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Ricardo: three principal steps for future development in China

Joanne Jiu From Gasgoo.com| April 23 , 2009

Ricardo is a leading provider of technology, product innovation, engineering solutions and strategic consulting to the world's automotive, transport and energy industries. Combining business, product and process strategy with fundamental technical research and the implementation of new product development programmes, Ricardo completed its first project in China in the 1970s. Dr. Simon Stevens, President of Ricardo China shared his opinion on China's automotive technical development with Gasgoo.com.

Opinion on China's transmission technology development

Gasgoo.com: I learnt you would give a speech alongside the 2009 Shanghai Auto Show, titled with "Transmission for China--key development and future technologies", so Ricardo's stepping up efforts for its transmission technology expertise in China?

Ricardo: three principal steps for future development in ChinaSimon Stevens: Yes. For example, last month we imported a demonstration car (a VW Passat) from the UK to showcase Ricardo's software capability. Previously demonstrated in Europe,the US, and now China, the control system of the original DCT system has been replaced with Ricardo's own control strategy and prototype control unit. The vehicle will be here to the end of the month and all next week is booked for demonstration drives.

This forms part of our philosophy to demonstrate capability and our next-generation technology on a vehicle platform. We have a series of demo vehicles for our DCT, AMT and Torque Vectoring transmission technologies. In addition we also have hybrid, gasoline, diesel and advanced active safety demonstrator vehicles. In particular, Ricardo is developing knowledge and capability of actuation and control for next generation transmissions. We are also looking at other features that enable the current transmission to be more efficient so that we can support the drive for improved fuel economy.

This summer, we're going to show a second demonstration car with our linear actuator technology in a DCT transmission system, already applied in an AMT demonstrator.

Gasgoo.com: Which type of transmission technology you bet the most-DCT, CVT, AMT or AT?

Simon Stevens: The focus of our recent transmission programs worldwide is in DCT. So far the most mature production dual clutch transmissions have a hydraulically actuated wet clutch configuration. As the industry has the most experience with this DCT configuration, it may be quite applicable for the China market. However, due to the drive for improved fuel economy, we believe there is need to look technologies to improve transmission efficiency for the future. This is where our research work is focused and why we have our electric linear actuation technology and dry clutch DCT solutions.

With manufacturers now launching dry clutch electro/hydraulic transmission systems, there may be a migration to this kind of technology.

Gasgoo.com: The decision-makers of the local Chinese automakers are facing lots of technology choices; I guess Ricardo could play a great role in helping them finalize their decision…

Simon Stevens: What appears to be important for Chinese customers is to have proven technology that is reliable and cost-effective for the market. Perhaps in the future that will change, but at the moment we see that as a dominant preference. To reduce the manufacturing cost, the manufacturer could increase volume by supplying other domestic OEMs as well as its own brands, or even exported to the overseas market.

For Chinese manufacturers, generally they have advantage in production and manufacturing engineering, and the quality of Chinese products is improving. As their product quality is converging to global standards, there's a lot of potential for the domestic suppliers and manufacturers to successfully compete in the overseas market.

Gasgoo.com: Besides increase in volume, there're other ways to lower the cost. Could the local players modify the transmission design when it's introduced into China?

Simon Stevens: There is also the possibility to modify the transmission to reduce cost or function by redesigning some of the components. This may result in some reduction in performance which may be acceptable in the Chinese market but perhaps unacceptable elsewhere. If your durability criteria or duty cycle is different for a Chinese application versus an application in the US or Europe for example, then it may be possible to reoptimise the specification for some components.

Local experience in China

Gasgoo.com: Let's talk about Ricardo's China operation history. What if you make the history into several phases?

Simon Stevens: Ricardo first entered the Chinese market in 1977, completing our first project at that time. During the 1980s, we made ourselves publicly known by working on the heavy duty diesel engines in China. And then during the 1990s and the first years of this century, Ricardo has been involved in a number of major programs that successfully delivered new products into volume production.

So the company has transformed from the early 1970s to today by expanding our experience and capabilities in production engineering, but also in our breadth of systems capability from our focus up to the 1980s on gasoline and diesel technology, to firstly transmission and vehicle system engineering, and then into hybrid systems and control electronics. We are now working to expand our presence in the clean energy sector and have secured contracts in both the wind and tidal power markets. Ricardo is based in UK, and has built Engineering Centres in Germany, US and Prague. Now we are building our Asian engineering center in China.

Gasgoo.com: What challenges have you met in the Chinese market?

Simon Stevens: The Chinese market is quite dynamic, and very innovative, so has many opportunities for companies like Ricardo. Many Chinese manufactures are continuing to develop key fuel economy and emissions reduction technologies. Most notably, client interest in gasoline hybrid technologies remains high, aligning well with our core product offerings. Ambitions by Chinese automakers to develop domestic DCT products are also becoming more apparent, providing further significant opportunities for Ricardo.

One of the challenges we have in the market is to ensure we clearly understand our customer's requirements. All projects are investments and we work closely with our customers to help them to understand the options available and that we develop a solution that best meets their product needs.

About the Chinese automakers' tech development

Gasgoo.com: What are the tech breakthroughs that you would suggest the Chinese automakers achieve in the short and long term?

Simon Stevens: Ricardo believes combustion engines will remain a dominant part of the automotive industry until 2025-the main reasons are its cost, reliability and availability.  However, as the market moves and the volume of the vehicle increases, the efficiency of the powertrain needs to improve. This is the where hybrid and electric drive systems have a part to play. Also for the existing vehicle fleet already on the road, the role of alternative fuel may become more important.

I think there's combination of two categories of technology: one category makes an incremental step; the other provides a significant change (breakthroughs) in terms of performance and fuel economy. This second type may also challenge the market in some way.

In terms of incremental technology, like reduction of friction and weight, the gain may be relatively low but the cost is also relatively low, therefore the benefit is still valuable. Another example is the stop-start system used to reduce fuel consumption and CO2 emissions in city driving. It's a low cost solution but with potentially significant gain. It's not a major "break-through" technology, but it's still beneficial to the market. Then in terms of break-though technologies, we might consider direct gasoline injection, engine downsizing and turbo-charging. These create the opportunity for significantly improved fuel economy but at relatively higher cost. Also these technologies may create challenges to the market. For example, with plug-in hybrid technology, the vehicle may have a small engine combined with a large electric motor. The car may have a level of performance traditionally associated with a larger engine in the Chinese market. Thus this kind of technology may cause some confusion. So the industry must make sure the technologies introduced to the market are acceptable to and understood by the customer.

At the Auto Show this year, there are many such break-through technologies on display. As they move further, this understanding will develop

Gasgoo.com: What do you think of the Chinese automakers' technical capability?

Simon Stevens: Domestic OEMs are growing very fast. As I said earlier many Chinese manufactures are good at production and manufacturing, and quality improves product-by-product. I think there's development potential in system engineering and integration in systems. For example, integration of engine and transmission to mount on the vehicle; how do you get the best performance of the whole powertrain within the vehicle? By taking a top-level view of the product, and then looking down at a system, and then a subsystem, we can make the product well -integrated-this is an area of great potential.

The second area is in the product development process. Here key elements are to define clear targets for the product and a specification to describe the product requirements in detail.  With these and a clearly specified and well structured development process, the product can be successfully delivered into series production.

Ricardo takes the view that by working closely with our customers to build their own capability whilst at the same time delivering the projects in this way, the local auto industry, particularly with the domestic players, become stronger.

Three principal steps for future development

Gasgoo.com: Have you a clear picture as for Ricardo' local operation development in the coming years?

Simon Stevens: In essence, we have three principal steps:

The first is to establish our local engineering presence and strengthen our capability. A key milestone was the successful transfer to a new facility in Shanghai in the summer of 2008. The new technical centre, which includes purpose built customer project offices, will accommodate the next phase of expansion of both technical and strategic consulting. Our structured recruitment, training and deployment process now includes engagement with the top Chinese engineering universities as our recruitment needs broaden.

The second step is to establish long-term strategic partnerships with selected OEMs and suppliers. We ensure this with successful delivery of projects and help with their supply chain, etc.

The third step is to broaden the industry areas we support. This relates to our core strategy to broaden our technical and strategic offering, together with client, sector and geographical diversification. We're expanding to the clean energy and transportation sectors as part of this strategy.

All the three steps are overlapping, to aim for continued and sustainable growth together with our customers in what is one of the world's most important automotive markets. 

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