Auto Component Industry Report

NATIONAL INSTITUTE OF FASHION TECHNOLOGY
SUSTAINABLE PRODUCTION
AUTOMOBILE INDUSTRY
l
2013
By: Aditya Meena (03) Amber Mani (04)
Gaurav Gomez (08)
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Modern Global Automobile Industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2007, more than 72 million motor vehicles, including cars and commercial vehicles were produced worldwide. In this same year, 17 million new automobiles were sold in the US, 16 million in Western Europe, 8 million in China, and 2 million in India. There are approximately 244 million vehicles in operation in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007. By 2020, the predicted number of cars worldwide will reach 1 billion. Currently, these vehicles burn nearly 260 billion gallons of fuel yearly. According to N.A.D.A (National Automobile Dealers Association), in the US, as of 2006, the industry included about 21,200 new-car dealerships, 1.07 million manufacturing employees and 1.12 million retail new and used car dealership employees. Total revenues at new-car and light truck dealers exceed $675 billion this year. Today, the modern global automotive industry encompasses the principal
manufacturers, General Motors, Ford, Toyota, Honda, Volkswagen, and DaimlerChrylser, all of which operate in a global competitive marketplace. It is suggested that the globalization of the automotive industry, has greatly accelerated during the last half of the 1990's due to the construction of important overseas facilities and establishment of mergers between giant multinational automakers.1
Industry specialists indicate that the origins in the expansion of foreign commerce in the automobile industry, date back to the technology transfer of Ford Motor Company's mass-production model from the U.S. to Western Europe and Japan following both World Wars I and II.2 The advancements in industrialization led to significant increases in the growth and production of the Japanese and German markets, in particular. The second important trend in industrial globalization was the export of fuel efficient cars from Japan to the U.S. as a result of the oil embargo from 1973 to 1974.
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Increasing global trade has enabled the growth in world commercial distribution systems, which has also expanded global competition amongst the automobile manufacturers. Japanese automakers in particular, have instituted innovative production methods by modifying the U.S. manufacturing model, as well as adapting and utilizing technology to enhance production and increase product competition.
There are a number of trends that can be identified by examining the global automotive market, which can be divided into the following factors: Global Market Dynamics - The world's largest automobile manufacturers continue to invest into production facilities in emerging markets in order to reduce production costs. These emerging markets include Latin America, China, Malaysia and other markets in Southeast Asia. Establishment of Global Alliances - U.S. automakers, "The Big Three" (GM, Ford and Chrysler) have merged with, and in some cases established commercial strategic partnerships with other European and Japanese automobile manufacturers. Some mergers, such as the Chrysler Daimler-Benz merger, was initiated by the European automaker in a strategy to strengthen its position in the U.S. market. Overall, there has been a trend by the world automakers to expand in overseas markets.
Industry Consolidation - Increasing global competition amongst the global manufacturers and positioning within foreign markets has divided the world's automakers into three tiers, the first tier being GM, Ford, Toyota, Honda and Volkswagen, and the two remaining tier manufacturers attempting to consolidate or merge with other lower tier automakers to compete with the first tier companies.
1st Tier Company Mergers - Volkswagen-Lamborgini; BMW-Rolls Royce 2nd Tier Company Mergers - Chrysler-Mercedes Benz; Renault-Nissan-Fiat 3rd Tier Company Mergers - Mazda-Mitsubishi; Kia-Volvo
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Top 20 production countries
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Top 20 production companies
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OVERVIEW OF INDIA AUTO COMPONENT INDUSTRY

The Indian auto component industry has been navigating through a period of rapid changes with great lan. Driven by global competition and the recent shift in focus of global automobile manufacturers, business rules are changing and liberalisation has had sweeping ramifications for the industry. The global auto components industry is estimated at US$1.2 trillion. The Indian auto component sector has been growing at 20% per annumsince 2000 and is projected to maintain the highgrowth phaseof 1520% till 2015. The Indian auto component industry is one of the few sectors in the economy that has a distinct global competitive advantage in terms of cost and quality. The value in sourcing auto components from India includes low labour cost, raw material availability, technically skilled manpower and quality assurance. An average cost reduction of nearly 2530% has attracted several global automobile manufacturers to set base since 1991. Indias processengineering skills, applied to redesigning of production processes, have enabled reduction in manufacturing costs of components. Today, India has become the outsourcing hub for several global automobile manufacturers. Innovation and cost pruning hold the key to meeting the global challenge of rising demand from developed countries and competition from other emerging economies. Several large Indian auto component manufacturers are already gearing to this new reality and are in the process of substantially investing in capacity expansion, establishing partnerships in India and abroad, acquiring companies overseas and setting up greenfield ventures, R&D facilities and design capabilities. Some leading manufacturers of auto components in India include Motor Industries Company of India, Bharat Forge, Sundaram Fasteners, Wheels India, Amtek Auto, Motherson Sumi, Rico Auto and Subros. The Indias Top 500 Companies, published by Dun & Bradstreet in 2006, listed 22 auto component manufacturers as top companies in India with a total turnover of US$ 3 bn. These companies are in the process of making a mark on the global arena, and some have already acquired assets abroad.
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Industry Structure The total turnover of the Indian auto component industry is estimated at US$9 bn in 2006. The industry has the resources to manufacture the entire range of auto products required for vehicle manufacturing, approximately 20,000 components. The entry of global manufacturers into India during the 1990s enabled induction of new technologies, new products, improved quality and better efficiencies in operations. This in turn effectively acted as a catalyst to the local development of the component industry. The Indian auto component industry is extensive and highly fragmented. Estimates by the Department of Heavy Industries, Government of India, indicate there are over 400 large firms who are part of the organised sector and cater largely to the Original EquipmentManufacturers (OEMs). Another 10,000 firms exist in the unorganised sector that operatesin a tierformat. The firms in this segment operate in low technology products and cater toTier I and Tier II suppliers and also serve the replacement market Around 4% of the companies operating in the auto component segment cater to 80% of the demand emanating from OEMs. Within the unorganised segment, apart from supplying in the aftermarket, a number of players are also involved in job work and contract manufacturing. The range of products manufactured, with each broad product segment having a different market structure and technology, has negated any possible concentration of the market in a few hands. The market is so large and diverse that a large number of players can be absorbed to accommodate buyer needs. However, there are a select few large companies that have integrated their operations across the value chain. The key to competing in this industry is through specialisation by producttype, and integrating operations across the related area of specialisation. An interesting insight provided by a study conducted by the National Council of Applied Economic Research revealed that the market segments for auto components included OEMs constituting 33%, local components having 25% with the balance 42% comprising of spurious market including reconditioned parts. A large part of the spurious or grey market companies are in the unorganised sector.
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The regional base of auto component manufacturers is mostly concentrated in the West, North and South of India.This regional concentration of auto component manufacturers has been dictated by the emergence of automobile manufacturers in these regions. The set up of Tata Motors, Bajaj, Mahindra & Mahindra and TVS in the 1950s and 1960s laid the foundation for auto component manufacturers in the West and South, whilst the entry of Maruti during the 1980s created the base in the North.
Industry Growth Production of auto ancillaries was estimated at US$10 bn in 200506 and has been growing at a robust 20% per annum since 2000. Exports of auto components have been strong growing at 24% per annum since 2000. This growth in exports if sustained for another five years will see Indias auto components exports will touch US$ 5 bn by 2011 from the US$ 2 bn at present. Till the 1990s, the auto component industry was solely dependent on the domestic automobile industry to drive the demand for ancillary products. This composition of themarket however is undergoing radical changes with global outsourcing gaining momentum. In recent times, exports has emerged as a significant driver of growth, and the demand emanating from global OEMs and Tier I manufacturers has opened new opportunities for the auto component industry in India. At the same time, a bright outlook for the domestic automobile industry also offers significant growth potential, given the fast rising income levels with a rapidly growing middle and high income consumers. Share of exports in total production has risen from 10% in 1997 to 18% in 2006. The composition of exports in terms of the proportion of OEM and aftermarket has also undergone a sweeping change since the past decade. The ratio of OEM to aftermarket has changed from 35:65 in the 1990s to 75:25 in 2006. While exports have been booming, there has been a sharp rise in imports of auto components as well, especially in the last three years. From an import of US$ 250 mn in FY03, they have gone up to US$750 mn in FY06. This is a healthy trend, indicative of rising domestic demand.
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Investments Since 2000, the auto component industry has recorded an investment level of Rs 18 bn and has attracted US$ 530 mn in terms of foreign direct investment. Investments in the sector have been growing at 14% per year. In 200506, investments touched US$ 4.4 bn, and are expected to grow significantly in future. The Investment Commission has set a target of attracting foreign investment worth US$ 5 bn for the next five years to increase Indias share in the global auto components market from the present 0.4% to 34%. This is a sizeable target considering the meagre amount of FDI currently coming into the industry. The changing perception of global auto makers is however fast altering this scenario. With less than 1% share in the global market, India has tremendous potential to emerge as a supply base. Several global giants like Ford and Toyota have already set up base in India to source auto components. Outsourcing is fast catching up with domestic OEMs as well, with most Indian OEMs today sourcing nearly 7080% of their component requirements from vendors. This changing business scenario is leading to an inevitable outcome of consolidation within the industry. The takeover of Kar Mobiles by Rane Engine and of Gero Auto by Uma Precision are few instances. However, such mergers and takeovers will be few and far in between in the auto component industry, unlike the churn out anticipated in other emerging industries the principal factor being the vastness of the market and the range of products that need to be delivered. Rather than domestic consolidation, the general trend at present is for the large auto component manufacturers to establish a global presence. Top auto component manufacturers have already set up base in the global markets, especially in Europe. Overall, there have already been 16 acquisitions, with six made in 2005. The industry is the third highest among the Indian industries after IT and Pharma, in acquiring overseas assets. These acquisitions have largely been in Europe and the USA. This trend has been possible as the auto ancillary industry in these countries have been collapsing, thus making it affordable to acquire these companies. Nevertheless, this will provide a base for Indian companies to access the European and American markets. Indian auto component companies are also setting up bases in other emerging economies, who are potential competitors, for instance, Sundaram Fasteners greenfield facility in Zhejiang and Bharat Forges joint venture with the Chinese automotive major FAW Corporation.
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Another auto component manufacturer with plans to enter China is PMP Components, which intends to set up a sourcing base to establish itself as a low cost supplier. These trends are indicative of the changing business environment in the country. Top auto component manufacturers are gearing to take big risks. Their crossborder vision has established them as global companies. Though the goingglobal phenomenon is limited to a handful of companies, the smaller companies are also indirectly gearing to this trend by entering into formal manufacturing contracts and specialisation.
Prospects Looking forward, the industry displays tremendous potential in generating employment and boosting entrepreneurship in the country. The spate of new investment plans announced by global and domestic automobile manufacturers promises the emergence of India as a global hub for auto components. The industry is transforming, and the boost in demand will see the emergence of several new players in the industry. The vast market for auto components, and the diverse products and technology involved ensures a place and role for many. At the same time, the entry of several global automobile manufacturers will bring in more regulation into the industry and see a pruning of the spurious market. Among the smaller players in the unorganised segment, this implies moving away from being standalone companies, to entering into either contract manufacturing or being ancillary units. The newly defined rules are specialisation, development and delivery that hold the key to success in the auto component industry.
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Foreign Acquisitions by Indian Companies
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SMES IN THE AUTO COMPONENT INDUSTRY

The division of production processes and outsourcing among global automobile manufacturers has led to a major reorganisation of the supply base within the automobile and auto component industry. This new business model being followed by global companies holds tremendous potential for the growth of small and medium enterprises (SMEs) in India. Defining SMEs A welldebated issue, the definition of small and medium enterprises in India was very recently ratified. The Micro, Small and Medium Enterprises Bill, 2006, which is likely to take effect from October 2006, define the segment on the basis of investments in plant and machinery. Small enterprises are those with an investment of not more than Rs 50 mn in plant and machinery, and medium enterprises with an investment of over Rs 50 mn but less than Rs 100 mn in plant and machinery. This definition has finally put the segment within a legal framework. The traditional small scale industries have been in focus since Independence. The medium enterprises are recent entrants, and part of governments policy focus l ately. The small scale segment is a manifestation of Indias socioeconomic development model and has met with the countrys longterm expectations in terms of contribution to GDP, industrial base, employment and exports. This segment forms a major part of Indias industrial base. Recognising the importance of SMEs in the industrial development of the country, the Government has initiated a range of programmes in diverse areas, viz. financing, technology, innovation, market information, technical training and developmental assistance. These initiatives are important in facilitating the growth of the SMEs. But it will be the internal dynamics of industries, and the path Indias industrial development takes, that will give a thrust to the emergence of SMEs. The auto component industry is one such sector that would give a major boost to SMEs.
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SMEs in Auto Components Auto component SMEs are one of the fastest growing within the SME category of industries. These units are key contributors to the total production of auto components and also have a significant share in the exports of the industry. As part of a highly fragmented industry, these companies mostly are part of the unorganised sector. They operate in a tier framework, and most of the companies in the SME segment are in the Tier II or below. Few of the suppliers to OEMs are medium scale enterprises. The SMEs are riding a boom phase, driven by demand from global auto manufacturers. The industry is undergoing a major restructuring and many existing companies are expected to move up in the value chain to a higher tier. Nevertheless, sustenance and survival still remains an issue of concern for these companies as they will have to absorb global best practices in this competitive environment. Cost competitiveness, customer orientation, lead time, are some key factors the auto component SMEs will have to imbibe to survive in the new global setup. At the same time,these companies face the limitations of being SMEs, like 1. Low capital base 2. Limited generation of surplus funds for reinvestment due to tight working capital cycle 3. Lack of awareness of business opportunities 4. Inadequate exposure to international environment 5. Limited geographical diversity of markets 6. Obsolete Technology 7. Poor infrastructure facilities Despite these limitations, the SMEs have managed to significantly contribute towards development of Indias industrial base. The key risks that the auto component SMEs faces include: Fluctuations in the cost of production; especially raw materials like steel,
aluminium, polymers 1.Poor negotiation powers due to fragmented nature of industry; which in turn limits their pricing power 2. Dependence on traders and agents to access overseas markets which threatens their competitiveness 3. Product substitutes due to fastchanging technology
Addressing these challenges and risks will be crucial to promoting SMEs in the auto component industry. The government has initiated clusterbased development geographical concentration of enterprises having similar lines of business which gives rise to external economies and favours emergence of specialised technical, administrative and financial services. This form of networking of small firms is a means of achieving economies of scale. Extending this intitiative further, the government is encouraging banks to adopt a clusterbased lending approach to ease availability of funds to SMEs. Multinational automobile manufacturers like Magna International of Canada, Delphi and Ford of US and some European companies have announced plans to enter the Indian markets. This bodes well for the auto component industry as it would enable the collective development auto component SMEs. This will bring in better technology, skills, new products and an assured market. Strategic tieups and contract manufacturing is another way forward for SMEs in the auto component industry. Looking forward, it is the best of times for Indian auto component manufacturers. The outlook for the industry is bright and is expected to continue on a highgrowth trajectory for the next 10 years. Capitalising on this growth prospect will mean keeping pace with global developments and imbibing capabilities that will give an edge to Indian SMEs in surviving this rapidly changing competitive environment.
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Auto Component Clusters in India State No. Andhra Pradesh 1 Delhi 1 Gujarat 5 Haryana 3 Jharkhand 1 Karnataka 2 Maharashtra 5 Madhya Pradesh 1 Punjab 4 Tamil Nadu 1
FUTURE OUTLOOK Current trends indicate a smooth run for the auto component industry. In fact, since 2000, this is one sector which has made a global mark and has been identified as a sunrise industry. The industry is transforming from being highly domesticcentric, to a force ready to face global competition. The factors that will drive growth for the auto component industry are: 1. The growth expected in the domestic automobile industry will give a fillip to the auto component sector. The Indian automobile industry offers great potential considering the low penetration along with rising income levels and a rapidly growing middle class. These factors will see a boost in demand for vehicles, especially passenger cars and two wheelers. These two segments are estimated to grow at between 1012% for at least the next five years.
2. The entry of global OEMs, making India as their manufacturing base, has given a big boost to the industry. For instance, Skoda plans to source parts for its European operations from its Indian base and raise indigenisation level for Indian models to 70%. This trend has also enabled Indian companies to gain a competitive edge in the global market. Further, the model of clusterbased development prominent in this sector will provide economies of scale. 3. Export of automobiles has also emerged as a key component of growth. Rising exports of Indianmade vehicles like M&Ms Scorpio model, Bajaj Autos Bikes, Tata Motors City Rover are indirectly increasing the demand for Indian auto components. Also, the export of Indiamade models of global OEMs like Hyundais Santro Xing and Suzukis Alto has given a boost to the industry.
1. Deregulation and the Governments policy initiatives have facilitated growth and focus has now shifted towards attracting foreign direct investments. Also, the Governments initiative towards road development will give a boost to demand for vehicles and indirectly auto components. 2. The Governments initiatives towards opening up channels of finance. 3. Investments coming in for research and development will keep the industry abreast of the latest technology.
Entry of global OEMs has transformed the Indian automobile and auto components landscape. India is being perceived as a major market for cars and two wheelers by global OEMs. Before the end of 2006, at least 30 new car models are expected to be launched by foreign OEMs. These factors portend a robust auto ancillary industry in India and the overall expected good growth will provide several opportunities for the emergence of new enterprises. Extending their reach to global markets is the predominant outlook among the top auto component manufacturers in the country. The vision to compete globally comes from
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the inherent strengths the Indian auto component industry possesses. Some features are: 1. Cost reduction of 2530% in production in the domestic market compared to overseas 2. Low labour costs 3. Designing, engineering and technical skills 4. Established quality systems 5. Availability of raw materials 6. Adaptability to new technology 7. Investments in research and development, coming in from global OEMs. This stands out positively in favour of India. Key players are not only willing to invest in R&D but also in mechanical and engineering operations. These investments are expected to increase in the near future Though India rides on these inherent strengths, a few risks exist that the auto component manufacturers may have to confront.
1. A global slowdown can derail the prospects of the industry. 2. Volatility in the prices of metals and other inputs could erode the industrys cost competitiveness. Further, global OEMs expect a commitment of 510% reduction in prices every year. 3. Tier I manufacturers taking up greenfield projects overseas. 4. Intense competition from counterparts in other emerging economies may add pressure on margins of manufacturers. The Indian auto component industry is poised for robust growth till 2010. There is a perceptive exuberance in the industry and growth estimates indicate a booming industry.
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Going by current trends in production and exports of auto components, indicate a doubling of the domestic auto component industry by 2010. The production of auto components could grow to US$22 bn by 2010. Similarly, Indias exports of auto components could grow to US$4.5 bn as compared to US$1.8 bn in 2005. Expected growth in production and exports of auto components is shown in the graphs below. This growth outlook implies opportunities for the small and medium enterprises. The overall trend is encouraging, but remaining competitive in this changing scenario will be the toughest challenge. The combination of low manufacturing costs along with quality systems would give an edge to companies in terms of pricing and quality. Expansion and diversification will help break into new markets. It would be imperative for these companies, which are largely based on traditional management practices, to imbibe technology in a big way. The SMEs can exploit these opportunities through joint ventures, collaboration and technical tie ups. Knowledge, specialisation, innovation and networking will determine the success of the SMEs in this globally competitive environment.
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SUSTAINABLE PRODUCTION IN AUTOMOBILE INDUSTRY
1. Sustainability Issues in Future Automotive Manufacturing When discussing sustainability issues in automotive manufacturing, several levels of analysis have to be pursued. On the one hand, within a time period up to 2020, a different approach to mobility might have changed personal cars in many ways. Anticipating these changes and their effect on manufacturing is certainly an important part of ensuring lasting competitiveness and sustainability of automotive manufacturing in Europe. On the other hand, it is clear that there are several developments under way in automotive manufacturing today which will affect environment and socio-economic structures in a lasting manner. Accordingly, to discuss these kinds of issues is of major importance when determining needs for R&D support for sustainable manufacturing. The automotive expert group at the scenario workshop gave due consideration to both perspectives by looking at effects of different baseline scenarios on manufacturing on the one hand, and naming trends arising from current developments on the other. In this section, we will also point at both perspectives. On the level of corporate strategies, the communication of environmental and social consciousness seems to be a must. Automotive companies are leading in several sustainability initiatives, like: certification according to ISO 14000, environmental reporting (e.g. within the Global Reporting Initiative), commitment to CERES principles and participation in the World Business Council on Sustainable Development. At the same time, cost and functional issues are the main arguments when it comes to business decisions about product and process innovations. Although the overall commitment of the top-management to sustainability certainly strengthens the backbone of the many individuals in the companies aiming at increased sustainability, the general diffusion down the management levels and the supply chain is by no means comprehensive. Actually, it seems to have slowed down in recent years.
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1.1 Current Environmental Issues in Car Manufacturing Although manufacturing of personal cars is not particularly environmentally problematic, the high manufacturing volume of the sector results in major impact on the environment.
The main issues that are raised in this context are: recycling/saving of resources life-cycle assessment emissions (primarily from coating and painting)
From the interviews with automotive experts, it has become clear that most of them considered environmental aspects in manufacturing not primarily driven by consumer demands. It was stated that environmental awareness has been rising for a time but is now declining again. Individual features are considered as more important for consumers. In addition, it was reckoned that it is too difficult for customers to differentiate between more or less environmental friendly produced cars. Therefore, environmental regulations which are numerous and tight in automotive manufacturing are perceived as the main drivers of environmental improvements in car manufacturing. Most publications dealing with environmental issues concerning personal cars as well as the environmental reports from automotive manufacturers are focussing on the environmental impact of the vehicles use phase while touching only slightly on manufacturing issues. However, most car manufacturing companies are introducing more topics related to manufacturing in their environmental reports and projects like the UNEP mobility forum are discussing the subject. 1.1.1 Relevant Legislation There is a large variety of special regulations directly aimed at car manufacturing. Furthermore, car manufacturers are affected by several general regulations concerning manufacturing.
An important European directive for the automotive industry is the European Union Eco Management and Audit Scheme (EMAS), which has been revised and newly implemented in April 2001 (EMAS II). EMAS is a tool aimed at encouraging companies to continuously assess and improve their environmental management and processes. It is one of the instruments aiming at implementing the strategy of Integrated Product Policy (IPP), which is concerned with cost effectively reducing products impacts throughout their life-cycle. Accordingly, IPP is an instrument that integrates product and manufacturing aspects. Another world-wide instrument is the ISO 14000 standard. Both management systems are in place with many international automotive manufacturers.38 Some automotive OEMs such as General Motors require ISO 14000compliant Environmental Management Systems to be implemented from their first tier suppliers. The automotive industry is heavily affected by the EU water regulations that were implemented in December 2000. According to the German association of car manufacturers some substances used in car manufacturing (like chlorinealcanes used as lubricants in metal processing) have to be replaced due to this. Another subject where European legislation is influencing the automotive sector is waste disposal. In the light of the expected increase of electronic components in personal cars, it is to be expected that the question of electronic waste will be of growing importance for car recycling and disposal. At the moment, electronic components in cars are treated by the car take-back directive. This means that they are not counted as electronic waste but as part of the car. The Directive on integrated pollution prevention and control (IPPC) is expected to become another important driver for the installation of environmental technologies in car manufacturing. The IPPC is regulating how operators of industrial installations must apply for a permit based on BAT (best available techniques). National, international and EU regulations aiming at reducing Volatile Organic Compounds (VOC) emissions are heavily influencing car manufacturing because of the high amount of VOCs generated in paint shops.
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A major driver for environmental design issues in the automotive industry is the end-of-life vehicle directive under which car makers are required to provide for free take-back of new vehicles from the 1st of July 2002 and of all vehicles from the 1st of January 2007. Furthermore, certain shares of utilisation are determined: In 2015, 95% of a vehicles weight has to be utilised. From this share, only 10% thermal utilisation will be allowed and the rest has to be material recycling. An ISO norm is being developed to calculate recyclability. To comply with this directive, product and process design methods have to be reviewed with respect to recycling. 1.1.2 Recycling and Re-Manufacturing Recycling of cars is a major concern for sustainability reasons. The aim is to save material and energy resources as well as to reduce landfill through waste disposal. Though it is generally acknowledged that recycling will gain in importance, the extent of this is very much depending on the political and societal background. The scenario automotive group is expecting the possibility of breaking the link between growth, use of resources and generation of waste only if a very high level of shared responsibility between individuals and government will be reached. Only in this case, product and process design will be guided by the precautionary principle. Closed-loop production and supply chains will be priorities for manufacturing process innovation. Life time control of the product is then reckoned to become a very prominent feature. Nevertheless, reuse and recycling of resources are also pursued by manufacturers for reasons of cost reduction. Major savings can be achieved through lowering energy and material use in manufacturing by application of recycling concepts. Accordingly, cost considerations as well as the necessity to comply to tightening regulations has driven most car manufacturers to initiate research projects on recycling issues like dismantling technologies, recycling friendly design or biodegradable materials. Considering the prominent influence of legislation on the direction of environmentally beneficial innovations, particular care has to be taken that the effects of regulations are matching their objectives. This is especially important at the moment with respect to the European directive for car recycling and take-back.
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A crucial political issue with respect to overall sustainability in the context of the EU directive is the possible competition between the recycling approach and the development of other concepts of the use of cars like intensification or prolongation/ durability. Depending on the way the European directive is specified and implemented it might be disadvantageous to such concepts as well as to the use of biodegradable and renewable material. It has to be taken care that the new rules do not hinder promising innovation paths towards improved sustainability of the automotive system. As the FutMan project is explicitly focussing on ways to enable sustainable manufacturing in Europe, we have taken particular care to extract information with respect to recycling and remanufacturing issues in our interviews as well as in our literature survey. Several of the results regarding specific topics have been mentioned in the preceding sections. However, there are some general findings which we think are important to be taken into account in R&D funding in the automotive sector: 1.There is no one best way of recycling but a diversity of concepts suitable for different contexts. Alternative solutions have to be carefully evaluated against each other with respect to different criteria. 2.Recycling/remanufacturing issues have to be integrated into every research project (e.g. materials research or process research) instead of being investigated in isolation. Furthermore, it is highly important to integrate these questions from the start instead of leaving them to the final research stadium to avoid end-ofpipe solutions. Choice of materials and manufacturing processes (especially joining methods) are heavily determining recycling/re-manufacturing possibilities. 3.Knowledge about the recycling impact of design decisions has to be gathered in a comprehensive way and spread on every level of car manufacturing. Several experts expressed their will to implement recycling friendly design wherever possible but pointed out the lack of consistent and operable information. Therefore, methods and tools for Life cycle assessment are strong enablers for recycling 4.The fewer materials that are used in a product the better it is for recycling. 5.Labelling concepts for products, parts and materials are important for recycling. As labelling of products and parts is also being investigated for safety and liability
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reasons and for adding special features to products, there seems to be a good opportunity for integrating recycling demands via strategic funding. Nevertheless, in current labelling projects, this is usually no real issue. Moreover, there does not seem to be any connection between the above labelling attempts and the many approaches to fulfil information needs for manufacturing planning and control purposes. Integrating these different attempts to provide partly the same information for different purposes holds potential for synergy effects. Another topic that should be thought of with regard to recycling is the co-operation between actors along the value chain. Concepts for recycling have to be developed between several partners. Suppliers play an important role here, e.g. by submitting information on their parts but also as initiators of recycling concepts for their modules. Virtual reality laboratories could be an enabler for co-ordinating remanufacturing/recycling projects between actors. Care should be taken so that VR projects are directed at this issue. Furthermore, there are different organisational options for recycling activities to take place. Depending on the political and societal background, there might be more regional/on-site solutions or centralised concepts. A large variety of small firms specialised on disassembly and recycling or a monopolistic or oligopolistic recycling industry might evolve.
1.1.3 Volatile Organic Compounds Most of industrial volatile organic compounds emissions come from the car body paint shops in final assembly plants. They stem primarily from paint solvents (primers, lacquers, varnish), but also from cleaning and adhesion processes. Car manufacturers have introduced a number of solutions to reduce these emissions to comply with current legislation.42 There are different options like: 1.paints with a low solvent content, 2.water based paints, 3.powder coating technologies, 4.systems to treat the air in paint booths,
5.improvements of painting processes (e.g. introduction of robots), 6. solvent recovery, 7.aluminium casting instead of steel casting, 8.design to reduce painting altogether. Most of these solutions are used in pioneer applications and are not yet widespread in global production sites. Accordingly, VOC reduction in automotive manufacturing and its diffusion is still a major topic in order to reduce the environmental impact of automotive manufacturing. However, as it has been mentioned in section 4, radical changes in materials concepts like the use of new readily coated plastics or nanotechnology for coating might bring completely different solutions. Some developments in socio-economic background might change the need for colouring
1.1.4 ICT Enabling Reduction of Environmental Impact There is a high potential for ICT to help reaching environmental benefits in manufacturing in general and in the automotive industry in particular since a huge volume of materials has to be moved and processed. One of the areas where improvements are expected is logistics: Process reengineering for e-business can reduce material use and transport; unused stocks and warehousing can be reduced, better transport and logistics can cut the number of journeys etc.. Nevertheless, it should be noticed that a severe reduction of transport of materials and components can only be reached by manufacturing concepts that allow regionally adapted mass customisation. Furthermore, special software tools are valuable instruments for creating data collections, which are important for recycling and re-manufacturing efforts. A good example is the International Material Data System (IMDS) developed by a joint effort of several car manufacturers to store data regarding materials used in components to enable effective recycling.
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Another highly emphasised issue is simulation to aid process and manufacturing planning. With the aid of simulation, processes can be optimised with respect to energy and materials use. Model based control concepts can be implemented with the same objectives. Furthermore, digital prototyping reduces the need of material for physical prototypes of components as well as for processing tools. Although simulation and modelling are powerful enablers to reduce the environmental impact of car manufacturing, this aim is by no means automatically fulfilled when simulation is applied. It has to be made very clear that simulation will enable engineers to influence only those parameters that have been consciously studied in the modelling. To reach objectives like reduction of energy use by simulation efforts, it is vital to ensure that the modelling is including the relevant parameters. R&D support for modelling and simulation should therefore stress the importance of including environmentally relevant parameters into simulation models. Example from Fiat/Iveco46: Better process control during the machining and assembly of these new engines and the development of more effective procedures to test their performance lowered engine testing time to just two minutes compared with 30 minutes in the past. This improvement produced major savings in the consumption of energy and cooling water and helped reduce emissions into the atmosphere. While the improvements expected by ICT in car manufacturing mentioned until now have been of a more incremental nature, there are more radical changes associated with the role of ICT in new mobility concepts. For example, some mobility needs could be replaced by communication offers altogether
1.1.5 Life Cycle Assessment In the scenario workshop automotive group, life time product control is expected to become more important in cases where a high degree of concerted policy action is possible. However already today, it is often mentioned (e.g. by many interviewed experts) that methods of life-cycle assessment (LCA) are gaining in importance
very rapidly at the moment. This has not come up primarily for environmental reasons but for the sake of cost reduction. Costs that are expected at the end of product life cycles as well as disposal costs for by-products are becoming more important for customers. Through development of special calculation and software tools, it is sought to evaluate these costs early on. As mentioned above, these tools can be important enablers for recycling and other environmental concerns like reduction of emissions. This development is highly interesting for sustainable manufacturing.47 Similar to the area of labelling, it seems to be possible to strengthen environmental concerns by linking this objective with the development that is under way for economic reasons. For example, DaimlerChrysler has used LCA as a method to evaluate the environmental impact of a product throughout its life-cycle in the course of its Design for environment initiative. One element of LCA is the life cycle inventory, which allows manufacturers to obtain detailed information about material flow and energy consumption. Carmakers in Germany (Volkswagen) and Sweden (Volvo) have already implemented this approach and Volvo has published environmental product declarations with detailed product information based on extensive Life Cycle AsNevertheless, it must be recognised that LCA has been developed mainly for reasons of cost reduction. It is therefore necessary to broaden its specific perspective to optimise sustainability gain. It could furthermore be beneficial to add criteria arising from social sustainability to the evaluations. Accordingly, it seems to be worthwhile to promote life cycle assessment projects while at the same time ensuring that sustainability criteria are taken up in these projects. Another issue that needs support is the integration of supplier companies, especially SMEs, into LCA projects.
1.2 Possible Disruptions Demands on Manufacturing Arising From New Concepts of Mobility
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New Mobility Concepts: - For the automotive industry in the future it wont be sufficient any more to sell cars. Instead it will be necessary to provide mobility as a service.. - Mobility is understood as participation in a network, including communication functions. - The automobile together with other means of transportation is only one part of such a transport concept (for example supply of automobiles at railroad-stations). (Automotive OEM)
This case study is not the place for a detailed discussion of new concepts of mobility. However, when considering manufacturing in 2020, this issue can not be entirely omitted. In case of more disruptive changes in socioeconomic background (e.g. through extremely rising oil prices), it might well be that completely different ways of mobility provision will be arising. As is mentioned in the notes from the scenarios, a multi-modal mobility, with an emphasis on mobility service instead of car sale and a focus on public transport might evolve. Obviously, such a development will not be without consequences for the manufacturing of personal cars. For example, if the individual car loses its importance as a status symbol, the demand for more car variants will take completely different directions. For example, it might be very important for persons of different heights or different abilities to be able to use a car. At the same time, several features that are now enforcing complex manufacturing processes might lose importance. ICT technologies in order to connect to a system of mobility provision and to enable the change of modalities will be vital. Shift to public transport for long distances or severe restrictions on car speed might lead to a need for ultra light hypercars with less emphasis on crash safety. All these changes will significantly affect manufacturing concepts. Furthermore, the same driving forces that change mobility concepts are expected to drive manufacturing into localised concepts and closed loop production. All these considerations
are suggesting that policy makers aiming at changing mobility concepts should integrate manufacturing into their policy action. If process innovation is not considered together with product changes, manufacturing might become a major barrier for the realisation of new mobility visions. 1.3 Environmental Impact Some Possible Trajectories of Automotive Manufacturing Concerning manufacturing technologies, it is impossible to speak of general technological paths. However, regarding sustainable manufacturing in the automotive sector, we conclude from the outcomes of the strand reports, scenarios and this case study that three different trajectories are to be envisaged: (1) End-of-the-pipe perfection In this trajectory it will be sought to optimise current manufacturing activities in the automotive sector with respect to environmental impact. For example, advanced recycling technologies will be developed specifically for each different car variant, which has been designed following cost reduction and functional criteria. Car manufacturing will be highly reactive to product development. There will be diligent observance of regulations at each location but no proactive attempt to be ahead of legislation through completely innovative concepts. Manufacturing and mobility concepts will be linked through the number of cars that is ordered alone. (2) Life-cycle orientation In this trajectory an integrated planning of car-design and manufacturing processes with respect to sustainability concerns will evolve. Recycling and re-manufacturing issues will be considered in the planning of product and process at a very early stage. Questions of workplace safety and work quality will also be integrated from the start. This integration will be based on a very close co-ordination between process and product design. Advanced methods for product life cycle management will include environmental data. (3) Sufficiency turn In this trajectory a turn in consumer demands together with a concerted policy effort will lead to completely different concepts of use and production. Sufficiency will replace efficiency as the main strategy for producing and consuming. Concepts of take-back, re-use, rental systems and leasing systems will be dominating. Durability
of products and suitability for re-use will be important criteria for product development. Services will become the most important way of value adding. This will particularly affect mobility concepts and, therefore, manufacturing of personal cars. Furthermore, the way machines and plants are used and planned in automotive manufacturing will be different from now. Coming from a manufacturing perspective, which differs slightly from the view of scientific materials research, we are much more reluctant to define such definite relations between technological progress and sustainability gain. While it will often be true that advanced manufacturing processes will be more environmentally benign, there is no guaranty that this will always be the case. Sometimes advanced materials will be posing severe environmental problems. The environmental benefit of a new process or material can only be evaluated with a view on the whole product life cycle for every specific case. Nevertheless, there is one finding from the materials strand report we can clearly support from our results. The more it is possible to adapt materials and manufacturing processes to each other in a very early stage of product and process design the better sustainability issues can be integrated in a proactive way. New concepts of functional material design can therefore be a very strong enabler for sustainable manufacturing. However, their pure availability is no guarantee to their sustainable use. Here lies another big challenge for technology policy and R&D funding. For every regulating or promoting measure, it has to be carefully evaluated which of the trajectories outlined above it is promoting and to which developments it might pose barriers.
1.4 Social Sustainability Aspects Funny enough German manufacturing is competitive where wage costs are highest like in the automotive industry (Foresight expert) There are many aspects of social sustainability involved in automotive manufacturing. As the automotive industry is one of the main employers in Europe and to some extent a lighthouse with respect to manufacturing organisation, it is obvious that
changes in its manufacturing strategies are affecting working conditions in Europe in a special way. Furthermore, in automotive industry there is a long tradition of joint efforts between unions and management to develop advanced organisational concepts. Several aspects touching social sustainability issues have been mentioned in this report. The central topics were: 1.Relation between automation and material choice on the one hand and automation and the ability to manufacture at high wage locations 2.Necessity of adequate man-machine interfaces 3.Necessity to include local know how and experiences from all levels of manufacturing into modelling and simulation approaches 4.Necessity of proactive planning of development of workers skills and competencies 5.Conflicts between workers mobility and human demands on living conditions in Europe Some automotive OEMs are still partly owned by public authorities and there are many single plants which are of paramount importance for a certain region. In addition, strong employee representation as well as established labour relations support corporate social sustainability. Therefore, flexibility and personal development measures are often implemented with specific social concern and aims. Volkswagen for instance developed and realised a number of initiatives which were widely recognised: general working time reduction to avoid layoffs, VW Coaching (a training and temporary employment agency), Wolfsburg AG (a joint company of VW and the city of Wolfsburg to undertake regional development initiatives) or the 5000 x 5000 model to create new jobs especially for registered unemployed integrating specific training schemes.
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Technology Trends and Processing Advancement in Automotive Manufacturing

In the strand report transformation processes it was concluded that manufacturing is almost entirely reactive to developments in other areas instead of developing on its own line to a considerable extent as well. Particularly, manufacturing is driven by product trends on the one hand, especially new materials, and by demands from globalised markets like flexibility and increasing competition on the other hand. Both drivers are simultaneously shaping the development and adoption of manufacturing technologies. This is especially true for automotive manufacturing where several new product trends are arising at the moment and which is far ahead in the internationalisation of production. For analytical purposes we will first discuss technological trends driven by new features of personal cars. 80% of new developments originate from the automotive sector, thus this will be the driving force in the future (materials and mechatronics expert from applied research unit) The automotive industry is a prime sector in driving new technological developments. Because of its high R&D expenses, this industry is determining the directions of research in several areas. Accordingly, many of the technological developments that were outlined in the strand reports as well as discrete transformation processes are driven by the needs of the automotive industry or at least relevant for automotive applications. 1.1 Changes in Manufacturing Driven by Changes in Concepts for Personal Cars 1.1.1 Multi-material Processing The adoption of new materials in cars is a very important driver for the development and implementation of new manufacturing technologies in the automotive FutMan Project: Case Sector Report Automotive Industry/Personal Cars industry. This was stated by several of the experts as well as in the automotive group of the FutMan Scenario workshops. The variety of materials used in automotive design is steadily increasing and there
is a clear trend to use specific materials for specific purposes (multi-material design). Though the quantitative division between advanced and classical materials depends on the background described for the trajectories of materials development outlined in the materials strand report by CMI2, it becomes clear that hybrid materials and composites will increasingly be used in any of the trajectories. Another trend mentioned in the interviews and in the environmental reports of car manufacturers (though of minor importance in R&D expenditure) is the use of biodegradable materials to be used for interior parts. Though the trend to multi-material design or material-mix seems to be universally acknowledged and is expected to be increasing, it is by no means clear which materials will be the winners of this process. Instead it is obvious that there is severe competition between different kinds of materials to be used in cars especially in light weight construction (see 4.1.2). Associated with the current competition are powerful associations of material providers from different regions of the world. By the way, the steel industry and its aluminium counterparts are not co-operating but fight each other. (manufacturer of aluminium parts of the car) As each type of material is connected with specific demands on manufacturing processes, it is clear that competition between future materials will be accompanied by competition between manufacturing processes. In general there is a very strong need for processes that can be adapted to the needs of different materials and for machines that can be programmed or configured to perform different processes. In addition, there will be an increasing need for new ways of joining different materials. Accordingly, adhesives are expected to gain in importance in car manufacturing. For example, in the BMW 7 there is an increase of glue line from 8 to 150 meters from one model to the next.3 Newly developed adhesives that are resistant against oil are allowing the increasing use of this technology in car manufacturing.4 In addition to its suitability for multi-material design, adhesion is reducing weight and increasing stiffness. Especially photo-bondings (adhesives hardening under light) seem to be of growing interest Other promising joining technologies for different materials in cars like collar joining6 and different variants of snap fastening are arising. These processes are nonthermal, do not need any lubrication and can be combined with adhesives. Also coated materials can be joined.
As was pointed out in the materials strand report, the need for specific materials for specific functions will lead to an increasing integration of materials design into the design of manufacturing processes. Costs will be reduced by adapting processes especially designed for specific materials (see materials report prepared by CMI). There will be a simultaneous optimising of product, process and material properties. In this optimisation, modelling and simulation will play a very important role. A number of experts named the improvement of the interface between production, process and material properties via simulation as a prime research issue in order to enhance competitiveness of European car manufacturing. adhesion means application of additional material between components. This is problematic for material quality as well as for environmental reasons. Therefore (laser)welding of plastics is the better solution (manufacturer of machine tools for laser welding) From a recycling point of view, multi-material design is highly problematic. The more different materials are being used in a product, the more difficult and expensive are the re-manufacturing and recycling processes. Neither is it clear how different new joining technologies relate to recycling demands. Nevertheless, recycling can be enabled by some measures like labelling the materials used and consideration of re-manufacturing at the development of new joining methods. For example, some adhesives are loosening when heated and this enables easy recycling. This aspect should be stressed in any research support measure. Accordingly, joining technologies for new materials with a view to recycling ability were also considered as one of the two most important cross cutting issues for research priorities by the automotive group at the scenario workshop. 1.1.2 Processing of Lightweight Materials In order to reduce the fuel consumption, designers in the automotive industry are aiming at reducing the weight of cars as far as possible. By 2020, the weight of a car is expected to be reduced by 17% (250 kg).7 Accordingly, weight reduction is Mechanical process where a collar is produced in a sheet metal by pressing a punching tool through it. The plastic component can then be joined to the metal sheet by simple pressing (similar to clinch technology) one of the main drivers of material selection in automotive industry. The followingdevelopments are generally expected8:
Body-Exterior: use of aluminium, magnesium and plastics in the very near future Body-Structure: metal foams (2003), steel/aluminium-space-frame (2004), sandwich-structure (2005), composites (2006), plastics (2015). However, especially with respect to the body structure, it is by no means clear to what extent these advanced solutions will be applied. Some of these technologies might be confined to niche-cars and there are experts who reckon that the conventional steel frame will stay on the market for quite some time. When manufacturers have decided for a certain materials concept for car bodies, they are likely to stay with it for quite some time instead of switching to the next trend. The scenario automotive group expects a general increase in the use of aluminium and magnesium. Additionally, the emergence of other lightweight materials is expected in case the political background is characterised by a high degree of concerted policy. As of 2007 and onwards, coated and completely coloured plastics (fully recyclable) will have a breakthrough in personal cars ... This will need completely new competencies from designers. (automotive OEM) Magnesium While magnesium is considered to have increasing importance but is confined in its use for niche applications, aluminium is widely expected to be of growing importance in all areas of car manufacturing.9 However, some studies are expecting a rise of average magnesium share in a car from the current ca 2.3 kg up to 113 kg.10 There are advantages with magnesium such as the low weight (one third of the weight of aluminium), but also disadvantages such as high costs and safety problems in processing the material. Nevertheless, prices are expected to fall from around 2010 due to expanded use of resources in China. The introduction of magnesium-alloys will require completely new production technologies, for example, magnesium can not be formed easily(Materials and Mechatronics expert from research unit) Aluminium As the first car manufacturer, Audi started with mass manufacturing of aluminium bodies for the A2 in 2000.
Examples for advanced aluminium applications in cars: components processes Door: Range Rover, Opel Omega Audi A3 die casting, extrusion, press joining: mix from adhesion, welding, riveting, screwing11 laser-welding Motor parts sintering Full body: Audi A8, A2 hydro forming, laser welding. The use of aluminium depends very much on the development of adequate processing technologies. High investments are necessary to switch to a new material in car manufacturing. For example, it is reckoned that Audi planned for five years and invested more than 150 million Euros for their new aluminium manufacturing site. The aluminium car industry today would gain very much in competitiveness if the extrusion technology could be developed further and there are many aluminium automotive industries in Europe(aluminium parts supplier) For aluminium, the main processes being currently under investigation are: laser processing (detailed discussion see below), extrusion processes (see material strand report by CMI), hydroforming13, flow-forming (a kind of rolling which is done immediately after casting)14, compact-spraying (a powder-metallurgy process), foaming and sintering. From the environmental point of view, there are two aspects to be considered with respect to aluminium. On the one hand, it needs a high amount of primary energy for its production. On the other hand, it can be reused at a high energy level which gives it an advantage over plastics in recycling (magnesium has roughly the same advantage). Overall, with increasing taxes on energy use, aluminium is becoming a more expensive material. Extrusion of aluminium can be used in many areas where steel on the contrary needs to be welded together. Accordingly, aluminium profiles can have varying/floating thickness which is a clear benefit. (aluminium parts supplier) There is still a growing demand for low fuel vehicles in combination with recyclable materials.
Thermoplastics are light, strong and in this aspect good for automobiles but they can not be recycled. That is where aluminium comes in. It weighs a third of steel and even though thicker parts are needed than for steel, the total weight is much less.(company producing aluminium chassis) Steel Some interview partners pointed out that the variety of steel offered is steadily increasing which means that there is also a high potential for light weight steel applications in the automotive sector. In particular, highly compact steel products are competing with aluminium. Because of their high strength, their use is also inducing important weight reductions.15 In addition, steel is cheaper than many other materials and easy to recycle. The steel industry has started a special initiative to develop steel light weight concepts for cars and promote it to the automotive industry (ULSAC Ultra light steel auto closures). Plastics There is a heavy competition between plastics, composites and light metals to be used for several purposes in personal cars. Several car manufacturers have started to use plastics for parts of the body. There is particularly one possible usage of plastics, which could lead to a disruptive change for automotive manufacturing. If plastics can be coated and coloured from the beginning, paint-shops that today account for a substantial part of the automotive manufacturing process might vanish. Nevertheless, the use of plastics raises several questions with respect to recycling. To make re-use possible, it is important to use only a limited number of plastics and to label the components . Use of plastics will mean a complete restructuring of manufacturing. Issues like clean room manufacturing will arise. New joining technologies will be needed. Plank concepts will have to be adapted. Automation will be much higher. (OEM manufacturing planner)
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Other materials Hybrid materials like foamed metals are also expected to gain importance but composites and hybrid materials are generally difficult to reuse. It is therefore recommendable to integrate recycling considerations into research projects dealing with light weight construction, just as for multi-material processing. Regarding new materials, as one of the interviewees pointed out, there are several possibilities for weight reduction that have not even been investigated by now because of high costs. For example, titanium has a high potential as a light weight material but is much too expensive at the moment. Another promising material that is considered for automotive applications only in very pre-application projects is carbon composite, which is expected to bring weight reductions up to 40%. Laser The necessity to use plastics, hybrids and composites has brought about a variety of new processes. A key technology for processing light weight materials is laser processing. Laser welding has revolutionised the manufacturing of cars as several materials can be welded with a high degree of safety and exactness. The application of laser welding in serial manufacturing is rising at the moment and is expected to be further expanding according to literature as well as by several of the experts interviewed. While laser welding and cutting of conventional blank sheets and laser cracking of motor parts are already widely implemented, the processing of innovative materials like foamed metals is currently under way. Application of laser technology to plastics and composites as well as to several alloy metals and hardened materials is heavily investigated at the moment and even processing of copper for electronics applications is considered. For example, regarding plastics, VW is using laser welding robots for cutting covering plastics. Automotive suppliers are increasingly using laser welding for plastic housings (e.g. of electronic components). Furthermore, laser soldering and laser welding for micro applications like sensors are being tested. For all these advanced applications, process control and quality control are key issues. Digital image processing is essential for testing welding seam quality.18 Sensors are of high importance to enable such control concepts as a variety of parameters
have to be surveyed with a high degree of exactness. Furthermore, new kinds of laser sources have to be investigated to allow further applications. 16 The EU project Tecabs (Technologies for carbon fibre reinforced, modular, automotive structures) which is co-ordinated by Volkswagen is dealing with this issue. Laser technology for joining materials. To some extent it is available already today, but it is very expensive. This will develop in the future and will result in decreased usage of material since with this technology, two materials (or pieces of materials) can be joined lying next to each other without overlap (which is the case with todays joining technologies). (Automotive systems supplier) Apart from the mentioned positive aspects on safety, laser technology is also advantageous for high degrees of automation (see below) and supports process integration. Furthermore, it is extremely fast and flexible. Because no tools are needed, there is no wear out. Laser technology therefore seems to be a key process for competitiveness of manufacturing of personal cars in Europe. Lightweight construction is driven by the need for highly automated production at high wage locations (OEM manufacturing planner) As one expert mentioned, not all manufacturing processes are equally easy to automate and therefore suitable for production in high-wage locations (see also strategies section). Therefore, choice of materials which go along with certain processes has an impact not only on the nature of the jobs in car manufacturing but also on the location of these jobs. The expert thought the application of highly automated light weight manufacturing essential for the survival of European car manufacturing.
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Conclusions In summary it can be concluded that there is a multitude of trends in light weight construction and that some developments are heading in different directions. At the moment, it can not be foreseen in which state light weight construction in car manufacturing will stabilise. Nevertheless, it is clear that the direction of change will have major impacts in the following areas: car manufacturing processes and therefore on the opportunities for machine tool manufacturers and automotive suppliers recycling possibilities and environmental burden employment issues Accordingly, there is an urgent need for innovative concepts for light weight design and manufacturing that takes into account the whole vehicle life cycle including manufacturing. Therefore, in the interest of competitiveness and sustainability, it is highly recommendable to investigate this area more closely. The high degree of uncertainty at present about life cycle developments at the same time makes it possible to actually affect developments in this area. For example, it might be worthwhile to invest into one of the more far reaching alternatives instead of risking a lock in into half-way solutions. At the same time, some solutions that seem to be very advanced with respect to weight reduction might lead to outsourcing of manufacturing operations or bring up new recycling problems. 1.1.3 Possible Adoption of Nanotechnologies In the materials and transformation processes strand reports, future applications of nano-science were discussed in detail. Several of the applications named there are of relevance in the automotive industry. As sensor technologies are considered to be of high importance for the cars themselves as well as for manufacturing processes19, nanotechnologies that enable smaller sensors with higher sensitivity would allow for major progresses in the automotive sector. Example of applications mentioned by the experts were how sensors could be used to tell the driver when he comes too close to the car in front of him and when to brake or not etc.
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Other impacts are expected with nano-powders20 that help to improve powdermetallurgy methods. This would certainly have an effect on the industry since powdermetallurgy is widely expected to be increasingly used in car manufacturing. Nevertheless, is has to be diligently considered if or how nanopowders can be recycled. If this issue can not be solved, these methods are not likely to be taken up in the automotive sector since there is a strong pressure to recycle large parts of old cars . In the interviews, the main issue raised in connection with nano-technology was coating and painting. The majority of the automotive experts that were interviewed expected applications of nanotechnology in car manufacturing in the time period up to 2020 in this area. New coatings for chassis and body as well as for other parts, which would result in harder and stronger material would at the same time allow for thinner materials and, thus, lighter cars. There is a major effort of car manufacturers to replace current coating methods to reduce VOC emissions (see all environmental reports listed). Several car manufacturers have developed alternatives to classical painting methods, but most of them are still difficult to apply universally. Therefore, the use of nano-coatings, espe19 This was pointed out especially in the strand report transformation processes. 20 A detailed explanation of nano powders can be found in the strand report materials especially for plastics, is highly interesting. Furthermore, nano-coatings are expected to bring new improved surface quality and to add interesting features to the surfaces. Examples for this are: Dirt repellent coatings for lights and window screens Self cleaning coatings Shining foils Tire coatings improving adhesion Moreover, with nano-coatings used to improve tooling, as was suggested in the strand report for transformation processes, this will be of high importance to the automotive sector due to the fact that new tools are needed to meet the increasing demands on fast processing of different materials. New tool coatings would be even more interesting due to cost considerations as well as to environmental concerns if coolants or lubricants can be avoided or reduced through their use.
1.1.4 Manufacturing and Emerging New Concepts in the Power Train The car industrys answer to the request of making the transport system more sustainable is not least the development of new propulsion systems. There are several directions taken, from the incremental innovation of the traditional combustion engines via the use of alternative fuels like natural gas and synthetic as well as renewable fuel up to electrical power using hybrid concepts. The most radical and increasingly probable change is the use of fuel cells. Therefore, in the following, changes and challenges connected with this innovation are elaborated. The fuel cell implies considerable technical changes throughout the sector and this will also have far-reaching impacts on the related equipment producing industries concerned with the motor and its periphery (cf. Wengel/Schirrmeister 2000). The drive train and motor accounts for around one third of the value of a car. Demand will tend to shift away from mechanical parts such as crankshafts, cylinders and pistons, towards process-technical and electro-technical components such as electrical motors or gas generating equipment. There will thus be completely new manufacturing processes for car engines. An important question is how the traditional innovation partnerships between automotive companies and machine tool manufacturers will react to that challenge. These co-operations mark a leading edge of machine tool innovations and are also a stronghold of European manufacturing sectors. The changes in components will have an effect on the production methods used Particularly those production methods required in the combustion engine (because of strain due to temperature and rotation, such as die casting, grinding and honing), will only be necessary to a smaller extent in fuel cell drive systems. Other technologies will grow in importance, for example, punching could be used in the production of the stacks for the fuel cell and the gas production unit.
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CASE STUDY ON MARUTI UDYOG

Abstract
The present era of globalization, modernization and developmentis the resultant of extreme exploitation of natural and human resources in developed as well as developing countries. But the scarcity of these resources lead the business or corporate world to explore the methods of handling and exploiting them to fulfill the current and future needs without any compromise. Therefore, being sustainable is becoming the most important factor for any developmental process. As manufacturing is also viewed from broader perspective of sustainability these days, so manufacturing companies are also pushing them to achieve various dimensions of sustainability, such as social, economical and environmental. Sustainability, in case of manufacturer, is measured by evaluation of products, processes or systems that effect its operations. It requires assessment of all the factors that affect the manufacturing facilities and then developing strategies to reduce their impact. Therefore, the manufacturing companies are always under pressure to develop strategies to allocate their resources efficiently, because of increasing prices and competition. As traditional approach related to quality and price can not be ignored, the manufacturers are intensely focused on areas like energy, water, emission, waste, production, awareness, etc. This paper reviews sustainability manufacturing practices and initiatives taken by Maruti Udyog Limited in this field.
I.
Introduction
Traditionally, the manufacturing system was assumed to be sound if it can provide opportunity for continuous improvement, hence results in increase in production and operational quality. In such a system, the production system was designed to improve process capability and operational performance. However, the proper attention was paid towards product nonconformities and process off-specifications. The reason behind was, this kind of system resulted in lesser waste and emissions due to reduction of rejected parts. The manufacturing companies were only emphasizing on good quality in lesser price and
optimal use of resources. As it is rightly said, for these kinds of manufacturing units by David C. Korten that Economists know the price of everything and the value of nothing . Therefore, now days, manufacturing system is viewed from different perspective. Revolutionary production-systems thinking directed at the identification and elimination of all forms of non-value added activity, or waste, from an organization]. The manufacturing systems need to be designed for value creation. As said by Henry Ford, If it doesnt produce value, its waste So, it directs an organization towards the waste elimination from all the sources. Because, manufacturing industries are additionally under the economic pressure to compensate increasing cost and create adding value . So, it has become necessary to design products as well as processes for value creation. Besides value creation, the manufacturing systems are viewed from the broader characteristic of sustainability these days. The idea of sustainability has come to represent the rising expectations not only from economic viewpoint but also from social and environmental performances of manufacturing system . So, the manufacturing system is not only limited to value creation but to sustainable value creation. That means the manufacturing companies are finding their way to sustainable development by using methodologies of increasing the efficiencies (economic, ecologic, social) into the production system by producing products with less energy, less material, and less pollution .Some of objectives of a sustainable manufacturing system can be, Improving resource efficiency and waste management Examining the product life cycle involved in manufacturing. Trying to ensure economic growth minimizing environmental pollution. Examining how to stimulate innovation and investment to provide cleaner technology Providing awareness and training to employees. This paper compares quality with sustainability and reviews the concept of sustainability in reference to manufacturing and concludes with the sustainability practices adopted by Maruti Udyog Ltd.
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II. Quality Vs Sustainability

According to Caplan (1990) Quality is process dependent which means that the quality can be attained by effective product and process design . Deming, Juran, and Crosby, made the claim that quality programs would increase efficiency, rather than just raise costs. Crosby's famous words that Quality is free. made the important point that businesses can make breakthroughs by seeking quality . According to Feigenbaum (1991), "Quality is the most cost-effective, least capital-intensive route to productivity.". Thus, quality and productivity objectives are not different according to traditional view. But sustainability takes quality thinking to the next level to include creating a healthier, safer society by integrating environmental concerns into manufacturing and design efforts.
III. Sustainability
World Commission on Environment and Development defined sustainable economic progress as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" .Elgin also observes, if we do no more than work for a sustainable future, then we are in danger of creating a world in which living is little more than only not dying . It has been said because; our ecological demands already exceed what nature can supply. This ecological overshoot means, the stock of natural environmental capital is depleting. Therefore, business enterprises need to grow at least enough to keep pace with the economy, but defining growth and the ways & means of growth need to change. Earlier, the industries were only limited to environmental laws and regulations set by Government bodies. Traditional understanding of environmental management was limited to cleaning up the mess after production is completed. Environmental management in many companies is oriented to compliance, remediation of contaminated land, and reduction of targeted hazardous materials. Then, they start talking only about green production which was only limited to eco friendly products and processes. It is a very proven fact that eco-factories are not only the solution if they are producing the unsustainable products . Therefore, companies are proactively coming forward to develop sustainably. Many of these companies are now going beyond
environmental performance and are now beginning to discuss sustainability. Sustainability pushes the environmental envelope and challenges companies to consider issues such as the environmental impact of the materials they select, the social implications of their products and operations, and in some case the need for their product at all . However, successful sustainability initiatives often require fundamental product redesign and operational rethinking . Therefore, achieving solutions to environmental problems that we face today requires long-term potential actions for sustainable development . In long term, sustainable enterprise resilience can be defined as the capacity for an enterprise to survive, adapt, and grow in the face of turbulent change, and at the same time, to increase shareholder value without increasing material throughput. Sustainable enterprise resilience within the framework of industrial ecology creates multiple business opportunities through green technologies, reduction of raw material and energy use. In Figure below, the holistic view of production system has been given. If the overall effectiveness of the industry has to be improved then the company has to pay proper attention towards economic, ecological and social factors of production, which in return result in sustainable production.
Efficiency and sustainability.

Concepts that are discussed above guide sustainability practices at multiple levels. Firms use these frameworks to motivate sustainability initiatives, to educate employees, and in decision-making. Viewed together, these frameworks can guide firms in encouraging and launching sustainability initiatives, in evaluating their success, in integrating environmental considerations into the allocation of resources, and in designing products to gain competitive advantage from sustainable business .
IV. Case study of Maruti Udyog Ltd.

The products of automobile industry touch daily lives by providing personal mobility for millions. But there are some challenges that are faced by the industry such as deterioration of local air quality, global warming and the treatment of scrapped vehicle. Every automaker has worked in the direction to save environment and the considerable improvements are also made in this direction. As there are competitive pressures to reduce cost, the automakers are driven towards resource productivity and minimization of waste to achieve economies of scale. A recent World Energy Council (WEC) study found that without any change in our current practice, he world energy demand in 2020 would be 5080% higher than 1990 levels. Maruti Udyog, Indias leading automaker whose parent is Suzuki from Japan, has also paved its way towards sustainable development by incremental changes in few things that resulted in big savings. Last year Maruti ran program to reduce part of each component by 1 gram. Interestingly, Maruti has reduced its electricity consumption per vehicle by 20 per cent in the last nine years, water consumption by 46 per cent, and land fill waste by 67 per cent. The carbon dioxide emission has declined 27 per cent in seven years. It has become a zero discharge company and recycles all its water . The small car named A-Star, which is global car of Maruti, is designed in such a way that 87 per cent of car can be recycled as explained by European regulations about the concept of endof-life-vehicles.Therefore company bagged an order of 35000 A-star from Nissan in Europe recently .In this direction, Maruri has taken some other initiatives towards sustainability, which are,
When the Indian market was offering only two tube light configurations i.e., 42 watts and 36 watts, Maruti tied up with a small manufacturer for 28-watt tubes. In the factory there is provision for three CFL lamps and company managers realized that the room would have enough illumination with two lamps of 36 watts in each holder. So the third lamps were taken out. This seems to be a small step but if we look towards energy savings in a year time, and then they are huge. In the assembly line, where axles are installed, the components are placed on an inclined bar on which they slide towards the worker due to gravity which helped in eliminating the use of conveyor belts. Water pumps in cooling towers were made to consume less electricity by slightly reducing the size of the impeller. The power supply of machines, that run intermittently, was cut to save energy. The compressed air used to run various tools used to go into the shop floor at 28-29 degrees centigrade allowed to rise its temperature to 32 degrees because of no harm. Earlier waste water from all sources was dumped into Government sewers, for which company was paying Government. But now after the improvements in treatment processes no sewer is discharged into Government sewers and all waste water is recycled by the company. Company has used steel crates rather than wooden or board packaging for storage and transport of components coming from Japan. After use the steel crates are folded and sent back for reuse. The thousand of parts coming.
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PRODUCTION PROCESS IN MARUTI SUZUKI

The production process in maruti Suzuki is set. It works on assembly line processing and involves the following steps-
Blanking Stamping Welding Painting Assembly Final Inspection Blanking:: making of blanks from steel coils by blanking process. Stamping:: making of panels from blanks by stamping. Dies: to give shape to the car models. Welding:: making of body parts-chassis,doors. Robots: spot welding (15 number of spot weldings..) White body: completely welded white body.
Cathode electro deception- (paint area): 1st coat of paint on white body-1st coat is same for all body.
Intermediate/top coat: (computerized) 2nd & 3rd coat after 1st coat.
Heating zone in paint shop.
Touch upline/final inspection: final inspection of the painted body.
Assembly line: o Trim linefitment of lighter component viz. Wiring harnesses, head lamp, ac, etc.
o Chassis linefitment of heavier components-axes,brakes, etc. o Engineer assembly line components machines in m/c shops 1.cam shaft 2.crank shaft 3.cylinder head 4.cylinder block 5.transmission case o o o o o o o o Final linefitment of seats, ac gas filling & final adjustments. Vehicle inspection process First appearance Drum tester( inspection of brake performance and other functions of the vehicle) Emission Checkchecking of emission conformity. Shower tester endurance testing of the vehicle to pass the water at 1.5kg/cm2 volume. Final appearance testerfinal roll out of the vehicle after final inspection. Handover to sales and dispatch handing over to sales and dispatch for delivery to dealer.
Our First Shipment to A-Star to Europe from Mundra Port..
Total process time from Blanking To Rolling Out of a vehicle :: 12 hours
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EMISSIONS REGULATIONS AND STANDARDS FOLLOWED IN INDIA 1989 - Idle Emission Regulation 1991 - Mass Emission Regulation (CO & HC) (Hot Start; Indian Driving Cycle) 1992 - Mass Emission regulation for Diesel Vehicles 1995 - Fitment of CAT Converters for cars in four metros 1996 - Tightening of emission limits (CO, HC & NOx), Evaporative Emission & Crank Case Emission 1998 - Norms for CAT Fitted vehicles (50% tighter standards)
1998 - From September, fitment of CAT Converters in 42 major cities for petrol driven passenger cars 2000 - India 2000 (Euro-I equivalent) norms for all 4- Wheelers - Bharat Stage-II (EuroII equivalent) norms in NCR for Passenger Cars & MUVs - Extended to Mumbai & Kolkata from January 2001 and Chennai from July 2001 - Tightest norms in the world for two wheelers 2001 Bharat Stage II (Euro II equivalent) norms for Commercial Vehicles in Delhi & Kolkata (from 24th October,2001) - Bharat Stage II norms for CVs in Mumbai and Chennai from 01st November, 2001 Future norms under deliberation.
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NATIONAL INSTITUTE OF FASHION TECHNOLOGY

Gaurav Gomez (08)

THE COMPANY ADDRESS]

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Top 20 production countries

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Technology Trends and Processing Advancement in Automotive Manufacturing

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CASE STUDY ON MARUTI UDYOG

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II. Quality Vs Sustainability

Efficiency and sustainability.

IV. Case study of Maruti Udyog Ltd.

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PRODUCTION PROCESS IN MARUTI SUZUKI

Heating zone in paint shop.

Touch upline/final inspection: final inspection of the painted body.

Our First Shipment to A-Star to Europe from Mundra Port..

Total process time from Blanking To Rolling Out of a vehicle :: 12 hours

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