Several countries intend to make catalysts compulsory for new diesel engine-equipped cars in order to reduce particle emissions. The problem seems to be supply since only a few producers are able to deliver diesel catalysts at present. One key supplier is Faurecia, a 71% subsidiary of Peugeot. Recently, several German car manufacturers had to recall diesel cars <strong>and</strong> reduce or even close production of several model lines because supplier Bosch delivered a low-quality injection pump. OEMs are highly dependent on their suppliers <strong>and</strong> the quality that they deliver. Automobile suppliers are currently very powerful; they can pass on higher raw-materials costs to OEMs <strong>and</strong> even increase their own margins. German car manufacturers concentrate their diesel research on inner-engine solutions for the particular problem, but have failed to deliver a system in due time. The first generation of new diesel engines just hit the market. Diesel market penetration in North America is still below 1%, which is attributable to the poor history <strong>and</strong> lack of acceptance by customers as well as to the poor quality of diesel fuel in the past. The big question is whether diesel engines will eventually become a success story in the USA too. (see Figure 6) The current success story comes from Japan, where hybrids attract key attention for development. It took three years <strong>and</strong> a second-generation hybrid car to successfully launch this technology for the mass market. The latest-generation hybrid cars do not differ from other automobiles on the road with respect to shape, look or performance. The <strong>innovation</strong> is taking place behind the scenes, with an additional electric engine (or even two in the new Lexus 400h), a trunk of batteries <strong>and</strong> the latest electrical technology to coordinate the performance between the two different engines. Even hybrid cars have just started to undergo <strong>innovation</strong>. Toyota has been the first-mover in this field of technology, followed by Honda. Both companies are offering their technology to third parties, which will enable the industry to further develop this new st<strong>and</strong>ard. Several countries support this technology, with incentives similar to, or even exceeding, those for diesel catalyst cars in some European countries. Besides this support, hybrids provide a real alternative for anyone living in urban areas. Next-generation hybrid cars will be equipped with diesel-powered or natural-gas-powered engines, in combination with improved battery technology or even fuel cells later on. Natural gas on the edge Natural-gas technology is drawing more attention as the discussion for ecological compatibility seriously evolves. Argentina has the largest fleet of natural-gas-powered cars, with 750,000 units, followed by Italy with more than 400,000. More cars are available with bi-fuel tanks, where conventional gasoline <strong>and</strong> natural gas can be used together, providing the same power <strong>and</strong> performance as gasoline engines. A number of cars are now available with bifuel tanks. Besides the ordinary gasoline tank <strong>and</strong> engine, an additional fuel tank needs to be added <strong>and</strong> some electronics. With natural-gas technology, the number of fuel stations as well as tax advantages will be key for this environmentally friendly alternative to penetrate the market. Several countries in Europe support natural gas <strong>and</strong> the development of a fuel-station grid. Today, around 60 fuel stations for natural or biogas are already in place throughout Switzerl<strong>and</strong>, 555 in Germany <strong>and</strong> 24 in the UK. A full grid should be in place by 2007 given that political support for tax cuts on fuel continues. Several gas stations for bio-fuel are already in place. Bio-fuel is produced without any CO 2 emissions. Figure 6 Market share of diesel engines in Europe by country Source: ACEA 70 60 50 40 30 20 10 0 % 94 95 96 97 98 99 00 01 02 03 France Germany Italy United Kingdom Switzerl<strong>and</strong> Western Europe
GLOBAL INVESTOR 2.05 Automobiles—29 Projects to produce a simple low-cost car in large volumes <strong>and</strong> on a profitable basis have failed so far. Every part of a car features the latest technology developments, but know-how ownership increasingly belongs to supplier companies.
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