Emerging regulations should also boost auto performance by imposing more stringent quality requirements, according to some analysts. In a recent report on the North American passenger car market, Frost & Sullivan mentions U.S. regulatory activity around safety airbags, emission standards and low fuel consumption, as well as the TREAD Act. TREAD mandates new systems for tire pressure monitoring as a way of averting accidents caused by tires that are either overinflated or underinflated. In another study, the U.K.-based Datamonitor research group discusses laws elsewhere in the world, such as the European Unions End of Life Vehicle Directive. Compliance efforts have spawned IMDS (International Materials Data System), a new system for logging and distributing data about the physical and chemical composition of auto parts.In a report called "TREAD: A Multibillion Dollar Black Hole," Mixer and two colleagues at AMR gauged the cost of TREAD at $2 billion in its first year, or 50 times higher than U.S. government estimates. Beyond the costs of compliance, analysts note lingering barriers to car performance that include product differentiation needs, legal and cultural differences between countries, technology integration, and simply "too many components." Viday Javakrishnan, an analyst at Frost & Sullivan, pointed to the conflicts confronting semiconductor manufacturers, who still need to differentiate their products, but who are now expected by customers to offer features supporting integration. In Europe, IMDS "has encountered interoperability problems that will need to be resolved to aid the recycling demanded by the legislation," Datamonitors study said. "How are you ever going to tie together all the systems and components from all those suppliers?" ABIs LaGuerra said. "Standards will help. But its going to be a daunting task to create standards that will work across all the various countries and regulatory environments." He said emissions requirements and taxes on vehicles with poor fuel economies will lead to a quick surge from todays 8-bit engine management systems to 32-bit systems. By 2010, autos in emerging countries will be using 16-bit processors, but most vehicles in the United States will have already stepped to 32-bit systems, he predicted. Adding too many components can actually reduce reliability, so the auto industry will try to simplify matters by using fewer but more powerful processors, the analyst said. Other new computerized car features now in various stages of adoption include anti-lock braking systems, adaptive cruise control, and lane departure warning systems. Check out eWEEK.coms for the latest news and analysis of enterprise supply chains.
On the other hand, regulatory compliance can be time consuming and expensive for OEMs and parts suppliers, some analysts say.