The Auto Industry
and
Lightweight Materials
SWEA Bluewater Corridor
Dr. Peter Frise – CEO, AUTO21 Inc.
June-11-2014
Presentation Outline
Introduction:
 Present status of the global auto industry;
 The value chain – who does what?
 Major technological and commercial trends;
 Canada’s place within the industry;
The challenges we face:
 The key issues for new automotive materials;
 How does Canada compete with the world?
Better Value
= Performance / Price
(quality, performance, fuel economy, safety,
durability, fun to drive, cool features,
styling, carrying capacity...)
Government
Demands
Quality, Reduced Cost,
Speed, Production Flexibility,
Tight Capital & Infrastructure
Regulatory Compliance
Environmental
& Safety
Good Jobs
Global Vehicle Sales in 2013
= 83.4 million units
Global vehicle assembly capacity will grow to 134.7 million units
which is still about 30 million units too high for the level of sales!!
The Auto Parts Value Chain
 Vehicle models are often assembled in multiple plants
around the world (ex. the Toyota Corolla is made in more
than a dozen different factories in every global region);
 Often more than 80% of the parts in a given model are
developed and manufactured by the same companies which
must supply ALL of the assembly plants from parts factories
located near to each assembly plant;
 Therefore, auto parts companies must have a global
footprint – but their manufacturing activities are often
localised to be near the assembly plants (shorter supply
chains / enhanced reliability);
 Key activities in R&D and product development are often
centralised however.
Energy prices are
a key concern
driving vehicle
design and
consumer views
around the world.
32 Years of North American Automotive Progress
1981 Ford
Escort
2013 Ford
Focus
Curb Weight
1100 kg.
1400 kg.
0-60 Time
15.1 sec.
8.3 sec.
EPA Fuel Economy
23 mpg
31 mpg
PLUS: the Focus has fuel injection, cam-phasing, airbags, ABS brakes, HID
headlights, AC/PW/PS/PB, power seats, heated mirrors, satellite radio,
Bluetooth phone, etc. AND it starts every single time, it goes, turns and
stops better, it is safer and quieter, it lasts way longer, it does not rust
AND it costs less in 1981 dollars than the Escort cost in 1981.
33 Years of European Automotive Progress
Curb
Weight
EUR Fuel
Economy
1975 VW
Golf
1992 VW
Golf
2008 VW
Golf
780 kg.
1015 kg.
1142 kg.
8.7 l/100 km 7.5 l/100 km
6 l/100 km
PLUS: the VW Golf now has all of the same features as the modern Focus along
with the durability, reliability and comfort features plus it is built in one of
the most expensive manufacturing jurisdictions in the world – and it
competes!
CAFE REGULATIONS – Complex but mandatory for future
light duty vehicles of all types & sizes
100% change in 15 years!
So – what is the solution to the CAFE issue?
 Automakers must make safe cars that use less energy AND reduce
tailpipe emissions – all at an affordable cost;
 Potential solutions could be:
 Enhanced gasoline vehicles (big improvements are happening every year);
 Diesels: (about 30% better fuel economy but with some emissions problems and extra cost);
 Some form of electric car (big barriers to widespread adoption);





Hybrid electric vehicles (HEV);
Plug-in hybrid electric vehicles (PHEV);
Battery electric vehicles (BEV);
Extended range hybrid electric vehicles (ERHEV);
Fuel cell vehicles (FCV);
 Current interest in EV’s is not translating into large market share:
EV FLEET
2015 Goal
2015 Actual
Actual/Goal %
USA
1,000,000
132,670
13.2%
China
500,000
20,000
4%
Why is that?
Why are electric vehicles not
taking off in the market?
(HINT: it’s all about money and energy – as are virtually all of
the major issues around new automotive technology)
Energy Use in Vehicles
Regardless of vehicle size or type of powertrain, the three
biggest determinants of energy use in vehicles are:

Vehicle weight: dominant at low speeds;

Vehicle aerodynamics: dominant at high speeds;

Driver behaviour: including driving habits & maintenance.
All of which means that lighter, sleeker vehicles with
energy efficient on-board systems are needed to help
drivers be greener and safer.
Balance among vehicle weight / energy use
and safety – all at an affordable cost…
The energy content / kg of various fuels varies over a wide range –
with batteries being the lowest efficiency energy storage media
presently available (about 5-8% of gasoline or diesel fuel)
Courtesy of Ricardo Inc.
Aluminium has help Land Rover reduce weight by
over 408 kg (~ 900 lb) from last year’s model.
Material use in vehicles (1985 – 2010)
Issues for all new (and old) materials
Any new material must compete with existing options head
to head on:
COST: (with few exceptions – people will not pay more for “green”);
PERFORMANCE: (nobody will compromise on performance);
RELIABILITY of SUPPLY: (no compromises are possible - ever);
Displacing existing materials: (those other guys are big and well
established, and they’re smart too);
Knowhow: industry needs people who understand these new materials
from the standpoint of design, manufacturing and service.
Canada’s Auto Industry Statistics
 ~ 8 light vehicle and 6 heavy vehicle assembly plants
across Canada (incl. cars, trucks & buses > 10 OEM’s);
 Approx. 400 parts supplier companies;
 Output – approx. 1.8 - 2.5 million vehicles/year;
 Approx. $119 billion including parts & assembly;
 Canadian employment is approx. 130,000 people +
300,000 indirect;
 Canadian R&D investments approx. $500M-$1B/year;
 Several large R&D centres are located in Canada.
Canada’s Auto Industry
8000 km
North American OEM HQ Locations
 Chrysler LLC – Auburn Hills MI
 Ford Motor Co. – Dearborn, MI
 General Motors – Detroit, MI
 Honda N. Am. – Marysville, OH
 Toyota N. Am. – Ann Arbor, MI
 Nissan N. Am. – Farmington MI
All of which are within
this little red circle
Auto Industry Product Development Investments –
Comparing Global & Canadian Data
Global
Canada
2011
2012
Light Vehicle Production
77.1 M
81 M
Product Development Expenditures
$ 96.8 B
$ 100 B
Product Development Investment $ / car
$1257
$1235
Light Vehicle Production
2.12 M
2.45 M
Product Development Expenditures (est.)
$ 425 M
$ 500 M
Product Development Investment $ / car
$ 200
$ 204
Product development investments in Canada’s auto industry are falling
behind by a factor of more than six (approx. $200 / vehicle in Canada
versus more than $1230 / vehicle abroad).
Data from Booz & Co. 2012 Global Innovation 1000,
DesRosiers Automotive Consultants and Industry Canada
So – how does Canada compete?
With our relatively high cost structure, high energy costs and
productivity challenges, the only means for Canada to present a
good business case going forward is to emphasize:
 INNOVATION: we have a very strong capacity to develop new science;
 QUALITY: we have a good reputation for reliability and quality;
 RESPONSIVENESS: we must learn to move much faster to respond
to market trends and commercialize new
technologies before our competitors.
This will require us to leverage the large investments we have made
in university and government labs along with a strong education
system and we must move those advantages into the private sector
where all new products and manufacturing processes are created.
The auto industry follows a highly disciplined
Product Development Process (PDP)….
Typical Automotive OEM
Program Engineer
Typical Automotive OEM
Program Manager
AUTO21 2015 Annual Conference
May 26-27, 2015
The Westin, Ottawa
www.auto21.ca
Developing the best people and
the best technology for the future of
the automotive industry
www.auto21.ca
www.nce.gc.ca