Participants in and observers of the automotive industry are familiar with the normally glacial pace of change in the business. But change sometimes comes rapidly as a result of unexpected events such as fatal accidents or the subsequent accident investigations.

The most recent example of this phenomenon lies in the final report and recommendations of the National Academy of Sciences (NAS) panel reviewing the findings of the National Highway Traffic Safety Administration (NHTSA) from the investigation of Toyota’s year-old sudden acceleration problems.

The NAS report has revealed the vulnerabilities of both the automotive industry and its regulatory body, NHTSA.  The fallout from the NAS recommendations are likely to quietly rattle the board rooms of car makers around the world.

Those recommendations are:

1.      That NHTSA become more familiar with and engaged in standard-setting and other efforts involving industry that are aimed at strengthening the means by which manufacturers ensure the safe performance of their automotive electronics systems.

2.      That NHTSA convene a standing technical advisory panel comprising individuals with backgrounds in the disciplines central to the design, development, and safety assurance of automotive electronics systems, including software and systems engineering, human factors, and electronics hardware. The panel should be consulted on relevant technical matters that

arise with respect to all of the agency’s vehicle safety programs, including regulatory reviews, defect investigation processes, and research needs assessments.

3.      That NHTSA undertake a comprehensive review of the capabilities that ODI (Office of Defect Investigation) will need in monitoring for and investigating safety deficiencies in electronics-intensive vehicles. A regular channel of communication should be established between NHTSA’s research program and ODI to ensure that (a) recurrent vehicle- and driver-related safety problems observed in the field are the subjects of research and (b) research is committed to furthering ODI’s surveillance and investigation capabilities, particularly the detail, timeliness, and analyzability of the consumer complaint and early warning data central to these capabilities.

4.      The committee concurs with NHTSA’s intent to ensure that EDRs be commonplace in new vehicles and recommends that the agency pursue this outcome, recognizing that the utility of more extensive and capable EDRs will depend in large part on the extent to which the stored data can be retrieved for safety investigations

5.      The committee also endorses NHTSA’s stated plan to conduct research on pedal design and placement and keyless ignition

design requirements but recommends that this research be a precursor to a broader human factors research initiative in collaboration with industry and that the research be aimed at informing manufacturers’ system design decisions.

6.      The committee believes that strategic planning is fundamental to sound decision

making and thus recommends that NHTSA initiate a strategic planning effort that gives explicit consideration to the safety challenges resulting from vehicle electronics and that gives rise to an agenda for meeting them. The agenda should spell out the near- and longer-term changes that will be needed in the scope, direction, and capabilities of the agency’s regulatory, research, and defect investigation programs.

7.      The committee further recommends that NHTSA place development and completion of the strategic plan as a top goal in its coming 3-year priority plan. NHTSA should communicate the purpose of the planning effort, define how it will be developed and implemented commensurate with advice in this report, and give a definite time frame for its completion. The plan should be made public so as to guide key policy decisions—from budgetary to legislative—that will determine the scope and direction of the agency’s vehicle safety programs.

The recommendations touch on the functioning of several vehicle systems including brake pedals, event data recorders and keyless ignition systems.  While the investigation resulted from several sudden acceleration incidents, one in particular, involving the Saylor family and Mark Saylor, a California Highway Patrol officer and former pilot, helped to bring the issue to the attention of regulators.

The Saylor crash was unique in the fact that it  involved a highly skilled driver and a live 911 call from the vehicle seeking help while the incident was in progress.  The vehicle involved, a Lexus, featured a keyless ignition system requiring a three-second depress of the ignition button to turn the car’s engine off.  The vehicle's floormats were implicated in the Saylor incident and an earlier mishap.  Mark Saylor and three family members died in the spectacular crash that resulted from the vehicle’s uncontrolled acceleration.

While mechanical failure was not completely ruled out, and Toyota endured a recall to replace brake pedal mechanisms, regulators focused on software issues.  NHTSA was unable to identify any specific software failure, a finding which was affirmed by NAS.

But NAS’s half-endorsement and half-critique of NHTSA is both unsatisfying and forboding.  (It is also a not-so-subtle request for additional research funding.)  NAS is in effect saying NHTSA was correct in finding no error, but that NHTSA is not and was not equipped to be successful in its quest in the first place.  NAS was only reviewing NHTSA’s findings and not conducting its own independent inquiry, so it is unclear whether NAS has the expertise, the lack of which it notes at NHTSA.

Two directions may emerge from the NAS report.  NHTSA may pursue additional research and regulatory actions or it may do nothing.  The likelihood is that NHTSA won’t do much as indicated by its comments on the report suggesting that it has already taken steps to beef up its capabilities.

In an ideal world, the following steps might be taken:

è Convene a panel to review the existing EDR standard (not currently a mandate though widely adopted on a voluntary basis) to determine what, if any, additional data ought to be collected;

è Consider a recommendation requiring greater sharing of EDR data voluntarily, on-demand or automatically in all accident cases;

è Review current OEM policies and procedures for vehicle data collection and distribution – ie. via embedded modems – what data is currently collected and processed, under what circumstances and for what purposes, and with whom and how it is shared;

è Develop a process for defining voluntary minimum standards for connected vehicle systems regarding safety-related data gathering and sharing;

è Convene a panel to assess the implications for remote vehicle control and real-time vehicle monitoring in circumstances impacting the safety of drivers or the public.

A review of the physical and electronic functioning of brake systems and keyless ignition systems implicated in the Toyota sudden acceleration incidents is inevitable and is likely ongoing.  And there are some in the regulatory community that have called for the implementation of a brake override capability.  Meanwhile, Toyota’s massive post-review investments in safety systems and safety research are noteworthy.

But the proliferation of connected vehicle technologies, particularly embedded systems, has wider implications in this context.  A live real-time connection to a car creates expectations from the consumer and obligations for the manufacturer.  OnStar’s remote vehicle slowdown capability for stopping vehicle thefts is but one example, but it is notable given its embrace in Brazil’s Contran 245 vehicle tracking and immobilization mandate.

If a car company has the capability to stop a car in danger of getting into an accident or the subject of criminal activity, does it have an obligation to do so?  Given the circumstances of the Saylor crash, such questions need to be asked and their implications explored.  The events are not dissimilar from the 2009 crash of Air France Flight 447, that regulators said might have been prevented by existing pilot monitoring technologies.

Implications:

NAS’s lukewarm endorsement of NHTSA’s findings brought the Toyota investigation to an unsatisfying conclusion.  Observers are left with the powerful implications of the multiple fatal incidents that caused the review.

Software and electronics are playing an increasingly important role in automotive systems.  Connectivity, too, is emerging and creating new demands on OEMs even as the technology enables new functions for consumers.

OEMs will do well to get ahead of the issues by improving transparency regarding the operation of their systems.  Car makers will benefit from enhanced consumer awareness of their systems and regulators clearly need to be educated regarding system capabilities and long term industry direction.

In this context it is important to note that OnStar emerged from General Motors’ own initiative and not from a government mandate.  It will be best for consumers, the industry and the marketplace if the automotive industry can maintain its firm grasp of this initiative.

The day has already arrived that a vehicle connectivity system can be used to stop a thief.  The day may not be far off when a telematics system can prevent a crash – especially with V2X technology arriving before the end of the decade.

Car makers should do all in their power to demonstrate that telematics systems are the solution to the problem and not just another driver distraction.  Perhaps this communication is already taking place.

The very organizations that present themselves as most concerned with the welfare of the driving public are actually impairing the adoption of automotive safety systems. Insurance companies in the U.S. refuse to offer discounts for safety systems and the inability of regulators to prove the efficacy of active safety systems will likely prevent the National Highway Traffic Safety Administration (NHTSA) from mandating these enhancements.

In spite of the lack of regulatory support and insurance incentives, Strategy Analytics actually foresees robust adoption rates for advanced driver assist systems (ADAS) among auto makers. (New ADAS Systems: Reaching Compact Segments, Reaching Greater Volumes, More Sensor Fusion http://bit.ly/pIXhdT) But that uptake will come in the absence and in spite of a lack of commercial incentives.

Soft mandates and incentives

The best that regulators can muster in the U.S., Europe and Asia is NCAP “recognition” for cars that offer these technologies – even though few are offered as standard. The safety mantra among regulators has shifted to crash avoidance from crashworthiness. This does not mean that crashworthiness has been abandoned, but the perception is that reductions in accident fatalities from mandated systems such as airbags have reached a point of diminishing returns and that most future reductions in fatalities will come from ADAS systems intended to avoid accidents altogether.

This shift in emphasis is also aligned with the long-term plan to deploy intelligent highway systems built around V2X vehicle connectivity. The key problem with this approach is that regulators are now facing the considerably more difficult task of proving that new ADAS technologies – candidates for new mandates – have actually or are actually preventing crashes. Crash worthiness is easier to demonstrate, measure and mandate.

The one company that stands out for its standard fitment of cutting edge ADAS technologies is Volvo. One might be forgiven for expecting the company and its well-appointed vehicles to be a shining commercial success for its leadership in safety system adoption. The XC60 – with its standard City Safety crash avoidance technology – has been blessed with research findings validating its effectiveness at crash avoidance, but nary a single insurance carrier in the U.S. offers a discount for the car as a result of its safety system.

Volvo’s XC60 changes the game

In 2011, the U.S.-based Highway Loss Data Institute released a study of claim frequency and severity for the Volvo XC60 – equipped with City Safety crash avoidance technology – and found that the estimated claim frequency was 27 percent lower than that for all other midsize luxury SUVs combined. The study concluded that “the overall loss ($68 per insured vehicle year) for the XC60 was lower than that for other midsize luxury SUVs combined by 20 percent, a statistically significant result.”

Strategy Analytics noted that this finding together with “the indication that the system reduces injury rates” provided some of the first real evidence that ADAS technologies can have a measurable, real-world impact on safety. But insurers have remained on the sideline. (For a description of the XC60 and the HDLI study: Advanced Safety Systems in the Real World: They Work! http://bit.ly/zqEBk1)

There is a legitimate concern for insurers arising from the City Safety technology deployed by Volvo. City Safety is intended to operate under congested, low-speed traffic circumstances – applying emergency braking with no alerts or warnings to the driver in order to avoid collisions. The HLDI study validated the insurance savings attributed to this system, but the implications of such systems are only beginning to be grasped.

A new acronym AEB for autonomous emergency braking has emerged to describe this class of safety system and the insurance industry is clearly struggling to assess its attraction to consumers and life and property saving qualities in practice. As the HLDI study has shown and anecdotal evidence suggests, AEB may actually have the ability to pay for itself especially in the age of the distracted driver.

Of course, if insurers will not step forward to incentivise consumers to purchase XC60’s, it is no shock that cars equipped with more familiar safety offerings such as blind spot detection and lane departure warning also fail to qualify for discounts. The same applies for telematics equipped cars offering automotive crash notification and stolen vehicle recovery technology. Discounts are available for limiting miles driven for OnStar drivers with State Farm insurance policies, but not for any other purpose.

Discounts for everything BUT safety systems

The reason this lack of insurance discounts is so aggravating is that it seems that insurers will offer discounts for almost anything else including student driver good grades discounts, online policy signing discounts, and accident forgiveness. In the words of Progressive Insurance from their Website: “We offer dozens of discounts depending on your state. You can receive discounts for mileage, students, coverage choices and more. Simply complete your quote and we'll include any applicable discounts for you.”

It is no less than shocking that even research findings from the insurance-industry funded HLDI are not enough to justify even the shadow of a discount. At one level, this failure is understandable, given the nature of insurance selling in the U.S.

Most consumers walking onto a dealer lot in the U.S. already have insurance. This proposition makes it difficult for a dealer to access or offer a discount since it would, in most cases, require the consumer to change his or her coverage or carrier – especially since, in the U.S., a substantial proportion of drivers have combined their car with their home insurance.

A lost opportunity?

Still, given the mature nature of the insurance industry – where large market share swings are almost unheard of – the opportunity to steal customers away from competing insurance companies ought to represent an opening to reward safety-system-buying consumers. The problem, though, is that the automotive insurance industry is as conservative as it is mature and the industry is also subject to 50 state regulatory bodies in the U.S. Insurers will not offer these discounts until there are more cars fitted with the technology, according to industry experts. And the low number of XC60’s on the road limits the attraction of reaching out to these buyers.

Here we arrive at the chicken and egg conundrum where consumers will resist adopting these advanced safety technologies because they are expensive, often hard to find on dealer lots and there is no reward – ie. a discount on insurance. The lack of a discount actually sends a secondary negative message that maybe these systems really aren’t worthwhile in the first place.

Further validation of the value of Volvo’s City Safety technology arrives in the form of a recent report in FenderBender magazine. (Cars with Crash Avoidance Steer Clear of the Repair Shop - http://bit.ly/wnkrFw) The article notes: An October report from the Institute of Electrical and Electronics Engineers (IEEE) estimated that crash avoidance technology could eliminate all accidents caused by driver error. That’s a whopping 90 percent of crashes.”

European insurers crack open the discount door

A glimmer of hope for drivers and Volvo arrives in the form of an emerging array of insurance company discounts, some in place and some under consideration, across Europe for the XC60. Volvo executives indicate some progress with European carriers even as they continue to lobby U.S. insurers.

The company says it has seen some reductions ranging from 10 percent to 30 percent for cars with City Safety. In some cases, the insurer requires the additional bundling of the full Driver Support package: blind spot detection, lane departure warning, active cruise control, front collision warning, etc. (See chart below.)

Implications:

All indications suggest that there is some hope for ADAS systems finding additional regulatory and insurance industry support. The current sad state of affairs where consumers obtain no insurance rate advantage from opting for advanced safety systems not only discourages interest but sends a strong message about the effectiveness of those systems.

Car makers bear some of the responsibility for low fitment rates and a lack of emphasis in advertising messages. Volvo and Mercedes are standouts in their safety messaging – focusing heavily on safety messages in their national advertising.

The opportunity for insurance companies to steal business from rivals with safety-system-based discounts ought to be attractive – especially in light of the HLDI study. But insurance companies may have been burned in the past by new technologies that failed to deliver discount-worthy savings.

By now, though, it is clear that these increasingly sophisticated safety systems – which are finding their way to larger volume vehicle segments – are very likely saving lives and money. When repair shops are starting to complain, as in the case of the FenderBender article, it is a strong indication that an insurer does not need a sophisticated study to interpret the writing on the wall.

For NHTSA, the emergence of advanced, active safety features represents a new opportunity to provide carrot and sticks to guide the industry, but unlike more mechanical solutions such as airbags, the path is less clear for software-based technologies such as LDW and BSD. New kinds of metrics are called for, although they may be, by necessity, rearward looking.

The HLDI study of the XC60 may ultimately serve as a preliminary template for creating standards recommendations for future enhanced safety systems. But given the wide range of functionality and performance of these camera- and radar-based systems it is likely that NHTSA, like the NCAP movement, will be forced into more of an advisory role.

Above all, NHTSA will have to walk a fine line between too-specific standards and providing no guidance or vision at all. The best outcome might be for NHTSA to define a roadmap or vision of ADAS development and deployment to assist the industry in prioritizing its development activities. This process will put at the top of the list those technologies or systems expected to save the most lives. But again, NHTSA will do best to mandate solutions such as automatic crash notification without specifying the physical implementation.

And it is time for NHTSA to intervene on behalf of the automotive industry and the driving public and insist on insurance industry support for safe driving technologies. Consumer-driven adoption of safety technologies is a proven life saver, after all.

Additional insight:

ADAS Supply & Fitment Database: http://bit.ly/xGAxyb

Automotive RADAR: Design Trends Point Towards Performance And Affordability: http://bit.ly/zntsde

Advanced Safety Systems in the Real World: They Work! http://bit.ly/zqEBk1

New ADAS Systems: Reaching Compact Segments, Reaching Greater Volumes, More Sensor Fusion http://bit.ly/pIXhdT

NHTSA Rear View Requirements Will Provide up to 10 Million Unit Boost to Automotive Camera Market http://bit.ly/yMhmz0

ADAS Demand Outlook: Affordability and Reliability Key to Future Growth http://bit.ly/xtI7UJ

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

I've just go back from a very enjoyable couple of days in Munich, where I was invited to present at the 1st Ethernet & IP @ Automotive Techday, which was put together expertly by Kirsten Matheus and her team at BMW. 

The event gathered more than 350 people from across the industry.  I estimate that the attendance broke down very approximately as follows:

It was also a very international event.  Yes, there were a lot of German accents - but there were also plenty from other parts of Europe, the US, Japan and Korea.  

I'll be publishing a report on High-Speed Bus Networks to Strategy Analytics clients by the end of November.  However, in the meantime, here's the answer to the question that Kirsten ran out of time before she could ask me in the Q&A session at the end of my presentation yesterday:

Q: "In the light of what you've seen and learnt in the last couple of days, are you minded to put your forecast up or down?"

A: "Up."

Watch this space.

As someone who spends a reasonable amount of time aboard aircraft, I have a certain interest in air safety. I recently came across an article on MSNBC titled "Are airline pilots forgetting how to fly?" This essentially argues that some recent fatal crashes have been caused by pilots being unfamiliar with how to operate the airplane when the automatic systems fail.

The automotive industry is clearly well behind aerospace in the levels of automation offered.  The article states that it is commonplace for the crew to only manually fly the aircraft for 90 seconds at each of take-off and landing.  However, with the increasing level of ADAS (Advanced Driver Assistance Systems) and other support, do we risk de-skilling drivers?

What will the driver who has relied on their automatic parking system do when it fails?  What will the driver used to autonomous cruise control do when driving a rental car without it?  I know from my own experience the momentary confusion that can often arise when switching to and from vehicles with manual and automatic transmission.

The industry is progressing upon generally sensible lines.  For example, the Volvo City Safety system, which can apply emergency braking effort automatically, offers no audio/visual warning to the driver.  This is deliberate, the thinking being that if it did, drivers may begin to rely on the system to keep an eye out for them.  The system intervention is deliberately late and harsh, so that it is truly an emergency aid only.

However, we regularly see examples of people taking dangerous and unsuitable roads because their sat-nav told them to.  Some seem to have already delegated navigation responsibilities to a machine, and will obey it blindly.

Safety and support system designers will need to keep a close eye on ensuring that they do not unintentionally de-skill drivers and leave them in situations that they no longer have the talents to deal with.

Many automotive companies have a long and noble history.  They also tend to have a fairly rigid internal structure.  You have your powertrain engineers over here, your safety engineers over there, and your infotainment engineers somewhere else altogether.  

As vehicle functions become more and more sophisticated, their functionality increasingly relies on information from across numerous vehicle domains.  It makes sense to many head-unit vendors to try and integrate some driver assist functions, such as surround view.  Head units have a large, powerful processor, and access to a large screen.  What they don’t typically have is access to the camera data over a high-speed digital bus.

One view of the future is that Ethernet will become the dominant solution for moving high-speed data around the vehicle.  This is across all vehicle domains, and the vision crucially crosses the infotainment/rest of vehicle divide.

Rick Kreifeldt, Vice President, Global Automotive Research and Innovation at Harman Automotive is an enthusiastic evangelist for this vision.  Perhaps, given that he is also the AVnu Alliance chairman and president, this is understandable.

In a recent discussion with Strategy Analytics, Rick outlined his view of an Ethernet-enabled future for automotive.  He admitted that AVnu has focused on high-end professional audio/visual applications to date – but claimed that this was part of the intended roadmap.  2011 will see a vehicle OEM along with one or two Tier One suppliers and key automotive semiconductor vendors join the Alliance, he asserts.

He sees the potential for Ethernet in the vehicle as huge, with a future vehicle architecture potentially containing only Ethernet and low-speed CAN buses.  No LIN.  No FlexRay. No MOST.

It’s still far from certain how soon – or if at all – this vision will be realized.  As explained already, and highlighted by Rick, the internal structure of many automotive companies is an active block on pursuing this approach.

Strategy Analytics believes that the first major casualty may well be MOST.  Although volumes are likely to grow further for a few years (a volume OEM is expected to launch soon, and Audi and Mercedes Benz are committed to MOST 150 rollout) – by 2015 or so MOST could well be in decline.

The bigger – and as yet far from answered – question, however, is the relevance of this to mainstream vehicles.  MOST and FlexRay have been solutions that have found application almost exclusively on high-end vehicles and prestige brands.  Will the conventional CAN/LIN vehicle architecture be a bottleneck for the Ford Fiesta class vehicles of 2020?  If Ford can implement Sync using nothing faster or more exotic than USB 2.0 and CAN, is Ethernet an engineer’s solution to a problem that largely doesn’t exist?

When it comes down to it, Rick sees Ethernet in the car as coming down to the silicon ecosystem.  The range of products and suppliers – together with his prediction of Ethernet’s future ubiquity in vehicle diagnostic systems – could tip the balance.

“There’s a convincing economic argument for Ethernet-enabling each vehicle ECU based upon flash/re-flash times alone” he reckons.  “Hey, if it’s in there and already paid for, you’d be crazy not to use it.”

We’ll see.  There are still big blocks and vested interests that are far from sold on Ethernet.  Some of those heavily involved in Ethernet are also forging their own paths and own standards.  It would still seem unlikely to us that a 2020 Fiesta class vehicle will have an Ethernet-enabled architecture.

But if you’re a vendor with significant LIN, MOST or FlexRay revenues, it’s certainly something worth thinking about.  And if you’re an OEM or Tier One with high and wide internal walls, it could be the push that gets those barriers a-tumbling down.

Strategy Analytics sees high-end automotive electronic control systems driving up on-board MCU data and code storage needs, especially for next-generation designs in powertrain, ADAS (advanced driver assistance) and Infotainment systems.  So this week's STMicroelectronics announcement of its 55 nm embedded Flash (eFlash) process technology, which will be implemented in its next-generation automotive microcontroller (MCU) chips is significant.  The company plans the first 55nm embedded-Flash product to be available for customer sampling in mid-2011, and automotive qualification in 2013. http://www.st.com/stonline/stappl/cms/press/news/year2010/t2482.htm The move should give ST a competitve advantage over its nearest industry rivals:  Strategy Analytics currently ranks ST as #3 global automotive semiconductor supplier.  Infineon (#2) announced in November 2009 an extension of its development and production partnership with TSMC to a 65 nm embedded flash process technology targeting a range of applications including next generation automotive systems.  Its automotive MCU qualification and production start is scheduled for the first half of 2013. http://www.infineon.com/cms/en/corporate/press/news/releases/2009/INFXX200911-005.html Our eyes are on Freescale, #1 automotive vendor overall and # automotive MCU vendor.  Its current 90 nm low power CMOS process for its automotive eFlash Power Architecture MCU products was developed in collaboration with ST, but the Austin-based company has yet to announce a decision on its route to a next generation solution. Strategy Analytics sees powertrain and ADAS are critical future battlegrounds for competing 32-bit MCU vendors, and having products with the right performance levels available on time to match designers needs is critical.  Forecast demand for these systems is provided in SA's Automotive System Demand Forecast: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5073 MCU demand forecasts for powertrain, ADAS and other systems can be found in SA's Automotive Semiconductor Demand Forecast: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5081

Strategy Analytics (SA) has been tracking the deployment of ADAS (Advanced Driver Assistance Systems) since some its earliest deployment and has been speaking to a number of leading players in the camera industry regarding the latest product developments.   From its research, SA concludes that these new developments will lead to an expanded opportunity and growth in automotive cameras - and predicts annual demand at 50 million units by 2016. As a result, cameras represent one of the fastest growing sensor technologies in the automotive industry.  New developments include:

• The development of more compact, lower cost camera module designs but with increased levels of performance.
• Greater ease in adding new image based systems to the vehicle, thanks to increased deployment of flat panel screens used in primary instrument clusters, center stacks, and even small displays integrated into rear view mirror, in more new vehicle designs.
• The development of new ADAS features that require the use of multiple cameras, such as the surround vision systems and corner view junction cameras that are being fitted on some Japanese minivan models, or the use of cameras to provide additional support to other sensors used in ADAS, such as object detection and identification in Adaptive Cruise Control and Pre-Crash Safety systems.
• Improved ability to use the same imaging camera to feed its information to multiple ADAS features, thus raising the benefit-to-cost proposition of the camera.  One example is the multi-functional windshield camera, now deployed on some European sedans, used to input to several safety features.
• Growth in designs of new car models that are much sleeker and coupe-like which, while they appeal to consumers viewed from the outside they offer poor visibility to the driver from the inside; Also, production of large minivan and SUV models with significant blindspots represent a sizeable proportion of the industry's total - both these vehicle segments can benefit from additional camera based park assistance.
• There is a high possibility that government mandates will require fitment of cameras on future models.  In the US, the Gulbransen Act has forced NHTSA to look into park assistance systems such as cameras to prevent deaths of children when drivers are backing-up.  Similar mandates have already been legislated on heavy duty and light commercial vehicles to prevent back-up and blindspot collisions in Europe, Japan and North America. 

For clients wanting to see the full report and market forecast on automotive cameras and systems using cameras, please go to http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5221 to download the relevant Viewpoint, and the accompanying ADAS supply database can be downloaded at http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5220. 

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.�