlier camera counterpart inFarmington Hills, MI., which has already launched its camera-based Lane Departure Warning System (LDWS).

The focus behind the new design center in Livonia, MI., is the development of new radar-based ADAS systems, which may include the newly-launched, cost competitive 24 GHz radar system for ACC and PCS systems.  Current TRW ACC/PCS radar customers include Volkswagen, which is planning to expand its North America based manufacturing and start assembly of a mid-sized sedan in the U.S.  TRW is also hoping to extend its customer base further.   However, the ADAS supply scene is becoming more crowded and TRW has to act fast in order to stand out from the other players in the market - see Strategy Analytics ADAS Supply and Fitment Database:  http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4642.  Despite the current woes of the automotive industry, which are now beginning to ease, Strategy Analytics has seen continued investment in new engineering development centers in North America and elsewhere, which it has documented in its latest "Tier 1 Vendor Regional Design Center Database ": http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4982.�