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MilePost Online ... Transcript of November 10, 2009 Luncheon Presentation
Robert Davis of Mazda How to Sustain the Zoom-Zoom
Aaron Robinson, President, MPG: Our speaker today comes from Mazda. He’s Senior Vice President of Market Development and Quality. Also runs Mazda’s motorsports operations. He’s a bit of the Roger Penske of Mazda, in that he runs Robert Davis Racing and is the Performance Touring Champion this year in NASA, running his own RX-8. Car and Driver not long ago named him the highest-ranking redneck in the auto industry, being the owner of five cars, four horses, a mini-horse, two mini-donkeys and two barn cats. Please help us welcome Robert Davis.
Robert Davis, Senior Vice President, Product Development and Quality, Mazda North American Operations: Thank you, Aaron. I don’t think it was Car and Driver named me that, it think it was Aaron Robinson named me that. But we’ll get down to that later.
It’s a pleasure to be here. Asked Aaron when you guys all don your coonskin caps and do your secret signs and all your club business here, but glad to be here with ya and want to take you through material that we developed corporately to talk about our environmental strategy going forward.
And a few of you I recognize that have seen this material at a recent event up in Monterey. I want to take about 30 minutes to go through the material, and then we can open it up to Q and A as we move forward. So let’s just roll through it real quick.
Here’s really what we’re going to talk about today: where we’ve been, where we’re going to go, what methods we’re going to use to get there, the Base Technology and the Device Technology, and then talk a little bit about some technologies that are already introduced. Maybe you’ve heard of i-stop in the Japan market and the hydrogen rotary engine, which we’ve got a rotary-engine RX-8 out front. Then we’ll quickly go through a summary of our actions.
Really, a recap of what we did from an environmental standpoint. Before the year 2000, this is a recap of actions that were taken, including alternative fuels, CO2 reductions, emissions strategies going back to 1970. You can see that, really, the initial strategy was on emissions. The second strategy was on CO2 reductions. The third strategy, building up to the turn of the century, was on alternatives to fossil fuels. And you can see there’s a lot of activity here, including electric vehicles, hydrogen vehicles, flex-fuel, lean burn, small displacement, all the buzzwords that are really in our industry today. So a wide history of this, including something that was pretty popular here in the U.S., the Millennia with the 2.3-liter Miller-cycle, supercharged engine.
As we move forward, after the turn of the century we really focus on Mazda’s product actions since 2002 and you see that the technology here, starting with the prior generation Mazda6, which was introduced in 2002 along with the RX-8, Mazda3 and so on, and you can see that we really refined our brand strategy and our product strategy to match “Zoom-Zoom.”
And Zoom-Zoom also has an element of the environment with it, and you can see that we’ve launched new gasoline and diesel technology, new rotary technology, direct injection small displacement turbo engines, Mazda2 which was world car of the year a couple of years ago, and moving forward with cars that are appropriate for the Mazda brand but also develop and deliver sustainable Zoom-Zoom.
And Sustainable Zoom-Zoom was really announced in 2007. And the premise of Sustainable Zoom-Zoom, as it states here, is to provide all of Mazda customers with cars that are a joy of driving, have excellent safety and environmental performance.
And we use the tree as an example, or the sapling as an example of the robustness of our technology. In 2007, when we introduced this concept, we were, you know, this little sapling. It’s hard, when you look at me, to think of little sapling, but… [chuckles] We were a little sapling with some small branches. The core of that sapling was Zoom-Zoom, stylish, spirited and insightful. The arms of that sapling, one was safety and one was the environment.
We use this analogy because we have grown — and I have grown, but different story — but the tree has grown and the core of the story is still Zoom-Zoom. Stylish, spirited and insightful. Which is spirited and insightful.
The arms of the tree have grown more robust also. And again, it’s developing this environmental and safety strategy. As we move forward, we’ll talk about from now to 2015, we see this robust, growing more robust. But again, going to our core, the trunk of the tree is still stylish, spirited and insightful.
One of the questions I get a lot is, where are we at on the new fuel economy regulations? The Sustainable Zoom-Zoom philosophy was built around a 30% fuel economy improvement by 2015. So corporate-wide, that’s a commitment that we’ve made. That commitment exceeds the recently announced U.S. government commitment, so we’re pretty well ahead of the environmental and regulatory requirements going up until the 2016 model years.
so what is our foundation based on? Our foundation is based on the internal combustion engine. Now this is pretty straightforward. It’s not as flashy and it doesn’t have as many Time magazine articles written about it, but let’s take a look at the environment and what we’ve got in the car park, not only in North America but in the entire world.
If we use the triangle to the left, 2009, every vehicle or virtually every vehicle either sold in 2009 or on the street in 2009 has an internal combustion engine. Less than 1% of the vehicles in the car park don’t have internal combustion engines.
Now some of these vehicles, a small percentage of them today, have electronic devices, mild or developed hybrids or idle-stop, but all of those vehicles have internal combustion engines.
By 2015, even the most aggressive forecasts show EVs at around 5% of the population. So 95% of the vehicles are still going to have internal combustion engines.
So in relation to our philosophy, where we want all Mazda customers to have the environmental benefit, our strategy is focused on improving the internal combustion engine to the best it can develop. Because even, we’ll talk about it later, even moving out another five years, internal combustion engine is still the primary driver of our vehicles, not only in the U.S. but around the world.
So where are we apt to get to? This chart represent our forecasts and our development targets for our gasoline and our diesel engine. The horizontal axis represents the cost, because if you forget the cost to benefit analysis to the customer you’re going off to a direction that really is dangerous ground. The vertical axis represents fuel economy and CO2. You can see where today’s gasoline engine works at the crossroads of the two axis. Our next generation gasoline engine will have the fuel economy an the CO2 improvement of today’s diesel engines, and today’s [sic -- mean’s “tomorrow’s”] diesel engines will basically have the fuel economy and the CO2 output of today’s mild hybrids, along with a reduced cost for the diesel and a slightly increased cost for the gasoline.
How does that relate to a car like the Mazda3? The Mazda3 is Mazda’s most popular car. It’s about 30% of our volume worldwide. You see today’s gasoline car will become as fuel efficient as today’s diesel engined car. The next diesel engined car will be as fuel efficient as the mid- to mild hybrids.
How are we gonna get there? Let’s talk about the base technologies that apply to engines. We’ve introduced the Sky engine, Sky-G at the Tokyo Motor Show. And this graph represents a two liter Sky-G’s performance. On this graph the down toward the axis is better. You can see that the red line represents the next generation target. The blue line represents today’s diesel engine. and the triangles represent the current gasoline engine. Where the efficiency can be met is in low load and low operating speeds. This target is forecast to be anywhere between 12 and 15% vs today’s two-liter gasoline engine.
Another way to look at this is output. The scatter diagram here, the shaded area, are competitors’ engines, a various group of competitors. Again, the triangles are the current gasoline engine. The red line represents the target. And again both the torque and then the per engine speed, improving the next generation gasoline engine is in the 12 to 15% range, based on the output.
Sky-G will also develop and implement a new emissions category using nano technology. I’ve gotten a lot of questions on this, but basically the simple answer is using nano technology can allow the catalyst material, the precious metal, to more effectively combat the particles and the gasses that are in the exhaust catalyst. It doesn’t save weight, it just reduces the amount of the precious metals that are required for each catalyst. It makes the catalyst more efficient, allows the catalyst to heat up and have a more even operating temperature, allows the catalyst to be a more effective on the total entire operating range of the powertrain.
The next solution is the Sky-D diesel engine. Now what we have actively discussed, that we’re very interested in diesel engine technology for North America. Mazda diesel technology allows us to keep with our core of Zoom-Zoom and also deliver a very, very attractive fuel economy and emissions score. The Sky-D is very important for us and really represents a good opportunity in the future. The Sky-D program is very much like the gasoline program, where at low operating speeds and low loads it’s where the improvement can be made.
This is a representation of the forecast of the Sky-D diesel engine, where fuel economy is improved across the range against a 20% fuel economy improvement vs. today’s 2.2-liter Mazda diesel engine.
Output is also improved. Output’s improved across the board. This graph represents, the blue line represents our 2.3-liter diesel turbo engine which is very well loved in the CX-7 and the MazdaSpeed3. So we’ve set ourselves a very aggressive target in developing the next generation diesel technology to give better torque feel throughout the range, particularly moving the axis away to higher rpm.
Exhaust performance on diesels are tough. We recognize that our solution needs to be a 50-state solution, therefore we’re utilizing some new Mazda diesel technology to meet the Tier 2 Bin 5 regulatory requirement that’ll allow the Mazda diesel to be a 50-state diesel engine. This will be done without a urea system, so it’ll allow us to have a 50-state diesel without the problems that are supplemented with the urea systems going forward.
Engines tend to get all the glamour in discussions of fuel economy programs, but everything’s got to be considered. The Sky-Drive automatic transmission is another new development that delivers performance that you would expect from Mazda, plus fuel economy improvements. This graph represent the contribution of fuel economy in the new transmission in the area of lockup. And lockup is basically the transmission of the engine power to the drivetrain, and you can see our large capacity new fuel economy improvement is 4% in city mode and more popular here in the U.S. is our medium capacity automatic transmisson at 7%. So we’ve moved the lockup characteristics up to 88% of the time in the U.S. EPA city mode.
What does that do for us? It allows us to have much less mechanical loss in developing the automatic transmission, therefore delivering more fuel economy and minimizing the fuel economy that’s wasted through automatic transmission loss. We’re very close to our target. This transmission will also deliver a very strong performance feel, similar to a dual-clutch manual transmission without the cost, complexity and weight of those systems.
Again, in the U.S. automatic transmission represents over 80% of our volume, so we see this solution as being very valuable and a very important link as we go forward.
This is a understanding of how the direct shift feeling works. You can see from the graph that represents the transmission gear selection and you’re trying to minimize the gap, which is the slippage of the clutch, which will give you a better feel.
The fourth technology that we’re working through is weight reduction. Certainly I’m not an expert in weight reduction, but we’re working hard to improve our weight reduction of our vehicles. And really what we’ve found is, as we went through every major change of our vehicles, our vehicles gained about 80 lb., and that was through a couple of things: through tires and wheels, through safety strategies, through added equipment that the cars as they went through their product life cycles generally gained weight.
The one item that we’ve addressed aggressively with the Mazda2, which will be announced at the LA Auto Show for North America coming up next month, was with a 100-kilo weight improvement, weight reduction, we were able to gain 3 to 5% efficiency in fuel economy. So the Mazda2 is the first program where we’ve really aggressively attacked weight in trying to get that overall weight of the vehicle down, vs. trying to just counter the extra stuff that we wanted to put on as the product program moved forward. So that program has been the benchmark. Now as we move forward with our next generation Mazda3 and our next generation Mazda6, the target is a 100-kilo weight reduction for each new product program.
How are you going to do that? Aside from eating less, we’re really looking at three targets here that deliver the weight reduction. The easy one is material replacement. That’s also the most expensive. The hardest one is the ideal structure of the vehicle, because that’s the one that requires the longest lead time. In between those two are processes, and we’ll talk quickly about each of theses three items.
First of all, on the width reduction standpoint we see a much bigger benefit through the ideal structure developing our next generation of platforms. Secondarily, a new process strategy. Lastly, materials replacement.
Now carbon fiber roofs and hoods work great on BMW M5s, but the core of the market, at Mazda3, MX-5, that material is not going to be viable in the cost structure of our vehicles going forward. So the primary focus for our strategy is on our ideal body structure.
This is an example of optimizing the framework and the materials around the body structure. We’re looking for a 10% weight reduction just in the body structure alone, based on material, construction and joining for our next generation of platforms.
Chassis and suspension are also designed around a 15% weight reduction, and this is critical and this is a challenging target, because it’s still got to deliver Zoom-Zoom in all of our vehicles. But at the same time, the weight reduction on suspension components allows a better, more crisp driving feel to deliver Zoom-Zoom. So this target is actually trying to be exceeded in the engineering community.
Now what do we do beyond powertrains, weight reduction and what devices do we use to further improve our fuel economy to deliver beyond 2015? That’s device technology. We’ve got to expand device technology to deliver more and more fuel economy. As we talked about earlier, once we have the internal combustion engine as efficient as we can make it, we still got a ways to go beyond 2015.
So out in 2020, you see the triangle represents, again, still 80, 75 to 80% internal combustion engines. We’re forecasting much more electronic devices to enhance the performance of the internal combustion engine, including idle stop, regenerative braking, and hybrid systems.
So what’s that technology look like? Well, this is a really busy chart, but it’s fundamentally very simple. The top of the chart represents base technology and electric devices while you drive. the bottom of the chart represents device technology and opportunities while you’re sitting still. The device technology in the bottom, base technology in the top, you can see the automatic transmissions, the diesels, and the next generation platforms really interaction with the car, delivering great driving experience.
The device technology at the bottom, again, I split the two things. Motor usage and non-effective, non-efficient drive. Those are hybrid systems. Those would be electric motors driving the wheels while the internal combustion engine is not very efficient.
The other devices here will be while you’re not driving. That would be I-stop technology and regenerative braking systems to recharge different battery systems, and electric devices.
So this is the continuation of the technology that we’ve already got developed. I-stop, which we’ll talk about soon, is a precursor to regenerative braking and hybrid technology, and hybrid technology goes along with hydrogen technology that, again, we’ll talk about later.
So let’s talk about these. First, i-stop. Now i-stop is the use of the internal combustion engine and a positioning of the piston to restart the engine rather than to use the starter. This program has been launched in Japan. It represents about 50% of our Mazda3 volume for the last model year. Has been very popular. And the chart to the right talks about the advantage vs. using an external starter, but basically I-stop allows the vehicle to stop a piston at a certain level, to have the charge, engine cylinder charge, without injecting the gasoline, and when the system senses that it’s ready to restart it injects the gasoline, fires the spark and restarts the motor. So very effective technology, very simple technology and so far it’s delivered about a 7% fuel economy improvement for city modes in our Japanese market.
Next, hydrogen rotary. We’ve got one outside. Hydrogen Rotary Engine RX-8 and also Hydrogen Rotary Engine Mazda5. We’ll talk about both in detail.
First, why hydrogen? And why internal combustion hydrogen? Hydrogen vehicles really are in two areas, internal combustion hydrogen rotaries and fuel cell hydrogens, like the Honda Clarity. This chart outlines the various pros and cons to each technology. Obviously for CO2 the fuel cells and hydrogen vehicles are very emissions-friendly, very CO2-friendly. A fuel cell is very energy efficient vs. a internal combustion engine, but also fuel cell’s very expensive. Fuel cells are also have no opportunity for a gasoline alternative.
We really feel strongly until the infrastructure is available for hydrogen widely, dual-use of hydrogen and fossil fuels will be required. It’s the process that you’re never going to have infrastructure developed fast enough to be able to go from here to Salt Lake City on hydrogen alone. You’re going to need dual-use. So using hydrogen as internal combustion allows you the dual-use.
The strengths of a fuel cell vehicle are in the efficiency, the weaknesses are in the cost. The strengths of an internal combustion hybrid are in cost, reliability and dual-use of gasoline.
The car outside is a dual-use car. If you run out of hydrogen, it’s a flip of a switch [to] switch over to the gasoline road.
So why rotary? Well, beyond us being Mazda and being rotary guys, there’s actually a pretty good reason for this. This is a comparison between hydrogen combustion vs. gasoline. I’m sure you all know the chemical formula for gasoline. I failed chemistry, so that one was beyond me, but the key here is the combustibility of gasoline vs. hydrogen.
A rotary engine uses the combustion cycle in one part of the rotor housing itself, vs. a piston uses the intake, the compression, the power and the exhaust stroke all on the same cylinder. So with the combustibility of hydrogen, you’re able to cool the chamber that you use and develop a hydrogen injector, which allows you to inject the hydrogen in a cool area of the engine, before it is compressed and before it is ignited.
It also again allows you to have a functional engine that uses gasoline and hydrogen, dual-use.
So here’s the specifications on our hydrogen rotary engine. I’ll be glad to talk to you about that later, one on one.
Here’s an application of the Hy-Nor project, which the RX-8 was used in the Hy-Nor project in Norway.
Now let’s talk about our hydrogen hybrid. We’ve got a hydrogen Mazda5 hybrid that’s got 40% more power and it also keeps five passenger seating and allows for a dual-fuel system. Here’s an outline of it. This is a serial hybrid. It represents a hybrid engine, a rotary engine, hybrid rotary engine, use of gasoline and hydrogen, an electric vehicle and lithium-ion battery technology. The powertrain uses regenerative braking and a 100% electric drive system — we’ll talk about that soon. But it also uses a hybrid Renesis rotary engine.
So a series hybrid is this illustration, where the engine, the hybrid rotary engine, drives a generator only. The rotary in this case never powers the wheels. So it is used either to recharge the battery or the battery is used to drive 100% of the motive power to the wheels using electricity. So you can see it can work in 100% electric mode, where the battery powers the wheels. It can use both the battery and the generator to power the wheels. Or, I’m sorry, that’s both the generate the power in the battery to generate the wheels. Or the generator to power the wheels on it. So depending on what is required.
The motor also functions as a regenerative braking system to repower the lithium-ion battery on coastdowns as you pull up to a stoplight.
Expansion of this can be done where you could operate this as a plug-in hybrid, so to plug the car in overnight to charge the battery. It eliminates the hydrogen rotary engine and have a electric vehicle. And this is an illustration of this technology and allows us to go. This allows us to have opportunities to move in different areas taking the same basic system, having either a plug-in hybrid or a battery EV totally, or a fuel-cell EV using this technology.
So in summary, I went through this pretty fast for ya, I apologize, but really we want to deliver environmental and safety to all of our customers. We have an environmental brand strategy, not an environmental model strategy. Our priority is to develop efficient internal combustion engines and use electric devices to, in a step-by-step function in the future, to improve that fuel economy.
And the first step of this is introduction of I-stop in the Premacy rotary engine hybrids in Japan and in other markets to get us there.
So with that, that’s all I’ve got. I’ll be glad to open it up to Q&A and answer any questions.
Q&A
Merkel Weiss: You made mention of a 2.3-liter Mazda diesel. I have not seen that. Is it sold in America?
Davis: No, sir. It’s a 2.2-liter turbo diesel that’s sold in Europe, primarily. [Inaudible second sentence regarding “percent of our volume”.]
Weiss: Do you plan to bring it here?
Davis: That 2.2-liter, no. It won’t meet the next-generation diesel emissions requirements.
Weiss: When do you plan to bring a diesel here and what do you plan to put it in?
Davis: Ah, I can’t make any public announcements of where we’re going with diesel engines, but we’re very aggressively pursuing them for the future, particularly the Sky-D diesel engine, and hopefully we’ll be able to let you know something sooner vs. later.
Charlie Vogelheim: While I’m walking over there [with mic], other uses of the rotary engine technology; you’ve seen burning hydrogen’s one of them. Other things you’re testing that you can talk about?
Davis: Ahm, no, not really. Our next-generation rotary engine is still under development, and Kanai-san [head of Mazda R&D — Ed.] kinda talked about at the Tokyo Motor Show. We’re not there yet on power and performance and fuel economy, so the development’s still ongoing for the 16-x rotary engine, but we’ve not gotten it to where we need it to be for prime time per se.
Don Fuller: Seems not that long ago that the whole industry was in love with ethanol and you seem to have got through your entire presentation without mentioning it once. [Laughter and clapping.] So it’s a two-part deal. First, we thank you and second, would you talk about that boondoggle, please?
Davis: Well, I like to not pollute biofuels with the e-word. We really see biofuels as having a very strong future in internal combustion engines. I think biofuels are gonna be very, very important for transportation in the future.
Ironically, we’re right by LAX here. I haven’t seen a Popular Mechanics, the hybrid jet airliner of the zero-emissions battery airplane, so at some point some various modes of transportation are going to be needed to run on biofuel. We feel strongly that ethanol is, was a good first step, but other biofuels will come along and are coming along that are much more efficient, much more compatible with the environment and much more compatible with the current infrastructure we’ve got.
I don’t know how many of ya saw it, but we ran an experiment with our strategic partner, BP, trying a biobutanol car in the American Le Mans Series. Biobutanol certainly, to us, seems like a much more rational and long-term solution, not only to fossil fuels but energy security, particularly here in North America, and is much more adaptable to the current infrastructure that we’ve got.
So we’ve got to have a biofuel that interacts with the current gasoline and diesel infrastructure, or it’s not gonna be viable. And ethanol, to your point, just doesn’t do that. So there has got to be another stage in the biofuel development that’s gotta come. Did I answer your question? [Distant sound of assent.]
Aaron Robinson: You mentioned that you’re shooting for 15% weight reduction. What happens when you run up against market forces that are, for example, asking for bigger wheels? Bigger wheels and tires weight a lot. It would be an easy place to cut and it doesn’t cost anything, but if the market wants ‘em, what are you gonna do about that?
Davis: Well, it’s a challenge, because, you’re right, the bigger wheels and tires are an influence. But Aaron, I don’t think beyond 20s we’ve got anything to worry about. The mass market’s not wanting a 23 — even though you are! [Laughter.] So I think we’ve kinda reached our feasibility limit here on tire-wheel size, so while you love those 24-inch hubs that you’ve got, I don’t think the OEs are gonna go that route.
Robinson: [Unmiced followup about suspensions.]
Davis: Probably not. We’ll probably look at new technologies to develop the wheel-tire combination along with the rest of the suspension components to deliver the target. some of our tire partners are really aggressively pushing the weight issue and doing a good job in getting the weight out of the tires. Same with some of the wheel technology partners we’ve got, with new casting techniques on the aluminum side.
Mark Rechtin: When you talked about the weight reduction target time you said 2011. Is that calendar or model year?
Davis: It’s by programs. Every introduction of new programs will be a 100-kilo weight reduction starting in 2011.
Rechtin: And what will be the first U.S. application of the Sky engine technology?
Davis: I’m not prepared to say that, but I will be probably by the New York show.
Alysha Webb: You talked about new technologies. How are you developing this technology, where are you looking for them…? Are there any countries or markets where you see the new technologies might emerge more quickly?
Davis: We’re really focused on a couple of technologies. For example, ignition technology. We’re working with our suppliers on ignition technology to really fine-tune the combustion technology of the new Sky-G engines. And the ignition technology is a big part of that. As we’ve gone forward as an industry in direct injection and valve technology, including timing of the intake and the exhaust cycles of the valves, we’ve seen a measurable increase of the effectiveness of the combustion cycle itself.
The next measured increase in that cycle will be the ignition technology that goes along with it — faster, hotter burn, whatever fuel that is in the combustion chamber. So that’s an example of the technology partnership that we’ve got in Japan that will deliver new technology using the Sky-G engine.
There’s other areas. One of the items that we quickly ran over in the manufacturing process, bonding technology. The ability to bond steel to aluminum in an automobile body has always been a difficult thing. You can’t weld steel to aluminum. Or I should say you can’t weld aluminum to steel. So having an effective bonding process to use aluminum sheet to bond to a steel subframe is very attractive to us as a process. We actually developed that technology in-house with a very small, local partner back in Hiroshima, and it actually debuted on the RX-8 when it was introduced in 2003.
So taking those technologies and just taking every infrastructure and starting with the new platform we’re able to take all those lessons learned and apply ‘em to that. And that’s where talk about an ideal structure with the lessons learned from all the product programs and defining it on those new platforms. These new platforms will be coming to market soon. We’ll be talking about them soon, along with the new engine technology, and you’ll see those applications.
As far as do I see any market that drives more or less of them, we’re a Japanese company, so my exposure to ‘em is primarily Japanese. But I’m not saying that we don’t go other places for ‘em, as obviously that is the case.
Webb: [Unmiced followup about “average development time.”]
Davis: It’s about three years. It depends on the scalability and the newness of it, how new it is.
Webb: [Unmiced followup about materials development outpacing platforms.]
Davis: I don’t think that materials will, but as the material development will take longer than that, to move it forward in this kind of application. I think the ideal structure will be as the ideal structure change and as people come up with new ideas in the industry the ideal structure will be the thing that can probably outpace platform development.
Ed Jenks: I noticed that you did your product introductions on the Sky technologies in Tokyo. What can you, what was the general reaction to the marketplace to have it in Tokyo and was there anything learned through the product introduction?
Davis: The reaction was very well. I think the overall, particularly the press and the public, want to see long-term viable solutions. So where we’re at as a social unit now and what we see is what needs to be developed from an environmental infrastructure as we go forward. The feedback I received is that the strategy is very well thought out, it’s very methodical, it’s right for a company Mazda’s size. This technology and this pace of development wouldn’t be right for a Toyota, per se, it’s not in their genes, it’s not the appropriate level of development for them. So I think it was viewed as appropriate for Mazda. I think it’s viewed as innovative and a way that the company like Mazda thinks and develops itself and positions itself for the future.
From my standpoint, the feedback I received from quite a bit of our retailers when I took them to this presentation was, “Thank you for not moving away from your core values,” which is stylish, spirited and insightful. “Thank you for staying Zoom-Zoom, because we don’t need another 180-degree turn in the brand strategy of our business.” So we feel comfortable that Zoom-Zoom and environment and safety can live as one.
Jenks: [Unmiced, inaudible followup.]
Davis: Yeah, we really have, we learned some painful lessons in the 90s about not being Mazda and trying to be somebody that we’re not, and this strategy is developed around what we think is right for our company in progressing the strategy and evolving the current product strategy vs, again, a 180-degree shift to something else. So thank you.
Dave Kunz: Can you clarify getting back to the dual-fuel rotary engine — that’s gaseous hydrogen, or liquid hydrogen?
Davis: Gas.
Kunz: So hydrogen gas, unlike another manufacturer decided to go with liquid hydrogen. What’s the range and storage, though, with a gaseous hydrogen.
Davis: This is Tod Kaneko, he’s my hydrogen expert.
Tod Kaneko, Manager, MazdaSpeed Engineering and Technology: [First part of answer unmiced, inaudible] …so driving range on the RX-8 is approximately 70 miles on the hydrogen alone. On the gasoline side it’s a standard tank, so it’s the standard range of the RX-8. So you have opposites involved.
Jim Dvorak: It’s no secret that you run RX-8s around the track in the NASA series, and Mazda’s obviously very involved in enthusiast racing. Do you perceive someday, five, ten years down the line, that you’d be running hybrid vehicles or diesel vehicles on the racetrack?
Davis: Ah, certainly that’s an option and we’re looking at a lot of things. One of the things that we have been discussing with partners, particularly our partners over at Michelin, is Michelin has done a really innovative thing with the Green X Challenge in the American Le Mans Series. One of the things we’ve been talking about internally is, you know, what do we do for a Green X Challenge-type environment in the amateur ranks. As you guys know, Mazda has more than 50% share in amateur racing, and how can we recognize the efforts of amateur racers and developing new, innovative ways to use less fossil fuels and have less of a C02. So we’ve been thinking through that process and we’re on the early stages of it, but yeah, we have been thinking about it and trying to figure out what’s responsible for all involved.
Brian Smith: What are the performance characteristics of the dual-use RX-8 when you switch from, when you run out of hydrogen and then you’re on fuel? Is it similar?
Kaneko: Both the hydrogen rotary application and as well the gasoline, they’re actually phased to be equal, so there’s really no disparity between the two forms. It’s primarily for the hydrogen Hy-Nor project that this was created for, so, and the power output is basically the same between the hydrogen and the rotary.
Mike Caudill: I just have a global branding positioning question. Over the past year it seems like the rat race in the auto industry has been all around electric technology. You know, you have Tesla championing this whole thing. It seems like very manufacturer has kinda come out with their electric technology, but that was not prevalent in your presentation. It was more hydrogen. Can you just tell us, it seems like it’s kind of a gamble. Everyone’s going to come with electric technology. You’re going to go in a separate direction with infrastructure that’s not yet created around hydrogen. Can you expand on just the omission, I guess, of electric?
Davis: We really, ah, you know, electric vehicles, and Tesla’s done a great job in showing the electric vehicles can be fun and have a high level of performance. Their roadster is obviously a lot of fun to drive.
So the box we’re put into as a company that’s our size and having a vehicle that’s viable through the development process, that’s available and then only appeals to a very small number of people. As we showed in the graphs, the triangle graphs, at 2015, less than five… Our even aggressive assumption shows that less than 5% of the marketplace is gonna be electric. And that’s going to be a combination of electric Transits all the way to Tesla roadsters, right? And everything in between. We just don’t really see the viability, the business viability of a company our size being in that marketplace.
And even in the longer term, again pushing it out ten more years, don’t see a wide enough scope of electric vehicles being viable. The battery technology, certainly when I sit down and talk to really, really smart people, they say the battery technology can get there, but the process that it’s gonna take is gonna be long. So the internal combustion engine is a much bigger playing field, per se, that we see, at least in the mid-term or even semi-long-term, is gonna have a much more bigger impact on the market.
The hydrogen programs allow you to do both. Because, remember the electric infrastructure’s gotta be built also. If we all run out and buy electric cars tomorrow, guess what happens. It’s what happened around here a couple of years ago, things go brown, you know? The infrastructure is not there for that, and so infrastructures must be built for all the solutions.
And honestly, I personally think that the solution is gonna be a lot of different things, not just electric, not just hybrid, not just hydrogen, not just biofuel. It’s gonna be a combination of it. Everybody on the popular side wants a silver bullet. It’s gonna be a magazine of silver bullets. It’s not gonna be one single silver bullet.
Don Fuller: I just had one more little short one. What do your dealers tell you has been the longer-term effect of Cash for Clunkers?
Davis: They feel that certainly it brought in some incremental business. From our standpoint, our conquest ratio on Cash for Clunkers, because we generally for a long time have made fuel-efficient cars, a lot of our older cars weren’t necessarily eligible. So we saw Clunkers being very beneficial because it was a high-conquest ratio. Because except for some MPVs, some RX-7s and some 929s, there really wasn’t much Clunker-eligible Mazdas in the system.
They don’t see that it had a long-term problem, because it lasted such a short period of time. What I’m hearing from the European countries that it’s a bigger long-term problem, because they run the programs for a much longer period of time. Now when the programs stop, the public just sits there and waits, you know, does the stare-down until the government buckles its knees and comes back. And I think we all know the government’s pretty good at buckling under the pressure of the populace.
We saw a little bit of improvement in the market last month. We’re seeing it again in early indications this month. So it looks like it’s stabilized.
Aaron Robinson: I’ll take the last question. The current Mazda6 is a great example of dimensional creep within the segment. It’s really ballooned in size from the old generation. Do you see that those car lines will give up size in the quest for fuel economy and weight reduction, or will they stay the same size and smaller products will be introduced underneath them?
Davis: I think they’ll give up some size. I think they’ll give up… They won’t give up size, Aaron, proportionally to the overall footprint. I think one of the things that you’ll see as new platforms are developed, you’ll be able to keep or very much limit the reduction in size of the interior package and make the exterior package more efficient. So what you’re gonna see is, you know, kinda relates if you lose an inch on the inside you’re gonna lose three inches on the outside. You’ll see that continuing improvement.
And then as the packaging in the powertrains becomes smaller, that’s a way to make the overall package on the outside smaller, also. So if you look at the dimensions, the exterior dimensions are driven a lot by your powertrain choices, and as those powertrains become smaller and more efficient, even if the output stays you’ll be able to reduce that overall footprint.
So the answer to your question is yes, they will give up some package for efficiency, but the exterior package will be giving up more. The interior package will be giving up less.
Very good, thank you.
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