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PSA Peugeot Citroen’s sales in China and Southeast Asia continued to slump in May, dropping 50 percent year on year to below 24,800. The French automaker did not release country-by-country sales figures but China accounts for nearly all of PSA’s Asian volume.  Last month, roughly 16,600 Peugeot models and 8,200 Citroen cars including 500 DS models were delivered in China and Southeast Asia, according to figures PSA disclosed on its website. Through May, PSA’s deliveries in the two markets plunged 49 percent from a year earlier to roughly 130,300 vehicles.  PSA’s joint venture with Dongfeng Motor Co. in the central China city of Wuhan produces Citroen and Peugeot cars and light trucks.  PSA builds Citroen DS models — the DS 4S, DS 5, DS 6 and DS 7 — at its partnership with Chongqing Changan Automobile Co. in the south China city of Shenzhen. With sales floundering, PSA signed a deal with Changan earlier this month to jointly invest 500 million euros (3.7 billion yuan) to recapitalize their joint venture and introduce new models including electric vehicles under the Citroen DS brand.

Credit source: Auto News China 

Honda Motor Co.’s joint venture with China’s Dongfeng Motor Corp. plans to hire 2,200 workers this month to boost vehicle production and keep pace with fast-growing sales, the Nikkei news agency reported. The new employees will allow the partnership to maintain weekend output, according to Nikkei.  Dongfeng Honda has 10,000 employees. With sales rising, employees are working overtime to ramp up production. The joint venture assembles the Civic, Spirior, Jade, Geriz and Gienia sedans, the XR-V and CR-V crossovers and the Elysion multi-purpose vehicle at two plants in the central China city of Wuhan.  The two factories can produce 512,000 vehicles a year.  In the first five months, Dongfeng Honda’s sales surged 126 percent year on year to 254,323 vehicles.  Dongfeng Honda’s third assembly plant is still under construction in Wuhan. It is due to start production in 2019, adding another 120,000 vehicles to the partnership’s annual output.  Honda also has a joint venture with Guangzhou Automobile Group Co. in the south China city of Guangzhou, where deliveries surged 113 percent to 276,075 vehicles in the first five months. Through May, Honda’s China sales totaled 530,198 vehicles, up 119 percent from the same period last year.

Disruptive innovation has reached a multitude of industries with the majority adapting fast to a changing environment. As the logistics industry is experiencing strong inflection points, such as high inefficiency – for example, a staggering 50% of transporters travel without cargo post-delivery – it is not surprising that this industry is being forced to innovate rapidly and develop solutions. The major component driving this innovation process is digital transformation, which accounts for €1.42 trillion in investments that are to be allocated to logistics by 2025.

As innovation is our business, cutting-edge startups are the focus of our attention. At StartUs Insights, our unit dedicated to Innovation Scouting and Open Innovation, we conducted a detailed analysis of 40.000 startups, and consequently discovered eight innovation areas that will alter the logistics industry as we know it today. To shed light on the application and potential of the most disruptive of these technologies we decided to outline the eight most dominant innovation areas that influence the entire industry. As our focus lies on emerging startups, we provide one as an example for each innovation area in order to engender a better understanding and highlight existing cooperation potential.

AUTOMATED GUIDED VEHICLES

This emerging technology holds enormous potential for logistics companies willing to innovate as it offers several areas of application, such as last-mile delivery, line haul transportation and warehousing operations. Recognized as the ground equivalent to drones in last-mile delivery, AGVs have an even greater potential for disruption, as the regulatory system is more open towards them by comparison to drones. Within warehousing, AGVs massively contribute to a new paradigm of material handling – meeting full automation.

French startup Scallog operates in this innovation area to optimize order fulfillment. Utilizing automated guided vehicles to lift up to 600kg and carry storage shelves at a speed of one meter per second dramatically improves warehouse efficiency.

ROBOTICS & AUTOMATION 

As robots are already able to manipulate objects in less structured environments, they support zero-defects logistics processes while also massively aiding performance and improving sensing capabilities, nearly substituting manual handling. Fully automatic solutions capable of unloading containers or palletizing are developed, establishing new application areas, e.g. collaborative, pick & place and shelving robots among many others.

Germany-based Smart-Robotics sets a precedent by building collaborative robotic arms in different size variations that are suitable for a wide range of needs. Their ability to “mimic movements of human hands closely due to unrivalled flexibility provided by the six joints” makes these arms unique.

AUGMENTED REALITY (AR) & WEARABLES 

Ranging from smart clothing to bionic arms and smart contact lenses, wearables offer powerful support to the workforce. Enabling smoother communication, a safer work environment, and better process execution, Augmented Reality systems predominantly consist of a wearable camera, smart-glass display, and battery pack which open new doors for the logistics industry, namely gamification, pick-by-vision, positioning and scanning.

Oculavis is one example of a startup that produces smart glasses which empower workers to complete their tasks hands-free. This German startup utilizes AR to create new applications such as picking & placing orders by vision, scanning, interacting with support via Augmented Reality, and real-time tracking.

DRONES

Also known as unmanned aerial vehicles, drones disrupt the industry by offering a viable alternative to conventional express delivery. While not yet expected to replace ground delivery entirely, drones will have a significant impact on logistic processes. In warehouses they will be used for inventory management like the scanning of goods. Secondly, they are also very well equipped for certain material handling scenarios within the warehouse.

One award-winning startup operating at the frontiers of drone technology in the logistics industry is London-based Unmanned Life, a company that is currently building “the world’s first and only fully autonomous drone-based parcel sorting center”.

LAST-MILE DELIVERY

Last-mile delivery has become vital to logistic companies with the rise of e-commerce that has reinforced the importance of customer preferences. Making use of a flexible courier workforce along with the power of the crowd, last-mile delivery has gained significant importance for logistics companies, as it is a key differentiator in terms of customer satisfaction.

London-based startup Quiqup is at the forefront of providing businesses with affordable on-demand logistics. Their solution, Quiqees fleet, will shop, pick up and drop anything needed, offering transportation of a package by car, scooter, or bike, alongside providing real-time tracking for each delivery.

ANTICIPATORY LOGISTICS

One of the lesser-known innovation areas is anticipatory logistics, implemented via software solutions that are able to predict demand before it occurs. Empowering logistics companies to substantially improve efficiency through reduced delivery times and better utilization of their transport capacity and network, big data predictive algorithms contribute to precisely this.

Stating that “24% of the road freight kilometers in Europe are driven by trucks which are completely empty”, Bulgarian-based startup Transmetrics is on a mission to end these inefficiencies by providing logistics companies with network optimization and demand forecasts by using predictive analytics and big data.

MACHINE LEARNING 

The arrival of machine-learning, sometimes called self-learning, is bound to transform the logistics industry. As this emerging technology needs very little human intervention and adapts algorithms according to the data received, thus becoming more efficient automatically, it offers great potential for process optimization and the automatization of decision making in logistics.

One example of the application of this technology is Sentenai, which facilitates the usage of sensor networks to support real-time intelligence across logistics networks or in the cloud. The startup makes use of a company’s gathered data to increase the intelligence of their systems. Additionally, Sentenai’s stream learning system is able to adapt to changes as it “can relearn a stream’s structure whenever it changes, whether through the addition of new fields or the addition of new event types”.

INTERNET OF THINGS (IOT) 

As it holds many promises, the logistics industry is expected to take full advantage of IoT. Smart objects will be capable of taking part in event-driven processes, while internet protocols will facilitate communication between sensor data and applications. IoT adds tremendous value across the entire supply chain including warehousing, last-mile delivery, and freight transportation.

CargoSense is just one case of an IoT startup which has the capacity to easily track valuable assets via their platform. The software taps into data provided by internet connected sensors, thereby guaranteeing logistics companies full transparency as to what happens to a package until reception by the customer.

The eight outlined innovation areas are just a few of the crucial drivers in the logistics industry we recognized. Others include blockchain, logistics as a service, cloud logistics, digital identifiers, and 3D printing. As these emerging technologies grow further and transform the industry, logistics companies across Europe are well counseled to rapidly identify the relevant innovation areas for their business and use the potential of evolving, disruptive and innovative startups to collaborate and achieve a lasting competitive advantage. StartUs Insights supports this process by providing actionable innovation intelligence on startup driven innovation, enabling the collaboration with these disruptors.

Credit Source: Magazine Startus 

CHINA is aiming to become a world automaking powerhouse in a decade, vowing to boost development of new-energy vehicles and relax restrictions on foreign ownership in the auto industry.

The country will strive to achieve breakthroughs in key technologies and markedly increase the share of Chinese brands in the international auto market by 2025, according to an auto industry development plan released yesterday by three government departments, including the Ministry of Industry and Information Technology.

China is the world’s largest auto market but lags behind frontrunners in core technology, parts and components production, innovation and brand development.

The plan set the target that China should “enter the ranks of world automobile powerhouses after 10 years of sustained efforts,” saying the country’s auto industry is “large but not strong.”

It also noted the risk of overcapacity in the industry and concerns over energy, environmental and traffic problems arising from the huge number of cars hitting the road.

The government pins hopes on NEVs and “smart” cars to upgrade the industry and catch more advanced countries, according to the plan.

Sales of NEVs should reach 2 million by 2020 and account for more than 20 percent of total vehicle production and sales by 2025, the plan said.

That number is about four times the current level. China sold 507,000 NEVs last year, the most in the world for a second year and up 53 percent from 2015, according to the China Association of Automobile Manufacturers.

NEV sales have risen dramatically on the back of government policies, but still represented under 2 percent of China’s overall auto market last year.

There should be several Chinese NEV firms that are strong enough to rank among the world top 10 by 2020, and their global influence should further rise by 2025, according to the plan.

It said highly and fully autonomous cars will start to enter the Chinese market by 2025, when 80 percent of new cars should be equipped with driver assistance systems or certain types of self-driving systems.

Internationally competitive producers of auto parts and components will emerge in the country, smart industrial chains will be developed, while car fuel efficiency will be increased, the plan said.

It noted restrictions on foreign ownership in joint-venture carmakers will be relaxed “in an orderly manner.”

China caps foreign stakes in joint ventures in the domestic auto industry at 50 percent.

Auto sales in China hit a record high of 28.03 million in 2016, up 13.7 percent year on year and ranking the first among all countries, according to CAAM. About half of the total were Chinese brands.

The plan predicted China’s annual auto output to rise further to 30 million by 2020 and 35 million by 2025, on demand from rapid urbanization and overseas emerging markets.

Credit Source – Shanghai Daily

BERLIN/FRANKFURT – Daimlerand its Chinese joint venture partner BAIC Motor Corporation agreed to upgrade the Mercedes-Benz factory in Beijing to make electric cars, the German carmaker said on Thursday.

At a signing ceremony in Berlin attended by German Chancellor Angela Merkel and Chinese Premier Li Keqiang, Daimler signed a framework agreement to upgrade production facilities at Beijing Benz Automotive Co., Ltd. (BBAC), to make New Energy Vehicles, a label for so-called low-emission vehicles which include hybrid and pure battery electric cars.

"China today is already the world’s largest market for NEVs, and Daimler is committed to contributing to the further development of electric mobility in this country," Hubertus Troska, Daimler’s board member in charge of China, said.

Daimler also agreed to acquire a minority stake in Beijing Electric Vehicle Co., Ltd. (BJEV), a subsidiary of the BAIC Group, to enhance collaboration on developing so-called new energy vehicles. Daimler declined to provide a figure for the scale or value of the stake.

BJEV was established in 2009 by the BAIC Group and other shareholders as a development platform for New Energy Vehicles.

It focuses on research and development, production, and sales and services for New Energy Vehicles and core NEV components. To date, the company’s product portfolio covers five major series of electric vehicles.

The German government’s agenda to the Germany-China summit in Berlin also showed that Volkswagen was due to sign a contract with Anhui Jianghuai Automobile Co about production, research and development of electric cars in China.

source credit: Autoblog ( https://tinyurl.com/y8lw5z29 )

Considering these disparate pressures on costs, there is no easy formula that OEMs or suppliers can use to improve their return on capital. The solution will likely come from a combination of actions. Part of the answer lies in consolidation, which reduces industry capital requirements by eliminating competition and combining two manufacturing and design footprints into one. To a degree, these goals explain 2016’s robust supplier M&A volume, continuing the trend of the previous year’s record deal value, according to PwC’s Global Automotive M&A Deals Insights Year-end 2016 report.

However, consolidation is not the only solution — and in fact not even an attractive solution for companies struggling to fund new innovations. Auto makers in particular will need to examine other strategic channels for relief. We believe that OEMs should consider three actions:

If auto makers expanded their cooperative efforts, the industry would essentially be smart-sizing, the way the airplane manufacturing sector has over its long history. In the very beginning of aeronautics, the Wright Brothers and companies that grew in their wake made their own engines. Before long, a group of separate businesses emerged to produce engines, each of them competing to improve and advance the equipment. As aircraft engine technology advanced rapidly, jet engines became the dominant design — and having a spate of companies making the same part proved costly. The industry responded by consolidating, resulting in just a few independent aircraft engine manufacturers and a more efficient supply market.

By removing excess capacity and concentrating supply, these collaborative solutions offer some of the same benefits as industry consolidation — in particular, improvements in capital efficiency and capital returns.

Redesign distribution models.Upward of 15 percent of a car’s cost typically goes to distribution. There is of course some variation by country and segment; for instance, fleet sales are less expensive than retail. However, the percentage is generally higher than it needs to be. Although OEMs are locked into dealer relationships in the U.S. and Europe by complex and often antediluvian rules, they should begin to explore and lobby for approaches that will reduce their costs by using more efficient channels to reach car buyers. These changes in the distribution system should ultimately aim to cut costs by minimizing the number and expense of retail outlets and using technology for better inventory control.Savings could come from selling via Web channels. In the U.S., OEMs are barred from bypassing dealerships, a prohibition that electric carmaker Tesla is campaigning to eliminate. Rather than opposing Tesla, as some auto makers have, U.S. OEMs should view this potential change as an opportunity to innovate. OEMs are finding that as customers use the Internet to research car purchases, they do less shopping in person. Car buyers are now visiting between one and one-and-a-half dealers before buying a car, compared with visiting four or five a generation ago. Using analytics to assess this data for demographic and location trends, auto makers hope to gain savings from inventory and dealer facilities management. They can target customer preferences more effectively and place the appropriate mix of retail formats in the right areas.Improving the dealer model would be a plus for OEMs and a relief for customers, who by and large want a haggle-free, simple experience — and can’t seem to find one. That is why in the U.S., the auto sales program of warehouse club Costco, which represents consumers in negotiations with car dealers, has become popular. Costco assisted on almost half a million car purchases in 2015, comparable to the volume at some of the country’s top dealership groups.

Broadly speaking, OEMs have more leeway than suppliers to implement aspects of this road map — largely because they are at the top of the food chain and in a better position to influence ground rules than those below them. Given these constraints, suppliers should focus on two areas. First, they should position themselves in a profitable part of the vehicle ecosystem. Whether the end product is differentiated or a commodity, suppliers need to be sure they have the best organizational and operational capabilities for their niche in the current and future industry structure. Second, they need to optimize their business model. For suppliers of commodities, this involves a relentless focus on minimizing costs. For other suppliers that are able to differentiate their products or operations — through technology innovation, patents, an advantageous manufacturing footprint, or superior logistics and supply chains — the challenge is to build upon these assets by creatively upgrading them while enjoying the benefits of the price premium. In short, suppliers must recognize the world they inhabit and make sure that they can effectively navigate it.

source credit: PWC ( https://tinyurl.com/yc4ysq6z )

SHANGHAI– Elvis Presley, not lost in China!

At the biggest-selling Cadillac dealership in China, customers react to the brand’s image the way Cadillachopes customers everywhere will. Famous names in imposing silver lettering adorn a "wall of honor" at Shanghai Brilliance Hutong Auto Sales Co. There is Marilyn Monroe, Muhammad Ali, Cindy Crawford, Barack Obama, Queen Elizabeth II and, of course, one of history’s most famous Cadillac customers — Elvis.

It is a message the brand hopes hits home with China’s uninitiated, yet ever status-conscious customer base: People who own, or are at least chauffeured in, a Cadillac are part of an elite 115-year-old club.

"Cadillac is associated with historical figures like U.S. presidents," declares 40-year-old customer He Zhenyu, an e-commerce executive who was among the first in China to snap up Cadillac’s new CT6 flagship sedan last year. "Cadillac represents my individuality. The culture is the deal sealer."

That Chinese shoppers buy into Cadillac’s heritage is one of many things going right for the U.S. luxury brand in the world’s biggest market.

Cadillac sales are booming; its average customer age is a sprightly 30 years; the premium segment in general is poised to explode; and thanks to an assembly plant that opened just last year, Cadillac is now flush with local capacity to feed the growing market.

Buick playbook

General Motors is deftly repeating its success in restoring Buick a few years ago: Take a long-in-the-tooth brand that is losing relevance in the U.S. and give it new life halfway around the world by leveraging its heritage. Today in China, locals still respect Buick as the brand of choice for the country’s first president, Sun Yat-sen, as well as China’s last emperor, Pu Yi. China is now Buick’s biggest market.

Cadillac Chief Marketing Officer Uwe Ellinghaus believes the same will happen with Cadillac over the next five years.

It is already trending that way. Cadillac sold more cars in China than in the U.S. last December. And China sales surged 90 percent in the first quarter of 2017 to about 39,400 vehicles, GM says.

A critical piece of the China breakout plan fell into place last year when GM opened a plant in Shanghai dedicated to churning out Caddys.

GM’s second-newest assembly plant worldwide, the Cadillac factory showcases the company’s most modern production engineering. Robots rule, with zero human welding in the body shop and parts being shuttled between sparsely populated workstations by a fleet of automated vehicles.

The factory makes the CT6, CT6 Plug-In, XT5 crossover and Buick GL8 MPV. It began exporting the CT6 Plug-In to the United States this year, but the other products all go to Chinese showrooms.

By localizing production, Cadillac can duck China’s 25 percent import tariff — an absolute precondition for taking on the Germans. Known collectively in China as ABB, short for Audi, Benz and BMW, the Germans scooped up early market share by beating Cadillac to China with local factories.

Paul Buetow, GM’s executive director for manufacturing in China, said the Shanghai plant marks a turning point in what could soon be Cadillac’s biggest profit center.

"It was absolutely critical," Buetow said of GM’s decision to go local with Cadillac. "We can make mistakes in smaller markets, but if we make mistakes here, it’s a big issue."

The stakes are high due to the Chinese market’s incredible size and burgeoning wealth.

Indeed, it is China that is now driving Cadillac toward record global sales. Worldwide volume rose 11 percent to 309,000 vehicles in 2016, Cadillac’s highest since 1986 — and approaching its all-time high of 360,000 vehicles in 1980.

In the 1980s, almost all Cadillac sales came from the U.S. Today, more than a third comes from China. China sales surged 45 percent to 116,000 last year, while U.S. sales fell 3 percent to 170,006 vehicles.

The market in China could play to Cadillac’s favor for a long time.

The luxury segment accounts for around 9 percent of the Chinese auto market, said Andreas Schaaf, general director for Cadillac in China. But the luxury segment is expected to expand to as much as 15 percent — on par with U.S. penetration — in the next 10 years.

Between 2020 and 2025, annual luxury-segment sales in China could top 4 million vehicles, from nearly 600,000 now. In the next three years, Cadillac plans to open 100 dealerships to position itself for the growth, on top of the 180 it already has.

Demographic trends are fanning the optimism.

Cadillac’s average customer in China is 30 years old; the average U.S. customer is over 50. And about 40 percent of Cadillac buyers are first-time car owners, Schaaf said.

Cadillac’s China sales surged in 2016, thanks to the launch of two models, the CT6 flagship sedan and the XT5 midsize crossover. With no new nameplates planned for 2017 except the CT6 Plug-In derivative, Cadillac isn’t expecting a repeat performance, Schaaf said. But its sales are still expected to notch an impressive double-digit percentage increase in China this year as the brand rides the rising tide of overall luxury-segment sales, he said.

"We are on the path to get the brand up to the top in China," said Schaaf, who, like Ellinghaus, came to Cadillac after working at rival BMW. "We have the top three Germans in mind."

GM built in plenty of room for expansion at the new Cadillac factory. It is operating at about half of its annual capacity of 160,000 units. Buetow says it will reach full output in two years.

The plant’s highly flexible line can run six body styles at the same time.

But Cadillac has a long way to go to catch up with the ABB competition. Mercedes-Benz sold 472,844 vehicles in China in 2016, more than four times Cadillac’s tally. BMW sold 516,355, and Audi sold 591,554.

While chasing the prestige of the Germans, Cadillac faces the balancing act of standing out as something different but equal, says James Chao, an auto analyst at IHS Markit.

"In China, they might be behind, but they are quickly catching up. The Chinese consumer wants to stand out among luxury buyers, and Cadillac offers a way to do that," Chao said. "But are they competing from a brand standpoint with the Germans? It’s a question mark."

Impressions

With plenty of young, first-time buyers, Cadillac hopes its heritage message makes a lasting first impression. At Shanghai Brilliance Hutong, it clearly has.

Siren Zhou, a 28-year-old English teacher, got her white long-wheelbase ATS sedan last year as a wedding present from her father. It beats her old Volkswagen Polo hands down, she says.

Her friends are impressed, she says. They see it on par with those prized ABB nameplates. And when it’s time to buy her next car, Zhou has already decided what it will be: an XT5 crossover.

"Maybe we’ll have a baby," she said, "so we’ll need a bigger one."

source credit: Automotive News (https://tinyurl.com/mbporuk). 

Industrial robots are in high demand in the automotive sector, and a research company is saying the market will grow to beyond $8 billion by 2021. 

In the report published by MarketsandMarkets, the market was estimated to be $5.07 billion in 2016, and is projected to grow to $8.44 billion by 2021, at a growth rate of 10.74 per cent. 

The full title of the study is Automotive Robotics Market by Type (Articulated, Cartesian, SCARA, Cylindrical), Component (Controller, Robotic Arm, End Effector, Sensors, Drive), Application (Welding, Painting, Cutting, Material Handling), and Region – Global Forecast to 2021.

The company says automotive robotics is still in a growing phase. Additionally, increasing industrial plans such as Industry 4.0 of Germany, and Made in China 2025 of China, is likely to trigger further growth in the automotive robotics market.

Moreover, increased focus on automation, to mitigate the risk arising from increasing labor costs, can provide a strong impetus to the demand for automotive robotics market.

The articulated robot segment is estimated to account for the largest share in the automotive robotics market.

The articulated robot is more widely present in the market as compared to Cartesian, cylindrical, SCARA (Selective Compliance Assembly Robot Arm/ Selective Compliance Articulated Robot Arm) robots due to its higher degree of freedom that provides a manufacturer a larger work envelope and can be used for multiple applications.

Development in advanced technologies and consistent growth in demand for automated solutions is a contributing factor for growth in the robotics controller market, says the report.

In terms of regions, Asia-Pacific market is projected to have the largest market share in automotive robotics controller market by 2021.

The region is projected to be primarily driven by increasing demand for sophisticated motion control technology.

Furthermore, in developed countries and regions, such as the US and Europe, the focus on further enhancing cost competitiveness amongst all major automotive manufacturers is expected to result in growing demand for advanced controllers in the automotive industry.

source credit: Robotics & Automation News  (goo.gl/PaKTN0content_copyCopy short URL)

It’s easy to become blase about China’s auto market, especially now that growth there has gone from white hot to merely off-white hot.

Up 15 percent in 2016? Ho-hum.

But just stop and marvel for a moment at the volume even a plateauing Chinese market represents — 24 million passenger vehicles last year, according to IHS Markit. Twenty-four million!

With numbers like that, it ought to be China — not the U.S., Europe or Japan — that dictates the future of what we call global vehicles.

Indeed, it most certainly will be.

Already, the Chinese market has exhibited all the diversity and dynamism of the U.S. market, embracing locally made economy cars, tech-laden European luxury sedans, SUVs and even a bit of Detroit muscle.

From here, the changes will come fast. China’s bureaucracy is world-class, but when it sets its mind on, say, an all-electric fleet, that one-party system can overcome legislative gridlock pretty quickly, and the auto lobby can do little to stop it. (See also: California.)

Sure enough, China’s industry ministry hinted at the mother of all zero-emission vehicle mandates last week in calling for electric vehicles and hybrids to make up at least a fifth of its vehicle sales by 2025.

Leaders in Washington may think we can wall ourselves off from economic change beyond our borders. Ministers in Tokyo appear determined to carve a hydrogen fuel cell island for themselves. But beyond those walls and moats, China will still be there, increasingly driving the future of the auto industry.

Source credit – Automotive News (http://www.autonews.com/article/20170501/GLOBAL03/170429816/-1)