Frankfurt Auto Show (IAA) 2011 – A Look into the Future of Automobile Technologies and Value Chain Architecture

Frankfurt IAA (Messeturm at the background)

After missing one season of the biennial Frankfurt Motor Show (Internationale Automobil-Ausstellung (IAA) in German) in 2009, I decided to head up to Frankfurt on last weekend. The IAA is probably the most important motor show in the world. Of course, even though the German ICE high speed train would have been a little faster, I deliberately drove up to Frankfurt to visit the show. Otherwise, one may ask: who the hell take a train to a car show? So, I cruised up to Frankfurt (am Main) from Bavaria in less than 3 hours. The 150 km/h average cruise on the Autobahn went smoothly until I caught myself in the Friday morning rush hours in Frankfurt city. The IAA was held at the Frankfurter Messe (10 minutes walk from the Frankfurt main train station). 

I was given a forewarning by a friend, who was already there on the opening day, that the Frankfurt Motor Show was somehow disappointing this year, but it didn’t really lower my expectation at all. After my recent disappointing experience at the Paris Airshow (refer to my blog in June), I knew that this visit experience at the IAA could not be any worse. During my 2-day visit, I was fortunate to have the company from friends from the US, Singapore and Italy, all automotive industry veterans (but not the typical street car-freaks with only skin-deep knowledge). They have worked on some of the most fascinating automotive products and technologies. Furthermore, the weather on both days was fantastically good with blue sky and dry warm temperature. Perhaps it was on Friday and on the last weekend, the IAA was not overly crowded and there was plenty of space to hop in and out of the exhibited autos.

Like in the previous IAA, the different auto manufacturers were organized in individual or shared pavilions or exhibition halls. The big auto manufacturers like Daimler, BMW and Audi had individual pavilions with dedicated interior styling to showcase their autos. Manufacturers like Ford and Volkswagen with multiple brands managed to squeeze all their brands into their gigantic halls. Visitor experience in the pavilions was pretty much like eating at any Michelin-rated restaurant. You would go there for the brand experience. In contrast, visiting the mixed brand exhibition halls was like eating at any Singaporean neighborhood food court.  You would go to the halls just to look for your next family car.   

Mercedes-Benz Pavilion (Michelin Restaurant)

Volkswagon Hall (Food Court)

         Well, I must say that the focus of this year’s IAA was definitely very different from the last one I visited in 2007. I was able to feel the strong electrifying endorsement by almost all leading manufacturers (except niche sport car segment) on the rosy future of electrical power train. This year IAA has certainly marked the major shift from conventional IC-engine driven power trains to electrical-centric power trains, whether it is mild, 2-mode or full hybrid, full electric or fuel-cells. Furthermore, the exhibited autos marked not only power train technological shift but also in the vehicular architectural shift, which is only possible with more compact and modular electrical power train designs.

Mercedes-Benz Electrical Power Train

       Perhaps even more significant than the technological shift, there was a strong presence of small and large industrial invaders at the IAA. Within the insignificantly looking Hall 4 at the IAA, I found a myriad of small unknown automotive startups and large established enterprises like Siemens.  There were even interesting showcases from leading German institutions such as Technical University of Munich and Karlsruhe Institute of Technology. Clearly, with hand on key electrical system technologies, these emerging small and intruding big companies pose a clear and present threat to incumbent automotive manufacturers. Imagine the future with Daimler and BMW powered by Siemens or Bosch! Or Siemens or Bosch inside! Something that is not really unthinkable. This could lead to a significant value chain architectural shift from traditional automotive manufacturers to the Tier 1 system suppliers. Nevertheless, I don’t feel that these system suppliers would compete directly at OEM level given the lack of system-integration and product lifecycle knowhow (R&D, testing, certification, industrialization, lifecycle management), which are still immense barrier to new comers (ok, it can be overcome but at a price and time). Anyway, why dirty your hands if you can supply subsystems to multiple OEMs and capture more value?

Siemens Dominant Presence in Hall 4

Technical University of Munich's MUTE electric car in Hall 4

        Coming back to the autos, as usual, every manufacturer showcased their newest products, some of which were simply concepts and some will be on roads real soon. In my view, the main highlights were the premiere of the Mercedes-Benz F125 (with fuel cell plug-in hybrid, BMW i3 and i8 (eDrive electrical hybrid), Porsche 911 (newer “cleaner” boxer engine). It was interesting to see that different manufacturers pursuing different power train solutions. It seems like the dominant technology hasn't emerged yet. With Daimler holding firmly to its fuel cell technology and the remaining manufacturers to pure battery-electrical and hybrid drive technologies, it will be very interesting to see in the future on whether this technological plurality will prevail. My guess is that is could be very likely remain so unless disruptive technologies such as flywheel, compressed air or rechargeable flow battery (designed by 24M) storage systems could really commercialize into a serious alternative to existing energy storage technologies. 
More about 24M: 24M flow battery
More about other energy storage technologies: Hybrid energy storage

Overall, the IAA 2011 met my expectation and was a great experience for visitors with various interests (family outing, car enthusiasts, technology geeks, business and career opportunity seekers). The weather was fantastic and the event was very well organized and managed. After having great Chinese food at the local takeaway Malaysian-run restaurant and a couple of beers at Fressgasse and the Römer located in downtown Frankfurt with my friends, I drove back to Bavaria the next day wondering what kind of auto I would be driving to the next IAA ........