Automobile industry in the country as well as globally is passing through a huge transition and perhaps in few years time, the meaning and manifestation of ‘mobility’ will be altogether different !
The last few years saw an enhanced consideration for aerodynamic models, fuel efficiency, impact resistance etc. This led to a gradual shift of some component materials from steel to aluminium and even to composites. Although steel is the most important material and cannot be replaced due to its high strength and impact resistance, the non critical parts have shifted to other materials. This was the period when all the major automakers built their manufacturing facilities in India. This gave a big boost to foundries and auto component industry in the country and India slowly emerged as auto and auto component manufacturing hub for global consumption.
Now, the next generation mobility will employ new technologies and processes like 3D printing and Industry 4.0 and gradually our roads will be flooded with first hybrid cars (which can use fossil as well as electricity as fuel) and then electric cars. Driver less and ‘connected’ vehicles are also not very far. Tesla electric cars are already on the road in the US and have become very popular in a short time span. Industry analysts feel that this change will not be sudden and it will take 7 to 10 years for the industry to completely shift to electric cars, though hybrid cars will become popular in next few years.
This transition in automobile industry will impose a great impact on metals sector. It is obvious that an electric vehicle will have only few metal parts and will consume very less castings as compared with today’s requirement. India’s foundry sector is third in the world ranking in terms of volume (only after China and the US) and produces around 9 mt of castings per year. Its fortune is thickly connected with auto sector and is expecting a double digit growth rate in coming years. With these new developments in auto industry, the long term fortune for foundries look bleak. Will these new structural changes in auto industry have a big dent on foundry and auto component manufacturing sector ? Do we have to look for and develop markets other than auto sector ?
Though 7 to 10 years is a rather longish time frame, we have to address this issue now..