RICARDO QUARTERLYREVIEW

Q4

, 20

06

RICARDO QUARTERLYREVIEW

100 g/km CO2Ricardo and PSA develop world-class energy-efficientpowertrain

InterviewsGilles Michel, PSA technology chiefUlrich Walker, president of Smart

China sourcingDon’t miss the opportunities: the mistakes that some western OEMs make

Taking it to the

MAXAndy Green, Ricardo and JCB clinch the world land speedrecord for diesel cars

The Energy Saving Trust’s green fleet review has provided us with the skills and expertise needed to identify and quantify areas of cost savings, allowing us to develop a significant business case. They helped us identify hundreds of thousands of pounds worth of potential savings on transport costs and at present we are reviewing plans to purchase more fuel efficient vehicles.

Ben Ross, Environmental Advisor, Bank of Ireland UK Financial Services Division

TE426B

If they can do it, you can too.Apply for a free green fleet review:

call 0845 602 1425 or visit www.est.org.uk/transport

Head office:

Ricardo plc, Shoreham-by-Sea,West Sussex, BN43 5FG, United Kingdom Tel: +44 (0)1273 455611

Ricardo contacts and locations:

www.ricardo.com/contacts RQ subscriptions: www.ricardo.com/rq Sales enquiries:

[email protected]

Conceived and produced for Ricardo by:

TwoTone Media Ltd Editor:Tony Lewin Contributors: Mark Roberts, Anthony Smith, Jesse Crosse, Andy ChienTwoTone Media Ltd contacts:

Anthony Smith: [email protected] Tony Lewin: [email protected]

ContentsRICARDO QUARTERLYREVIEWQ4, 2006

RICARDO QUARTERLYREVIEW

news

04 Industry newsParis show majors on grand touring style; Hondademonstrates fuel cell car; US green car ranking causescontroversy

28 Ricardo newsTVR sports car engines in development deal; majorprogramme targets world’s cleanest diesel; SULEVgasoline co-operation with Bosch; new VP of Control and Electronics

questions and answers

06 Gilles Michel, PSA Peugeot CitroënTony Lewin questions PSA’s technology chief about R&D,hybrids, co-operation and speeding up new modelintroductions

26 Ulrich Walker, president, SmartWalker is the new broom who promises to put Smart ontrack to profitability. We question him as he prepares tolaunch the second-generation Fortwo

features

08 World record engineeringIn August JCB broke the world land speed record fordiesel cars with the slender 9-metre Dieselmaxstreamliner, powered by Ricardo developed engines.Jesse Crosse tells the epic story of intensivedevelopment, round the clock teamwork and eventualtriumph

17 China sourcingToo many companies get it wrong, failing to spotopportunities, clinging to outdated ideas andmisunderstanding other cultures. Andy Chien of RicardoStrategic Consulting explains how organisations canprepare for low-cost sourcing

20 World-class fuel economyRicardo was quick to respond to the UK government’scall for a family car capable of better than 100 g/km CO2.Developed in conjunction with PSA, the Efficient-C dieselfull-hybrid exceeded all targets to establish world-classfuel economy benchmarks

08 0617

20

Industry News

New

s in

brief

China may take third placeChina is set to overtakeGermany as the world’s thirdbiggest automobile producerduring 2006, according to OICA.In the first six months Chinamade 3.6 million cars, behindJapan on 5.7 and the US on 6.1 million.

AUTOSAR becomes realityAutomotive Open SystemsArchitecture group AUTOSAR isabout to embark on its secondphase, standardising electronicprotocols and leading to aproduction vehicle in 2008. Newapplications such as safety willbe added in phase 2.

Common parts help cut costsToyota has saved $1000 pervehicle over the last five years byusing common parts, accordingto a report by Harbour-Felax.Warranty costs, too, are reducedby part sharing; Toyota averages$348 per vehicle, while its UScompetitors are at over $500.

Honda hybrid deal UK’s biggestThe largest ever UK fleet dealfor hybrids was secured byHonda when the MetropolitanPolice ordered 117 Civic Hybridsfor its Community SupportOfficers to use as part of theSafer Neighbourhoodsinitiative.

04 RICARDO QUARTERLY REVIEW • Q4, 2006

Prestige style and high-end hightechnology shot into focus at

September’s Paris show as France’sthree big automakers wheeled outextravagant grand touring prototypescalculated to show off their engineeringand design skills.

Citroën’s C-Metisse, one of the mosttechnically interesting, marries a V6 HDidiesel engine powering the frontwheels to electric hub motors in therear wheels to provideacceleration boost,

kinetic energy recuperation and anestimated 3 km zero-emission range onelectric power only.

The 4.7 metre four seater is ultra lowand features complex hingingmechanisms for its four doors foreasier passenger access. Weighing aclaimed 1400 kg complete with itscentrally mounted batteries, thecarbon-fibre structure C-Metisse iscapable of 174 g/km CO2 emissions onthe MVEG cycle.

Sister brand Peugeot wheeled out adiesel with a dramatic difference.Claimed to be capable of more than300 km/h, the Peugeot 908RC is anexotic four-seater supercar using aderivative of the 5.5 litre direct injectionV12 diesel with which the company willcontest the 2007 Le Mans 24 Hours.

Unusually, the V12 is mountedtransversely and in a central location,just behind the passengercompartment; the six-speed

transmission sits beneath the engine.Peak outputs are 515 kW (690 hp) and

over 1200 Nm torque.Measuring 5.12 metres in

length, the 908RCuses a complexcarbon andvacuumpolymerisedaluminiumhoneycombstructure.

Majoring onstyle rather thantechnology wasRenault’s Nepta, alarge and

luxurious four-seater convertible basedon a rear-drive platform. Particularlyinnovative is the gullwing doormechanism: the whole side of the caropens up and, hinged on points on thecentre line of vehicle ahead of theengine and behind the passengercompartment, the doors rise above thecabin area to reveal the 3.5 litre gasolineV6 engine too.

Paris concepts show luxurytheme

The North American Big Threecarmakers, already hurt by significantproduction cuts in the final quarters of2006, continue to operate at a majorcost disadvantage in relation to theirUS-based Asian competitors.Figures from the 2006 HarbourConsulting survey of automobile plantproductivity show that Nissan enjoys acost advantage of between $300 and$450 per vehicle over the lessproductive companies; overall, Nissancontinues to lead, but the US majorsare gradually closing the gap. One ironyis the fact that the most productiveassembly plant of all, Ford’s Atlantafacility, is set to close under the blueoval’s Way Forward restructuringinitiative.

US producers are being urged byRon Harbour, architect of the study, togive greater consideration to flexiblemanufacturing concepts. Correctlyconceived, he told Automotive News, aflexible plant need not cost much moreto operate than a dedicated line andwould provide much better insuranceagainst the sudden decline of a marketsector, as happened to the SUVsegment in 2006.“I still believe the differentiator is goingto be who is the most creative withdoing the most with the least,” Harbourcommented.

Big Three’s car-building dilemma

Show style: Citroën C-Metisse (above) is a

diesel hybrid with rear hub motors; Peugeot

908 RC (left) uses Midship V12 diesel from Le

Mans racer. Renault Nepta (bottom) has

remarkable door design.

Get slimmer, Hummer is toldFuture generations of Hummermilitary vehicles must be slimmer,lighter and more economical, saysthe Pentagon. Current militaryHumvees are heavily armoured,weigh up to five tonnes and guzzlefuel at a rate of up to 50 litres per 100 km in stop-start use.

US gets clean diesel at lastLow sulphur diesel fuel has now gone on sale in the UnitedStates, opening the door to next-generation diesel models such asthe Mercedes E320 CDI Bluetecthat meet Federal limits and which are in line to attract fuelefficiency credits.

Biofuels may inflate crop pricesEscalating demand for wheat and other crops used to producecarbon-neutral biofuels could push up the prices of crops andchange the face of agricultureacross much of Europe, accordingto a recent report in the Financial Times.

Focus to carry California eco badgeFord Focus 2.0E models sold inCalifornia will be badged PZEV,indicating partial zero emissions.The cars already meet the toughstandard but, says Ford, buyersbelieve hybrids are the onlyanswer to saving fuel and cuttingemissions.

RICARDOQUARTERLYREVIEW

Q4, 2006 • RICARDO QUARTERLY REVIEW 05

The task of RQ is to highlight the latestthinking in automotive engineering andtechnology worldwide – both withinRicardo and among other leadingcompanies. By presenting an up-to-datemix of news, profiles and interviews withtop business leaders we paint aninteresting and exciting picture of R&Dactivity at a world-class automotiveengineering services provider.

It is a formula that has certainly been ahit with the worldwide automotivecommunity: in the five years since RQwas launched we have had to increaseour print run to 14,000 copies to keeppace with the demand to read aboutRicardo and its activities.

Client confidentiality is of the utmostimportance to Ricardo, which means thatwe can only report on a small fraction ofthe work carried out by the company. Sowe are especially grateful to thoseRicardo customers who have kindlyagreed to co-operate with RQ and allowtheir programmes to be highlighted inprint: without such help from customers itwould not be possible to present such afascinating insight into the way vehiclesare conceived and developed.

Fuel cell Honda beginsdemonstrationsHonda offered its second-generation

fuel cell car, the FCX, for the mediato assess in September. The conceptwas first shown publicly at the 2005Tokyo motor show and features a newdesign of fuel cell stack whichdramatically improves packaging byadopting a vertical flow of water inplace of the traditional horizontalarrangement.

As well as giving greatly improvedwater drainage and thus cold startperformance, claims Honda, the newstack is much more compact and cannow be packaged longitudinally in thecentre of the vehicle in the area where

a conventional transmission tunnelwould be sited. This allows a low-slunginline layout and enables a much morestreamlined, space-efficient body style.

Honda also presented a solarpowered electrolyser to producehydrogen fuel for the FCX. “With a fuel

cell vehicle running on hydrogengenerated with solar panels, no carbondioxide is emitted either in producingthe fuel or operating the vehicle,” saidHonda CEO Takeo Fukui. “This is theultimate scenario.”

Fukui also announced that Honda hadbrought forward by one year the larger-scale user trials of its fuel celltechnology. Productionised modelsbased on the FCX concept will now belaunched in Japan and the US in 2008,though details of the demonstratorscheme have yet to be made public. Noscheme is presently planned for Europe.

A further innovation from Honda is

what CEO Takeo Fukui claims is the firstdiesel engine to attain a level ofenvironmental performance equal to agasoline engine.

Based on the company’s current 2.2litre i-CTDi unit, the next-generationHonda diesel uses a novel two-layer

catalytic converterthat adsorbs NOx from theexhaust gas and converts some of itinto ammonia. When the enginemanagement system provides a richspike, that ammonia is adsorbed in thesecond layer which, when the enginereturns to lean burn operation, usesthe ammonia to react with the NOx inthe exhaust to produce nitrogen. This,says Honda, enables the engine tomeet California’s 2009 Tier II Bin 5emissions standards, some of thestrictest in the world.

Fuel cell Honda FCX:Trials

begin in Japan and

US in 2008

As part of its 2006 Alternative Powertrainstudy, JD Power and Associates hasdrawn up a ranking of the mostenvironmental automobile nameplates inthe US. Some surprise was caused byVolkswagen appearing in first place,ahead of Honda, Mazda, Saturn and Kia.Toyota only ranked seventh, ahead ofScion and Suzuki.At the foot of the table were Land Rover,Hummer and GMC, all producers of largeSUVs.

JD Power’s scoring system includes notonly the vehicle’s official CAFÉ mileage

but also other factors such tailpipeemissions and consumer expectations –where many US consumers have beendisappointed in the wake of inflatedexpectations of hybrid economy. Three infour buyers would consider a hybrid,reported the survey; these buyersexpected to pay more than $5000 extrafor the hybrid powertrain, in anticipationof a 28 mpg fuel economy gain. Fordiesels the figures were $2800 and 21mpg. These results, said Power, showedwidespread need for consumereducation.

Green ranking causes stir in US

New catalyst

technology

allows Honda to

claim its diesel

engine as the

world’s

cleanest

What about speeding up model

cycles?

We have also indicated that we aregoing to renew some of our key coreofferings in Europe faster. [It has to be]faster because we see the competitionin Europe rapidly intensifying and thelifecycle tends to shorter – so we haveto adjust to that. That’s Europe; in bothSouth America and China we areembarking on a very ambitiousproduct plan by which we are going tosignificantly increase our offering inboth regions in the next three years.Some will be dedicated models,others will be adaptations of modelswe have here.

How can you do all this without

increasing your R&D costs?

This is another new element in ourstrategy. How do we do the trick?Basically, we’re going to reduce ourunit costs of development – by beingbetter focused on the product contentof our development and by beingmore aggressive and better in termsof capital investment: we’ve improvedfast in the recent past and now weknow we can invest less for a givenmanufacturing line. Thirdly, we have amajorproductivity plan under way inR&D which I willbe able to launchon the basis ofthe strongturnaround in thecontrol of ourR&D processesand costs overthe last threeyears.

Can you still manage this with your

existing three platforms?

I can do it only because I have thethree platforms. This remains a keyelement for us to minimisedevelopment costs of new vehicles.

You are looking to set up production

in Russia, yet you also want to save

on investment costs. Does this mean

you will be seeking a partner?

We’re not at this point ruling out agreenfield plant, though I’m not surethis would be the favoured solution.We are investigating a variety ofdifferent co-operations and are talkingto a number of potential partners. Weare in serious discussions about twoor three options: nothing is firm yet,but we do hope that this can come outin the next two to three months.

What are your target renewal rates for

your model lines?

Our [internal] guideline has beenabout seven years before renewal. Ithink we need to reduce that, but we’renot going to do that on all our models.We need to do it on those coreelements of the offer to make sure thatthey renew fast. Let me put it the other

PSA recently announced an Action

Plan to increase efficiency.What are its

most important points?

Perhaps the most significant is that weare adjusting our productive capacity;some of this has already been done,but a lot is still ahead of us. We havedecided to contain running costs, inparticular salary costs, throughinternal measures.

The third point is that we havedecided that, without compromising inany way the future developments ofthe group, we can contain the level ofinvestment to an amount that issignificantly lower than the level wehave had in recent years – 2.5 bneuros instead of 3 bn.

The plan also calls for more product

lines and the more frequent renewal

of core models. How can you do that

on reduced budgets?

That’s my fourth, and perhaps mostimportant, point. We have clearlyindicated that all the significant costcontainment measures we haveannounced have a purpose – to allowus to keep moving, to keep growing,to keep looking for developments andto keep offering new and broaderranges of cars on our home market,which is Europe. In other words, wewill strengthen our product plan forthe next three to five years so that inEurope we will be able to offervehicles in segments where we arenot present today.

Which vehicles or segments

will these be?

It’s well known that we’ll have an SUV on offer next year, but beyondthat we have three vehicles at presentunder way: these will come out in thenext three years – but I can’t say whichsegments. It’s significant, because it’sin Europe.


RQ Interview – Gilles Michel

Gilles Michel, 50, is widely tipped as a rising starwithin the PSA Peugeot Citroën group, where he iscurrently in charge of platforms, technology andpurchasing. At September’s Paris motor show heexplained toTony Lewin how he planned to launchmore cars, more frequently, on less investment

PSA’s starstrategist

Peugeot 207

Épure fuel cell concept:

for research only


operation you have to look at whatyou can bring to the party. All we canbring is what we have – we are ageneralist, with the three platformsand a good ability to develop localcontent and a local offer.

Is the cost base in Malaysia

significantly lower than Korea? How

does it compare with China?

It’s the obvious question, but I cannotanswer it at this point. It’s a majorpoint of our investigation: all thismakes sense only if you can becompetitive – not only in Malaysia butalso with all the competition possiblycoming into Malaysia or the area.

Peugeot showed a 207 coupe-

cabriolet concept at the Paris show,

powered by a fuel cell powertrain.

Does this indicate you are serious

about bringing such a vehicle to

market?

No – the fuel cell car is far away fromour [planning] horizon – it’s not evenat a horizon that can be crediblystated. What this concept indicates isthat we’re staying active in this area atthe research level, and that we havesome effort underway in some areasof those technologies. We want to stayup to speed with the evolution ofthese technologies and want to investin parts of them so that we are readyto embark on them when we feel thetime is right. The time isn’t right at themoment.

So how can you continue to invest in

these far-off technologies if you are

cutting back on R&D costs?

We’re not cutting back on the R&Dbudget: we’re making more of it,which I think is much better.

Are you on track with your target of

reducing the extra cost for the [C-

segment] diesel hybrid to €1500-2000

over the diesel car?

Yes, that’s the target, but it’s way tooearly to tell [if we are on target]. Theprogramme is under way, but it onlystarted this year. Within 18 months wewill have a good indication. We’reworking with a variety of partners andsuppliers on the various keycomponents of the hybridprogramme: our idea is to co-developthe various sub-components of thesystem – we have no intention toinvest alone or to develop it alone, andwe have no claim to expertise in avariety of the key elements of thehybrid system. We are currently

crafting the research and developmentagreements with a number of keypartners.

Is this a package you could sell on to

other automakers, like you do with

your diesel engine technology?

We’re open to co-operations, includingto another OEM, on this technology.

Are pure electric vehicles in any way a

consideration for PSA?

No, they are not. We still have a claimto being the OEM who has sold thelargest number of [electric] vehicles,but we don’t see a potential for privateuse [of EVs] either today or in thefuture. That, I think, is the bottom line.

Gilles Michel, 50, joined PSA PeugeotCitroën in 2001 and was appointed tothe executive committee the followingyear. A graduate of the elite EcolePolytechnique’s Ecole Nationale de laStatistique et de l’AdministrationEconomique, Michel worked at theWorld Bank in Washington DC andwith Saint Gobain in France and theUS prior to joining PSA

way round: the average age of ourproduct offer in Europe has reachedthe level of 4.5 years for 2005.According to our product plan – which,by the way, is on time, on track and onbudget – this will go down to 3.3 yearsby the year 2008. This is good, as itmeans a new, a young and anattractive product offer. The intent isnot to let it climb again. This is ourbest competitive argument.

What do you hope will be the scope of

the relationship you have just

announced with Proton of Malaysia?

We’re just embarking on three monthsof thorough exploratory discussions

on a spectrum of ideas and projects.It’s a spectrum that is wider thanusual. I cannot yet tell where it willlead, as this depends on theexploratory talks. But we are exploringprojects to allow both brands –Peugeot and Citroën – to be developedand therefore to be sold in this country[Malaysia] and in this part of theworld; we’re discussing what we canbring to the Proton brand itself toreinvigorate its own cars and offer, weare exploring possible new vehiclesthat we might develop out of thetechnical potential we bring and out ofthe industrial and supplier base thatwe can find there – and we areexploring where, and to whichsegments these new ideas couldapply. So at this point we have openedthe eyes, the ideas – and the books –fairly wide. At the end of the threemonth period we will pick out one ortwo of the ideas [to pursue further].

Proton owns Lotus.Will there be

any link with Lotus?

That is not in the scope of thediscussions. We haven’t selected thatarea as a priority one. In a co-

Uni

ted

Pict

ures

“We will strengthen our product plan so that in Europe we will be able tooffer vehicles in segments where we are not present today”

In August this year JCB and Ricardo succeeded in breaking the world land speed record for diesel cars – in a vehicle powered by engines originally designedby the two companies for back-hoe loaders. Jesse Crosse reports on the 19months of intensive and inspired development work that produced the world’shighest specific power automotive diesel engines and, finally, international glory

IIt is mid-morning on 23rd August2006 and Ricardo’s Matt Beasley, incommon with his team of diesel

engineers, feels a sense of sheerelation. Together with colleagues atRicardo and JCB, they hadsuccessfully completed a remarkableengineering programme that had

transformed the existing, co-developed JCB444 engine from asturdy construction equipment unitinto the world’s highest specific powerautomotive diesel – the JCB444-LSR. Itwas with this engine that the JCBDieselmax had just broken theBonneville Speed Week record for a

diesel car and set two new FIA-certified international land speedrecords in the space of just six days.

The JCB Dieselmax roared from thedrawing board into the history booksin a mere 19 months, setting theBonneville record of 317.021 mph anda new land speed record for diesel cars

JCB Dieselmax


350.09

of 350.092 mph (563.418 km/h). But ifthe idea of a diesel-powered recordbreaker was unusual enough, thenotion of using the engines from aback-hoe loader – a class of vehicle notusually noted for its speed – for the 350mph bid appeared extraordinary.

JCB group engineering director TimLeverton recalls how the diesel recordbreaker concept was born. “The ideacame from Sir Anthony Bamford andwas prompted by the decision to goahead with production of the JCB444engine. He thought it was an excellentway of promoting the fact that we hadentered the engine business andwould also fulfil a long-held dream to

embark upon a land speed recordproject.”

Ricardo had been a natural choice ofpartner on the JCB444-LSR speedrecord development programme. Thecompany had been powertrain partneron the original JCB444, taking leadresponsibility for the original conceptdevelopment and then graduallyhanding over responsibility to JCBengineers as the programmeprogressed. It was as part of thisprogramme that Sir Anthony Bamfordhad visited the Ricardo ShorehamTechnical Centre and had theinspiration for the audacious land-speed record bid on seeing the first

JCB444 prototype being tested (theoriginal JCB444 programme wasfeatured in RQ Q3, 2005).

Just two months later, on January14th 2005, Ricardo’s global dieseldirector, Ian Penny, joined the firstland speed record project meeting atMillennium Point in Birmingham(home of John Cobb’s Railton MobilSpecial). The project was shrouded insecrecy and aptly codenamed ‘H-1’after Howard Hughes’ 350 mph recordbreaking aircraft of 1935. On Penny’sreturn to base Matt Beasley wasappointed chief project engineer.

”The start point from ourperspective as engine development


2 MPH

the horizontal. To achieve that, theengines would need a bespoke drysump system.

Ricardo calculated that for the speedrecord attempt, the two engines wouldrequire an intake airflow of almost fivetonnes per hour. More challenginglystill, this would need to be delivered atthe 1300 m altitude of the BonnevilleSalt Flats, where ambient air pressureis 85 per cent of that at sea level. Whilethe production engine requires a boostpressure of 2 bar, the two enginesinstalled in Dieselmax require 6 barabsolute at full power. This compareswith around 3 bar absolute for a dieselLe Mans racer, and around 4 bar for theturbo-era Formula 1 cars.

Two-stage turbo boost

“The scale of the air-handlingchallenge was such that we realisedwe needed to go for two-stage turbo-charging”, explains Penny. “Throughsimulation we were able to show thatwith both inter-stage and after-cooling,and with water injection to provideeven further charge-cooling as well asreducing the thermal load on the


partner was to ascertain theapproximate power requirement forthe vehicle”, recalls Penny. “JCBwanted to exceed the existing recordby a large margin, so the teamestablished the target of 350 mph.Knowing the altitude of the BonnevilleSalt Flats, the range of possible saltconditions and the likely vehicle drag,we calculated that we needed to aimsomewhere in the region of 1500 bhp.With our knowledge of highperformance diesel combustionsystems from competitionapplications and our in-depthexperience of the original JCB444design, we were confident that wecould deliver this target from twounits based on a highly developedversion of this engine.”

Towards 1500 horsepower

Work began on the simulation usingthe Ricardo WAVE software. “Once wehad the scope,” explains Beasley, “wecould decide which engine componentscould be carried over and which shouldbe bespoke.” The value of Ricardo’sprevious role in the design of theJCB444 engine really came into its ownat this stage. “The fact that we hadvalidated CAE models of almost everyaspect of the baseline engine enabledus to make rapid progress”, continuesBeasley. “We could very quickly predictthe durability of components and

systems at far higher ratings, safe inthe knowledge that the models were ofhigh fidelity and able to provide reliabledata.” The feasibility study would takeuntil the end of February 2005,Ricardo’s vehicle division coming upwith a basic layout for the car. Thefavourite was to seat the driverbetween the two engines andtransmissions – but at that point thefirst sign of a problem came into view.In this configuration the frontal areawould be too great, weight would betoo high and stability poor.

“I suggested we incline the engines,”says Penny, “which meant a lot of extrawork but it really was the only solution.”It would also require some complex

engineering. “The engine’s lubricationsystem is designed to drain verticallyand, if inclined, would function bestfitted ‘cold side’ down. However, inorder to fit them low enough in thevehicle the engines needed to go in ‘hotside’ down.” The team calculated thatthe best compromise between naturaldrainage and vertical height was toincline the engines at 10 degrees from

2004 2005 2006

AUG

Speed recordidea forms atJCB

JAN-FEB

Feasibilitystudy atRicardo

MAR-AUG

Conceptvalidated

SEPT

Project gets the green light

SEPT 05-APR 06

Engineeringdevelopment

APRIL

Press launchof theDieselmaxproject

MAY-JUL

Engines built andfurtherdeveloped

JCB Dieselmax

“Knowing the altitude, the saltconditions and likely vehicle drag, wecalculated that we needed somewherein the region of 1500 bhp” Ian Penny, Global Diesel Director, Ricardo

and the JCB444-LSR engines werefrom the outset designed usingRicardo’s High Speed Diesel Race(HSDR) direct-injection combustiontechnology. Fuel is delivered via twoparallel high-pressure pumps to acommon-rail system providing aninjection pressure of 1600 bar.Modifications had to be made to thecylinder head to facilitate the largerinjectors required for the HSDRsystem. Despite these changes,however, the team decided that thevalve train could be carried oversubstantially in its original form, withthe exception of high-temperaturespecification exhaust valves, up-ratedvalve springs and a modified camshaftprofile.

Combustion chamber design

A completely redesigned piston isused with a large, quiescentcombustion chamber that has areduced overall compression ratio andspecific features to reduce the risk ofthermal damage to the combustionchamber components. Piston coolingwas improved over the baselinedesign by increasing the cooling oilflow to each piston by around 600 percent. A completely new, fully-machined connecting rod was used,including a significantly enlargedsmall-end bearing to increase strengthand robustness. While giving a longer


pistons and valves, we could deliverthe required airflow across the enginespeed range even at the high altitudeof Bonneville.”

The high boost pressures requiredfor the JCB444-LSR engines also hadan impact on the design of the drysump system. While these may beconsidered conventional forapplications such as Le Mans cars, theRicardo team realised that suchsystems would not function under suchextreme boost and thermal loading, asthe oil and gas flow rates would needto be around three times that ofcompetition engines. Beasley explains;“The combination of high boost levels,increased engine speed and pistoncooling jet oil flow turns the oil intofoam, causing it to become highlycompressible and hence riskingcatastrophic failure within seconds. Theoil looks like a pint of Guinness that hasbeen poured very badly.”

The dry sump tank was carefullydesigned to condition the foaminglubricant, incorporating centrifugeseparators and baffles through whichthe oil flows, in order to remove theair from it. It would take five layers toachieve a satisfactory result, but thebottom layer would consist of pure,air-free oil.

If the engine is the heart of thevehicle, then the combustion systemis very much the heart of the engine,

stroke, the billet-machined crankshaftretains the production main and big-end bearing sizes and bearing shells.

By now, the team was well into theconcept validation process scheduledto run from March to August, and byJuly it had the specification for thefirst engine mule. Following anexploratory visit to Bonneville for the2005 Speed Week, the streamliner’sdesign had been refined, becomingeven narrower; the track andwheelbase were modified too.

Finding suitable tyres proved a majorchallenge. Land speed record tyres areavailable off-the-shelf, but themanufacturers only provide a 300 mphspeed rating. To make an informeddecision as to their suitability to run a2700 kg car at over 300 mph, the teamrequired validation at target load ratingand running pressure. In the end, JCBlocated a suitable high speed tyre rig andindependently validated the tyres to 350mph, the maximum speed of the rig.

First engine firing

Final approval for the project wasprovided in September 2005, but inview of the three month lead time forthe procurement of parts there wasconsiderable pressure to get anengine running. Given the high powerrating, it had already been decidedthat the engine required a solid billetcrankshaft, a component which would

JUL

Witteringshakedowntests

AUG 4TH

Car andengines shipto the US

AUG 12TH

Speed weekbegins

AUG 18TH

BonnevilleRecord set at317.021 mph

AUG 19TH-20TH

750 bhpengines fitted

AUG 22ND

World landspeed recordfor diesels setat 328.767 mph

AUG 23RD

World landspeed recordfor dieselsraised to350.092 mph

inevitably require a long lead time.Luckily, Greville Sharman, Ricardochief designer on the original JCB444programme, remembered that one ofthe very first development prototypesof the JCB444 engine had beenproduced with just such a crankshaftand was on display at JCBheadquarters. Swiftly requisitioned bythe Dieselmax team, it was rushed toRicardo and stripped, allowing MattBeasley’s team to run the first enginetest on October 18th at 10 am.

The engine was initially runvertically installed, with the originalwet sump; no attempt was made atthis stage to produce any seriouspower figures. Capacity had beenincreased from 4.4 litres to 4.8 litresand, by November, the unit wasproducing 680 bhp against the targetof 750 bhp. Understandably, the moodwithin the Ricardo team was buoyant.

“We were limited by thecommon rail fuel pumpsavailable at the time,”recalls Beasley. “Thesehad lower capacity thanthose intended for the

final build, but the

results gave us great confidence.”“You have to understand,” adds

Penny, “that this is a bespoke fuelsystem and there is nothing like itanywhere in the world. Fitted with aconventional common rail system, anengine like this would produce nomore than 300 bhp. In layman’s terms,this one has very large holes throughwhich the fuel travels, so controllingthe flow is very difficult.”

From February through to May2006, with the record attempt loomingin August, a significant developmenteffort went into refining the design ofthe near-horizontally installed, drysump version of the JCB444-LSR landspeed record engine. When pushingthe limits of performance into territorythat no other engine developer hasever previously explored, somecomponent failures are to be expectedand are an inevitable part of thelearning and development process,enabling subsequent prototypes toachieve better durability and greaterperformance. By May the fuel systemwas further developed and the firststage engine configuration frozen at600 bhp. It was this specification thatwould ultimately run in the earlyvehicle tests and take the Bonnevillespeed record. By the end of June, bothof the 600 bhp Bonneville speedrecord engines were complete andready for installation in the vehicle.

Shakedown testing begins

Now ready and fitted with the 600 bhpunits, the car was dispatched to RAFWittering airbase along with half theengine team, the other half remainingto continue engine building. Fourweeks’ UK vehicle testing had beenplanned, but the enormous challengepresented by raising the power outputof the JCB444-LSR engines by 600 percent and building a bespokestreamliner vehicle had nibbled awayat the schedule, leaving the Dieselmaxteam with just 14 days to complete thetask. Furthermore, the test criteriawere tough: reaching 200 mph on the1.7 mile course, a speed equivalent tothe world’s fastest roadgoingsupercars.

Inevitably these first shakedowntests brought with them some seriouschallenges. The synchronisedtransmission shifting systems decidednot to co-operate with one anotherand triggered engine shutdown, whilethe ice-based cooling system neededfine tuning. But the biggest challengeof all came when both water and oilwere discovered in the exhaust.Beasley sums up the seriousness ofthe dilemma in a mastery ofunderstatement, remarking,“normally, this is a very bad thing forthe engine.”

Despite pressure to change theengine, Beasley resisted; the amountof work would have been too great.Instead, the team spent a day andnight investigating and eventuallydiscovered a failed injector seal and


“Andy decided to stick with it, slowing the car then bringing itback onto target temperature on the brakes. When hereleased the brakes the car just flew and we got our 335.695mph run” Matt Beasley, Ricardo

JCB Dieselmax

a water injection system malfunction.Diesel injectors are precisioncomponents normally assembled innear-surgical conditions, but thisoption was not open to Beasley.Instead he decided to strip andreassemble the injector in situ,working in a tent on the airfield, at twoin the morning. It may have beenunconventional but it worked, and theWittering tests not only yielded amaximum speed of 201 mph but theengine team was also able to sign offall of the 60 items they had beenmonitoring. Some boost lag had beenevident but not critical.

In parallel with the Wittering tests,part of the team continued to work atRicardo on the development of thefinal specification of the engines. OnJuly 17 the announcement was madethat the 750 bhp power target hadbeen achieved and attention wasturned to the preparation of the twoFIA-sealed engines which would be

fitted to the vehicle for theinternational speed record attempt. Bythe end of July the land speed recordengines were complete, having beensealed by the FIA flowing verificationof the bore and stroke.

The legendary Bonneville Salt Flats

The team, plus the car, arrived atWendover airfield near Utah’sBonneville Salt Flats on the Sunday.The team had planned to use SpeedWeek as a final test of the vehiclespecification before attempting to takethe international record one weeklater. A comprehensive risk analysis ofthe car and engines was used todetermine the approach to be takenthroughout this period so that the finaldevelopment time at Bonneville – theonly place that the vehicle couldultimately be tested in theenvironment of the record attempt –could be used to best effect.

By the Thursday before the start ofSpeed Week the team had re-assembled the car, made the firstshakedown runs and noticed anincrease in turbo lag due to the highaltitude. The first run on the salt onSaturday afternoon revealed thatsomething more than minorrecalibrations would be needed.

Because of the car’s layout, theexhaust system of the rear

engine is longer than


Dr Tim LevertonJCB engineering director

“The outcomeof this projecthas a significantinfluence on theapplication ofdiesel engines

and our own range in particular. Theincrease in power means the breakpoint at which a six-cylinder enginebecomes necessary has risen – andthis clearly has major commercialimplications. The compact power unitgives us more scope in terms of thetype of vehicles we can design.

“We could not have completed thisproject without Ricardo. We do nothave the tools, the people or theknow-how. This project was really anextension of the working relationshipwe already had with Ricardofollowing the development of theproduction 444 engine. To succeed inthis kind of venture you simply needenough hours and the right guys;Ricardo has the right guys and theyare a highly motivated and dedicatedteam. I didn’t expect to achieve thisin a one year programme.”

Wing CommanderAndy Green driver

“It was a classicrecord carexperience butthe dieselengine made itunique.

Sluggish at slow speed, when itsuddenly came onto boost the carwould just take off. The left foot braketechnique we developed to overcomethe boost problem at high altitudesproduced far better acceleration thanwe experienced, even during the UKtests. In the end, the car ended upbeing so fast at the top end that itoutstripped all expectations.

“Although Matt Beasley and histeam are used to working in a morecontrolled environment, they reactedto the pressures of a land speedrecord attempt superbly well andevolved into a true, land speed recordengineering team. In Matt Beasley Ihad my ‘man of the match’ andthereafter he became known as ‘MaxDiesel.’ He showed great leadershipand engineering development workunder intense team, company andmedia pressure, and indeed thescrutiny of an international audience.”

JCB Dieselmax

that of the front and, since the airpressure is some 15 per cent lower atBonneville than Wittering, the frontengine turbo was boosting two tothree seconds before the rear. With thefront engine doing all the work andwith no load on the rear engine, itsturbos simply refused to come ontoboost at all.

Saturday August 12th, the first dayof Speed Week, yielded a peak speedof only 163 mph before the team ranout of time on the salt. Sunday waseven more frustrating when, after athree-hour wait to get a run, they werestill unable to solve the boostproblem. On Monday 14th theyachieved 226 mph on the salt but stillcould not encourage the rear engineto boost. “226mph was not bad,” saysBeasley, “considering the front enginewas doing all the work.” To overcomethis situation he decided to reduce thefuelling of the front engine in firstgear, giving the rear engine a chanceto catch up. But when they returned tothe salt on Tuesday, the problemreversed and the front engine failed toboost.

Balance pipe solves boost problem

In order to resolve this issue once andfor all, Beasley and his team decidedto fit a balance pipe between the

induction manifolds of the twoengines to equalise the pressure onthe air side of the turbos. They workedthrough the night on this solution butin parallel, they also developed anovel run strategy which mirrored theway in which the JCB444-LSR engineswere tested at Ricardo – initiallyapplying load at low speed to raise theexhaust temperature before allowingthe engine to go onto boost. While thisis done in the test cell throughapplying load through thedynamometer, the same could beachieved by applying the brake underpower during the early stages of arecord run.


I n addition to diesel particulatefilters, the JCB Dieselmax includes

technologies such as two-stage inter-cooled turbo-charging, high pressurefuel injection and a low compressionratio, low temperature combustionsystem. All of these technologies arebeing developed by Ricardo forapplication on the high performance,ultra-lowemissionsdieselvehicles ofthe future.Thesuccessfulachievementof theinternationaldiesel landspeed recordfollows twokey Ricardo diesel announcements –firstly, that Ricardo is working with aleading global automaker todemonstrate technologies capable ofachieving the world’s cleanest dieselexhaust emissions standard (US TierII / Bin 2); and, secondly, the roll-outin June of the Efficient-C hybriddiesel demonstrator vehicle boastingone of the world’s most energy-efficient powertrains.

The JCB444-LSR engine points to future diesel trends

ENGINES - before and after

Specification JCB 444-TCA JCB 444-LSR

Power 125 hp 750 hpPeakTorque 525 Nm 1500 NmRated Speed 2200 rpm 3800 rpmBore 103 mm 109 mmStroke 132 mm 134 mmSwept Volume 4.4 lit 5.0 litBoost 2.2 bar abs 6.0 bar absAir Flow 550 kg/hr 3655 kg/hrFuelling 79 mg/injection 356 mg/injectionCooling 3.9 lit/sec 8.0 lit/secLubrication 55 lit/min 110 lit/minEngine Mass 470 kg 395 kg

and all engine and vehicledevelopment issues resolved, the

Dieselmax performed exactly asintended, achieving a measured milespeed of 308 mph.

On Friday, in the cool of the earlymorning, they returned to make thesecond run and Andy Greencomfortably averaged 325 mph,setting a new Bonneville record of317.021 mph. The Dieselmax hadbecome the fastest ever diesel to runat Bonneville but, unbeknown tooutsiders, Green had missed the milemarker and hit 350 mph beyond themeasured mile. “The car wasdeveloping just over 1000 bhp from its

two engines at the time, was not yet atfull boost and still in fifth gear notsixth, so everyone gained confidencefor the world record attempt,” saysBeasley.

The world record beckons

Now for the big one: the official FIAland speed record for diesel cars. WithSpeed Week over, the team returnedto Wendover in order to fit the 750bhp engines for the attempt. “Therewas some pressure to leave wellalone, to leave the existing engines

in place now we had them sorted, but Iknew they had done their allottedwork,” recalls Beasley. Yet whenrunning the new engines for the firsttime on the Monday morning, a fuelpump oil seal failed, causing furtherdelays. At dusk there was just time fora few test runs on the airfield runway.

Returning to the salt on Tuesday,they prepared for the first record runand the car was ready on the start linebefore dawn. Green left the line,pushed by the JCB Fastrac as usual,on what looked like a promising start.Then, just 1.5 miles into the first run,disaster struck and the Dieselmaxcoasted to a halt, Green reporting a‘total power failure’ over the radio. Asit turned out, a chafed wire beneaththe dashboard had killed the electricalsystems.

With the fault repaired, they triedagain. The first run average was324.265 mph, despite the enginesoverheating and the power beingautomatically reduced by a fifth. Onthe return run, made with just 11minutes to spare before the one hour


Wednesdaymorning dawnedand the modifiedDieselmax made six runs at Wendoverairport with driver Andy Green usingthe new ‘left foot brake’ technique toraise the exhaust temperatures to over400 degrees Centigrade. It was one ofthose Eureka moments as bothengines came cleanly onto boost forthe first time since the car had beenrun at Wittering: the machineaccelerated as never before.Maddeningly, though, strong cross-winds prevented a run on the salt thatafternoon. By Thursday afternoon,however, with good salt conditions

Andy Green prepares for the record attempt

(left), the Dieselmax is loaded into its

transporter at Wendover ready to go to the salt

(right), and JCB chairman Sir Anthony Bamford

congratulates Matt Beasley of Ricardo on

taking the FIA record (centre)

Thermal FE analysis

was used to optimise

piston design (far left); first

FIA-sealed engine (above)

JCB Dieselmax

cut-off, Green averaged 333.364 mph,giving a two-way average of 328.767mph and setting a new internationalrecord in the process. The team wereecstatic. “Andy ran to the 330 mphtarget but the speed climbed to 345mph. He backed off, but inadvertentlyhit the exhaust brake when he did so,decelerating the car by some 20 mph,”says Beasley. It was a fantastic resultbut the decision was taken to returnthe following day and attempt to raisethe bar still higher.

The team duly returned again onWednesday, still weary following alate night spent modifying the coolingcircuit on the front engine. At 7.39 amGreen pointed the streamliner’s longnose towards Bonneville’s famousFloating Mountain and began his run.This time the strategy for dealing withthe turbo lag worked a little too welland Green averaged a staggering365.779 mph using only 1250 bhp andstill only in fifth gear. “This time theturnaround was really slick,” recallsBeasley. “We got the pre-heaters onbecause the cooling mods had workedbetter than planned -- but even so, thefront engine was too cool and it tookAndy a mile to get it on boost on thereturn run.”

“Andy decided to stick with it,slowing the car then bringing it backonto the target temperature on thebrakes. When he released the brakesthe car just flew and we got our335.695 mph run,” crowed Beasley.Despite his annoyance at theinterrupted second run, Green had

raised the record to 350.092 mph,exactly what the team had set out toachieve. “But the car had not usedsixth gear, full power or evenmaximum revs. It was pulling 3700rpm, developing 1250 bhp and wasstill accelerating,” says Beasley. “Thiscar has the potential to go a lot fasterand our calculations show that itcould achieve almost 400 mph at fullpower if it was fitted with theappropriate tyres – but that is, ofcourse, a call that can only be madeby JCB.”

Most importantly, the team not onlysucceeded in all its objectives but alsodid so within what was anunprecedentedly demandingtimescale, even by the standards ofmotorsport. As Penny sums up: “Thisinitiative has served to demonstratethe ultimate performance that can beachieved from a diesel engine and atthe same time the very robustarchitecture of the production JCB444engine from which the JCB444-LSRhas been developed by Ricardo. Thishas been an exceptionally demandingprogramme for us but the team hasdelivered the engine and vehicle totime and to the required performanceunder very challenging circumstances.

“Most critically of all, though,”stresses Penny, “Dieselmaxdemonstrates many of the advancedengineering technologies whichRicardo is developing in order to makethe vehicles of tomorrow more energyefficient and less polluting.”


Land speed record rules

To be officially recognised as aworld record by the FIA,

motorsport’s governing body, a landspeed record attempt must beconducted over a measureddistance (usually a mile or akilometre) driven once in eachdirection. The turnaround, includingany refuelling or replenishments,must be achieved such that thevehicle leaves the measureddistance for the second time withinan hour of entering it on the firstrun. The official record speed iscalculated from the average of thetime taken to pass through themeasured distance in eitherdirection, rather than the average ofthe quoted speeds of the two timedruns. The Southern California TimingAssociation rules for the Bonnevillecourse record require two runs inthe same direction, carried out onsuccessive days.

The JCB Dieselmax team celebrates taking the FIA international diesel land speed record,

including Ricardo core team members Ian Penny, Matt Beasley, Jon Oakey, Richard Cornwell, Chris

Ward, Mark Guy, Mike Charman, Geoff Lattimer, Ron Jones, Nick Bailey, Richard King, Eric White,

Richard Penning and James Harrington

discrepancy in terms of results beingachieved. The obvious question thenpresents itself: what differentiatesorganizations with effectively run, topperforming China sourcing operationswhen compared with their lesseffective peers?

Based on our experience, here aresome practical observations on keysuccess factors behind successfulChina sourcing operations.

1. Change management

Organisationally, many internalgroups have reasons to doubt or blockthe success of China sourcing efforts.Common reasons range from naturalscepticism and risk aversion to theperception that globally sourcing fromthe most competitive economicregions inevitably means trading offquality for cost.

Most successful efforts include aChina sourcing organisation that haspartially or fully dedicated purchasing,logistics, supplier development andengineering functional resourcesassigned to them. This group will havethe necessary capability and ability tocollect data to help overcomeroadblocks and the natural bumps andhiccups involved with such a large

For reasons that span the rangefrom content localisation toreducing total cost, increased

direct materials sourcing from lowcost countries is a key strategicinitiative for most OEMs andsuppliers. China in particular is thecountry that has been attracting themost attention over the last decade –thanks to its dual promise of providinglarge pools of workers and a quicklymodernizing infrastructure coupledwith being the largest singleconsumer market in the world. In2005, over $30 bn worth of automotiveand truck components were producedin China, and this figure is expected torise to nearly $60 bn by 2009.

Active China sourcing groups are afixture at most automotive, truck and

off-highway manufacturers, whetherstandalone groups in purchasing orembedded as part of the company’slocal operations. While many suppliershave chosen to go the JV route insetting up partnerships with localcompanies as a part of their Chinalocalisation strategy, this option isoften not the correct choice inprocuring many of the morecommoditised components that arereadily available from many sourcesaround the world.

When done correctly, sourcing fromChina results in high quality parts thathave a net 20 per cent to 45 per centreduction on a total cost basis. Despitethe emphasis on having dedicatedresources in place to support Chinasourcing activities, there is quite a


Throughout the auto industry, the current buzz is low cost country sourcing. Yet, says Andy Chien ofRicardo Strategic Consulting, many westernautomakers are failing to benefit fully because theycling to outdated logistics models, they do not specifycomponents properly and they fail to keep track of arapidly developing supplier base

Preparing theorganisation forChina sourcing

Chinese Outsourcing


Chinese Outsourcing

cultural and structural shift.Proper management oversight of

China sourcing activities also plays animportant role in negotiating thechange management element of Chinasourcing. For cases whereunsuccessful market tests were made,it is important to audit the process tofind out why the market test wasunsuccessful: often, flawed executionin identifying, cultivating andobtaining quotes turns out to be thereason, rather than a lack of suppliercompetitiveness compared to theincumbent.

2.Tacit knowledge gaps

Suppliers in China and other low costcountries of supply are still rapidlymaturing and many do not yet havedirect first-hand export experience.Furthermore, export requirements aretypically more complex than those forlocal domestic consumption. The keyto avoiding misunderstandings thatcause misquotes, production approvaldelays and start-up issues is theconsistent application of purchasing,engineering and supplier developmentresources to help bridge the newsuppliers’ shortcomings in tacitknowledge – the experience thattraditional OEM suppliers havedeveloped over decades of servicingautomotive OEMs.

A key obstacle is that therequirements for many componentsare not fully specified, particularlywhen it comes to machining andfinishing operations. Over the years,the current incumbent supply basehas built up this knowledge, whichtypically is not documented ondrawings or specifications yet isessential for a functional part. A goodportion of the up-front preparatorywork needs to be spent ensuring thatall of the product and processrequirements are understood andformally codified.

3. Recognition of rapidly evolving

supply market dynamics

Buyers and engineers often make themistake of assuming a relatively staticsupplier footprint in the Chinesemarket. While this is not true, even indeveloped regions, the pace of changeis even more accelerated in China.Whereas three to five years may be anappropriate refresh frequency tosurvey the supplier market indeveloped regions, 18 to 24 months isa more appropriate timeframe forChina.

The implication of this rapidly

Selected countries included in each category:1: US, Canada, Germany & UK2: Spain, South Korea, Hungary & Portugal 3: Poland, Mexico, Brazil & Turkey4: China, India, Indonesia & Vietnam

Un

ited

Sta

tes

3.5%2.9%

0.9%1.8%

3.4% 3.9%

0.3%

4.1%3.2% 3.0% 2.4%

5.6%

9.9%

5.6%

7.6%8.4%

Can

ada

Ger

man

y

Un

ited

Kin

gd

om

Sp

ain

So

uth

Ko

rea

Port

uga

l

Hu

nga

ry

Pola

nd

Mex

ico

Bra

zil

Turk

ey

Ch

ina

Ind

on

esia

Ind

ia

Vie

tnam

Category 1 Category 2 Category 3 Category 4

$30K+

$16 – $26K

$8K – $14K

$3 – $7K

Source: The World Factbook, CIA, 2006

Source: The World Factbook, CIA, 2006

How long will ‘low cost’ be low cost?

GDP per capita

Manufacturing labour cost varies significantly across nations. Inindustrialised nations like the US, Canada and western Europe, the labourcost is $15 – 20 per hour, which is significantly higher than that indeveloping nations like Mexico ($4 - 6 per hour) and China ($2 per hour).Within developing countries, there is also a range of labour cost primarilydriven primarily by GDP per capita.

Standard of living correlates fairly well with the Gross Domestic Product(GDP) per capita. In 2005, US, Canada and western Europe had a GDP percapita of over $30,000, compared to developing nations like China, Indiaand Vietnam where the GDP per capita ranged from $2800 to $7000.

GDP growth rate

GDP growth rate among nations with anindustrial work force is a good indicatorof how long a country will remain lowcost. Even though Portugal and SouthKorea have similar GDP per capita($19,300 and $20,400 respectively in2005), it is expected that Portugal’slabour cost will remain unchanged inthe near future as a result of a smallerGDP growth rate (0.3 per cent). On theother hand, South Korea’s moderate

growth of 3.9 per cent may make it uncompetitive compared to Portugaland other medium cost countries in the next five to ten years. In 2005,China, India and Vietnam had relatively higher GDP growth rates (7.6 percent to 9.9 per cent). But since the GDP per capita in each of these countriesis significantly lower than in developed economies, it is likely that China,India, and Vietnam will continue to remain low cost for the next fewdecades.

As some of the developing nations transition from low to medium costmanufacturing destinations, focus on non-labour related factors such asimproved logistics networks and increased emphasis on more value-addedservices (e.g. design and development as opposed to manufacturing toprint) can help them maintain their competitive edge.


suppliers that have the equivalentcapability to the global supplier, yetwhich offer considerably greater costsavings. A significant portion ofcurrent China sourcing efforts revolvearound sourcing the Chineseoperations of global multi-nationals,but this only achieves half of thepossible benefits.

7. Common internal standards

A common area which is essential forthe success of China sourcing, yetwhich is a common stumbling blockfor most large OEMs, is the fact thatheavy reliance and trust has to beplaced on local in-country resources todo the proper due diligence inidentifying, evaluating, and selectingthe proper suppliers.

Simply setting up an operation inChina is not sufficient. If this trust doesnot exist, not only is there duplicationof resources, but most of the savingsare lost by flying personnelinternationally to double-check thework that the in-country resourceshave performed. A key enabler toavoid this situation is the developmentand internalisation of a common set ofstandards and expectationsthroughout the organisation,regardless of where in the world theyare located. Common training andrecruiting standards are the primaryelements to build the foundation forcommon standards and trust.

China sourcing is not either thepanacea or the flavour of the monthactivity, but rather a valuablecomplement in the tools that worldclass OEMs and suppliers use in theirchase to continually improve their costbase even as overall vehicle contentand refinement continue to rise. Eachsuccessful launch is one more win thatcan be used to dispel the mythssurrounding savings being consumedby quality issues and other hiddencosts. The practical considerationshighlighted above will transform anorganisation’s China sourcing effortsinto a more effective strategic tool tomanage total costs.

However, these metrics often tend todrive sub-optimal decision-making. Asan example, at one powertrain OEM,in order to promote sourcing fromChina and other low cost countries,the major metric is percentage of totalpurchases sourced out of low costcountries. This has led to decisionswhere components are being movedfrom current suppliers to supplierslocated in low cost regions where thetotal piece cost is only pennies lessthan the original supplier cost.

Also, functional metrics drive sub-optimisation and conflictingobjectives. At a large globalautomotive OEM the logistics functionis being measured on achievingreduced year-over-year logistics costswhile purchasing is being measuredon lowest piece cost, but neitherfunction is measured on lowest totalcost. The end goal – lowest total costs– frequently comes into conflict withtrying to simultaneously achievelowest piece cost and lowest logisticscost – especially when sourcing fromChina is considered. A key successfactor for an effective China sourcingprogramme is the correct set ofmetrics, both from an overallstandpoint and at a functional level todrive the best overall decision for thebusiness.

6. Differentiating between multi-

nationals with Chinese operations and

local Chinese suppliers

In most cases localisation and lowesttotal cost are aligned, except in thecase of selecting multi-nationalsuppliers that have Chinese operationsas a source versus selecting a locally-owned supplier to provide these sameparts. While in either case thelocalisation goal is achieved, what isgiven up is most of the cost savingsassociated with moving to a Chinesesource for the OEM.

Most global suppliers have adopteda global pricing strategy for thecomponents they supply, regardless ofthe point of manufacture. The mostdesirable outcome is to identify local

changing market is thatpreconceptions in terms of localsupplier capability often becomerapidly outdated. As a result, OEMsoften miss out on the ability toleverage new suppliers in commodityareas that in the recent past had nocapable suppliers. For instance, from2000 to 2005, the number of Chinesesuppliers has increased nearly ten-fold from a few hundred to nearly5000.

4. Logistics sensitivity bottleneck

Not surprisingly, one of the major costdrivers behind whether or not acomponent is suitable for Chinasourcing is total landed cost. Despitethis, the logistics models that aretypically used are extremely complexand not suitable for rapid turnaround.As a result, logistics calculations oftenbecome a bottleneck in thedevelopment of business cases. Often,logistics estimates are made withgross errors in some basicassumptions like part orientation,nesting, pack density or secondaryand tertiary packaging (especially if anintermediate warehousing/repackoperation occurs after the parts arriveat the port of entry).

The overall business case sensitivityto logistics costs and incorrectlogistics assumptions leads to theperpetuation of the belief that logisticscosts typically outweigh the savingsachieved from Chinese suppliers.However this ignores the reality thatcomponents ranging from sheet metalstampings to castings and entirevehicles are currently already beingshipped from Asia to the US in a costeffective fashion.

5. Aligned organisational metrics

All organizations, particularly largerones, utilise an elaborate set offunctional metrics to drive the righttype of organisational behaviour.

Joint ventures in China: Behr signs an

agreement; Bosch electronics factory; Bosch

equipment is checked


Efficient-C

A UK government challenge to produce a C-segment vehicle with CO2emissions of less than 100 g/km has seen Ricardo team up with PSA PeugeotCitroën and QinetiQ to develop an innovative diesel full-hybrid. Tony Lewinreports on a highly successful programme that exceeded all targets and whichpoints the way to future volume-market powertrain thinking

99g/km CO2


The diesel engine is universallyacknowledged as the mostefficient internal combustion

engine in widespread land transportuse. It can demonstrate its efficiency ina variety of ways – hauling 40 tonnepayloads across continents, waftingbusy executives along hectic Autobahnsat 200 km/h or, more recently and at theother end of the power scale, winningthe gruelling 24 hours of Le Mans by ahandsome margin.

More recently still, JCB and Ricardodemonstrated the most extremeapplication of the diesel’s inherentperformance potential when the 1500horsepower Dieselmax streamlinertook the world land speed record fordiesel-powered cars at Bonneville Salt

Flats in Utah in August, raising the barto over 350 mph.

Yet it is with low numbers for CO2

that the diesel is still primarilyassociated: here’s where the diesel’sinbuilt efficiency can be exploited tomaximum effect to generate fueleconomy figures that just a decade agowould have been dismissed as wishfulscience fiction thinking. But while thediesel is unrivalled as a near-perfectpower source for everyday running,even the most efficient of power unitswill be wasting energy if it is asked tooperate outside its optimum regime orif it continues running when it is notneeded to accelerate the vehicle ormaintain its speed.

That’s why, when the UKgovernment’s Department forTransport issued its Ultra Low CarbonCar Challenge (ULCCC) to the autoindustry in 2003, Ricardo was quick topropose a diesel-fuelled full-hybrid.Only this combination of a peak-efficiency engine with a trulyoptimised system of energymanagement would ensure that thedemanding target of 100 g/km CO2

emissions could be achieved,reasoned the Ricardo team.Considering that that target had to bemet on a C-class medium sized carmeeting market-competitiveperformance criteria and with no lossof comfort or amenity, the challengewas indeed a daunting one.

Teaming up with industrybenchmark diesel engine producersPSA Peugeot Citroën and energystorage specialists QinetiQ, theRicardo consortium – which had bythis time acquired the name Efficient-C– was awarded the £3 millionprogramme to go ahead and developa demonstrator vehicle for the newhundred-gram technology; Ricardochief engineer David Greenwood wasappointed project leader, and workbegan in February 2004.

Efficient-C’s target: 3.75 litres per 100 km

In a way, the name says it all. With Cstanding for the element carbon aswell as the C segment in which theeventual production car wouldcompete, the design demandedmaximum efficiency in every aspect ofits engineering if it was to achieve thenecessary step-change improvementin fuel consumption, and thus CO2 andgreenhouse gas emissions. Chasing a saving of almost one thirdover 2003-era models meant that nosystem on the vehicle would beimmune from scrutiny in the quest for

absolute energy efficiency. Airconditioning, steering, braking andeven the engine cooling circuits wereall to be rethought along energy-saving lines – and of course thepowertrain, where the major gainsstood to be made, would come in forthe biggest engineering effort of all.

By now the responsibilities of thethree technical partners had beenmore formally defined, with PSAPeugeot Citroën contributing itsexpertise in diesel engines, stop-startsystems and hybrid componentry andQinetiQ exploiting its militaryexperience to provide the high voltagenetwork and advanced batterysystems. Ricardo, as project leader,took on the hybrid control strategy aswell as the key responsibility foroverall vehicle integration.

However there was one surprisewhen the project went public in early2004: the choice of the very roomy butrelatively utilitarian and unstreamlinedCitroën Berlingo compact MPV as thedemonstrator vehicle.

“The choice was deliberate,” saidproject leader Dave Greenwood. “TheBerlingo uses the same enginepackages as the mainstream Peugeotand Citroën hatchbacks, so thetechnology is transferable. By goingfor 99 g/km CO2 in the bulkierBerlingo, we know this will translateinto under 90 g/km in a moreaerodynamically efficient vehicle suchas the Peugeot 307 or Citroën C4. Wealso want to show that the technologycan be applied to a basic family carand that it does not require advancedstreamlined carbon-fibre bodywork orany limiting of practical utility.”

Breakthrough in CO2 emissions

Robert Peugeot, vice president ofinnovation and quality at PSA,underlines the seriousness of thesituation and the need for a step-change in the control of CO2

emissions: “We are extremelyconcerned over the medium and long-term evolution of CO2 emissions andnew technology is one part of thesolution,” he told an audience ofstakeholders and press at thepresentation of the Efficient-C project.

M. Peugeot speaks with unparalleledauthority on the matter: PSA has a 30per cent European market share ofvehicles emitting under 120 g/km CO2,while in the under 110 g/km bandingits share is 60 per cent. “The workcarried out with our partners in theEfficient-C programme shows thatremarkable performance can be


Efficient-C

motor generator so as to allowindependent electric operation withoutthe diesel engine running.

Unusually for a hybrid, Efficient-Chas a separate 12 volt starter-generator for firing up the dieselengine, rather than relying on theintegrated electric machine as ongasoline hybrids. “It’s for refinement,”says Greenwood. “Because of thediesel’s higher compression ratio, themain electric machine could not restartthe combustion engine without thepassengers noticing: with the separatestarter we can restart the engine whileit is decoupled from the electric drivesystem, then seamlessly blend the twopower sources .”

The electrical drive architecture iscompleted by a DC/DC converter andan advanced lithium-ion battery,located under the luggagecompartment floor; the 288 volt arrayis managed by an efficient controlsystem monitoring everything fromstate of charge to temperature toensure maximum performance andlife expectancy.

delivered by means of hybridisation ofa base vehicle fitted with an HDiengine,” added M. Peugeot.

This is a view strongly supported byGreenwood: “I think that dieselhybridisation is the only currentlyavailable technology-based solutioncapable of bringing a significantbreakthrough in terms of consumptionand CO2 emissions in the Europeanmarket.”

Programme definition

Though the UK government’schallenge did not specifically requireit, Ricardo and its partners decided atan early stage that the base conceptshould be expanded to provide theuseful additional benefit of zero-emission pure electric operation forsensitive city centres.

“For this reason we selected a dieselfull-hybrid,” said Greenwood. “We chosea 1.6 litre HDi engine, almost identical tothe standard unit in the Berlingo, as ourstarting point, and linked it to a 288 volt,23 kW motor generator. “

Right from the start, the concept was

conceived to maximise commonalitywith non-hybrid variants and tominimise the likely cost of production,another of the Challenge’s stipulations.

Where the consortium chose to departfrom the specifications, however, waswhen early simulations had shown thatthe concept could improve significantlyon the stipulated performance thresholdof 0-100 km/h acceleration in amaximum of 16 seconds.

“We believed we could improve uponthe Challenge’s acceleration target andthat 0-100 km/h in less than 13 secondswas achievable, together with a topspeed of at least 150 km/h,” saidGreenwood. “The decision was alsomade to fit a diesel particulate filter inorder to reduce particulate emissions toa barely measurable level.”

By now the Efficient-C architecturehad become finalised. A five-speedautomated manual transmission waschosen as the most efficient means ofkeeping the engine in its optimumoperating regime, while the electro-hydraulic clutch was positionedbetween the engine and the electric

“The work carried out with our partners in the Efficient-Cprogramme shows that remarkable performance can bedelivered by means of hybridisation of a base vehicle fitted withan HDi engine” Robert Peugeot, vice president of innovation and quality at PSA


Innovative control strategy

Overseeing the operation of almostevery system on board, including theall-important management of currentflows and energy recuperation, is anadvanced supervisory control systembased on Ricardo’s rCube prototypecontroller.

“Almost half our total project effortwent into this control system,” saysGreenwood. “The aim is the seamlessintegration of all systems andfunctions. We have five CAN networks– most cars have one or two – andthere are six additionalmicroprocessors.”

More than 70 MB of bespoke controlcode were written for the project, saysGreenwood. This compares with lessthan 40 MB for most cars.

The substantial built-in electroniccapacity allowed the project engineersto implement many innovativepowertrain control strategies,including no fewer than six differentoperating modes. It is the task of thiscontrol system to interpret the driver’sdemands and respond to them in theglobally most effective manner.

Underlying all the thinking,however, is the golden rule that thediesel engine must only be run whenit makes sense from an energy-efficiency point of view.

“Diesel engines are most efficient atroughly one-third speed and two-thirds of the rated torque,” explains

Greenwood. “That’s why we don’t runthe engine in the non-efficient areas ofits operating map.”

As a result, Ricardo’s map (see page24) of a typical mid-sized diesel’s fuelefficiency shows three distinct areas ofoperation: the traditional broad speed-load area required for the standardMVEG consumption and emissionscycle, a smaller island of peak dieselefficiency within this area, and adistinct no-go zone at light load andlow rpm where electric rather thaninternal combustion power is calledfor.

What is innovative on the Efficient-Cmap, however, is a large blue arrowlinking the top end of the no-entryzone with the heart of the diesel peak-efficiency island. Dave Greenwoodexplains:

“What we’re doing here isincreasing the load on the dieselengine so as to move it into the mostefficient portion of it’s map. We do thisby generating current and storing it forlater use.”

In this way, Efficient-C is able toscore an effective win-win, keepingthe diesel engine in its sweet spotwhile also generating current in themost efficient way possible.

Six modes of operation

Besides the innovative efficiency-boosting mode just described,Efficient-C can also operate in five

High-VoltageJunction and

Fuse Box

1.6L HDiDiesel Engine

DC/DCConverter

12VBattery

AutomatedManual

Transmission

Inverter formain

E-Machine

Main E-Machine

Starter/Generator

Inverter

Electric A/CCompressor

Starter/Generator

Li-IonBattery

Power electronics package neatly around the

largely standard 1.6 HDi engine (left); even

floor lockers (below) come in useful for

Ricardo rCube controller; lithium-ion battery

pack is housed in the boot floor


Efficient-C

stationary for a substantial period withcurrent-consuming functions such aslights, wipers, air conditioning andaudio in continuous operation, seesthe diesel engine fire up and connectdirectly to the generator for a shorttime to keep the battery topped up tothe appropriate level. This does nothappen very frequently: the batterycapacity is such that these electricloads can be supported for around 20minutes before the top-up is needed.

Across all six of these modes thelow-temperature cooling circuits are

able to protect themotor and powerelectronics fromoverheating, whilethe DC/DCconverter enablesthe 288 volt motorgenerator toprovide a moreefficient 12 voltsupply than wouldhave beenpossible via aconventional 12volt generator.This is especiallyimportant, giventhe electrical loadrepresented bysuch key functionssuch as the 12 voltelectro-hydraulicpower steeringand the electricvacuum pump for

the brakes. Since it draws up to 6 kW,the air conditioning compressor ispowered at 288 volt as it is far moreefficient to supply this at high voltageand low current.

Mission accomplished; mission

exceeded

With the modesty typical of aconfident, dedicated engineer, DaveGreenwood confirms that all thetargets of the Ultra Low Carbon CarChallenge were met or exceeded.

“We achieved a 30 per centimprovement in overall consumption

other different ways, the controllersystem switching the vehicleseamlessly between modes withoutthe driver or passenger beingconscious of the change. The onlydriver-selected mode is that of electric-only drive for zero-emission cityzones.

Under steady cruise conditions, theconventional IC mode is most likely tobe invoked. With the diesel enginedriving the wheels directly, theautomated transmission is responsiblefor ensuring the powertrain is alwaysin the right gear.

For hard acceleration, where greatertorque is required than the dieselengine alone can supply, the electric

machine draws power from thebattery to send additional torque tothe wheels. In contrast, for low-speedurban driving and for pull-away fromrest, electric operation is much moreefficient: accordingly, the diesel engineremains stopped and the batterypowers the motor-generator directly.

With the vehicle slowing fromspeed, the diesel engine isautomatically shut down and themotor-generator captures the vehicle’skinetic energy and stores theregenerated current in the battery for

later use. “When the driver lifts off thethrottle,” says Greenwood, “we shutdown the engine and perform lightregenerative braking to replicate theengine braking effect. When the brakesare pressed we increase the amount ofregenerative braking until the capacityof the motor is saturated, and onlythen do we engage the foundationhydraulic brakes. In this way, duringnormal city driving almost all brakingis done electrically.”

The final mode, designed to copewith the reality of dense contemporarytraffic where the vehicle may be

Ultra Low Carbon CarChallenge – targets• Five-door C-segment family car• Better than 100 g/km CO2

• Equal or better range than standard model

• Standard pump-grade fuel• Euro 4 emissions compliant• 0-100 km/h acceleration in under

16 seconds• No compromise on comfort,

space or functionality• Suitable for mass production• Affordable in volume production

Programme achievements• All ULCCC targets met or exceeded• 30 per cent improvement in fuel

consumption and CO2 emissions relative to current state of the art diesel vehicle

• Better than Euro 4 emissions• Includes particulate filter• Zero emissions operating mode• Uncompromised performance,

comfort and space• Estimated additional cost around

£3000 over conventional vehicle

Technical specifications• 1.6 litre HDi engine: 92 hp at

4000 rpm• Electric motor: permanent magnet

synchronous, 23 kW peak power, 130 Nm torque

• Transmission: five-speed automated manual, electro-hydraulic clutch

• Brakes: combination of electrical regenerative and conventional hydraulic

• Fuel tank: 60 litres• Kerb weight: 1374 kg

Key performance indicatorsBerlingo Multispace Efficient-C

Maximum speed 158 km/h 171 km/h0-100 km/h 14.8 sec 13.4 sec80-120 km/h 17.9 sec 12.3 secFuel consumption, urban 6.7 lit/100 km 3.7 lit/100 kmExtra-urban 4.7 lit/100 km 4.0 lit/100 kmCombined 5.4 lit/100 km 3.75 lit/100 kmCO2 emissions 143 g/km 99 g/km

When the engine nears ‘no-entry’ area at low speed and load, the

innovative control system forces it upwards (blue arrow) to a more

efficient point by generating electricity

Typical Fuel Efficiency MapMid-sized diesel engine

Area of Best

Engine Efficiency

Conventional Area of

Operation on MVEG Cycle

Use motor, not

engine to deliver this

En

gin

e T

orq

ue

Engine Speed

and CO2 emissions compared with thealready highly efficient base HDiengine,” he affirms. “This puts eventhe high roofline Berlingo into the 99g/km CO2 bracket.”

Particularly impressive is the 45 percent fall in in-town consumption,confirming the effectiveness of thehybrid system in stemming urbanemissions. This figure is evencomputed with the battery chargestate stable for continuous in-townoperation – and if the car drives intoand out of the town along a dualcarriageway, the in-town performanceis even better.

“We’ve managed a smallimprovement in performance, too,” hesays with some satisfaction. Thismakes Efficient-C a strong candidatefor the status of one of the world’smost efficient internal combustionpowertrains.

Breaking down the 30 per centefficiency improvement, Greenwoodsays 6 per cent of the total savingscome from reduced rolling resistanceand slightly improved aerodynamics,4 per cent is contributed by the enginestop-start system, 8 per cent by theoptimisation of the engine’s operatingregime, and 12 per cent comes fromthe storage and re-use of regenerativebraking.

Compared with other advancedtechnology vehicles, he says, Efficient-C has class-leading powertrainefficiency. The current best-in-classgasoline hybrid vehicle, the ToyotaPrius, notably emits slightly moretailpipe CO2, even though its energyrequirement in terms of mass, rollingresistance and aerodynamic drag issome 25 per cent less.

But perhaps the most significantendorsement comes from the company

that has been the most consistentbacker of the diesel hybrid concept.“The technical breakthrough is here,”said Robert Peugeot at the project’s roll-out: “It’s here in front of us.”

The next frontier

The next challenge, says M. Peugeot,is to move from this projectexperience to an affordable car. “Threethousand pounds (€4300) is clearlytoo much for the customer to pay,” hesays, referring to his own engineers’estimation of the likely extra cost of ahybrid C4 or 307 over the price of aconventional HDi diesel edition. “Wehave to work and do further researchto progress from this prototype to putan affordable car onto the market.”

“Customers are very pragmatic,”observes M. Peugeot. “They make thefinal decision, and we find that theyare not prepared to pay for more thana certain level of technology – thoughit might be possible to make them

change their mind if suitableincentives were in place.”

Those incentives should not betechnology-specific, he adds, but mustbe geared directly to CO2 emissionsand be linear, rather than artificiallybanded, in their application. “Then it’sour job, as an automaker, to set theright products in front of thecustomer.”

The success of the Efficient-C projectin producing the world’s most energy-efficient C-segment five-door cardemonstrates that the diesel hybrid isindeed the most convincing CO2-reducing solution yet devised – the‘right product’ so elegantly describedby M. Peugeot. All that now remains isfor those same engineers to applyequal ingenuity to the perhaps toughertask of bringing the on-cost of dieselhybridisation down into the £1500target zone that PSA has identified asthe extra amount the Europeancustomer is prepared to pay.

“We achieved a 30 percent improvement in overall consumption and CO2 emissions compared with the alreadyhighly efficient base HDi engine. This puts even the high rooflineBerlingo into the 99 g/km CO2 bracket”Dave Greenwood, Ricardo chief engineer

How Efficient-C compares with leadingadvanced technology vehicles


200

175

150

125

100

75

50

25

00 100 200 300 400 500

Energy requirements for drive cycle (mass, drag, rolling loss) (kJ/km)

VW 1 litre/100kmHonda CIVIC IMAFord ProdigyEfficient-C

Audi A2 TDIToyota PRIUS IIGM PreceptCitroën C4 Hybride HDi

VW LUPO TDIToyota PRIUS Ii-MoGen Diesel Mild Hybrid

Honda INSIGHTChrysler ESX3Golf Diesel Hybrid

Tailp

ipe C

O2

(g/k

m)

The common perception is that

Smart is losing money, but in your

presentation you said that every

Smart Fortwo made money. Could you

explain this?

Yes, each Fortwo makes a profitablecontribution. Not the very first cars, ofcourse, but over the lifecycle it hasmade money – especially in the lastyears. If you exclude all theinvestments made for other products

like the Roadster and Forfour, theSmart fortwo has been profitable. It’smaybe because of all [the years of]these negative discussions andquestions of whether Smart has afuture that the perception built up thatSmart, even the Fortwo, couldn’t beprofitable. The message that the Fortwois losing money is wrong.

You will be launching the second-

generation Smart next spring.What

lessons have you learned from the

current Smart?

When you’ve got the basis, like wehave today, you know what you canimprove. We’ve been getting feedbackfrom customers, from our sales peopleand from clinics, and we’re taking anespecially close look at improvingdriving comfort and suspension. This isone of the reasons we’ve increased thewheelbase slightly. Then we lookedspecifically at the transmission issue,what we could improve to make the carsmoother: we have re-engineered thetransmission with Getrag. Niki Laudatested the car and said it was great. Onthe safety side there are always thingsyou can improve, and we re-engineered the diesel engine – it canmeet EU4 even without a particle filter.

What about the gasoline models?

We’ve got a totally new engine, whichcomes from Mitsubishi. It has highertorque, more power and greaterflexibility.

I understand there will be a turbo and a

non-turbo.The old model was all turbo,

so will this enable you to offer the

entry-level Fortwo at a lower price?

There are always discussions about thepricing. First of all, the message is thatwe will not increase the price.

Do you intend to make Smart a green

brand?

It’s part of the brand image. However,Smart is not only a green brand: wewanted to avoid this. Look at the carsoutside [on the streets] – it’s acombination. Many of the greenbranded products are not lifestyleproducts: everyone can see you’redriving a green product. But if you’redriving a Smart, as well as being alifestyle product it is also safe – andwhen you come to fuel consumption,if you’ve got the CDi engine, you’vegot CO2 of just 90 grammes. We’re theonly carmaker fulfilling the Kyotoprotocol. A purely green imagepolarises too much – we see Smart asa sexy green car.

Is Smart back to being a one-product

company?

Yes, we are clearly back to one product.The Fortwo is the icon of the brand, asingle product. But of course we havedifferent versions of the engines, anddifferent body styles – the coupé andthe convertible. We’ve also got ideas foralternative drive systems, so we end upwith a wide range of variations.

Will there be any other styles based on

the same platform, such as the

Crosstown concept you showed last

year?

No, that’s not planned. For now ourfocus is to not only achieve break-evennext year but to continue to improveprofitability over the next years.

So are too many variations bad for

profitability?

Yes. That was the problem in the past.We had to invest a lot of money in newproducts, but we hadn’t earned thatmoney beforehand.


RQ Interview – Ulrich Walker

Ulrich Walker faced tough decisions as Smart’sincoming CEO, dropping three model lines andcombining many functions with its parent,Mercedes-Benz. At the Paris show RQ reportersasked him how the new business model and thenew-generation Fortwo, to be unveiled in November,will restore Smart to profit

SMART RESTART

Ulrich Walker joined the divisionalboard of management of theMercedes Car Group and becamepresident of Smart GmbH inOctober 2004. Prior to hisappointment he spent four yearson the board of Mitsubishi MotorCorporation. He joined Daimler-Benz from university in 1978, risingto become head of Mercedes-Benzpassenger car and truck servicingworldwide in 1999.

You are looking at various different

alternative drivetrains for the new

Smart.Which is the biggest priority?

First and foremost, it must beeconomically feasible. With theelectrically driven car we are doing apilot study in London, and on the R&Dside we are prepared for gas engines.Then we’ve got the opportunity for amicro-hybrid with the integratedstarter-generator, and we also –theoretically, at least – have thepossibility of a hybrid, knowing thatthis will require a high investment onthe R&D side.

Which system is most likely to see

production?

The micro hybrid technique – that’seasy. A full hybrid would be tooexpensive: we would only do it if it waseconomically feasible. At the moment itmakes no sense because our fuelconsumption is already quite low. Theadditional benefit you’re getting from ahybrid is excellent [in relative terms]:you save 15 per cent, but 15 per cent ofless than 5 litres is not as much as the15 percent of 15 litres you might getfrom an SUV.

The new Smart business model

comes into effect with the new Fortwo.

How many units do you have to sell

annually to make it work?

Firstly, we are not stating any expectedsales figures – but let me give yousome indications. We are launching anew product with no cars in stock [indealers]. The current model is nearlysold out. It’s the first time that we’velaunched a second generation model,which means that there are more than750,000 customers who have already


had experience with Smart. This isimportant, as our customers are veryloyal: here in France our loyalty isroughly 70 per cent. We know that onaverage our loyalty is higher than 40per cent: this is much higher than theaverage for the small car segment.

What about the costs side of the

equation?

The good part of our story is that wehave reduced the cost structure: fixedcosts are down by 46 per cent, andmaterial costs are down by 12 per cent.

You will launch in the US in the

beginning of 2008.What do you expect

the volumes to be?

No official volumes have beenmentioned. But concerning the number

of dealerships we’re talking about twophases: 30 to 50 dealers in the firstphase, and 60 to 80 in the second. Thesecond phase will be one or two yearsin – it depends how the first phasegoes. Interestingly, enquires fordealerships have been ten times higherthan the number we needed.

What is your target selling price for the

Fortwo in the US?

At the moment the official position isthat it will be below $15,000. Wecalculated it with a wide range ofexchange rates, and even with thecurrent 1.35 [dollar/euro] it will still beprofitable.

It wasn’t long ago that DaimlerChrysler

announced that the Mercedes B-Class

wasn’t going to the US because it

couldn’t be profitable at the prevailing

exchange rates.Why is Smart different?

We have the advantage that we areunique: there are no real competitors[to the Fortwo]. The B-Class and also A-Class would always be directly relatedto competitors, meaning that theycould only occupy a small price band.

Will you launch Smart into any new

markets?

Except the USA, there are nonecurrently planned. But what we aredoing is making use of the potential ofthe markets we are already in, ratherthan trying to conquer new markets.There are some of our 36 marketswhere we don’t make use of the fullpotential in the market yet. There itmakes more sense to invest in thosemarkets than in totally new ones.

New generation

Fortwo (above) will

debut in 2007 to

restore Smart to profit.

Current model (right) is

virtually sold out

“We’re the only carmaker fulfilling the Kyotoprotocol. A purely green image polarises toomuch – we see Smart as a sexy green car”

28 RICARDO QUARTERLY REVIEW • Q4 2006

both sea level and altitude compliance.These advanced diesel technologies

will be integrated into a vehiclecapable of meeting the SULEV, Tier IIBin 2 standard without compromisingcustomer appeal, while maintainingsignificant fuel efficiency (and henceCO2) advantage over current US

equivalent gasoline products. Also, by applying a systems

engineering approach, combiningengine-out optimization with advancedaftertreatment, a highly cost-effectivesolution is expected.

Ricardo hasannounced a

collaboration witha globalmanufacturer tolead to thedemonstration ofadvanced dieseltechnologiescapable ofachieving USSuper Ultra-LowEmission (SULEV)and Tier II Bin 2 requirements, currentlythe toughest worldwide exhaustemissions standard.

The objective of this programme isto remove the diesel combustionengine from the environmental debateon regulated emissions – allowingadvanced diesel engines to take theirplace alongside gasoline hybrid andfuel cell powered vehicles in the futureof environmentally friendly automotiveproducts.

The programme started in late 2005,with the early project focus being ondeveloping technologies to deliverengine-out exhaust emissions (withoutNOx aftertreatment) that achievestringent Tier II Bin 5 emissionrequirements. Such NOx levels areapproximately one-sixth thosecurrently proposed for Euro 5.Technologies embraced by theprogramme include advanced airhandling systems, two-stage boosting,advanced exhaust gas recirculationand the application of closed-loopcylinder pressure-based enginecontrols.

In parallel, work is being carried outto develop an advanced exhaustaftertreatment system. Combiningadvanced aftertreatment with engineoptimisation will allow demonstrationof a system capable of meeting therequirements of US SULEV/Tier II Bin2, thereby achieving NOx levels lessthan one-tenth of currently proposedEuro 5 levels.

Throughout the project, a majoremphasis has been placed onachieving low emissions undertransient conditions to maintain orimprove the fun-to-driveresponsiveness of the engine withoutdeteriorating emissions performance.The engine is being developed with acompetitive power rating of 65 kW/l tomeet US emissions regulations for

Vectis CFD simulation showing spray,

mixing and flamefront

Ricardo News

Ricardo developing world-leading low CO2

SULEV diesel technology

Historic Shoreham siteplan presented byRicardo family

An original copy of the plans ofthe “New Factory at Shoreham,

Sussex” which went on to becometoday’s Ricardo Shoreham TechnicalCentre, was presented during a visitto the site by members of Sir HarryRicardo’s family. The architect’scoloured drawings were very much afamily enterprise, the architect beingnone other than Sir Harry’s father,Halsey Ricardo.

The visit by the Ricardo family wasmade following an invitation

extended at the unveilingceremony in June 2005 of theEnglish Heritage blue plaquemarking Sir Harry’s birth place at13, Bedford Square, London.The Shoreham visit washosted by Ricardo plcchairman MarcusBeresford andincluded a tour ofthe advancedtechnical facilitieswhich now formthe RicardoShorehamTechnical Centre.


In a separate collaboration, Ricardoand Robert Bosch Corporation have

joined engineering forces to develop anadvanced turbocharged, direct injectiongasoline engine system. The prototypesystem, named DI BOOST, will offersuperior performance and fueleconomy while also being capable ofachieving SULEV standards.

“With global fuel prices at recordlevels, Bosch is pleased to partner withRicardo to advance technologies thatdeliver improved fuel efficiency ofgasoline engines,” said John Moulton,president, powertrain division, RobertBosch Corporation. “The DI BOOSTconcept is a viable solution that bydownsizing engine displacementdramatically improves fuelconsumption and performance ingasoline vehicles.”

Two prototype DI BOOST enginesare in development and combine theperformance-enhancing capabilities ofmodern valve actuation and

turbocharging with the improved fuelefficiency and low emissions ofgasoline direct injection. The enginesare based on GM’s global high-feature3.6L V6 engine. A premium sportbrand vehicle is employed as thedemonstrator platform.

“The DI BOOST concept has clearadvantages for automakers in offeringdramatically improved fuelconsumption in parallel with a morerewarding driving experience for thecustomer and SULEV emissions levelsto benefit the environment,” saidJeremy W. Holt, president of Ricardo,Inc. “Ricardo is pleased to continue itspartnership with Bosch in developinga vehicle-based demonstration of thishighly promising gasoline enginetechnology.”

The first phase of DI BOOST, thedesign and procurement of prototypeengines, was completed in January2006. The next phase, which started inMarch 2006, concentrates on base

engine calibration for best efficiencyand driveability. In parallel, vehicleintegration is nearing completion.Future phases will focus on achievingSULEV emissions levels via high-pressure start capability and splitinjection.

Bosch is providing the complete DIMotronic engine management systemincluding the new, second-generationdirect-injection fuel system as well asignition, air and exhaust control.Ricardo has contributed to the studyusing its expertise for prototypepowertrain integration and providingbase engine calibration work at itsDetroit Technical Center.

…and high performanceSULEV gasoline concept

Green Diesel InitiativeRicardo is one of the latestorganisations to become a memberof China’s Green Diesel Initiative. Theaims of the Green Diesel Initiativeare stated as ‘to help China realise itsdevelopmental and environmentalgoals by advocating theestablishment and equalenforcement of performance-basedemissions regulations in China, andby introducing the advantages ofadvanced diesel technology and highquality fuels and lubricants to thenational and local governments andto the public’.

Ricardo becomes the 13th memberof the Green Diesel Initiative, joiningthe local Chinese operations of AVLList GmbH, Robert Bosch, Cummins,DaimlerChrysler, DongfengCummins Engine Co., Denso,Honeywell, MAN, Nissan, PSAPeugeot Citroën, Scania, and Valeo.

"Ricardo believes the need tominimise the environmental impactof future vehicles is a major driverfor technology development in theworld,” said Alex Marshall, businessmanager of Ricardo UK Ltd.’sShanghai representative office.

“The position Ricardo nowoccupies in the development ofclean diesel engine technologies canoffer improved fuel economy,reduced CO2 and low regulatedexhaust emissions, which stronglysupport the Chinese government’sdesire to realise its sustainabledevelopments environmentally andeconomically."

New dates for ‘sell-out’seminarsAs a result of overwhelmingdemand for delegate places at theoriginal events, further dates havebeen announced for a repeat of thehighly successful EngineFundamental Training Courses.

The two seminars – on light dutydiesel and gasoline fuelled vehicles– are designed to provide an in-depth understanding of current andfuture engine technology. The newdates announced are 21 and 22November 2006, respectively, forthe diesel and gasoline courses, atthe Ricardo Shoreham TechnicalCentre.

For further information or to register, [email protected]

Ricardo’s collabration with Bosch

uses GM’s global V6 in a Cadillac

demonstrator


Ricardo News

Ricardoappointed asTVR powertrainpartner

of the business strategy of thecompany. Our alliance with Ricardoallows us to advance our technicalcapabilities to achieve our aims at anaccelerated rate.”

The achievement of Euro 5 (LEVII)certification for the Speed Six engine isthe expected result of the initial

Following negotiations concluding inthe signature in July of a Heads of

Agreement, UK sports carmanufacturer TVR has announced thatit will collaborate with Ricardo onpowertrain development.

TVR is an exclusive British sports carbrand that has been synonymous withthe world's most powerfulperformance cars, both on the trackand on the road, for some 60 years.The company’s products deliverprodigious power and performance,married to a new, real-worldsophistication.

Development of powertrains to meetfuture European and North Americanemissions regulations is a significantpart of TVR’s future strategy, as thechairman and owner of TVR MotorsCompany Ltd, Nikolai Smolenski,explains: “My intention is to expandthe sales and distribution of TVR carsthroughout Europe, the rest of theworld and USA markets as a key part

The seniormanagementteam of theRicardo controland electronicsbusiness hasbeenconsiderablystrengthened

with the appointment of Karina K.Morley as global vice president.Reporting directly to CEO DaveShemmans, Morley will apply hermore than 20 years of automotiveengineering experience to the task offurther developing this rapidlygrowing and highly successful part ofthe company.

Morley joins Ricardo from herprevious role as powertrain controlelectronics director for VisteonCorporation, where she led a globalorganisation of 400 engineers,created a new strategic direction,implemented training of engineers inChina to support a joint venture and

created a new lean organisation toreduce budget spending. Prior to thisshe served as powertrain controlssenior engineering manager forVisteon, where she led thedevelopment of new technologies,including ionization ignition controls,electro-mechanical valve actuationand controls for harsh environments.Before her time at Visteon, Morleywas a chassis and climate controlelectronic design engineeringmanager for Ford Motor Co., whereshe led teams responsible for thedesign of new products includingelectronic modules for newtechnologies such as 42V, electrichydraulic power assist steering,electric steering, brake-by-wire andactive tilt control systems. She beganher career at Chrysler Corporation in1984.

Currently, the control andelectronics area is Ricardo’s highestgrowth segment globally, fuelled bythe rapid increase in electronics

penetration in vehicles, growth inmechatronics and increasingcomplexities related to supply chainand system integration. As such,control and electronics is a vitalelement of the company’s technicalstrategy – supporting its involvementin hybrids, fuel cells, advancedgasoline and diesel engines, efficienttransmissions and drivelines, andcomplete vehicle development.

“Demand for electronics-basedautomotive features is projected togrow steadily over the next decade,”explains Dave Shemmans,“requiring rapid development andbroad-based technical experts.Karina’s leadership will accelerateRicardo’s growth in this area, whichhas been built through recentinvestments, including ouracquisition and successfulintegration of automotive softwarespecialist Tarragon EmbeddedTechnology Ltd. We are stronglydedicated to continuing investmentsand building further momentum inthis strategic business area.”

New Control & Electronics VP appointed

planned collaboration between the twocompanies. “We are delighted tosupport TVR with its development”,says Ricardo CEO, Dave Shemmans,“and we look forward to bringing thevery best of Ricardo engineeringexpertise to such an exciting brand andproduct range.”

Ricardo’s work with TVR will

centre on emissions certification

for the Speed Six engine family

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