Unpaved Road Ahead

"Oh Lord, won’t you buy me… sustainability." Such might have been the opening lyrics of Janis Joplin’s Mercedes Benz, had she seen what the automotive industry is up against today.

Following a torrid summer of plummeting sales, manufacturers are singing a very different tune. Hundreds of the industry’s top engineers came to Vienna in early May for the annual Vienna International Motor Symposium to discuss the lack of demand, sustainable alternatives to boost consumer confidence, green solutions like hybrid and electric cars, and the future of the "good, old-fashioned" internal combustion engine (ICE). In a nutshell, where should the auto industry go from here?

"It is not the Austrian Society of Automotive Engineers that has caused the current crisis," said Hans Peter Lenz, President of Österreichische Verein für Kraftfahrzeugtechnik (ÖVK) in his opening address in the Hofburg’s Congress Center. On the contrary, "inspirational" technological developments have driven high quality standards in the industry.

The effects of the credit crunch and resulting recession have taken a toll on consumer confidence. The fear of unemployment means fewer people are taking on credit for new cars. The perceived risk of taking out is just too great.

Figures indicate that the first quarter slide has been dramatic, with sales down 16 per cent in Europe and 38 per cent in the USA, according to Helmut List of the Institute for Internal Combustion Engines (AVL List). China has also experienced a slowdown, but growth in sales till stands around 13 per cent.

The automotive industry finds itself in a perilous situation, at least for the short-term, with global brand names like Chrysler and General Motors in precarious financial situations, while others like Porsche and Volkswagen restructure, merge and define new ways forward.

Of course, the recession follows on the heels of the other, looming crisis of global warming. Automotive engineers are very conscious of the urgency of the environmental situation and the need to find solutions. The many presentations and lectures presented over the symposium touched upon these pressing issues. In his presentation "Looking into the Future," BMW’s Peter Langen acknowledged that climate change is now irrefutable. Hyundai-KIA’s Lee bolstered the argument with a telling figure:

"Transportation is consuming an estimated 21 per cent of fossil fuels," according to 2007 data released by ExxonMobil.

All agreed, however, that the key word is sustainability, and that hybrids and electric vehicles – though viewed as viable alternatives to consumers and auto manufacturers – may actually present major difficulties to sustainable growth in the auto industry.

The hybrid, a new breed of car that combines an internal combustion engine with electric motors is a nice idea, said Toyota’s Terutoshi Tomoda, but the reality is different.

"Hybrid cars are very costly to produce and not generally affordable for the public," Tomoda explained.

He was referring to the amount of CO2 emitted in the production of a hybrid car with two engines, which may be greater than the amount saved while it runs.

Another solution being pursued is the development of pure electric cars. French auto manufacturer Renault is now in talks with the government to find solutions to the issue of infrastructure, which will be necessary before electric cars will make economic sense, according to company representative Remi Bastien. It is not simply a question of buying an electric car, driving and plugging it in to recharge; A network of charging stations will have to be built. Since millions of people do not have garages in which to install charging devices, this means having charging meters on the streets of all major towns and cities, a program that will cost of billions of Euros to implement.

Proposals for filling stations that simply swap batteries, another proposal to keep electric cars running, are also flawed. Batteries  that can handle distances over 40 km are sizeable and most drivers are not interested in buying a car with limited range. And then there is the problem with lithium, the main mineral component in batteries. The world’s supply of lithium is limited; without it, where will the electricity come from?

At the moment, Austria is running at full electric generation capacity. In the Eastern Provinces and Vienna, electricity is imported from Czech Republic, which relies heavily on nuclear power. If the current trend continues and Austria moves towards a driving culture dominated by electric cars, it will have to buy more power from Czech sources, which could become a serious political issue. Alternative energy sources are therefore of crucial importance if the "green image" of electric vehicles is to be established.

So would the Viennese buy an electric car? Attendee Martina Hämmerle was upbeat. "I’d buy one if it goes a minimum of 400km – especially if it’s more environmentally friendly!" she said.

Reinhard Preiml was cautiously optimistic and stated that he would, but only under certain circumstances. "It must be easy to recharge," he said."As a first car, must have a 500 km range and as a second family car, a 100 km range."

Other issues discussed were the size of electric cars. People want to transport goods and the battery size for a vehicle that runs up to distances of 200 km would mean no place for the shopping, let alone the dog, kids and golf clubs.

AVL’s Helmut List feels that the electric solution is a complex one. "The electric drive niche has to be successful for the business model of electric vehicles to work," List said. "Overselling the electric vehicle is a disservice. The vehicles have to have the right image and prove that sound, drivability, affordability and practicability meet the needs and demands of the consumer."

This point has not yet been driven home, and it seems consumers will buy these vehicles when they see it is in their best interest. This may be easier in some regions than others. Indeed, the automotive industry may well take the business model ideas from other industries: Pay on demand, pay as you drive; pay per view; driving flat rate; car sharing.

And the future of power trains – in particular the motors and gearboxes under the hood? The consensus of the engineers at the symposium is that the ICE, the high-speed InterCityExpress power train, is here to stay for the foreseeable future. The 10-year forecast given by Magna’s Dr Herbert Demel is that the ICE is 100% secure. In 15 years, ICEs will most probably dominate vehicle power trains and only after 20 years will ICEs begin to lose their market dominance.

But maybe there is a new solution emerging with the "mild Hybrid" idea?  Michael Putz of Vienna Engineering explained: "A small compact ICE could generate electricity and recharge batteries of an electric car with drastically reduced emissions," he said. "A range extender would be a realistic and workable solution."

Ultimately, solutions to patterns causing uncomfortable and even life threatening environmental problems require a change in the consumer’s mindset.  "When the electric motor has a performance that competes with an ICE Power Train," Prof. Lenz himself admitted, "I will buy one!"

And among the gloomy news, both for the auto industry and the environment, those attending the symposium found time for a moment of humor: "We engineers now all need to pull together," Neumann exclaimed, "and provide Prof Lenz with such an electric car!"