Automobile Industry

By:
Aditya Meena (03) Amber Mani (04) Gaurav Gomez (08)

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. The global auto components industry is estimated at US$1.2 trillion.

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.

Top 20 production countries

Top 20 production companies

Tenth largest in the world with an annual production of

approximately 2 million units

AUTOMOBILE

2 WHEELER

3 WHEELER

PASSENGER VEHICLE

COMMERCIAL VEHICLE

It begins as early as 1769.

The automobile sector is one of the key segments of the economy having extensive forward and backward linkages with other key segments of the economy. It contributes about 4 per cent in India's Gross Domestic Product(GDP) and 5 per cent in India's industrial production. Indian Automobile sales growth rate would be 9.5 % by 2010.

FACTS
9th largest automobile industry . 2nd largest two-wheeler market, 4th largest in Heavy Trucks. 2nd largest tractor manufacturer. 11th largest passenger car market and expected to

become 7 th largest by 2016. Sale of passenger cars in India is likely to grow at an average of 14.9% each year to touch 2.1 million mark by 2010.

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. 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.

Market leader Hero Honda with market share 50%

Market leader Mahindra & Mahindra with market share 42%

Market leader Maruti with market share 52%

Market leader Tata Motor with market share 61%

 The automobile industry crossed a landmark with total

vehicle production of 10 million units. Car sales was 8,82,094 units against 8,20,179 units in 2007-08. The two-wheeler market grew by 13.6 % with 70,56,317 units against 62,09,765 units in 2007-08. Commercial vehicles segment grew at 10.1 % with 3,50,683 units against 3,18,430 units in 2007-08 The domestic automobile industry sales grew 12.8% at 89,10,224 units as against 78,97,629 units in 2007-08.

Medium and heavy commercial vehicles managed a

growth of 4.5%. Light commercial vehicles sales growth was 19.4% at 1,43,237 units against 1,19,924 units in 2007-08. Three-wheelers sales rose by 17% at 3,60,187 units against 3,07,862 units in 2007-08.

STRENGTHS Large domestic market Sustainable labor cost advantage Government incentives for manufacturing plants Strong engineering skills in design Able to achieve significant gains in productivity WEAKNESSES Low labor productivity High interest costs and high overheads Rising cost of production Low investment in Research and Development

OPPORTUNITIES
Commercial vehicles Heavy thrust on mining and construction activity Increase in the income level Cut in excise duties Rising rural demand

THREATS
Rising interest rates Cut throat competition Lack of technology for Indian Companies

The main issues that are raised in this context are: recycling/saving of resources life-cycle assessment emissions (primarily from coating and painting)

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.

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 inf luencing

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 inf luencing car manufacturing because of the high amount of VOCs generated in paint shops.

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 1 st of January 2007.
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.

The aim is to save material and energy resources as well as to reduce landfill through waste disposal. Major savings can be achieved through lowering energy and material use in manufacturing by application of recycling concepts. 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/remanufacturing possibilities. 3. The fewer materials that are used in a product the better it is for recycling. 4. Labelling concepts for products, parts and materials are important for recycling.

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.

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. 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.

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.

Nevertheless, 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.

(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 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.

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. 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 end-of-lifevehicles.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 f loor 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.