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Auto Focus

By Julie Cridler
Senior Market Analyst, IRN Inc.
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This year’s North American International Auto Show (NAIAS) heralded the unveiling of more than 40 new cars and trucks from participating automakers.

One of the clear messages coming from the proceedings at this year’s show is that the midsize and compact car segments are where the battle for consumers’ hearts (and pocketbooks) is rooted.

According to data from Automotive News, in 2011 midsized sedans accounted for 52 percent of passenger car sales in 2011 in the U.S. Together, midsized sedans and compact cars make up over 40 percent of total U.S. light vehicle sales. There are several new launches in the mid-size segment coming up in 2012, and this will make the playing field more competitive indeed.

There is no question that the designs are getting bolder and automakers are upping the ante for this particular market segment.

The interior of the Dodge Dart showcases how far the Chrysler Company’s cars have come – in terms of material fit and quality – in just a few years. PHOTO: JOE BOOMGAARD

Consumers have been gravitating to the midsize and smaller car segments because of the volatility in fuel prices. Given the near-term outlook for gasoline prices in 2012, the growth in both the midsize and compact segment will likely continue.

Although consumers are clearly interested in fuel economy, that alone is not enough to make the sale. Buyers want to see the same level of amenities in a smaller package that would be found in a larger vehicle platform — but at a reasonable cost.

OEMs are focusing on upgrading interiors and using innovative features to create differentiation to help sell vehicles. And they are looking to their suppliers to help with innovations in this area.

Specific areas of application include interior styling and customization. Car buyers want their vehicles to be a reflection of their personalities, and this carries over into the interior design as well as the exterior vehicle styling. The new 2013 Dodge Dart, which was unveiled in advance of the NAIAS, is a good example of the application of this. The vehicle will offer 14 interior color and trim combinations when it hits the market in mid-2012.

Lighting is another area that allows designers to create more ambiance and drama inside the vehicle. Growth in LED technology is facilitating the trend for interior “mood” lighting. LEDs are rugged, cool-burning and can be incorporated at a reasonable price. Prime areas for usage of customized lighting include door panels, foot wells, seats, center consoles, instrument clusters and even the headliner.

The West Michigan automotive sector features several players that have technology to create interior differentiation and are already participating in and capitalizing on the prevailing interior trends. The companies range in size from smaller privately owned suppliers with just a few locations to large publicly traded global enterprises.

• Spectrum Cubic, located in Grand Rapids, can help create sizzling interiors with its decorative technology that enables it to apply patterns to complex parts made of a variety of different materials. This enables a higher degree of design flexibility for the vehicle interior.
• Johnson Controls, a well-established leader in seating and interiors with plants in Holland, developed its ie3 interior concept. The design framework offers a variety of features for an integrated interior that enables greater space within a small area, including thin profile seats, a headliner which doubles as a speaker for the sound system (rather than taking up space in the doors), and innovative storage features in the instrument panel.
• Adac Automotive, with West Michigan locations in both Grand Rapids and Muskegon, offers solutions in interior lighting and trim products. One innovation that plays particular well to the trend in customization is Adac’s concealed illumination, which features lights and touch-sensitive controls that can be hidden behind a customizable surface when not in use.

Increasingly, automakers are focusing on improving the driver experience as a way to differentiate their products. Some of that effort has been in electronics and driver aids, but automakers, especially in the premium segment as seen in this Audi RS5, have also started adding more soft-touch materials and focusing on designing attractive spaces. PHOTO: JOE BOOMGAARD

For suppliers, the interior personalization and differentiation trend will offer multiple opportunities. OEMs and large interior Tier 1s will be looking for new ways of doing things — for example, new materials, components, and electronics as well as new assembly methods and other ideas that facilitate reconfiguring and customization.

This in turn will spill over into the lower tiers, so smaller process-dominated companies should take note and determine ways to get their technologies involved in the growth that is going to be taking place.

As the examples of company activities above show, there is no prerequisite for size, number of plants or even location. Rather, companies that can offer their customers a way to stand out in an increasingly competitive market (at a competitive price, of course) will create longer-term stability for their own organizations.

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