1 PRESENTED BY: Bob Eller, President Robert Eller Associates LLC Phone: 330-670-9566 E-mail: [email protected]Web Site: www.robertellerassoc.com AUTOMOTIVE INTERIORS TECHNOLOGY RESPONSES TO ECONOMIC AND GLOBALIZATION PRESSURES PREPARED FOR: Auto Interiors Show Detroit, MI June 5, 2008 R/mydox/papers/ATI 08.ppt Management DECISIONS ANALYSIS MARKET ECONOMIC TECHNICAL Robert Eller Associates LLC CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES
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2012SOURCES: IMF, WARD'S, ROBERT ELLER ASSOCIATES LLC, 2008
7
REGIONAL AUTO MARKET GROWTHVEHICLE SALES HISTORY BY REGION, 2000-2007
0
10
20
30
40
50
60
70
80
Global Tot.Europe
Tot. AP Tot. NA Tot. LA China India
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2008 b/mydox/papers/ACS08-Global Ind Vol.xls
Veh.
Sls
., M
M U
nit
20002007
6.9% -0.6%3% 1.9% 10.4% 21.3% 13.2% CAGR
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2008R/mydox/papers/ATI 08.ppt
8
0.0
0.0
0.0
0.4
4.6
1.0
1.4
0.9
0.2
0.1
0.2
0.0 2.0 4.0 6.0 8.0 10.0 12.0
VIETNAM
PHILLIPPINES
AUSTRALIA
TAIWAN
MALAYSIA
INDONESIA
THAILAND
INDIA
KOREA
CHINA
JAPAN
VEHICLE PRODUCTION, ASIA (MM UNITS)
2005
2012
7MM NEW VEHICLES ARE EXPECTED TO COME FROM CHINA, INDIA AND THAILAND BY 2012.
SOURCES: CSM; ROBERT ELLER ASSOCIATES LLC, 2008
PROJECTED AUTO PROD'N. IN ASIA: 2005-2012
9
FUEL EFFICIENCY REQUIREMENTS WILL DRIVE SUBSTITUTION
GAS PRICES vs. FUEL EFFICIENCY (2007)
$0
$1
$2
$3
$4
$5
$6
$7
U.S. JAPAN EUROPE
SOURCE: AUTO NATIONr/mydox/papers/ATI08-FUEL.xls
USD
/Gal
.
Taxes AddedCore Gasoline
21 MPG
36 MPG
$3.11/gal$0.40 tx
$2.71
$1.88 tx
$2.36
$4.24/gal
$6.14/gal
$4.11 tx
$2.03
10
U.S. VEHICLE FUEL EFFICIENCY
N. AMERICAN VEHICLES HAVE GAINED WEIGHT, INCREASED HORSEPOWER, AND NOT IMPROVED FUEL EFFICIENCY (MPG)
OVER THE LAST 20 YEARS
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1987 1997 2007SOURCE: EPA
r/mydox/papers/ACS08-FUEL.xls
VEH
. WT.
, LB
S
0
50
100
150
200
250
300
FUEL
EFF
ICIE
NC
YO
R H
OR
SEPO
WER
Vehicle WeightAdj. Fuel EfficiencyHorsepower
FUEL
EFF
ICIE
NC
Y O
R H
P
SOURCE: EPAR/mydox/papers/ATI 08.ppt
11
CHANGE IN US VEHICLE SALES VOLUME 2006-2007
-400 -300 -200 -100 0 100 200UNITS (THOUSANDS)
FULL-SIZE SUV, -15%
STD FULL-SIZE CAR, -24%
FULL-SIZE MPV, -18%MID-SIZE PICKUP, -16%
STD SPECIALTY, -11%
COMPACT, +4%
FULL-SIZE CROSSOVER, +69%
MID-SIZE CROSSOVER, +74%STD MID-SIZE, +8%
COMPACT SUV, +24%
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2008 b/mydox/Auto Industry/US Vehicle Sales
U.S. VEHICLE FLEET COMPOSITION SHIFT, 2006-2007
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FLEET TRENDS: AUTOPLASTICS IMPACTS
“Cheaper small cars are part of VW’s U.S. plan.” AUTO NEWS, 3-10-2008
“As dollar dives, automakers juggle global strategies.” AUTO NEWS, 3-10-2008
“In Geneva, the focus was on the U.S. – how to cope with the currency crunch and adapt Europe’s green technology in a country headed for $4 gasoline.” AUTO NEWS 3-10-2008
“As automakers feel heat from environmental movement, engineers find solutions that are quick, clean and cheap.”AUTO NEWS, 3-10-2008
“U.S. Auto Makers Show European Flair” WSJ 3-25-2008
b/mydox/SPE TPO 08/Headlines
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2008R/mydox/papers/AutoInteriors08.ppt
• Resin suppliers forward integration to compounding?
• Tier 1s shifting to in-line compounding• Expanding resin property envelopes• Strengthening of Japanese resin suppliers/
compounders in N. America and Europe• Renewed growth of European compounders in
N. America ($ weakness driver?)
SUPPLY CHAIN SHIFT/FLEET COMPOSITION EFFECTS
17
EXAMPLE TECHNOLOGY SHIFTS IN AUTO INTERIORS
• Multi-component molding (several processes) • In-line compounding (ILC, DLFRT, IMC)• Interior semi-structural substitutions• Elimination of IP cross-car beam?• Thermoplastic elastomer (TPE) growth (olefinic and
styrenic) - Styrenic TPE vs. olefinic TPE for airbag doors- Body seal substitution for EPDM rubber
• Growth of injection molded foams • Increased use of single compound for multiple interior
and exterior components (Fiat 500 example)• Innovation in rear storage area • Continued substitution for thermoset rubbers• Lighting innovation• Plastic glazing effects
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NEW HIGH GROWTH TPE FABRICATION TECH.:LARGE-PART, 2-SHOT MOLDING
CURRENT PROCESS 2-SHOT
COMPOUNDING
MAKE SKIN
TRIM SKIN
BACK-FOAM
TRIM
TRIMMED SKIN
PU FOAMFORMULATION
SUB-STRATE
NON-RECYCLABLE SCRAP
DOOR TRIM OR INSTRUMENT PANEL
ASSEMBLY
SCRAP
MOLDSUBSTRATE
SUBSTRATERESIN
TPE COMPOUND(CAN BE FOAMABLE)
SHOT 1
SHOT 2
3-LAYERDOOR TRIM
ORINSTRUMENT
PANEL
ASSEMBLY
- LABOR INTENSIVE- HIGH SCRAP- MULTI STEP
- MULTI MATERIAL- NON-RECYCLABLE- DIFFICULT CRAFTSMANSHIP
- LOW LABOR- LOW SCRAP- SINGLE STEP
- 1-2 CLOSELY RELATED MATERIAL FAMILIES- EASILY RECYCLED- HIGH CRAFTSMANSHIP
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2008r/mydox/papers/ACS08-LgPt2Shot08.vsd // lg/myfiles/Visio/ACS08-LgPt2Shot08.vsdSOURCE: ROBERT ELLER ASSOCIATES LLC, 2008R/mydox/papers/ATI 08.ppt
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2-Shot Molded Door Medallion
Vehicle: Dodge Caliber ('07)Molder: LearMaterial: Thermoplastic Elastomer On PP
20
LARGE-PART, 2-SHOT, SOFT TOUCH MOLDING
Part: Instrument Panel UpperSkin Compound: COPE (Foamed Pibiflex from P Group) Substrate: PBT/ASA (UltradurR S4090IGX from BASF)Injection Machine: Engel Foam Technology: TrexelSOURCE: ROBERT ELLER ASSOCIATES LLC, 2008
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Photo Source: Plastics News
Vehicle: Chrysler Jeep Liberty '08Skin: Localized TPE soft touch
Process: 2-shotTier 1: IAC
2-SHOT, SOFT TOUCH BROADENS APPLICATIONS
22
Product: Fan shroudManufacturer: Sur-FloMaterial Type: TPV (Nexprene)TPE Supplier: Solvay Engineering PolymersNote: Used in Dodge Ram HD pickup
SIDE BY SIDE 2-SHOT MOLDING
23
SEQUENTIAL 2 COMPONENT WATER ASSIST
Two approaches: Fluid transfer and melt breakthroughCompetition: 3D sequential co-extrusion blow molding Developer: IKV (Germany)e.g. mat'ls.: PP (hard segment) + TPE (soft segment)Initial example applications: cooling ducts, air intakes
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IN-LINE COMPOUNDING(ILC)
• Competes with glass mat thermoplastic (GMT) - ILC generally has better properties
• Example current/potential applications: - Seat pans/backs- Door hardware module/door carrier - Hatchback inner panel- IP carrier - Rear trunk module
-- load floor-- spare tire well
- Underbody shields
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PROPERTY UNITS ILC-PP LGF-PP % GAIN FOR ILC
9.7 -1
-1
+28
+25
+50
8.1
145
201
Tens. Mod. GPA
33
9.8
8.2
113
161.3
22
Flex. Mod. GPA
Tens. Str. MPA
Flex. Str. MPA
Notched Izod KJ/M2
ILC PROPERTIES vs. LGF PELLETS
Source: Husky
26
IN-LINE COMPOUNDING: CURRENT STATUS
• Example of efficient supply chain response• Starting with GF reinforced resins • Competes with LGF-PP, concentrates, GMT
- ILC generally has better properties - ILC raw material cost, process cost save vs. LGF-PP- Equipment costs 50-75%> conventional injection- Large parts (<5 lbs.) favor ILC- LGF-PP has 80-85% market share
• 3 equipment suppliers competing (Krauss Maffei in lead)• Example interior applications:
- Seat pans/backs- Door hardware module/door carrier - Hatchback inner panel- IP carrier - Rear trunk module
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SPARE TIRE WELL: SUBSTITUTION TARGET
Vehicle: Mercedes C-ClassWeight: 4.3 kgSubstitution drivers: - Impact strength for crash resist.- Ability to integrate shape features - Corrosion resistance
Mat'l.: GMT-PP combi-nation (random glass mat & fabric)
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SPARE TIRE WELL: NATURAL FIBER TARGET
Vehicle: Mercedes A-ClassMaterial: Abaca fiber/PPSubstitution drivers: - Good stiffness weight balance- Green solution- Energy saving (natural fiber vs. glass roving)
PATHS TO AUTOMOTIVE MARKET FOR NATURAL AND BIOFIBERS
MECHANICALPROCESSING
SOURCE: ROBERT ELLER ASSOCIATES, INC., 2007
PLANTSBIO
PROCESSING
NATURALFIBERS (NFs)
BIOFIBERS
BIOMATRIXRESINS
BLENDING WITHHC RESINS
BIOMATRIXRESINS
GLASS FIBERMAKING
FIBER PREP
GLASS
WASTE,VIRGINFIBERSOURCES
GLASSFIBERS
OTHERNFs
SYNTHETICFIBERS
TEXTILES
OTHERLAYERS
BONDINGAGENTS
MAT
MOLDED MATS
BIO FIBERBIO RESIN MATRIX
BIO OR NF IN HCRESIN MATRIX
BLENDING
MAT MOLDINGAND LOFTING
MOLDED PARTS
MOLDING OREXTRUSION
dl
SOURCE: ROBERT ELLER ASSOCIATES LLC, 2008 r/mydox/papers/ATI 08.ppt
36
LEDs AND LIGHT PIPES SHIFT INTERIOR LIGHTING
Technology: LEDs, gaining power, smaller footprint Applications: Cascading illumination, instruments, logosSubstitution drivers: - Night/day lighting- Reduced night vision interference- Lighting footprint reduction- Cost save vs. bulbs
37
PU CONTINUES DOMINATION OF HIGH END
Vehicle: BMW 5 SeriesPart: Center front armrestsMaterial: Molded PU
Photo Source: Grammer
38
TREND TOWARD SELF-SUPPORTING IPs?
Eliminates cross-car beamDimensions: Narrower/thinner IP; frees up spaceSome displays: Invisible until requiredCommercial status: 3 launches in 2008? Tier 1: Faurecia
39
- 2007 DCX DODGE RAM- SUPPLIER: JYCO (COMPOUND, PROFILE, DESIGN)- LITTLE GUY SCOOPS THE BIG GUYS- MATERIAL: o-TPV- FIRST o-TPV DYNAMIC BODY SEALSOURCE: JYCO
BODY/GLAZING SEALS: EPDM SUBSTITUTION ACCELERATES
40
Photo Source: Robert Eller Associates LLC
Vehicle: BMW (2-color door trim panel)2-color Skin Supplier: TS TrimSubstrate: Wood fiber/PPTier 1: JCI
Vehicle: None yet Tier 1: JCIProcess: "Perfect Fit" TF skin, injection molded substrateNote: Perfect Fit minimizes gaps between surfaces and colors. Perfect Fit is evolution of CrafTec process. Decoration can be via painting or stitching (JCI CrafTec process).
Photo Source: Automotive News
CRAFTSMANSHIP EXAMPLE
43
Vehicle: Fiat 500Resin supplier: Borealis (Daplan EE168AE)Molder: Plastal (Poland)Resin: Single material TPO
• Interiors technology drivers:- internationalization of the N. American fleet- supply chain efficiency- upgrade quality/craftsmanship requirements- PP continued share gain (via new technologies)- GF-PP structural capability share gains - bioplastics share gain
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BOTTOM LINE
• Economic and market drivers are in place.
• Improved interiors technologies are available.
• Capital availability/willingness to commit in N. America uncertain.