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The Future Automotive System: The World That Changed The Machine

04/05/2011 4:00 PM
Daniel Roos, '61, SM '63, PhD '66, Professor of Civil and Environmental Engineering and Engineering Systems

Description: The world economic order has shifted considerably since 1990, when Daniel Roos and his coauthors wrote The Machine that Changed the World, the story of lean production in the auto industry. Once dominant as a global industry, car manufacturing "has undergone tremendous stress," says Roos, and has now reached an "inflection point," with major changes brewing.

Manufacturing and markets, once centered in the U.S. and Europe, have migrated to developing nations such as India and China, where demand is skyrocketing, providing opportunities for new players in the industry. More than 18 million cars were sold in China in 2010, and its car market has grown by more than 20% in a short time. The Korean auto industry has positioned itself to take advantage of this auto appetite, and now claims the fastest increase in market share. Aggressive Chinese startups are also looking to move in on the domestic market. India's car industry (Tata, for example) has had problems with quality, but has begun selling for export to Suzuki, Hyundai and Nissan.

Roos also sees major shifts afoot among the companies that supply vital equipment and parts. For instance, a Canadian parts manufacturer hoped to buy Opal from GM, not content simply "to produce final assembly for vehicles." Technological innovations driven by concerns about gasoline prices and emissions have brought the first generation of electric cars, as well as improvements in diesel and the traditional internal combustion engine. Some bold ventures suggest completely new industry organization, where car battery manufacturers with proprietary rights "gain tremendous leverage," much as Intel did in developing chips for personal computers. A Better Place envisions a whole new transportation system, with battery charging stations for electric vehicles, connected by smart networks.

The wild card is demand, says Roos: "Will consumers purchase energy efficient vehicles?" Interest in such cars closely tracks the price in gas prices, he shows, and responds strongly to such incentives as 'cash"for"clunkers.' Finland, France and Canada charge less for buying fuel efficient vehicles, and more for gas"guzzlers, but the U.S. seems reluctant to push for these 'feebates,' or touch the "political third rail" of a gas tax, says Roos. He finds it "surprising and disappointing" how slowly the U.S. has been developing an Intelligent Transportation System, a "system of systems" that connects "infrastructure, energy and information systems." Roos says he's "always skeptical of people who predict what things are going to be like 10"20 years from now," but can safely say that new technologies, players, business models and networks will bring about major transformations.

About the Speaker(s): Daniel Roos became the founding Director of the Engineering Systems Division in 1998. Previously, he was Director of the Center for Transportation Studies, and Director of the Center for Technology, Policy and Industrial Development. Roos serves as Founding Director of the International Motor Vehicle Program and as Director of the Cooperative Mobility Program. He is co"author of The Machine That Changed the World, which has been published in 11 languages and has sold more than 600,000 copies.

Host(s): School of Engineering, Transportation@MIT

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