Global warming – The term we have been hearing for decades and the impact it had on our environment was catastrophic, throwing every local government into a state of recovery. The prime culprit accounting to over 25% of this catastrophe is the automobile emissions, which left unchecked might in fact, lead to the “End of the World”.
A recent report released by the US EPA, on the sources of greenhouse gases emissions showed that transportation alone accounted for 27% of the total U.S. green house emissions. These emissions from transportation has increased by 16% since 1990. The move by EPA in raising the mile per gallons standards to 35.5 miles per gallon by 2016 and CAFE standards becoming increasingly stringent, forced the automobile manufacturers to seek for an interim solution to increase the fuel economy and reduce the emissions of the vehicles.
Source – US EPA
Source – US EPA
Reducing the weight of the automobile by 15% was found to improve the fuel economy as high as 25%. This solution was a game-changer for the automobile industry and made the auto makers to identify ways to lighten the weight of their produce, like by employing die cast parts and light weight non-ferrous metals such as aluminum, magnesium and zinc, replacing conventional iron and steel.
Shift from steel chassis frame to aluminium or magnesium, at this point of time, can only be employed to premium vehicles, owing to cost feasibility. The other alternative is to employ magnesium, aluminum and zinc, especially their die-castings, in many of the powertrain and engine areas, which also can make the lightening of the vehicle possible.
Die-casting industry was primarily up, due to the continued advancements in the automotive industry. After a recession of 4 years in countries such as the U.S, this industry returned to pull out the regional economies out of the deep economic crisis. Demand side of Aluminum and Zinc is pressurizing the supply side and the prices of these raw materials are expected to start to edge upward. Technological advancements in cost effective methods to extract energy from vast reserves has put U.S, China and other major market leaders on the brink of becoming energy independent.
Higher cost of raw materials was one major constraint for the market. Further, Environmental Protection Agency mandating controls through policy documents, stalling pipeline decisions and attempting to find ways to further tax fledgling industries in order to reduce the overall emissions added up to the problem. However, the die casters are now working on installing advanced melting, distribution and holding systems that will cut the amount of energy needed to melt the metal and thereby meet the EPA emission standards. Further, the die casters have successfully implemented a closed loop system to recycle and reuse as much material as possible within their processes. Aluminium, Magnesium and Zinc are the most common metals employed for the die casting of automotive parts.
Since the 1994 Audi’s A8 model, to the latest Ford F-150, heavy usage of aluminum had grown several folds in the automotive industry. Starting from chassis, side panels, and hoods to the die casting parts in the drivetrain and engine blocks, the aluminum usage in automotive has become extensive. The Aluminium die cast parts market dominated the global die casting market with over 70% of the market share. This market is expected to grow at a CAGR of 5.92% till 2020. ( Source : Mordor Intelligence Report)
Alcoa, one of the major aluminum players is now planning to extend its market into developing the full body frame and door inners with aluminum, indicating the scope of the market for aluminum in the automotive industry.
Magnesium being a low-density metal can be used to create very low-weight castings. Boasting of its non-corrosive nature, magnesium casting can be used as under body material in automobiles which are exposed to harsh environmental conditions. Ability to form casting with RFI and EMI shielding, high electrical conductivity, full recyclability, high impact & dent resistance, exceptional damping capacity, low inertia, higher scope of application as alternative to thermoplastics due to light-weight feature are some of the major factors driving the growth of magnesium market in the automotive parts die casting industry. The single-piece die-cast engine cradle in Chevrolet Corvette Z06 2011, made it one of the lightest-high performance models available in the market. The market for magnesium parts die casting in automobile industry is estimated to grow at a faster pace till 2020, compared to that of aluminium.
Zinc die casting employment is almost 28% in the automotive industry followed by Building and Hardware sectors. Starting from door lock housing, pawls, inertia disks, retractor gears and pulleys in the seat belt system to the camshaft, pigeon gear, sensor components and pump housings, Zinc has become one of the important metals being employed in the automotive parts industry. Strength, ductility and weight management in an automobile were made easy, employing zinc die-castings. Though their employment is high, when observed as a whole, the market for Zinc die casting parts is low as compared to that of Aluminium and Magnesium.
Automobile industry, as such, is on the rise globally. Owning a vehicle has become a necessity, due to the time-bound life styles and longer transits. Growing population and higher disposable incomes in the developing economies resulted in a subsequent spike of the vehicle owing households. The growth of automobile industry in emerging countries is expected to be around 57% in 2015, compared to 51% in 2014 and that of 42% in 2013.The global production of passengers’ cars alone grew from 40 million in 2001 to 56.4 million in 2013 and that of overall motor vehicles was around 90.6 million in 2014 depicting the constant growth of the industry. This growth in automobile industry is expected to drive the market for automotive parts die casting market subsequently, at a faster pace.
A recent study on the automotive parts die-casting market performed by Mordor intelligence stated that this market will cross the $30 billion mark by 2020 with a CAGR of 6.45%. It was also observed that Aluminum parts die-casting was the major market accounting to over 60% of the market share, while that of magnesium is expected to grow at a higher CAGR of 10.5% in the emerging economies such as India and China. China with its huge magnesium reserves is expected to emerge as the leading supplier of the magnesium die cast parts in the coming decade. India is slowly growing as a hub for the manufacture of automobile components, especially for magnesium and zinc die cast auto parts.
Regulations imposed by OSHA and initiatives by NADCA to improve the technical workforce in the die casting industry is expected to improve the overall production of the die casting market and in turn, the market for automotive parts die casting. NADCA is working with several community colleges in the U.S to create a “die casting farm system”. These initiatives will aide in the entry of more technically qualified students into the die casting industry and improve the performance of the former as a whole. The end market for die-casting is quite prolific and an increase of 17.1 million units by 2015 is expected from 16.3 million units in 2013.
KSPG AG, NEMAK, GF Automotive, Rockman Industries, Ryobi Die Casting, Trimet Aluminium AG, Dynacast, Gibbs Die Casting solutions GmbH and Sandhar Technologies are some of the key players in the industry, who are trying to expand to expand their product portfolio across all the automotive parts range. Countries such as India has become the centre for many emerging medium to large-scale industries, such as Endurance group, MK Auto India, Sundaram-Clayton and Goyal die casting, which are now supplying their products to the western automakers.
The automakers themselves agreed to the fact that the only interim solution for reducing the emissions and meeting the standards of EPA is by lightening the weight of the vehicles. Replacing the steel or iron chassis with lighter weight metals such as aluminum can become a challenge when employed in smaller and low end cars, owing to cost effectiveness. So now, a suitable alternative would be employing the die cast parts, which not only reduce the over all weight of the vehicle, but are also economically feasible, making their employment in every automobile, possible. In a nutshell, with many new players entering the market and existing players trying to expand their reign, the market for automotive parts die-casting seems to be a prolific venture for the next 10 years.
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Business Strategist | Building Generative AI Models for Businesses | Founder @ Montaigne, Nyayasastra
Agreed that technologies and consumer preferences do change with time, but the practicality in global employment of electric cars or cleaner fuels is not on the cards for the next 10-15 years. An immediate solution for increasing fuel economy is by lightening the automotive weight, which can be possible by employing die casting parts. Replacing the entire body of a low-end car with aluminium, lacks economic feasibility as of now. Having said that, increasing automotive production and EPA regulations should make the market for die casting a prolific venture for the next 10 years.
Market Research & Insights
Prolific venture for the next 10 years is questionable with the drastic shift in technologies … in consumer preferences… what if people go retro? (they are) … nicely deliberated article nonetheless.
Founder at Hydrogen fuel cell
Very good insight…ausgezeichnet!
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