Efficiency, a simple word, but it underlines the major trend in almost all sections of life. Every industry and business is pursuing efficiency. This trend is gaining momentum due to declining natural resources, increased competition and regulatory pressure to reduce green-house-gas emissions. Automotive industry is the most affected by all these limiting factors and hence it aggressively pursues efficiency. Toyota invented "Just-In-Time" management to improve the manufacturing efficiency. The auto industry was first mover towards robotic assembly process to reduce assembly time and improve manufacturing efficiency. All these attempts were focused to reduce cost, improve speed and improve quality of the product.
Now companies are focusing more on reducing cost of ownership and reducing emissions. It may be heavily influenced by government regulations (Like CAFE regulation passed in US) and increased gasoline prices but as I see, first wave of efficiency helped companies, second wave of efficiency will directly help consumers. What I mean by this is the first wave of efficiency helped companies to reduce their operating cost, reduce the cost of production and reduce the warranty costs. All these cost savings helped companies improve their profitability. This enabled auto companies to pass some benefits to the consumer by reducing vehicle prices but it also increased overall sales of automobiles.
Now second wave of efficiency is focused on reducing total cost of ownership. Companies are introducing automobiles which are little costly at the start but are extremely efficient and require low maintenance costs. Take example of Ford Eco-boost engine vehicles. Ford's eco-boost engines provide excellent fuel efficiency and are having lower maintenance costs. Hence reducing total cost of ownership. Hybrids are another great example of this trend, these vehicle cost more upfront but over the lifetime of the vehicle, these vehicle cost less to operate.
This trend excites me because Electric Vehicles are most efficient and have smaller operation costs than gasoline cars and hybrids. See the comparison chart below developed using tools from Alternative Fuel Data Center.
Nissan Leaf has the lowest cost per mile. This is encouraging as the trend of companies pursuing lower cost of ownership will be beneficial to consumers and specially to environment. I see this trend continuing for a long time and expect companies to bring the cost of ownership down further by using smart diagnostics.
To make vehicles more efficient, companies are using techniques such as using innovative materials like carbon fiber, developing manufacturing techniques such as aluminum-steel welding, designing lighter frames, using lower volume engines, using turbo chargers, direct injections and improving engine compression ratios. All these efforts are focused towards reducing cost of ownership. These techniques sometimes increase the cost of vehicle upfront but provide superior performance, more miles per gallon and emit less green-house-gases.
To sum it all up, I observed two trends, one was improving efficiency at the factory floor and the second one is focused towards improving efficiency on the road. Overall the consumer and the environment will be the combined winners.
Now companies are focusing more on reducing cost of ownership and reducing emissions. It may be heavily influenced by government regulations (Like CAFE regulation passed in US) and increased gasoline prices but as I see, first wave of efficiency helped companies, second wave of efficiency will directly help consumers. What I mean by this is the first wave of efficiency helped companies to reduce their operating cost, reduce the cost of production and reduce the warranty costs. All these cost savings helped companies improve their profitability. This enabled auto companies to pass some benefits to the consumer by reducing vehicle prices but it also increased overall sales of automobiles.
Now second wave of efficiency is focused on reducing total cost of ownership. Companies are introducing automobiles which are little costly at the start but are extremely efficient and require low maintenance costs. Take example of Ford Eco-boost engine vehicles. Ford's eco-boost engines provide excellent fuel efficiency and are having lower maintenance costs. Hence reducing total cost of ownership. Hybrids are another great example of this trend, these vehicle cost more upfront but over the lifetime of the vehicle, these vehicle cost less to operate.
This trend excites me because Electric Vehicles are most efficient and have smaller operation costs than gasoline cars and hybrids. See the comparison chart below developed using tools from Alternative Fuel Data Center.
Nissan Leaf has the lowest cost per mile. This is encouraging as the trend of companies pursuing lower cost of ownership will be beneficial to consumers and specially to environment. I see this trend continuing for a long time and expect companies to bring the cost of ownership down further by using smart diagnostics.
To make vehicles more efficient, companies are using techniques such as using innovative materials like carbon fiber, developing manufacturing techniques such as aluminum-steel welding, designing lighter frames, using lower volume engines, using turbo chargers, direct injections and improving engine compression ratios. All these efforts are focused towards reducing cost of ownership. These techniques sometimes increase the cost of vehicle upfront but provide superior performance, more miles per gallon and emit less green-house-gases.
To sum it all up, I observed two trends, one was improving efficiency at the factory floor and the second one is focused towards improving efficiency on the road. Overall the consumer and the environment will be the combined winners.
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