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

Raw Material Threat To Semiconductors – Resulting In Disruption To Suppliers and OEMs

The overall impact of the earthquake and tsunami is yet to be played out for Japan.  What is clear is there is great uncertainty regarding the full impact on the automotive electronics supply chain and potential disruption for vehicle OEM production.  Damage to lower tier supplier facilities, particularly to the semiconductor and suppliers to the semiconductor industry, varies considerably and are causing knock-on effects that will affect upper tiers and OEMs on a wider scale.  Even undamaged facilities are being impacted by rolling electricity blackouts and some water shortages.

• Immediate damage to operations has lasted for two weeks since the disaster struck (by March 25th), mainly confined to the affected Tohoku region.  This is to ensure safety inspections are carried out following a major earthquake.  Limited operations have now resumed in many facilities.  Certain upper tier vendors have also transferred some production to areas unaffected by the disaster, such as in the west of Japan.
• Full production is likely to resume four weeks or one month after the disaster struck (by April 11th), although facilities that have suffered direct damage may be closed for longer, perhaps for another two or three months.  Aftershocks in Tohoku have prevented the reopening of several plants. 
• Even when production operations resume, the immediate challenge is the lack of a continuous supply of electricity, gas and water

• Fujitsu’s wafer fabs have been idled and will not proceed to full production capacity due to a lack of water and electricity, perhaps three or four weeks later.  The facilities that have restarted production in other companies have had to operate with limited lighting to conserve power.
• Furthermore, restrictions on fuel supply and damage to transport infrastructure will mean the difficulty of transporting components, systems and finished vehicles – although Mitsubishi Motors can assemble vehicles, it is having difficulty transporting them to customers because of damaged roads, resulting in a further shut down. 
• The plants that have received direct damage from the disaster include a Toyota plant supplying batteries for electric and hybrid vehicles, causing delay to launches of new hybrid models; and the Nissan engine assembly plant in Iwaki – possible alternative supplies for Japanese vehicle assembly plants could be sourced from Decherd, Tennessee, USA. 
• Among the worst affected Tier 1 vendors include Alpine and Yazaki, where one facility remains evacuated being located close to the Fukushima power station, and Hitachi Automotive. 

However, particular concerns in the potential lack of raw materials reaching the semiconductor vendors will have a longer effect on the automotive supply chain.

• Nearly all of the world’s supply of BT (bismaleimide triazine) resin, an epoxy resin used in the packaging of some chips, comes from two plants located in Fukushima and owned by Mitsubishi Gas Chemical.  These were directly damaged by the disaster and could take three months to repair and bring back into service.  Qualcomm, meanwhile, is using its buffer stock and is making adjustments to its near-term material mix as a result.
• Hitachi Chemical also supplies 50 percent of the world’s ACF (anisotropic conductive adhesive), used in panel module driver ICs and silicon wafers, according to the China Times.
• New supplies of copper-clad laminate, which is needed in the production of printed circuit boards, have been delayed following disruption in two chemical supply companies: Mitsubishi Gas Chemical and Hitachi Kasei Polymer.  These suppliers amount to 70 percent of the world’s supply of the material. 
• Silicon wafers supply has also been disrupted. Two major plants, Shin-Etsu Chemical's Shirakawa and MEMC Electronic Materials’ Utsunomiya facilities, have stopped production. These plants reportedly accounted for 25 per cent of the global supply of silicon wafers.

A raw material shortage will restrict the production of semiconductor components and delay assembly of systems, all the way to vehicle assembly, no matter where these are assembled. 

• For example, disruption in the supply of electronic components has delayed the assembly of diesel engines at PSA Peugeot Citroën in France.
• General Motors has also blamed the shortage of parts from Japan that led to the suspension of engine assembly operations at Tonawanda, New York, and of vehicle assembly operations at Shreveport, Louisiana. 
• GM has halted or slowed production of some model due to shortages of Mass Air Flow (MAF) sensors supplied by Hitachi Automotive.
• Overtime and other shifts have been cut at other assembly plants.  For example, the supply of some infotainment systems could bring disruption to some OEMs assembling outside of Japan.
• Should problems persist with the semiconductor supply chain, knock-on disruption to OEMs may worsen by early- or mid-April, when inventories run dry.
• Leading automotive semiconductor vendor Renesas has been badly affected and is issuing regular updates on progress on restarting its worst affected wafer fabs.

A further impact will be on Japanese OEMs that have a large proportion of exports sold in North America, especially with models assembled exclusively in Japan.

• The absence of Acura, Infiniti and Lexus-branded models will enable rivals to increase their market share in profitable luxury segments.
• Volume sales of compact models, such as the Honda Fit and Scion models, will also impact on sales turnover.  By the end of March, lost car production could amount to 450,000 units in Japan and 10,000 units overseas.

The vulnerability in the electronic supply chain may bring about the substitution of raw materials or the localization of raw material production to different regional markets (away to Europe and North America).  And flexibility may also be required from the lower tiers, to bring about contingency plans to their production capabilities.

The situation at suppliers can be expected to remain fluid for weeks to come with perhaps some acute shortages coming into sharper focus.  Although this is an exceptional event, vehicle OEMs and their tier suppliers are likely to review future supply policies in light of its impact on their business. 

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.

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.

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.�

STMicroelectronics has introduced its second automotive grade MEMS motion sensor, for use in systems such as adaptive front lights, anti-theft systems, navigation and control of vehicle dynamics. The AIS226DS is a two-axis in-plane accelerometer capable of sensing acceleration up to ±6g.  The new device can also resolve incredibly tiny angles of incline, smaller than 0.02 degrees.  The ability to accurately measure incline is important in auto-leveling lamp, e-parking brake, and HSA (Hill Start Aid) applications. http://www.st.com/stonline/stappl/cms/press/news/year2009/p2421.htm This is the second product ST has introduced that is designed to maintain highly stability and accuracy (±70mg) throughout the automotive temperature range –40 to +105 degrees C:  In 2H2008 ST introduced its first automotive grade device, the 3 axis, low g AIS326DQ. ST has been content to focus its MEMS resources on less operationally stringent applications, scoring two major successes for its MEMS accelerometers in the Nintendo Wii and Apple iPhone.  However the company nows seems intent on also leveraging its position in the automotive semiconductor sector (where Strategy Analytics analysis ranks it at #3 vendor with $1.52B sales in 2008) to advance its MEMS sensor business. http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4738 This will further increase the competitive pressure on the other incumbent automotive inertial sensors vendors which include Bosch, Infineon, Analog Devices, Denso, Freescale, Melexis, MEMSIC, Sensata, Panasonic and Systron Donner.