SAE: Auto industry should be regulated by itself, not by government

Dr. Thomas W. Ryan III
SAE International 2008 President
Institute Engineer
Department of Engine Research
Engine, Fuel & Vehicle Research Division
Southwest Research Institute

Gasgoo.com:  First of all, please give us a brief introduction of SAE International and the reason for holding 2008 SAE International Powertrains, Fuels and Lubricants Congress in Shanghai.

Dr. Ryan: The Society of Automotive Engineers (SAE) was founded more than one hundred year ago, and SAE International serves its primary constituents. Involved with the mobility industry; SAE develops and manages the standards, so that common problems could be solved in a uniformed way. After the WWII, the society's emphasis expanded slightly-from a predominantly standards centered organization to a broader-based information exchange organization. Through the conferences and exhibits SAE organized, the participants could share information and expand their individual technical knowledge base.

We also publish several magazines, which keeps the mobility community informed on the latest developments. SAE's broad array of technical, historical, and statistical publications are distributed to customers in more than 65 countries annually. SAE provides Training and Professional Development program in the past 20 years -we now produce more than 450 separate professional development events annually and offer continuous education. The training and education of an engineer could start from very young, and go through his whole life.

For this year, we choose shanghai to hold our 2008 SAE International Powertrains, Fuels and Lubricants Congress, also its first conference in China. This conference started 80 years ago and started as the Fuels and Lubricants Congress; from maybe ten years ago it evolves to include the powertrain. Along with the fast growth of China's auto industry, we saw growing interest by the Chinese engineers, so we come to Shanghai, China to hold this conference. We think this could allow Chinese engineers to hear and share information with experts from around the world.

Mix of tech solutions coexists in near future

Gasgoo.com: Soaring fuel price makes the green cars in high demand. The big players like Toyota, GM and VW differ from each other on their technologies; do you think at the end of the day, there will be a dominant powertrain technology?

Dr. Ryan: I think between now and the near future-maybe 2020, there will be a mix of alternative energy technologies. During the evolution, we'll see perhaps more electrical application--hybrid vehicles, plug-in hybrids, pure electrics, etc. Technology breakthrough comes to battery technology. If there is a real breakthrough in batteries, like the lithium-ion battery will be, then the clear winner would be electric vehicles. Now there is a major implication that to charge electric vehicles requires extensive reform of the electricity generation infrastructure in the country. So it's important consideration that fuel and powertrain are no longer the main themes in these meetings, but we need to talk about the electric power industry. Of course, for those countries short of electricity, then application may be more difficult.

Gasgoo.com: Do you think that individual market like China, or India will have a unique green car solution, different from other major markets?

Dr. Ryan: I don't think so, because I don't see you could afford to have totally different market approaches. There will be local content, but not significantly different technology approach. It would be an incompatible world if each country has a different concept for mobility.

Gasgoo.com: According to recent report, a chief executive from Fiat SpA said the Italian automaker is not intending to build electrically powered vehicles right now, but to refine its internal combustion technology. While lots of other companies are making investment on electric vehicles before the predominant technology finally turns up. Do you think it is wise of Fiat's decision?

Dr. Ryan: Well, I can't speak for Fiat. But I think major companies are looking at all the technologies today, and they'll invest some efforts in all of these, but just choose a few to focus on The main question is: are you considering the future in 5 year, or in 25 years? If you ask GM the questions, they could answer you the internal combustion engine as the 5-year technology, but the electric vehicle as the 25-eyar technology.

Gasgoo.com: We saw a trend that automakers join hands to develop battery technologies, i.e. Nissan with NEC, Toyota with Matsushita. Also recently Mitsubishi and PSA agreed to start a feasibility study on an extended technical collaboration in electric powertrains. Should Chinese automaker learn from this?

Dr. Ryan: I don't know enough about the capacity for battery technology in China. But if I were responsible to make long-term investment, that (batteries) will be the area I make the biggest investment.

What we see is that companies with the core business of designing, manufacturing batteries are not automakers, so they see this at this point of time as pre-competitive technology development. Through this program, typically you share the cost and reduce the risk of the pre-competitive technology development if you can arrange that. Once they become competitive, in other words go to the market, then individual companies will get the benefit.

So if you are not an expert in the battery developing, it'll be wise to pool your funds and resources to develop that in a pre-competitive way with partners-partners from different industry, or even partners from your competitors.

Government should play an indirect role

Gasgoo.com: In this process, do you think the government should give a helpful hand to the auto industry?

Dr. Ryan: In the United States typically, that does not happen. They help in an indirect way-for example the U.S. Department of Energy (DOE) is supporting the development of hybrid vehicles via the plug-in hybrid electric vehicles (PHEVs) program; and the government supports research at the national labs and funds it through the DOE.

Very similarly, in Europe, the same type of research at various national government labs in European Union. And they do the research with EU funding and national funding. Different organization, but similar way with the US. They indirectly support industry via these research programs.

In some cases the support is in a direct way. For example, some programs are cooperated by the industry and the government. The fundamental research was going on in a national lab with governmental funds, and a parallel program was being carried out by an individual company or a group of companies in the US market to develop new advanced technology. In Europe, the group of participants could be bigger, and the funding could rise from both levels.

Gasgoo.com: Do you think tax incentives and fuel taxes as the US government does could bring positive impact in China?

Dr. Ryan: I'm not quite familiar with the tax situation in China. But I heard that for a Chery QQ car-owner, he has to pay more than the new car price to buy a license plate in Shanghai. So that's disincentive. The incentive way is that for those small and fuel-efficient cars with low emission, you make the license plate inexpensive; but for bigger vehicles, you make the license plate more expensive-as an example. Also fuel taxes also work effectively to force people to buy more fuel-efficient cars and to drive less. The effect is obvious in the European countries especially.

I learnt the Chinese government made a decision to raise fuel prices from June 20 by 18 percent recently. The price of around $1 per liter is slightly lower than the US oil price, but just half of the oil price in UK. With China to fit the oil price with international society, the automotive industry would also be involved.

SAE plays a crucial role in moving auto industry forward

Gasgoo.com: The world's automotive market is restructuring. High oil price leads to chain reaction; automakers pay more focus on fuel-efficiency, environmental protection and so on. In these aspects, can SAE play a key role?

Dr. Ryan: We saw the safety, infotainment and low-emission and etc as the mega-trends in the world's auto industry. SAE tries to examine these mega-trends and positively respond to the mega-trends by providing meetings, courses and forums for experts from around the world to discuss the issues associated with these mega-trends.

This time in China, we're talking on electronics, fuel-efficiency, environmental regulations and etc. China is already an indispensible part of the world's mobility industry. This industry is a community that communicates very effectively through scientific organizations like SAE. So it's basically a closely-connected community; we connect with each other through emails, forums, meetings, publications, magazines and various training programs. We reach people via our organizations and offices in different regions of the world.

We have a very large body of technological information-they exercise in the way of publications for the present and the future. And we provide standards to the companies; allow the manufacturers to make all the pieces incompatible in the most compatible way. All the nuts and bolts, tries and lubricants…will bear the industry standards, so that the manufacturers could design and assemble a new car. Can you imagine that? If the manufactures all have their own standard for even every bolt, then a truck that breaks down in the off-high way perhaps has to wait for a long time till the manufacturing company come to solve it. So uniform industry standards are important for cost control, safety and that's a way that the industry regulates itself rather than the government does it.

SAE doesn't make regulations; the government makes regulations actually. But when the government makes regulation, it will start from previewing the industry standards. And perhaps then decide what to do to address whatever issues they want to address. One example is that SAE has standards on dummies; and some of the regulations on crash tests are specified through SAE standards; some of the procedures and test methods could be involved with SAE standards.

Gasgoo.com: I guess there must be lots of disagreement when SAE sets new standards, so how do you finally end up with all give reorganization?  Also I wonder whether there could be slight modification or change when the standards were applied in different markets.

Dr. Ryan: Some countries or originations did use standards actually as a way of controlling competitions. SAE International does not. All the companies either accept all the standards, or not at all. They couldn't change or only use part of the standards.

SAE develops standards with the consensus from all the coordinating companies; SAE staff themselves don't develop standards. It's the representatives, volunteers from the companies and experts from the industry that participate in the standard-developing. They come together, talk, discuss, argue, and eventually agree on a standard. With small modification in the process, the standards give the companies the easiest, safest and most cost-effective approach to implement.

SAE to expand presence in China

Gasgoo.com: Could you give us a brief introduction of the work SAE has done in China?

Dr. Ryan: SAE International started on-site presence in Beijing with Tsinghua University. And then we moved to Shanghai. We chose China Automotive Technology &Research Center (CATARC) to establish our partnership. Out of our Shanghai office, we conducted many training courses for the automotive engineers from many companies in many cities, like Wuhan，Nanjing and so on.

Going forward, through the three-way joint efforts among SAE, CATARC and local government organizations, we can bring in our advanced equipment (like testing equipments), our standards and teach them how to apply these standards. Every three month or so, we hold events to let the suppliers and the OEMs to attend, discussing where could be improved.

We now have helped around 15 supplies and OEMs in China improve their business, and more than 500 engineers have received our training. We'll make more concentrate efforts in China.