With the recent boom in the automotive sector ‘fuelling’ an upturn for many foundries supplying this vital sector for the metal casting industry, Foundry Trade Journal editor Lynn Postle assesses the current mood.
It’s no secret that the automotive industry ‘drives’ many developments and inovations in the metal casting sector as vehicle manufacturers steer us – as users and members of the supply chain - towards the next generation of cars and trucks. Despite the recent shocking revelations at VW, the sector is still enjoying a healthy growth period with much of the demand being ‘fuelled’ from emerging nations. Surely this is good news for our sector – isn’t it?
Current trends
Despite an ever-growing choice to confuse the consumer, the general factors dictating new car sales tend to revolve around quality, value for money and safety. Clearly as more and more added value items appear as standard on many vehicles despite the need to keep costs competitive, margins are squeezed further down the supply chain. Also the increasing fuel efficiency pressures and globalisation are impacting on type of parts and indeed costs as the industry continues its move towards lighter materials and electric powered vehicles.
Considering the matter Destinhaus(1) has identified four major automotive industry trends for the next five years:
1. Increasing emphasis on reducing carbon emissions – the continued move from internal combustion engines to electric and hybrid vehicles
2. New materials and new manufacturing processes – lighter materials and less moving parts in the powertrain
3. Information and communications technology – integration of more wireless technologies
4. Purchasing decisions shifting to online resources – more savvy shoppers
Casting the future
Clearly, those in the supply chain will need to predict trends and offer cost-effective solutions to such demands.
An example of the use of a new material is the rear frame of the Audi A8 which is now a magnesium diecasting rather than an aluminium extrusion or the compacted graphite iron engine block produced by Grainger & Worrall for a production petrol engine for a Ford US pickup truck(2).
In terms of emissions reductions, a recent success story is the Multi Material Lightweight Vehicle (MMLV) Program conducted by Magna International – an automotive supplier with five aluminium vacuum diecasting facilities - and Ford Motor Company which resulted in a redesign of the complete vehicle to achieve a weight saving of 23.5 per cent in the Ford Fusion leading to a downsize in the engine and improved fuel economy(3). Reporting on the breaktrhough Shannon Wetzel, managing editor Modern Casting said: “The MMLV lightweight body features eight aluminium castings that were produced via high pressure vacuum diecasting. The use of high pressure vacuum diecasting is unique for high volume automotive production, but the process allowed engineers to design castings for structural areas of the vehicle… OEM interest in structural diecastings for high volume vehicle segments has led to increased vacuum diecasting capacity in the marketplace.”
Many OEMs are keen to offer solutions to the way in which vehicles can become lighter and more efficient but it is also important to note that the increase of electronics and software in vehicles is another opportunity - the cost of electronics and software content in automobiles was less than 20 per cent of the total cost a decade ago, today it is as much as 35 per cent, according to studies by Manfred Broy, a professor of informatics at Technical University, Munich(4).
The consequence is that carmakers are joining forces with IT companies to ensure customers have all the Bluetooth, WiFi and 3G internet capacity they demand in today’s vehicles. However one consequence of this is that the traditional long innovation cycles in the automotive sector have had to adjust to the short-term development periods in the IT sector where change is a constant(5).
This could impact on those companies further down the supply chain such as the cast metals sector where R&D timescales may be lengthier.
Different markets
One of the most widely publicised shifts in the manufacturing sector in recent years has been the need to produce where you sell. Certainly in the foundry equipment industry this has been a trend and indeed as the cost of shipping and logistic problems increase, many foundries are also setting up facilities or joint-ventures in emerging markets to satisfy local demand.
The automotive industry has long been a trail blazer in this activity with many of the larger brands increasingly opening manufacturing plants in the BRICS regions with the intention of producing variations on models for specific markets as needs and cultures differ creating varying demands from vehicles. For example KPMG reports(6) that employees at Mercedes Benz Research and Development India have developed a new car horn for vehicles sold in India because drivers in the region honk their horns constantly – unlike German drivers - and a western produced horn would not cope with this! The moral of the story – understand your market.
Summary
There are many advanced technologies driving automotive manufacturers into the next phase of developments – as dictated by customer demand – and suppliers at all levels of the supply chain need to be drivers not passengers. Innovation is expensive, it requires investment ability as well as vision. But there are plenty of examples of how the foundry sector is responding to a changing world. Known for the ability to produce complex parts with long lifetimes, the foundry industry is well placed to be a significant part of the journey for the automotive industry for years to come.
References
1. ‘White Paper: four automotive industry trends to 2020’, January 2015, http://www.destinhaus.com/white-paper-four-automotive-industry-trends-to-2020/
2. ‘Success for lightweight iron engine block’, Foundry Trade Journal, Jan-Feb 2015, p22-23.
3. ‘Emission reduction possibilities with structural castings’, Shannon Wetzel, Modern Casting, September 2015, www.afsinc.org
4. http://www.strategyand.pwc.com/perspectives/2015-auto-trends
5. http://www.strategyand.pwc.com/perspectives/2015-auto-trends
6. Automotive Now, a KPMG AG Report, www.kpmg.com