Initial Quality in Malaysia Advances for Fourth Straight Year

Malaysia, PenangFor a fourth consecutive year, overall new-vehicle initial quality in Malaysia improves significantly, according to the 2013 Malaysia Initial Quality Study (IQS), based on responses from more than 3,100 new-vehicle buyers during the first two to six months of ownership.*

The 2013 Malaysia IQS findings are encouraging because the automotive market in Malaysia is becoming increasingly competitive with a rising number of new models, which makes it essential for brands to produce high-quality cars and trucks. Continue reading ›

Will Asean Become Major Market for Parts Makers in India and China?

Ammar Photo

Ammar Master

The realization of the Asean Economic Community in 2015* presents opportunities and challenges in the changing automotive landscape of the Southeast Asian region.

Foremost, a successful Asean integration will support the long‐term goal of creating a region with free movement of goods, services, investment, and skilled labor, in addition to a freer flow of capital. This in turn is likely to lead to faster economic growth and an ever‐expanding middle class.

May Arthapan, director of Asia Pacific forecasting at LMC Automotive in Bangkok, indicated in an aptly titled recent presentation that Asean could well become “Another BRIC in the Wall,”** given the region’s emergence in Asia. Not only are there opportunities for vehicle makers to expand sales in a big way, but component makers also are going to benefit from increasing manufacturing activity in Asean countries, led by Thailand and Indonesia.

Japan’s Suppliers Have Long-Term Presence in Southeast Asia

Japan’s component makers have had a long-established presence in the Asean countries, and will clearly be the biggest beneficiaries. However, there are also opportunities for companies in India and China. These companies have been eyeing the Asean region as a new market for a while. This has been evident from increased participation, especially by companies in China, at Asean region trade shows.Yet, component makers from both nations have been wary to enter unfamiliar territory and face strong Japanese competition. Continue reading ›

Will a Factory Alliance Help Peugeot and GM in Europe?

David Sargent

In late February, Automotive News and wire services reported that a possible alliance between General Motors and PSA Peugeot Citroen* was in the works. It would feature a broadening factory alliance. In another recent report, Peugeot, which is Europe’s second-largest automaker after the Volkswagen Group, also announced plans for a stock rights offer of 1 billion euro ($1.34 billion) to raise cash to offset a significant increase in its debt. GM will likely buy shares equal to a 7% stake in Peugeot when stock is offered, Reuters reports. Like Peugeot, GM is looking for ways to turn around its unprofitable Opel Division in Germany.

Sharing Vehicle Development, Platforms and Parts Will Lower Costs

Is an alliance between PSA Peugeot and GM a good idea? The concept of sharing vehicle development, platforms and parts is, in principle, a good one. Both automakers have very similar lineups and so there is considerable room for sharing costs across multiple vehicle lines. The key concern would be if the co-developed models become so similar that they simply cannibalize sales from each other and/or either automaker’s products lose their “identity.” Continue reading ›

Five-Year Snapshot: Component Quality Advances and Satisfaction Rises

Andrew Bernhard

J.D. Power recently released its latest series of Component Quality Reports (CQRs), detailing owner-reported evaluations of the quality of their new vehicles and how satisfied they were with their 2011 model- year vehicle component areas after the first 90 days of ownership.

These CQR reports, which are based on analysis of Voice of the Customer data and findings from our annual Initial Quality Study (IQS) and the Automotive Performance, Execution and Layout (APEAL) Study, cover six major vehicle component areas: Seats/Seat Belts; Interior; Multimedia Systems; HVAC/Rear Defrost; Brakes/Driving Dynamics; and Engine/Transmission.

Notably, when results from the 2011 studies are compared to results from five years ago (2006), when the studies were redesigned, it is observed that quality has improved for five of the six component areas—significantly so for four of the six component areas—and satisfaction, or “things gone right,” has significantly improved in all six component areas.

Multimedia systems is the lone exception among the six component areas, declining significantly in quality, while manufacturers and suppliers continue to struggle with making more complex multimedia systems easier for owners to use and understand. However, as is the case with all other component areas, new-vehicle owners are still significantly more satisfied with their multimedia systems in 2011 compared to owners from the 2006 study.

Outlook and Implications for the Future

With the current landscape of in-vehicle communication and entertainment, the environment for the success of components has evolved. There has never been a complex component area like multimedia that requires such a robust and personal understanding of consumer behaviors and consumer expectations. More than ever, both OEMs and suppliers must understand how to assist and not hinder consumer connectivity. There will be some hurdles to overcome, but as long as the same quality metrics are aligned with improved consumer-driven product development requirements, the road for the next 5 years should improve. Continue reading ›

Reducing Vehicle Weights Helps Automakers Meet Fuel Economy Rules

Mike Omotoso

All the major auto manufacturers are making efforts to reduce weight in order to meet tighter CAFE (corporate average fuel economy) standards in the United States and to meet CO2 reduction targets in Western Europe.

Vehicle weight reduction in conjunction with powertrain improvements are the two main tools for improving fuel . . . Continue Reading Reducing Vehicle Weights Helps Automakers Meet Fuel Economy Rules

Global Auto Sales Shift Hampers Reducing Vehicle Emissions

As emerging markets, led by the BRIC countries, eclipse mature markets in global auto sales growth, it will become more challenging to control or reduce emissions from vehicles powered by internal combustion engines (ICEs).

John Humphrey

A major reason is that passenger-vehicle buyers in these markets already tend to be more sensitive to price pressure than are buyers in economically mature markets, which favors the sale of traditional ICE-powered passenger vehicles. Therefore, it is unlikely that buyers in these developing markets will accept the price premium charged for hybrid-electric or battery-electric powertrains with a price differential expected to average about US $11,000.

Although some governments, such as China’s, are taking steps to reduce auto-related carbon emissions, the sheer volume of vehicles being added to the global fleet during the next decade will largely negate these efforts, which means carbon emissions and overall air quality will get worse before it gets better. Continue reading ›

Toyota Plans New Small Car for ASEAN Market

Ammar Master

Toyota is planning to build a new small car that we call the EFC in our forecast  for the ASEAN member countries in Southeast Asia. We believe this new model will go into production in 2013, and will first be sold in Thailand and Indonesia, followed by Malaysia a year later.

The EFC will be built on the same platform as the Etios sub-compact that is currently on sale in India. Like the Etios, the focus for the EFC is likely to be on keeping costs in check, while maintaining high quality standards and meeting specific fuel-efficiency requirements. Continue reading ›

Navigation System and Satellite Radio Penetration Rises

Satellite radio and navigation systems are increasingly common in new vehicles as consumer interest in high-tech features continues to grow, according to the J.D. Power and Associates 2010 U.S. Multimedia Quality and Satisfaction Study.SM The study finds that two-thirds (66%) of owners indicate having satellite radio capability as part of the audio system in . . . Continue Reading Navigation System and Satellite Radio Penetration Rises