TIANJIN – Banning traditional fossil fuel vehicles maybe the long-term trend in various countries including China but issues such as consumer acceptance, sustainability and enjoyable mobility must be considered when deciding on a timeline to do so, according to Young-Ho Lee, CEO of GETRAG Asia Pacific, Magna Powertrain.
Lee made the comments at a media roundtable held on September 9 in Tianjin on the sidelines of the 2017 International Forum (TEDA) on Chinese Automotive Industry Development (IFCAID), while responding to a question from CBU/CAR on his initial reaction to the government’s plan to ban traditional fuel vehicles, a plan that was announced earlier in the day by Xin Guobin, vice minister of the Ministry of Industry and Information Technology (MIIT).
“We still need to consider, firstly whether customers can afford the cost of new technology development, secondly whether it is sustainable, and lastly whether we are providing the mobility people enjoy, which is our ultimate goal,” said Lee.
He told CBU/CAR that companies and governments aiming to develop electric vehicles must also consider the acceptance of customers to new technology and where electricity actually comes from, whether it is windmill, nuclear, oil burning or coal burning power plants, still remains a question as far as pollution is really reduced.
With regard to the CAFC+NEV “dual credit” policy that is still being ironed out, Lee believes the Chinese government has made the decision for the benefits of its people and support relevant policies to inspire innovation in enterprises.
“As long as the government gives enough stimulation, I believe technology-wise we will see breakthrough soon,” said Lee.
Magna Powertrain’s core advantage, according to Lee, is the ability to provide complete Powertrain Systems and its vast Systems Integration knowledge and capability, which has been gained over many years of experience with many global OEMs. It is the global leader in 4WD and AWD systems, and with the acquisition of GETRAG it is now the world’s largest independent transmission supplier.
Even though Magna is a latecomer to the Chinese market, with the GETRAG acquisition, it is ramping up its transmission business especially with Chinese OEM customers. In the non-transmission business area, it has a strong relationship with western joint ventures in China. The unique advantage that Magna brings to China is that it is able to provide integrated solutions because it has a portfolio of divisions in powertrain, exterior, seating and contract manufacturing. “Magna has the capability to actually design and manufacture fully built vehicles although we have made a decision not to get into the OE business,” said Lee.
Lee says there is still much uncertainty and ambiguity regarding elements that OEMs consider when making decisions on what powertrain systems to pursue
“Such confusion and difficulty lies in China and international OEMs alike, and even within one OEM, there will still be arguments regarding the fitment for one car,” said Lee. “I believe the trend will be clearer later, but nowadays there will be a lot of trial and errors, which will last for some time.”
Magna powertrain’s unique advantages for this problem is with its complete system integration capabilities, broad product portfolio covering traditional powertrain architecture and hybrid/pure electric solutions, as well as the global footprint which meets customer demands in Asia, Europe as well as North America, according to Lee.
He predicted that by 2025, 30 percent of the global vehicle market will be electrified, and half of those will be equipped with 48V mild hybrid systems. There it will continue to expand cooperation on hybrid business as well as the NEV business where there is a total electrification solution.
“We are interested in working with the newcomers, short- to mid-term, as well as long-term. We are having activities with many players already and some of them will come to fruition soon,” said Lee when responding to a question on whether Magna would work with Chinese internet car startups such as NIO.