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Knowledge Clusters in the Automotive Industry

Kim Hill, Director, Sustainability & Economic Development Strategies, Center for Automotive Research and Debbie Menk, Center for Automotive Research (CAR) (Automotive Site Guide 2012)
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Development of vehicle electronics is expanding beyond features for the vehicle itself into connected vehicle technology. Connected vehicle technology targets safety, mobility, and environmental improvements. The promise of these technologies has induced vehicle manufacturers, auto suppliers, government agencies, and others to work collaboratively to test and develop connected vehicle systems. Michigan and California are centers of connected vehicle technology development and testing. Development of vehicle electronics is expanding beyond features for the vehicle itself into connected vehicle technology. Connected vehicle technology targets safety, mobility, and environmental improvements. The promise of these technologies has induced vehicle manufacturers, auto suppliers, government agencies, and others to work collaboratively to test and develop connected vehicle systems. Michigan and California are centers of connected vehicle technology development and testing.
Advanced Materials for Lightweighting
Vehicle weight is a considerable factor in vehicle fuel economy; it is estimated that a 10 percent reduction in vehicle mass results in 6 percent to 7 percent fuel economy improvement. Weight reduction is also appealing to automakers because it tends to increase other performance factors valued by consumers: ride and handling; noise, vibration, and harshness; braking; and acceleration. Up to a 250- to 750-pound reduction in average vehicle mass is expected by the year 2025 according to some forecasts. Michigan and Ohio are states leading the research efforts in materials lightweighting.

Bio-Based Materials
Bio-based materials are industrial products made from renewable agricultural and forestry feedstocks, which can include wood, grasses, and crops, as well as wastes and residues. These materials may replace fabrics, adhesives, reinforcement fibers, polymers, and other more conventional materials. Flax, sisal, and hemp are used in door interiors, seatback linings, package shelves, and floor panels. Coconut fiber and bio-based foams have been used to make seat bottoms, back cushions, and head restraints. Cotton and other natural fibers have been shown to offer superior sound proofing properties and are used in interior components. Corn-based plastics have been used in several applications, including demanding under-the-hood applications where components are exposed to heat and chemicals; soy-based foams are becoming common in seats and headliners.5
The fleetwide CAFE (Corporate Average Fuel Economy) for passenger cars and light-duty trucks now exceeds 30 mpg. By 2016, the combined required CAFE for light-duty truck fleets and passenger car fleets will be 35.5 miles per gallon (mpg), approximately double the initial 1970s requirements of 18 mpg for passenger cars only.
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Automotive R&D clusters — consisting of auto companies, suppliers, and universities that work in collaboration with these firms — are located in many regional pockets throughout the Midwest, the Southeast, and California.


These materials provide a number of benefits, and the use of bio-based materials by the automotive industry has been gradually accelerating over the last several years. The industry's new emphasis on environmentally friendly materials and technologies has been spurred by government regulations, consumer preferences, and, in some cases, financial savings that can be realized from the adoption of these materials and technologies. After years of research, bio-based plastics are now closer to meeting or exceeding performance and cost parameters of conventional plastics than ever before.

Bio-based materials present a unique opportunity for the localization of both the supply chain of this emerging technology and the feedstock from which the materials are developed. In order to fulfill the full promise behind its premise, bio-based materials technology needs to use feedstock from plants sourced as locally as possible. This way, the cost and environmental impact of using petroleum from the Middle East for plastics production is mitigated. As a region rich in both agricultural and manufacturing capacity, the Midwest is perfectly poised to take maximum advantage of the emergence of bio-based materials.

Connected Vehicle Technology
The vehicle electronics market is growing rapidly. An average vehicle might contain about 60 microprocessors to run its electrical content, as compared to about only 15 microprocessors in a vehicle just 10 years ago. As companies increasingly rely on vehicle electronics to comply with environmental and safety requirements, the automotive electronics market is expected to expand even more rapidly.

Development of vehicle electronics is expanding beyond features for the vehicle itself into connected vehicle technology. Connected vehicle technology targets safety, mobility, and environmental improvements. The promise of these technologies has induced vehicle manufacturers, auto suppliers, government agencies, and others to work collaboratively to test and develop connected vehicle systems. Michigan and California are centers of connected vehicle technology development and testing.

Advantages of Locating in Auto Tech Cluster
These are but a few of the changes to motor vehicles that are causing a demand for new technologies. Thus, technology clusters have become an important factor in location decisions. Just as the automotive manufacturing industry is widespread across large areas of the country, automotive R&D clusters are located in many regional pockets throughout the Midwest, the Southeast, and California. For automotive firms, there are several advantages to locating near one or more of these clusters. A knowledge cluster attracts workers with skills and training related to that industry, allowing all firms within that industry to benefit from a labor force that is both larger and more specialized.

Firms and their suppliers further benefit from the effects of a cluster on the nature of the supplier base. If several firms with similar needs are situated in close proximity to one another, businesses that provide those goods, services, and materials will enter that cluster. These suppliers benefit from a larger pool of potential customers to which they can sell their products. Those customers, in turn, benefit from lower search costs associated with locating suppliers, a more competitive supplier base, and improved access to specialized goods, services, and facilities.

Firms located within clusters may be more productive and innovative. Proximity enables the flow of ideas and may provide firms an opportunity to glean the best practices of other companies. Productivity within a cluster can also benefit from shared use of specialized public goods and the availability of specialized infrastructure.

The Center for Automotive Research (CAR) is a nonprofit organization based in Ann Arbor, Michigan. Its mission is to conduct research on significant issues related to the future direction of the global auto industry, as well as organize and conduct industry forums. The CAR's Automotive Communities Partnership (ACP) brings together communities, international partners, auto companies, educational institutions, and government agencies to advocate for continuing investment in communities that are integral to the North American auto industry.

1 Kim Hill, Debbie Menk, and Joshua Cregger. (2012). "The Case for Investment in the Central Automotive Region." Center for Automotive Research. May 2012.
2 Defined here as Ohio, Michigan, Indiana, Illinois, Kentucky, Missouri, and the province of Ontario.
3 Wolfe, Raymond. (2010). "Survey of Industrial Research and Development," 2007. National Science Foundation.
4 MEDC. (2007). "Michigan Automotive Research & Development Facilities Directory, Third Edition." Michigan Economic Development Corporation.
5 Kim Hill, Bernard Swiecki, and Joshua Cregger. (2012). "The Bio-Based Materials Automotive Value Chain." Center for Automotive Research. April 2012.
6 U.S. Dept. of Transportation "Summary of Fuel Economy Performance," National Highway Traffic Safety Administration. March 2012.
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