Sei sulla pagina 1di 13

Position Paper

on
Automobile Industry

Submitted to :
Prof. Satish Nair

Submitted by:
Ankita Jain
084104
MBA (FB&E)

INTRODUCTION:
The automobile industry in India is the ninth largest in the world with an annual production
of over 2.3 million units in 2008. In 2009, India emerged as Asia's fourth largest exporter of
automobiles, behind Japan, South Korea and Thailand. The Indian automobile industry is also
experiencing an exponential rise in demand, but its sustainability is an issue due to the
dynamic nature of the market and environmental conditions. And has witnessed a tremendous
growth in recent years and is all set to carry on the momentum in the foreseeable future.
Today, automobile sector in India is one of the key sectors of the economy in terms of the
employment. Directly and indirectly it employs more than 10 million people.

The past few years have witnessed a rapid change in all the segments of the Indian
automotive industry. International competition, increase in the number of participants, and
the need to counter the pressure on margins have made it a buyer's rather than a seller's
market. Customers have wide model choices and the rising income levels – especially among
young adults – coupled with the low equal monthly installments (EMIs) have made vehicle
purchase affordable. With foreign competitors focusing on passenger vehicles, domestic
participants are scrambling to catch up and compete by investing in R&D and improving
overall efficiency.

Also the automotive sector is one of the core industries of the Indian economy, whose
prospect is reflective of the economic resilience of the country. Continuous economic
liberalization over the years by the government of India has resulted in making India as one
of the prime business destination for many global automotive players. The automotive sector
in India is growing at around 18 per cent per annum. And with the gradual liberalization of
the automobile sector since 1991, the number of manufacturing facilities in India has grown
progressively.

Some of the major characteristics of Indian automobile sector are:

• Second largest two-wheeler market in the world.


• Fourth largest commercial vehicle market in the world.
• 11th largest passenger car market in the world
• Expected to become the world's third largest automobile market by 2030, behind only
China and the US.
Advantage to automobile Industry in India:

• India holds huge potential in the automobile sector including the automobile
component sector owing to its technological, cost and manpower advantage.
• India has a well-developed, globally competitive Auto Ancillary Industry and
established automobile testing and R&D centres.
• The country enjoys natural advantage and is among the lowest cost producers of steel
in the world.
• India is the world’s second largest manufacturer of two wheelers.
• India is fifth largest manufacturer of commercial vehicles.
• The country manufactures largest number of tractors in the world.
• India is fourth largest passenger car market in Asia.
• World’s largest manufacturer of two wheelers is located in India.

Key Challenges Faced by Indian Automobile Industry

Indian auto industry is one of the most promising and growing auto industries across the
world. But at this juncture the Indian auto industry is facing various challenges catering to the
growing domestic market.

Recently, SIAM (Society of Indian Automobile Manufacturers) organized an Annual


Convention in association with the Ministry of Heavy Industries and Public Enterprises to
discuss the current scenario of the auto industry as well as to define the key challenges faced
by the industry. The meeting focused to pave a way to transform challenges into business
opportunities and boost the status of automotive industry in India. Some of the key challenges
discussed faced by auto industry are fuel technology and nurturing talented manpower. And
the effect of these challenges on the Indian market and how the fuel technology is becoming a
matter of grave concern is discussed below.
Fuel Technology

Technology is significant and needed to ignite the growth of auto industry. Whether it’s a
two-wheeler or a car, technology drives the growth. The challenge of alternative fuel
technology ensures a brighter vision of the auto industry in the country. The increasing
environmental pollution has become a concern for manufacturers and all associated with the
industry. All of them are struggling hard to come up with a holistic and integrated approach
to reduce carbon dioxide emission.

Some of the initiatives to reduce the level of automotive emission include introduction of
fuel-efficient cars, obligatory periodic maintenance, and inspection of automotives, designing
automotives with recyclable materials, use of alternative fuels like CNG, LPG, biodiesel, and
introduction of electric and hybrid cars. Various car manufacturer have already introduced
the new concept of using recyclable substance for car production After the production of such
a new model, companies thrives to apply the same concept in all their future car models.

In addition, it is believed that the Bharat IV Emission Norms are stringent and are to become
mandatory in the next couple of years. The growing industry is hunting for more advanced
ways and measures to meet the stringent norms. Some of the cars and other automotives may
even be phased out during that period.
POSITION PAPER

INDUSTRY: Automobile industry

ISSUE: Alternative fuel technology

INTRODUCTION:

With the current scenario of increasing consumption of natural resources, cost of fuel is rising
day by day and making it expensive for the consumers. And considering the price factor
which is the most important factor can be turned into a competitive advantage with
alternative fuel technology in automobiles. Also with the higher growth in population, the
demand for vehicles is also increasing.

The natural supply of crude oil continues to grow more and more scarce, which naturally
raises the price progressively. Every barrel pulled out of the ground makes the remaining
supply more valuable so not only do prices go up but there will be wars and imperialism in
attempts to gain control of the supply, and this will go on continuously, with increasing
intensity, until it is gone! Fossil fuels release billions of tons of carbon into the atmosphere,
causing serious global climate change that endangers our lifestyle, perhaps our lives
themselves. We are burning up the world's supply of petroleum, a cheap, easy to process
material that has many other uses--making materials (like plastics), chemicals, pesticides,
fertilizers, etc. The cheap price of petrol (cheap relative to actual cost) encourages people to
use it in wasteful ways, commuting and travelling alone in cars for instance.

Though, fuel taxes may act as an incentive for the production of more efficient, hence less
polluting, car designs (e.g. hybrid vehicles) and the development of alternative fuels. High
fuel taxes may provide a strong incentive for consumers to purchase lighter, smaller, more
fuel-efficient cars, or to not drive. On average, today's automobiles are about 75 percent
recyclable, and using recycled steel helps reduce energy use and pollution.

The leading alternative fuels right now are bio fuels (mainly bio diesel and ethanol),
hydrogen (both fuel cell and combustion), electric and CNG/LPG. However, Compressed
Natural Gas and Liquid Propane Gas are not much better than oil because they are still fossil
fuels.

We should change because oil is severely flawed. Like all fossil fuels, oil is only available in
a limited, rapidly depleting supply. Because the carbon in fossil fuels has been out of the
Carbon Cycle for millions of years, the Cycle has adjusted. Then, when the carbon is released
into the environment, it causes many problems like global warming, acid rain and pollution in
general.The American economy would generally benefit. Most (if not all) of the alternative
fuels would be readily available in the US. They would keep money from leaving our
country, the fuel costs would stay lower and more stable and jobs would be created.

The cost would really depend on the fuel. The technology and infrastructure already exist in
some capacity for bio fuels. Bio fuels operate on the same concept of internal combustion as
oil (but cleaner and renewable), so there would not be much transition. In fact, most regular
cars and trucks could easily be converted to run on either ethanol (for gasoline engines) or bio
diesel (in diesel engines). Hydrogen and electric would cost noticeably more because the
technology is not as advanced yet and the infrastructure is still in its infancy.

Fuel cells are electrochemical devices that convert chemical energy directly into electrical
energy. All types are based on the same principles and have four basic components:
electrolyte, anode, cathode, and interconnect. The different fuel cell types are categorized
according to their electrolyte since it determines key features such as operating temperature,
power-up time, type of fuel, migrating ions, and shock resistance. Fuel cells are generally
utilized for secondary power generation, since in cases where they are not using fossil fuels –
a possibility only for high temperature fuel cells – pure hydrogen has to be generated by
using primary energy sources. Working fuel cell systems have already been developed by
many companies in the automobile, electronics, and power generation industries. These
systems have to be improved before they can compete on the market with existing
technologies, by extending their lifetime and significantly reducing their cost. Two high
temperature (solid oxide and molten carbonate) and two low temperature (polymer electrolyte
and direct methanol) fuel cells are discussed in more detail, with a focus on the materials and
the electrochemical reaction.
MY DEFENSE

It has been charged that the time frame for overcoming the technical and economic
challenges to implementing wide-scale use of hydrogen vehicles is likely to be at least several
decades, and hydrogen vehicles may never become broadly available. Also it is believed that
the focus on the use of the hydrogen car is a dangerous detour from more readily available
solutions to reducing the use of fossil fuels in vehicles. Even the experts have commented
that it will be 40 years or more before hydrogen has any meaningful impact on gasoline
consumption or global warming, and we can't afford to wait that long. In the meantime, fuel
cells are diverting resources from more immediate solutions.

A hydrogen car is one of the least efficient, most expensive ways to reduce greenhouse gases.
And when asked hydrogen cars will be broadly available the reply was: "Not in the present
lifetime, and very possibly never." It was also reported that Hydrogen fuel-cell technology
won't work in cars.... Any way you look at it, hydrogen is a lousy way to move cars.

In the context of the overall energy economy, a car like the BMW Hydrogen 7 would
probably produce far more carbon dioxide emissions than gasoline-powered cars available
today. And changing this calculation would take multiple breakthroughs--which study after
study has predicted will take decades, if they arrive at all. In fact, the Hydrogen 7 and its
hydrogen-fuel-cell cousins are, in many ways, simply flashy distractions produced by
automakers who should be taking stronger immediate action to reduce the greenhouse-gas
emissions of their cars.

Top level executives from car manufacturing companies have expressed their doubts about
the viability of hydrogen fuel cells for mass-market production in the near term and suggested
their companies are now betting that electric cars will prove to be a better way to reduce fuel
consumption and cut tailpipe emissions on a large scale. In addition, Ballard Power Systems,
a leading developer of hydrogen vehicle technology, pulled out of the Hydrogen vehicle
business in late 2007. Research Capital analyst Jon Hykawy concluded that Ballard saw the
industry going nowhere and said: "In my view, the hydrogen car was never alive. The
problem was never could you build a fuel cell that would consume hydrogen, produce
electricity, and fit in a car. The problem was always, can you make hydrogen fuel at a price
point that makes any sense to anybody. And the answer to that to date has been no."
Authors of various magazines think hydrogen is 'just about the worst possible vehicle fuel.
The magazine have also noted that most hydrogen is produced through steam reformation,
which creates at least as much emission of carbon per mile as some of today's gasoline cars.
On the other hand, if the hydrogen could be produced using renewable energy, "it would
surely be easier simply to use this energy to charge the batteries of all-electric or plug-in
hybrid vehicles."

The difficulties in the development of the required infrastructure to distribute hydrogen was
also an obstacle. Also there is a lack of well-established standards for alternative fuel vehicles
in various countries; on the other, it is hard to simply adopt any of the current available
standards from Europe, North America or Japan, since that may cause the domestic
automobile industry to follow passively and lose out on development opportunities. There are
too many complicated problems in setting standards for new vehicles. In reality, it is
impossible to take the standard from any individual country or enterprise as the reference.

Promoting the new vehicles depends largely on government policy support. One reason is
that the technological platforms for most alternative fuel vehicles are completely different
from traditional vehicles, so it is difficult for the manufacturers to bring down their R&D and
manufacturing costs for the new cars by using previous technologies for gas vehicles. Many
consumers, however, are still leery of alternative fuel vehicles and are reluctant to pay the
high sticker prices. Limited market demand will lead to failure of mass-production, and
production costs remains high. Many industry insiders are looking to the government to break
the cycle.

Disadvantages

• Fuelling fuel cells is still a problem since the production, transportation, distribution and
storage of hydrogen is difficult.
• Reforming hydrocarbons via reformer to produce hydrogen is technically challenging and
not clearly environmentally friendly.
• The refueling and the starting time of fuel cell vehicles are longer and the driving range is
shorter than in a “normal” car.
• Fuel cells are in general slightly bigger than comparable batteries or engines. However, the
size of the units is decreasing.
• Fuel cells are currently expensive to produce, since most units are hand-made.
• Some fuel cells use expensive materials.
• The technology is not yet fully developed and few products are available.

MY STAND

The reality is that driving our vehicle is the one regular activity that has the single largest
impact on the earth regarding climate change. Fossil fuels are non-renewable which means
they utilize the sunlight captured millions of years ago—and are ultimately finite resources
that will go extinct, much like the prehistoric creatures for which they’re named. It’s not a
pleasant thought: Eventually (and there is great dispute as to when), these supplies will run
low and the expense, labor and ability to obtain them will surpass their value.

Also the auto industry is increasingly agitated about the looming energy crisis, and rightfully
so. Aside from growing dismay about the large quantity of emissions from traditional
gasoline and diesel vehicles, the motoring public is also crying out for more responsible
alternatives to traditional gas engines.

In this context, the automobile companies that have embraced cutting-edge technologies have
taken the lead in developing automobiles powered by alternative fuels. With high fuel
efficiency, low energy consumption and low emissions, this new breed of vehicles has great
potential to gain a competitive advantage in the future market. The emerging trend is having a
tremendous impact on the directions of foreign automobile industries. The entire industry is
researching and developing alternative fuel vehicles in a bid to break the technological
monopoly of the few automakers that currently dominate that segment.

Technological revolution often brings industrial changes. In the auto industry, alternative
fuels are the basis for the next revolutionary technologies. The generally recognized new
technologies that can be industrialized worldwide are: hybrid vehicles, electric vehicles, fuel-
cell vehicles, clean diesel vehicles and bio-energy vehicles.

In order to meet the new fuel economy and greenhouse targets, automakers will be looking to
use technologies available at the lowest cost per fuel economy improvement. There has been
an agreement that all the car manufacturers will see further improvements to the internal
combustion engine as well as increased use of more advanced transmissions, such as six-
speed automated transmissions and dual clutch transmissions. Reduction of a vehicle’s
weight and engine size (a smaller engine in combination with turbo charging can provide
similar power to that of larger engines) are also in the mix. Finally, there are several
advanced engine management options, such as cylinder deactivation, variable valve timing,
and gasoline direct injection. These technologies would improve fuel economy between 3%
and 7% each, at a cost of up to $300 each. In addition, increased use of bio fuels can
represent significant benefits to carmakers in terms of achieving CAFE compliance. It is also
widely expected that automakers will apply improvements to a vehicle’s air conditioning
system to achieve reductions in GHG emissions.

The application of diesel-burning engine technology—popular and proven to be quite


successful in Europe—will be more challenging in the U.S. because of stricter regulations
related to the control of smog (which is associated with some non carbon emissions). Finally,
possible next generation technologies such as hybrid power trains as well as fuel cells, while
intriguing, were widely characterized as being not yet cost competitive.

Hydrogen has great potential as a fuel of future because it is an environmentally clean energy
fuel and save us from the undesirable side effects of greenhouse gases. Before becoming it a
fuel of the masses there is a need of necessary infrastructure to store it and move it. Also
there is a need of fuel cells on economical scale. To make hydrogen as a popular alternative
fuel some engineers are working on storage factor of hydrogen fuel. As they don’t want
compressed hydrogen into a tank and want to store hydrogen fuel into a large molecule.

Even the environmentalists are continuously searching for green and clean fuel. Until now
they have been putting a lot of energy and talent into hydrogen fuels because when hydrogen
is burned, the only emission it makes is water vapor. So it is a great advantage that burning of
hydrogen doesn’t produce carbon dioxide. Clearly, hydrogen is less of a pollutant in the air
because it emits little tail pipe pollution. Engineers at various universities are working on a
project keeping hydrogen in mind. They are keen on developing an energy efficient,
environmental-friendly hydrogen production system but with a difference. They are trying to
extract hydrogen from waste materials. These materials can be vegetable oil or the glycerol
by-product of bio-diesel. They are aspiring for the high purity hydrogen-based fuel that could
be utilized for large-scale power production. They are also developing hydrogen cells for
laptops or other gadgets.
And despite the criticisms, various automobile manufacturers have said that they will put
resources into hydrogen fuel cell development, which it sees as "a better long term bet than
batteries and plug-in vehicles.”

WHY USE FUEL CELLS?

NO GLOBAL WARMING GASES

When hydrogen is obtained from renewable energy sources, no global warming gases are
emitted. Hydrogen fuel cell systems store intermittent solar and wind power so there is no
need for back -up generators powered by fossil fuels.

Hydrogen can also be obtained from wave, tidal, biomass or waste energy sources.

CLEANAND QUIET OPERATIONS

The only emission from hydrogen fuel cells powered by renewable energy is pure water.
Fuel cells can generate electricity quietly and efficiently on the site where it is needed. There
will be no toxic emissions if electricity is generated in schools, hospitals, homes and
factories.

SECURITY OF SUPPLY

When energy conversion technologies such as hydrogen fuel cell systems are made available,
countries around the world will be able to tap into their own virtually unlimited renewable
energy resources.

ECONOMIC CONSIDERATIONS

One of the main causes of third world deficits is the cost of importing fossil fuels. Hydrogen
can be obtained from using the indigenous resources of sun, wind, wave, waste, biomass or
tidal power. A hydrogen fuel cell system is of modular construction so it can be set up and
added to as required.

And even the American automobile industry favours fuel cells. The idea is to turn the
chemical energy inside the fuel into electricity to power vehicles; the final product is water
with zero emissions. The hydrogen fuel-cell electric car is widely regarded as the ultimate
future path for new vehicles.

No alternative fuel vehicle is perfect, however. The hydrogen vehicle, for example, may have
zero emissions, but when hydrogen is generated using current technology, pollution is
unavoidable. The same holds true for electric cars. If the electricity comes from burning coal,
the power plants, instead of cars, will end up polluting the environment. In addition, the
problem of disposing used batteries in an environmentally friendly way remains to be solved.

Advantages

• Fuel cells eliminate pollution caused by burning fossil fuels; the only byproduct is water.
• If the hydrogen used comes from the electrolysis of water, then using fuel cells eliminates
greenhouse gases.
• Fuel cells do not need conventional fuels such as oil or gas and can therefore eliminate
economic dependence on politically unstable countries.
• Since hydrogen can be produced anywhere where there is water and electricity, production
of potential fuel can be distributed.
• Installation of smaller stationary fuel cells leads to a more stabilized and decentralized
power grid.
• Fuel cells have a higher efficiency than diesel or gas engines
• Most fuel cells operate silently, compared to internal combustion engines
• Low temperature fuel cells (PEM, DMFC) have low heat transmission which makes them
ideal for military applications.
• Operating times are much longer than with batteries, since doubling the operating time
needs only doubling the amount of fuel and not the doubling of the capacity of the unit itself.
• Fuel cells have no “memory effect” when they are getting refueled.
• The maintenance of fuel cells is simple since there are few moving parts in the system.
REFRENCES

http://www.cbfeature.com/industry_spotlight/news/the_race_to_drive_chinas_alternative_fue
l_vehicle_technology

http://www.docstoc.com/docs/16255122/Indian-Automobile-Industry

http://www.associatedcontent.com/article/1133280/the_advantages_and_disadvantages_of.ht
ml

http://en.wikipedia.org/wiki/Fuel_cell

http://www.fuelcellmarkets.com/fuel_cell_markets/5,1,1,663.html

http://www.fuelcellmarkets.com/fuel_cell_power/5,1,6250,431.html

http://www.carazoo.com/article/2511200801/Key-Challenges-Faced--by-Indian-Automobile-
Industry

http://midwest.chicagofedblogs.org/archives/2009/06/fuel_efficiency.html

http://www.alternative-energy-news.info/technology/hydrogen-fuel/