Automotive Market Research Council Spring Conference

Scott D. Upham

Scott D. Upham
President & Chief Executive Officer, Valient Automotive Market Research

Scott D. Upham is the founder, president & chief executive officer of Valient Market Research, a
worldwide leader in consumer and business-to-business market research, market forecasting and
competitive intelligence. Based in Rochester, New York, Valient ’s Automotive division provides
primary and secondary market research, competitive intelligence and forecasting services to over one
hundred automotive industry firms. Upham is an automotive industry thought leader, forecaster,
journalist and a senior consultant to several automotive industry CEO’s. During his twenty-four year
career, Upham has provided confidential management advisory services to several leading vehicle
manufacturers, Tier 1-2-3 parts suppliers and private equity firms around the world. His areas of
expertise include automotive light vehicle production forecasting, primary and secondary competitive
intelligence, merger & acquisition assessment, new market entry strategies, technology migration
analysis, consumer market research and automotive business-to-business market research. Upham
serves on the Western New York Board of Directors of the Society of Competitive Intelligence
Professionals (SCIP). Upham is an oft-quoted source to major media outlets including the Wall
Street Journal, Handelsblatt, Investors Business Daily, Nikkei Weekly, New York Times, Washington
Post, Automotive News, USA Today and National Public Radio. Prior to founding Valient Solutions,
Upham was senior vice president of Harris Interactive’s Automotive & Transportation division, senior
director of J.D. Power and Associates Global Forecasting division and president and chief executive
officer of Providata Inc. Upham began his career in NAAO purchasing at Ford Motor Company and
held senior marketing posts with automotive suppliers including TRW Automotive, Kelsey-Hayes and
Takata Corporation. Upham earned a Bachelor of Science degree in public relations from Eastern
Michigan University in Ypsilanti, Michigan and completed graduate studies from Pennsylvania State
University in State College, Pennsylvania.

© 2012 VALIENT AUTOMOTIVE MARKET RESEARCH PAGE 2

Global Economic Outlook - Positive

Global Economic Outlook – Positive

• Despite a slow U.S. economic recovery impacted by high
unemployment rates and depressed housing values, North American
production volumes continue to rise.

• In the near term, expect volumes to continue to rise as unemployment
decreases to 7-8% level and sub-prime lending environment improves.
Post-2012 Election optimism could provide a boost as well.

• Continued strong growth in light-vehicle production continues in BRIC
(Brazil, Russia, India & China) countries.

• Recovery from 2011’s Japanese earthquake/tsunami is almost 100%
completed. Honda, Toyota continue to struggle in the North American
market to regain market share.


Global Economic Outlook - Negative

Global Economic Outlook – Negative

• Growth coming to a stand-still in Western Europe due to the continued
debt crisis in several countries including Greece, Spain and Italy.

• Potential Israel-Iran conflict could have a large effect on near-term
consumer demand due to large fuel price increases, regional instability
and oil shortages.

• Elongated vehicle retention cycle in the U.S. is hampering near term
production volume and sales growth. Consumers are holding onto
vehicles longer than at anytime since the early 1990’s.

• European Union stability is wavering and could have a large impact on
production volumes if current fractures lead to EU departures.


Near Term
Technological Innovations

Near Term Technological Innovations – 2013-2020

• New “Black Box” vehicle performance recording device legislation
gaining traction in Congress and within European Union committees.

• In the U.S., Congress is also debating the merits of a national texting
while driving ban.

• Other safety innovations appearing in the near-term:
• Windshield and in-between occupant airbag modules
• Occupant injury mitigation systems – seat angle/position sensors,
seatbelt pretensioners and inflatable head rests.
• Exterior pedestrian protection airbag systems – hood lift and
inflatable bladder varieties.
• Emergency power protection – roof embedded solar panels for
electricity generation for emergency services.
• Self-repair tires.

Near Term


• Further customizable vehicle solutions including:

• Seat position, angle, lumbar and inflatable seating comfort bladder
systems. Lear, JCI and Magna developing this technology now.

• HVAC controls using body heat and stored preference information.

• Audio system configuration customization based upon music or
content type – base, treble, volume, surround, etc. Bose, Sony,
Panasonic and several premium brands developing this technology.

• Coordinated safety system performance – airbag, seatbelt, steering
wheel, braking, traction control and vehicle stability systems.
Bosch, TRW and Continental leading the way.


Near Term


• Cellular phone-based vehicle customization trends – Personal Vehicle
Customization Key

• Microsoft, Google and Apple developing personal vehicle
customization key that is based in your PDA or cell phone.

• Will automatically adjust all in-vehicle systems to your personal
preferences including your seat’s position, angle, temperature,
lumbar and comfort bladder system. It will also adjust the vehicle’s
infotainment system for your preferences for audio content type,
volumes and tuning. HVAC temperature preferences will also be
controlled through this system.

• Exploration into senior driver profiles and teenager/early driver
tracking and vehicle performance controls.


Near Term


• In-vehicle “By Wire” systems gain popularity

• Brake By Wire will eliminate over sixty pounds of vehicle
infrastructure and improve braking reliability, performance and
reaction times.

• Steering By Wire will eliminate over one hundred pounds of vehicle
infrastructure (i.e. steering column and simplified axles). Again,
improved steering accuracy, reliability, performance and reaction
times are top outcomes.

• Will allow for easier integration of vehicle stability control systems.

• Vehicle-to-vehicle communication technologies being developed by
BMW, Mercedes-Benz and over ten vehicle suppliers now.


Long Term

Long Term Technological Innovations – 2020-2030

• Extinction Level Events – Automotive Systems & Components

• OnStar and other concierge services.
• Sunroofs becoming obsolete due to panoramic roof technologies.
• Glass will be replaced by hybrid glass/resin products.
• Mirrors will be replaced by low-cost camera and displays
• Instrument panel clusters will be replaced by display screens.
• Engine cooling and exhaust systems will decrease as powertrains
shift to non-fossil fuel based technologies.
• Steering wheels and columns likely to be replaced by different
driver interface devices.
• Tires will transform due to higher speed tolerance needs and 100%
lifetime inflation demands.


Long Term


• Areas of Development – Automotive Systems & Components

• Biometric sensors – alcohol, low glucose, CO2 output, eye tracking,
heartbeat monitoring.

• Recyclable materials – plant-based material for foam, padding, and
surface materials.

• Carbon fiber-based products – lightweight carbon fiber-based
products help lower vehicle weight and improve performance.

• Anti-bacterial materials – no/low growth materials for in-vehicle
applications including surface materials, filters and HVAC systems.


Long Term


• Areas of Development – Automotive Systems & Components

• Safety – Invisible A-B-C-D pillars, pedestrian/animal sensing
protection systems, EV noise generation.

• Older generation focused products – easy of entry swiveling seats,
seatbelt presenters, larger font controls, easier to operate controls
and higher output vehicle lighting.

• RFID based systems for personal vehicle fleet management.


Long Term


• Autonomous Vehicle Development

• A vehicle that is not dependant on a driver.
• Rapid development into several research areas that will result in
the first production autonomous light-vehicles by 2030.
• Several State governments including Arizona and California are
developing legislation to address autonomous vehicle technologies.
• Largely driven by Google, Microsoft and other technology-based
firms.
• Not just vehicle-based systems but in-road systems for consistency,
improved performance and connectivity.
• Goal = Large decrease in traffic deaths, increased productivity,
improve quality of road/vehicle interface, lower energy consumption
and lower carbon footprint.


Long Term


• Autonomous Vehicle Development continued…

• Goal of 200 miles per hour will decrease traffic congestion, improve
productivity and lessen demand for high-cost/high environmental
impacting travel modes like air travel.

• More predictable vehicle maintenance based upon tighter control of
vehicle/road interface.

• “True” vehicle location, distance, speed, maintenance and history
recording tied to vehicle title records and insurance policies.

• Lowering of drunk/impaired drinking, older driver and poor driver
related deaths.


Long Term


• Autonomous Vehicle Development continued…

• Family trip from Rochester, NY to New Orleans, LA – 1,388 miles
• Google Maps = 22 hours 20 minutes
• True time = Day 1, 12 hours and Day 2, 10 hours
• Autonomous Vehicle Time: 7-8 hours


Automotive Market Research Council Spring Conference

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