Mike Smitka
Thứ Năm, 28 tháng 8, 2014
Does Car Racing Make Cents?
Here is a post that draws upon questions posed by students that appears on the Economics 244 Auto Industry blog. However, instead of posting it in full here, I encourage you to go to it on The Truth About Cars item Does Racing Make Cents?, in part for the occasionally thoughtful comments that appear on that site.
Thứ Hai, 25 tháng 8, 2014
QNX Acoustics for Voice — a new name and a new benchmark in acoustic processing
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| Tina Jeffrey |
Designed as a complete software solution, the product includes both the QNX Acoustics for Voice signal-processing library and the QWALive tool for tuning and configuration.
The signal-processing library manages the flow of audio during a hands-free voice call. It defines two paths: the send path, which handles audio flowing from the microphones to the far end of the call, and the receive path, which handles audio flowing from the far end to the loudspeakers in the car:
QWALive, used throughout development and pre-production phases, gives developers realtime control over all library parameters to accelerate tuning and diagnosis of audio issues:
A look under the hood
QNX Acoustics for Voice 3.0 builds on QNX Software Systems’ best-in-class acoustic echo cancellation and noise reduction algorithms, road-proven in tens of millions of cars, and offers breakthrough advancements over existing solutions.
Let me run through some of the innovative features that are already making waves (sorry, couldn’t resist) among automotive developers.
Perhaps the most significant innovation is our high efficiency technology. Why? Well, simply put, it saves up to 30% both in CPU load and in memory requirements for wideband (16 kHz sample rate for HD Voice) and Wideband Plus (24 kHz sample rate). This translates into the ability to do more processing on existing hardware, and with less memory. For instance, automakers can enable new smartphone connectivity capabilities on current hardware, without compromising performance:
Another feature that premieres with this release is intelligent voice optimization technology, designed to accelerate and increase the robustness of send-path tuning. This technology implements an automated frequency response correction model that dynamically adjusts the frequency response of the send path to compensate for variations in the acoustic path and vehicle cabin conditions.
Dynamic noise shaping, which is exclusive to QNX Acoustics for Voice, also debuts in this release. It enhances speech quality in the send path by reducing broadband noise from fans, defrost vents, and HVAC systems — a welcome feature, as broadband noise can be particularly difficult for hands-free systems to contend with.
Flexibility and portability — check and check
Like its predecessor (QNX Aviage Acoustic Processing 2.0), QNX Acoustics for Voice 3.0 continues to offer maximum flexibility to automakers. The modular software library comes with a comprehensive API, easing integration efforts into infotainment, telematics, and audio amplifier modules. Developers can choose from fixed- and floating-point versions that can be ported to a variety of operating systems and deployed on a wide range of processors or DSPs.
We’re excited about this release as it’s the most sophisticated acoustic voice processing solution available to date, and it allows automakers to build and hone systems for a variety of speech requirements, across all their vehicle platforms.
Check out the QNX Acoustics for Voice product page to learn more.
Thứ Tư, 20 tháng 8, 2014
Interest rates, inflation and growth
I go through US data periodically for a weekly radio show on W3Z - WREL in Lexington, Virginia. Unfortunately they don't stream their locally-produced content, probably because most of what they broadcast is syndicated and they aren't licensed to do so.
I've talked in recent weeks about the low returns available on savings. Let me trace that logic in more detail. In the end, I'll tie this to the discussion going on in economics circles about secular stagnation. (Since this is a blog, here's a link to VoxEU, which has just released a free eBook with essays by 19 economists, arguing the empirical strengths, weaknesses and implications of "staganation.")
Long-term rates are generally down since December: 30-year bonds fell from 4.0% to 3.2% and 20-year bonds from 3.0% to 2.4%. Those are drops of 0.8 percentage points and 0.6 percentage points, respectively. (Meanwhile-year rates are flat at 1.6%.) That is not necessarily good news, as it means that the serious money crowd think that growth will be weak for years to come.
Let's look at the numbers over time and see what they imply. If you're an investor, you can buy a 1-year bond today and another 1-year bond a year from now. Or you can buy a 2-year-bond today. Since there are lots of players in this market trading minute-by-minute, those two returns ought to be comparable. Here are calculations of future rates consistent with today's bond prices. (There are other corrections, such as for risk, but I don't think that changes my results in a qualitative manner.)
The first column is actual rates. The second column are rates in the respective years that are consistent with the actual rates. The third column is the year, and the final column is the implied 1-year bond rate that year consistent with today's rates. As you can see below, when I do these arbitrage calculations, we don't get "normal" 3+% interest rates until 2019. (In fact, over the period Jan 1990-Dec 2007 one-year interest rates averaged 4.5%) In other words, we will have had 10 years of well-below-normal interest rates.
The total return after (say) 3 years of buying 1-year-bonds 3 years in a row should equal the return on a 3-year-bond. In algebra, we have (1+i3 yr)3 = (1+iyr 1)*(1+iyr 2)*(1+iyr 3). Excel lets you find the future rates consistent with todays rates; I used rates in 0.25 percentage point (25 basis point) increments to get close.
| Maturity | Interest Rate Aug 19, 2014 | Year | Implied 1-year bond rate | |
| 1 year | 0.11% | 2014 | 0.11% (actual) | |
| 2 years | 0.46% | 2015 | 0.75% | |
| 3 years | 0.90% | 2016 | 1.75% | |
| 4 years | 1.1% (implied) | 2017 | 2.00% | |
| 5 years | 1.59% | 2018 | 2.00% | |
| 2019 | 3.75% | |||
| 7 years | 2.05% | 2020 | 4.00% | |
| 2021 | 3.25% | |||
| 2022 | 3.25% | |||
| 10 years | 2.40% | 2023 | 3.25% |
In the background 3 components are operating::
- Growth will remain low. Unfortunately, the 2019 date is consistent with my calculations of when labor markets return to normal, based on jobs growth versus population growth, corrected for baby boomer retirement, updates of which I post here from time to time.
- We will not have inflation in the foreseeable future. None. (Remember, short-term interest rates should be approximately the growth rate plus the inflation rate.) Yes, there's lots of noise from gold bugs. There are the "old dog" monetarists (those who blindly apply a single, simple-minded monetarist equation, as fitted to data from the 1950s). They play with a few billion dollars. In contrast, the real players, pension and insurance fund managers, mutual fund managers and the Saudis and Chinese have invested a few trillion dollars on the belief that there won't be inflation. I believe money talks.
- Stock prices will remain high and returns low. Low growth means that profits won't rise much, while low interest rates mean that stocks will still look attractive relative to bonds and bank accounts.
Now slow but steady isn't bad, unless you're job-hunting. But low interest rates impose a risk, because interest rates that are near zero can't be pushed down. In other words, as we've observed these past several years, monetary policy has no power, and aggressive "quantitative easing" only a little. If we have another recession – there are lots of scenarios in which something goes wrong over the next 5 years – then we're powerless to do anything, unless we can engage in fiscal stimulus. Will Congress be prepared to act? I fear not.
But let me return to stock prices: Robert Shiller, the Nobel laureate who discussed the housing while it was developing and predicted its collapse, argues that stocks are overpriced (see here on MarketWatch). If growth will indeed remain low, however, interest rates will stay low, and stock prices high by historic norms. That would also make sense from another direction: the returns to buying stocks were unusually profitable for decades. As savers adapt to that and hold more stocks, prices should be high – but then not rise further. So either way – overprice or not – don't look to buying stocks as a reliable way to make money. And certainly don't believe anyone who tells you they can beat the market, or generate good returns. The best you can aim for are comparable returns, and those returns are low.
Finally, we have a reality check in the most recent consumer price data, released yesterday (August 19th). The headline number remains 2.0% and the rate excluding the volatile components of food and energy is at 1.9%. The biggest rises at the detailed level remain medical commodities at 3.0% and medical services at 2.5%. (Actually, these have fallen a bit.)
Oh, and since this is an auto blog, new car prices were up +0.3% in July, but bounce around quite a bit. Over the last 12 months there were up 0.2%, so well below average inflation. The same is true of used car prices, up 0.2% over the past year. However, they have been falling over past few months, and Tom Kontos, the Chief Economist at Adesa, one of the two big auto auction companies, thinks they'll continue to fall: the normalization of sales and leasing over the past few years is leading to a rise in the supply of off-lease vehicles and trade-ins. He doesn't see demand rising so as to offset that. That's consistent with my above analysis of the economy as a whole.
Thứ Ba, 19 tháng 8, 2014
Who is Number One?
Auto sales are not the only measure to assess an auto OEM's relative health. This piece from the Detroit Bureau lays it out:
- GM slid to third when it comes to units sold for the first half of 2014. And focusing on just the most recent quarter, the Detroit maker fell to fourth when it comes to gross revenues.
- GM reported gross sales of $39 billion for the April to June quarter, noted Autoline: Detroit Editor John McElroy, putting it well behind Germany’s multi-brand Volkswagen AG, at $68 billion. That was well ahead of even the industry’s leader from a unit sales standpoint, Toyota, which managed a still-hefty $62 billion in revenues.
- The big surprise was Daimler AG, which managed to nudge past GM with $42 billion in second-quarter revenues. GM, in turn, managed to squeak past the Euro-Asian Renault-Nissan Alliance by just $100 million.
- Ford Motor Co. delivered $37 million in revenue, with fast-growing Korean siblings, Hyundai-Kia reporting $33 billion. The newly merged Fiat Chrysler had combined revenues of $31 billion. Rounding out the list of major global plays, Honda revenues came in at $29 billion, with BMW in the industry’s 10th spot at $26 billion.
Thứ Hai, 18 tháng 8, 2014
QNX Acoustics for Active Noise Control wins a Silver Stevie
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| Lynn Gayowski |
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If you're unfamiliar with QNX Acoustics for ANC, it's a software solution that can dramatically reduce unwanted engine harmonic noise inside the cabin of a vehicle. The software's algorithms for noise cancellation can run on an existing CPU or DSP in the infotainment system, eliminating the need for dedicated hardware controller modules. The end result is significant savings for automakers and a quieter ride for drivers and passengers.
This is the second award for QNX Acoustics for ANC, after a win in February at the Embedded World conference's embedded AWARDs. If you want to learn more about the solution, read our white paper titled A Software-Based Approach to Active Noise Control in Automobiles. Congratulations QNX!
Chủ Nhật, 17 tháng 8, 2014
Drive Me: Volvo's groundbreaking autonomous driving project
Volvo's project called "Drive Me" plans to have 100 self-driving Volvos to public roads in everyday conditions by 2017.
Watch the video:
Watch the video:
Thứ Sáu, 15 tháng 8, 2014
QNX-powered Audi Virtual Cockpit in 2015 Audi TT named finalist in CTIA Hot for the Holidays Awards
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| Andrew Poliak |
The sleek 2015 Audi TT features a one-of-a-kind combined infotainment and fully digital instrument cluster — the Audi virtual cockpit —powered by the QNX OS platform. With the virtual cockpit, all content from current speed to the next turnoff, is located on one 12.3” display directly in front of the driver’s eyes elegantly blending infotainment and car gauges, in crisp, fast 3D. You can check out virtual cockpit in action below.Winners will be announced on Wednesday, September 10, 2014 during CTIA’s Super Mobility Week in Las Vegas. The Audi Virtual Cockpit in the 2015 Audi TT is also up for the crowd favorite award where attendees and online users have the opportunity to select their favorite product, so please be sure to vote! Online voting ends Monday, September 8 at 5 p.m. PT.
Volvo Car Malaysia expands into Sarawak
Volvo owners will now be able to service their cars at the two authorised service centres in Sarawak, located in Sibu and Kuching with more locations planned in the future
Greatwall Group of Companies has been appointed as the new 2S representative.
Greatwall Group of Companies has been appointed as the new 2S representative.
Thứ Ba, 12 tháng 8, 2014
The summer road trip of 2017 – Part II
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| Lynn Gayowski |
Staying safe
By 2017, we likely won’t have developed the technology to shrink your mechanic down to a size that allows you to perch one on your dashboard like a bobble-head, but many cars will have a “virtual mechanic.” This application will let you check lights, fluids, tire pressure and other system vitals, all through your center stack, digital instrument cluster, or phone – as seen below. The idea of a safety speedometer is hardly new in concept (see the Plymouth safety speedometer from 1939), but its modern implementation in the cars of 2017 in the form of vision systems performing road sign detection might just mean fewer speeding tickets on your road trip, especially as you cruise through unfamiliar areas.
Staying in touch
Sometimes you want to take a road trip to get away from the world, but sometimes you still want (or need) to stay connected. Whether it’s phone calls, texts, or emails, all of this information will continue to be seamlessly integrated into your car in 2017. Less fumbling, fewer distractions.
And low-quality, stilted speakerphone calls will be a thing of the past with the emerging crop of acoustic technologies. Driving alone on a stretch of road and miss having your loved ones close by? Advanced duplex technology will make it seem as though the person on the other end of your phone conversation is sitting right beside you in the passenger’s seat.
Another cool development? You won’t have to struggle to use voice recognition technologies because of your noisy in-car cabin (that’s right, serenely quiet cabins will no longer be exclusive to luxury cars). Vehicles will continue to evolve to meet the strictest CAFÉ and emissions standards, while the negative acoustic side-effects from less damping materials will be countered using software to remove unwanted engine sound. And your engine in 2017 might really sound like purring (or growling, if that’s your preference), as signature sounds are enabled by engine sound enhancement software. So not only will you not feel crazy for talking to your car, you’ll also be less frustrated as you do so cruising down the interstate.
Beyond 2017: Look ma, no hands!
While it won’t happen quite as soon as 2017, autonomous cars will hit the roads in the relatively near future, forever changing the dynamic of the road trip. Will road trips be more accessible for the elderly and others who can’t physically drive long distances? Will the new meaning of "cruise control" make the road trip more or less enjoyable? All of these considerations are up for discussion. One thing is certain: many of the advanced safety systems of today and 2017 are precursors to cars that could drive themselves. One such example of what the future of autonomous driving will look like is the University of Parma’s DEEVA autonomous car project being developed by the Artificial Vision and Intelligent Systems Laboratory (VisLab).
How is in-car technology playing a role in your current summer road trip? How do you want it to improve your future road trips? Stay tuned to our QNX_Auto Twitter account and Facebook page for weekly discussions throughout the rest of the summer about 2017 has in store for your road trip.
Thứ Năm, 7 tháng 8, 2014
Acoustics, ADAS, and autonomous cars, oh my!
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| Lynn Gayowski |
QNX announced the new QNX OS for Automotive Safety at Telematics Detroit, so safety was clearly top of mind during the interview. One question posed was whether automakers have the potential to use safety options as revenue generators. There's a quote here I love: "Safety shouldn't be about premium." OEMs need to find cost-effective ways to bring next-generation safety to the mass market, not just luxury vehicles.
The section of the video I find most interesting is when Derek discusses how acoustics in a car play a big role in creating "the emotion and experience of driving." Noise reduction technology and engine sound enhancement both have a significant impact on a driver's affinity for a vehicle, and OEMs are taking note.
Check out the video for yourself here, my pretties:
Auto Finance Sub Prime Bubble?
I don't think so. For some reason, the New York times jumped on an Equifax report, cherry picked data to suit a sensationalistic agenda, and published the piece on Dealbook (link). Many have weighed in since, including myself – see below! Other examples are Marketwatch and a NYT Op-Ed
Written for Auto Finance News
By David Ruggles
A recent report from Equifax Inc., which noted that originations and total outstanding balances for subprime auto loans have hit recent highs, triggered an alarmist article on subprime lending in The New York Times. In the July 19 piece, authors Jessica Silver-Greenburg and Michael Corkery cited anecdotes that leave the impression that fraudulent practices are widespread. They castigate the “high” interest rates on subprime loans without mentioning the high rate and expense of default and repossession. Repos can reach a third of originations, and collection practices ― which are expensive to begin with ― are a challenge on these loans.
Through April, 2.6 million subprime loans were originated, representing 32% of all auto loan originations, according to Equifax. The outstanding balance of those subprime loans totaled $46.2 billion, an eight-year high. Equifax defines “subprime” as loans to customers with credit scores of 640 or below. As a matter of record, though, in some circles, a loan is deemed subprime when the credit score drops to 580.
The American Financial Services Association and other industry professionals have since weighed in on the NYT article, noting that it enflames already-riled regulators. And Derek Kreindler, managing editor of TheTruthAboutCars.com blog, writes: “Don’t expect that 32% figure to let up anytime soon. The glut of credit available for auto financing ― driven by securitized subprime auto loans being sold as investment-grade instruments ― is going to keep the auto financing business alive and kicking for the foreseeable future.”
I have seen many articles trumpeting the danger of the expansion of subprime without proper context. It is one thing to have data, but quite another to interpret it properly. In the Equifax report, Deputy Chief Economist Dennis Carlson called the increase in subprime lending “good news,” adding that “a fully functioning second-chance market is essential for a healthy economy.”
I would be pleased if people would stop acting like subprime auto financing had a damn thing to do with the global economic meltdown in 2008. It didn’t. Subprime auto financing is nothing like the subprime home lending issues of the past decade, and $46 billion of total outstanding balances on all subprime loans is miniscule compared with the size of the overall economy and a drop in the bucket compared with the mortgage market.
Meanwhile, the ratio of subprime auto originations, including the buy-here, pay-here sector, has hovered around the 30%-to-35% mark for more than a decade. After all, more than a third of the population has a credit score below 640. Kind of makes sense, right? People need cars, and those originations include new and used loans, although they are mostly used.
To be clear, despite the sky-is-falling tone of the NYT piece, Equifax said “serious” delinquencies of 60-plus days remained near all-time lows, and represented less than 1% of total outstanding balances.
A quick call to Melinda Zabritski, director of auto finance at credit bureau Experian, revealed the following: First, the Great Recession spurred the average credit score of U.S. consumers to take the hit one would intuitively expect. Second, when credit dried up, many people ― except for the highest credit score consumers ― turned to BHPH or subprime finance, as one might expect. The stat cited in the NYT article compared subprime originations today with the dark days of the credit crisis, when capital for that kind of lending was completely dried up. Why pick a point in time that is obviously an anomaly, if one is trying to tell a story in real context?
Third, lenders are looking at the near-prime and subprime markets in a search for yield unavailable in the highly competitive prime lending space. Fourth, fast-track credit ― the point at which a dealer can send a contract to a lender without first calling it in for formal approval ― is now 720, up from 690. There are more strict debt-to-income and loan-to-value parameters, as well. Fifth, and perhaps most importantly, millions of consumers have been able to rehabilitate their credit through subprime financing ― and there will be millions more. An accurate portrayal of the Sub Prime market would have at least mentioned this.
There are some who equate subprime auto lending to with mortgages made under the Community Reinvestment Act. Nothing could be further from the truth. CRA mortgages are NOT inherently "Sub Prime." According to the Federal Reserve, CRA mortgages have outperformed the mortgage market overall.
Also, as a matter of record, most of the mortgages that soured during the mortgage crisis were not subprime. Many people with excellent credit walked away from mortgages where they were paying off, for example, $450,000 on a $250,000 home. Yes, their credit score took a hit, and they might have had to get a subprime auto loan to buy a car. It will take some time to repair all the damaged credit. This has played its own part in the slow economic recovery.
Despite the NYT piece, clearly fueled by a desire to create controversy where the facts don’t indicate controversy exists, it’s time for everyone to take a deep breath and keep both feet firmly planted on the ground. There is no subprime bubble.
Thứ Ba, 5 tháng 8, 2014
The summer road trip of 2017 — Part I
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| Lynn Gayowski |
Tunes for the road
A road trip without a soundtrack is a road trip I want no part of. I think we can all agree that a Britney Spears playlist is compulsory. Music has always been intimately connected to the driving experience (see the Highway Hi-Fi Phonograph below for proof
The media sources that you depend on today — local drives, USB storage devices, smartphones, cloud services — will work seamlessly with your vehicle, allowing you and your passengers to enjoy any genre from any source. Conventionally constrained to your center stack, music meta-data will permeate all the screens of your car, even the instrument cluster.
The context-aware cockpit
The road trip of years past was plotted on a paper map and required a navigator in the passenger seat; today’s passengers are relieved of these duties as navigation and route plotting have gone digital. But even with that convenience, having to divert your eyes from the road to the center stack can be a nuisance. The dashboard of 2017 will offer greater convenience with a driver centric-display that could blend navigation and digital cluster information all on one screen. These vehicles will be "context aware" and display different information depending on the environment. For instance, surround-view cameras could detect pedestrians or cyclists and provide a minimalist on-screen alert to minimize driver distraction. Similarly, the system may disable certain functionality when the driver is about to navigate a hairpin turn. If the vehicle “knows” there’s a challenge ahead related to road condition, visibility, local speed limits, traffic, or topographical information, it could display the appropriate context-relevant information to the driver.
Staying mobile
By 2017, you’ll probably have a new smartphone and, regardless of the platform, it’ll be able to communicate with your car. Projection mode technologies will be commonplace and render your phone’s display and services onto your car’s center stack (one example is QNX-powered Audi’s MMI mobile media application framework). This integration will no doubt get even more advanced in the coming years, and with Apple’s CarPlay and Google’s Android Auto connectivity protocols taking form, your favorite apps will be as at home on your dash as they are in your hand.
Your phone will also be able to control and monitor your car in new ways via the much-discussed, but sometimes nebulous, cloud. For instance, let’s say you find yourself at a behemoth rest stop and can’t remember the location of your car after indulging in the roadside cuisine. Your phone’s “key fob” app could tell you exactly where your car is — it could even let you check your oil and washer fluid remotely to see if your car is in shape to make it on the next of your leg of your trip.
How is in-car technology playing a role in your current summer road trip? How do you want it to improve your future road trips? What’s your favorite road trip destination? (My personal favorite is Washington, DC
