The 2017 Automotive Leaders Summit – Europe was held at the Ritz-Carlton Hotel in Vienna, March 14-15. The event started with a visit to the LKW WALTER headquarters in South Vienna on March 14, which was attended by many of the delegates who found it most interesting and informative. This was followed by an evening networking drinks reception and then a networking dinner in the hotel.
The morning of the 15 March saw delegates gather for the presentations, panel discussions and extensive networking opportunities.
Themes that emerged from the presentations and panel discussions included the urgent need for greater connectivity in the supply chain, with more synchronised systems between OEMs, tier suppliers and logistics providers. The rise of autonomous vehicles and its impact on every area, from yard management to the last mile, was high on many speakers, panelists and delegates minds. Added to this interesting mix was the debate on platooning and combining this with autonomous trucks and passenger cars led one panelist to comment that, “Platooning is already possible today and it is only the beginning, however there are challenges we must face in order to succeed. Platooning is at only level 2 today, requiring a driver, so we are not saving on driving time, despite this great technology. We need higher levels of automation to achieve level 4 automation. Full autonomous trucks are still years away, and may not be seen before 2022, following passenger cars, that we might well see by 2020 or 2021.”
Other topics discussed included the excellence of workforces available in Central and Eastern Europe, the need for infrastructure development, better border management and the challenges of transporting electric vehicles.
Europe’s place on the world stage
Christoph Stürmer of Price Waterhouse Cooper opened the event with a presentation on Europe’s place in the global automotive landscape. He spoke of growth in various regions and how we can expect to see still further shifting of production from Europe and the northern US to Mexico and the southern US and commented on markets as diverse as Russia, Brazil and China.
Connecting freight distribution
The second session was entitled The Future of Freight Distribution and started with a presentation on how the physical internet is the long term vision of efficient freight transport and how the next level of connectivity, IoT and big data analytics is a necessity and to achieve this,logistics providers need to have many IT capabilities. You have to know where your stuff is, a lot of data needs to be processed.”
Elements such as drive style optimisation, real time traffic information, predictive maintenance, remote diagnosis, location based services, fleet management, cooperative services and connected drivers were discussed by the panel. Drones and the last mile were subject high in the minds of the panelists and the delegates and was cited by some as the possible answer to the driver shortage situation.
Digitising the supply chain
This session saw some lively debate between OEMs, tier suppliers and logistics providers.
Topics included the importance of digitisation and the need for transparency down the supply chain for better synchronisation of processes and one panelist commented that: “If we had optimised processes like transparency, we wouldn’t have the problems we see today and it will benefit everyone in the supply chain. We need a connected process to speed up our operations.”
Cost was another factor seen as hampering improvement, with comments that every OEM is doing a lot of visionary stuff but the question is at what cost? The industry is still spending a lot through a lot of separate systems but this was generally seen as an opportunity rather than a challenge.
Finished vehicle distribution
Logistics company executives and shipping experts joined moderator Sam Ogle, the Editor of Automotive Purchasing and Supply Chain magazine to discuss issues such as capacity and driver shortages. The overriding theme that emerged was the need for streamlined communication and complete supply chain visibility.
Standardisation of communication protocols was also seen as an important factor but the panelists agreed that one software system was likely an impossible dream.
Ogle asked the panel several searching questions, including, “Is there is enough capacity, both on land and at sea? Panelists spoke of investment now being focused on networks and the design of networks rather than the cost and the need for commitment from customers. The problems of the length contracts from customers, of ports’ performances, driver shortages and streamlining logistics in the ‘last mile’ reared their head again.
A presentation on how smart cities will create a world of interlinked, smart transportation started this session. It looked back at the hundred year history of what the speaker called “dumb” transportation, which was never designed to be used within the cities. The presenter pointed out that in Vienna 25% of people walking, 7% travel by bicycle, 39% by tram and 28% by car and asked if this is a reflection of the space given to infrastructure?
It touched on the ‘death of diesel’ and whether fleet managers are unsure as to whether they can continue to buy and rent diesel-powered vehicles. It showed another part of the puzzle, that of how smart infrastructure is dependent on smart energy and how the industry needs to look at turning problems like roads into part of the solution, using solar roads to give energy back to the vehicle through inductive charging. Some smart infrastructures were illustrated, including an EV coach/bus in Geneva that recharges its battery in 15 seconds as it picks up pedestrians.
New mobility versus old automotive
‘Game changers’ in transforming transport was the theme of this session, with a presentation stressing how future transport must be digital, clean, service orientated, safe and secure.
It talked of mobility services that can be harnessed such as traffic management, freight demand and delivery management, car sharing and connectivity, and the need to lay down architecture to support these services. We need to find out who has what role in this new mobility era.
A panel discussion followed, with OEMs and transport providers debating whether urban dwellers are truly likely to opt for a car-free life, with shared autonomous mobility, and if people will eventually rely on driverless cars as a mobility solution, especially in cities.
The panel concluded that governments have to change in order to help increase this transition and how the automotive industry is going to change more in the next decade than the last 100 years.
The summit was rounded off by a panel discussion between several OEM executives and a tier supplier, with moderator Sam Ogle. Panelists talked about the steps the industry needs to take and the vision needed to improve the supply chain, one stating that, “We should not ignore the little things that can help us find a solution, we should not always be looking for massive technological overhauls.”
The panel agreed that, as the cost of EVs falls as demand and thus production rises, this type of mobility will thrive on collaboration across all modes, in order to create an efficient global supply chain. They concurred that investment in both vehicles and infrastructure should come from the private sector, without putting further demands on public funds.
Workforce and infrastructure
An OEM panelist stated that the workforces [in Central and Eastern Europe] are, “definitely not a problem. We export jobs which means we eliminate our own sales, training people in other regions who can ultimately take over the jobs of our employees. Technology gets exported, knowledge gets exported; you have global standards on how you want to produce cars and if you go into another country you provide these capabilities for them.” This brought the discussion on to infrastructure and another OEM executive said: “We invested heavily in recent years. Infrastructure is a problem with difficulties on the road and on the rails. There needs to be more intermodal methods. There is high potential, there is belief on growth, but there needs to be a significant improvement in infrastructure in order to meet our goals. This is a key issue that we all need to look at collectively.”
The panel then discussed border issues within the CEE region, how freight must pass through a number of different countries, in a way that differs from any other area in the world. Established OEMs are producing all over the region with a range of facilities and a range of suppliers and the executives agreed that this is where Eastern Europe thrives, as border control is much easier than that of the West.
EVs and the Russian experience
Then the panel moved onto logistical problems with EVs. They felt that there are no major issues as automakers like Renault have established good relationships with their component suppliers. However, as one major OEM panelist illustrated, the rapid evolution of battery technology will cast doubt over long term relationship as battery technology could thrive in, say, Asia, so they will have to change suppliers and regions.
The Russian automotive market has shown indications that it may be returning. The general consensus was that Russia is a one-to-one market and not considered as a European market and that the market there will recover, with sanctions set to be lifted which will allow automakers to move in and out more easily.
Cooperation and relationships
The panel was unanimous that the industry needs to continue to grow the cooperation between OEMs and the transport companies, so that they do not go ‘blind’ once the vehicle comes off the ship, train or truck and felt that it is not harnessing connected supply chain technology as effectively as it might, to get a better aligned approach.
One of the senior OEM executives summed things up with the observation that success in tomorrow’s industry will hinge on fostering good relationships, saying: “Go and visit your customers, go and build that relationship. Then, if there’s a problem, you can trust in one another that it will be sorted out. Trust must be built from both sides.”