According to ZF, automation systems will have more interest in commercial vehicles and trucks. A strategic position deciphered by Thierry Metais, vice-president of the ZF group in charge of sales and development but also managing director of ZF France,
At the end of June 2018, ZF presented its strategic shift for the autonomous vehicle, during its annual conference devoted to new technologies. The equipment supplier will primarily target commercial vehicles. Thierry Metais ZF vice-president in charge of sales and development and general manager ZF France, gives details of this short-term vision.
JA. What do you remember from the first half of 2018?
TM. The global car market has proved stable. The signs of deceleration are weak in Europe and North America, as is the slowdown in growth in China. We are seeing a reboot in South America, which means that the lowest point has been reached. Africa and Russia, on the other hand, are struggling to revive the momentum.
JA. How does this translate into the order books?
TM. The notebooks reflect this trend, which is regulated by the market-making that we can achieve, thanks to the technologies we present to manufacturers. In 2017, ZF totaled 36.6 billion euros in revenue, up 4% from 2016, on a like-for-like basis, and above the global market. In 2018, we expect growth slightly above the global market, around 4% again.
JA. What about the trend towards electrification?
TM. This is the other big trend of the first half. It marks the decline in Europe of thermal engines and especially diesel, forced by regulations increasingly severe. Individuals as well as public authorities want to fight against pollution. This forces the electrification of vehicles.
JA. Do we understand that walking is a bit too fast?
TM. It’s a forced march, that’s for sure. We will all struggle to follow, including consumers, the will of the European authorities. An electric vehicle is expensive and requires financial incentives. But for the consumer, it remains expensive, especially as there are fears about autonomy. The electric vehicle does not have its audience yet.
JA. As an OEM, what message do you want to hear?
TM. You must not want to go too fast. There are balances to be respected, especially on the supply side of raw materials, such as lithium or cobalt, or on the part of manufacturers and equipment manufacturers who have installed industrial capacities on combustion engines. We can not do everything in six months.
JA. There is, however, a Chinese market that does not wait. Do you embrace the market forecasts that give it 50% of global EV volumes in the medium term, and how do you adjust the strategy?
TM. All these expert forecasts are most optimistic. But even the Chinese government has revised its regulatory ambitions downward because production rates did not follow. They do not necessarily have lithium or electricity. This is proof of the obligation to respect equilibrium. In France, we know that 50% of homes have no parking and therefore no capacity to recharge a vehicle at night. Pushing EV is like pushing a product on half of consumers. And it is hard to imagine that 60% of this portion is willing to buy an electric vehicle in the next ten years. But you have to give strong goals to get there.
JA. At ZF, strong ambitions concern emissions and safety. A year after your technological demonstration day in Austria, where are you?
TM. I will not list everything. Remember that we have four themes that are the electrification of the traction chain, chassis management, integrated security – active and passive – and the automation of driving. We are doing well and acting as a force of proposal, including with mobility providers. 80% of our turnover comes from private vehicles, 10% from industrial vehicles and as much on the heavy truck target. We must continue to intervene in all these segments.
JA. Take the autonomous vehicle, unavoidable subject …
TM. There is significant progress. We think it will take more time on the VP than on the LCV and shuttles. ZF is preparing for it and we have made world premieres in Friedrischafen of autonomous vehicles capable of helping deliverers in their distribution work, the heart of their job, which is not to be a driver, but to be in contact with the recipient customer.
JA. How do you motivate this arbitration between private and commercial vehicles?
TM. This arbitration was done naturally according to the degree of reliability that must be brought to these systems. The VP must be able to go everywhere at sometimes high speeds. Use cases are fewer and more manageable when it comes to commercial vehicles. Development and reliability are easier. Reason why you observe that everyone is turning to the shuttles.
JA. What story will be written?
TM. The autonomous private vehicle will arrive later. The owner or the user will need a time of adaptation and he will have, I think, always the desire to drive. The autonomous vehicle must above all help logistics professions, then come the leisure.
JA. Can this vision be played by generalists who have utilities in their ranges?
TM. The commercial vehicle is not the target of premiums, however I do not worry about them, which will find opportunities. They have a preserved market.
JA. Does this mean that you will arbitrate the investments?
TM. Clearly, we do not have the resources to realize all our projects and all the desires of our customers. Arbitration is in favor of reducing emissions and reducing consumption in a context of rising fuel costs. The second arbitration factor for ZF is the continuous improvement of security, whether it is active or passive.
JA. Back to commercial vehicles, given your position, what is the roadmap?
TM. We want to bring electrification and ADAS level 2 solutions en masse to develop active safety. Personally, I have a doubt about the expectations for level 3 and 4 automation. I think the market will need level 5 full delegation technologies.
JA. When are the concretizations?
TM. There will be very quickly put in production series, in volumes nevertheless modest, since concerning shuttles. The reasons are many and above all economic: the reliability of these systems is expensive, and therefore can only be difficult to depreciate on a particular vehicle.
JA. At the beginning of September, there will be the IAA Hannover, what will be the message?
TM. We will demonstrate our ability to design a complete system through the four areas of expertise that we have selected. This strategy will be the right one for the next ten years.
JA. You presented with Rinspeed a futuristic vision of the transport of people. A concept reminiscent of Toyota’s e-Palette and a management project at Renault. Do you believe that another way of designing vehicles, with input from the operators, can emerge?
TM. I believe it is difficult to produce affordable vehicles without the use of large scale. Which is the talent of the big builders. Tesla has experienced this while proving that the electric opens the door to new contenders who support efforts to gather all the high-level skills needed to achieve an EV. The Rinspeed remains a marketing tool to give ideas, research leads. In the short term, the know-how of manufacturers remains the safe bet.
JA. France has created two unrivaled passenger transport operators. What is the state of your relations with these actors?
TM. No announcement has yet been made, our exchanges are still covered confidentiality. On the other hand, we can talk about e.Go Mover, our joint venture founded with e.Go Mobile, in which we are suppliers of the chassis, the drivetrain and sensors covering the entire environment of the vehicle. This is an example of a partnership we are committed to.
JA. What is in the program?
TM. We will install an annual production capacity of 10,000 copies, starting in 2019, as we believe this autonomous shuttle market will grow. e.Go Mobile will be the first customer of this production line and we are talking to other mobility providers. It must be remembered that, in all the major cities of the world, there is a board in charge of local public transport, such as the RATP, or private companies like Transdev or Veolia, and we discuss with these interlocutors to know their needs.
JA. Difficult not to compare your new joint venture with the incursion of Valeo at Navya and Bosch at EasyMile. Is this the new competition ground of the equipment manufacturers?
TM. I could not say it that way. I believe there are areas of expertise and development in mobility. ZF was the first to design an autonomous farm tractor.
JA. But the boards will receive responses to bids from companies supported by equipment manufacturers …
TM. They will also see car manufacturers. We will see how this will be put in place and how the cities will seize the subject.
JA. At Renault, it is estimated that 4,000 global cities could be adapted to these new offerings. Does this number inspire you?
TM. This is a figure that defends itself and may seem a little weak if we consider that even a city of one million inhabitants may be interested depending on its configuration. Mobility in urban areas must change and will change. E.Go Mover will serve as a laboratory during the decade to open.