Page 18 - MetalForming February 2022 Special Automotive Issue

LOW-VOLUME, HIGH MIX BECOMING MORE PREVALENT
Tennessee and Kentucky and create 11,000 jobs “in pursuit of becoming a major player in the electric vehicle arena.” For its part, General Motors soon will join the electric-truck fray with an all-electric Chevrolet Silverado on the horizon.
Grappling with the Dramatic Pace of Change
All of this has suppliers on edge, “grappling with the dramatic pace of industry change,” notes Amir E. El- Aswad, a litigation attorney with Foley & Lardner LLP, in his report on a December meeting held by the Original Equipment Suppliers Association (OESA). Part of its Strategic Insights Executive Briefing Series, the OESA meeting addressed the theme of sup- plier competency and EV readiness.
Deloitte Consulting kicked off the conference with a panel discussion, reports El-Aswad, and shared action- able insights from Deloitte's 2021 Glob- al Automotive Supplier Survey (GASS), including identifying “four significant forces disrupting the automotive sup- ply industry: electrification, technology convergence, new entrants and sup- ply-chain difficulties.”
In terms of new technology, “as cars evolve, users increasingly demand dif- ferent functionalities, shifting the value from hardware to software,” El-Aswad
ICE
INTERNAL COMBUSTION ENGINES
329 Nameplates 2006 50,000 on 16.6M Units
2019 361 Nameplates 46,000 on 16.8M Units
2028 405 Nameplates 35,000 on 14.1M Units
writes. “Based on the rapidly changing consumer preferences, software may soon make up over 30 percent of vehi- cle content. This would shift revenue and profit pools from traditional hard- ware sectors to new content creators.“
Within the supply chain, “distur- bances caused by the COVID-19 pan- demic and ongoing semiconductor shortage have brought a new focus on the resiliency and agility required to manage supply-chain operations,” he adds, “with success shared by new high performers. ...Supply-chain agility is the best antidote to the increasing com- plexity. Suppliers can develop their agility by actively monitoring fast-mov- ing markets, predicting and prioritizing an endless stream of risks, and orches- trating internal and partner recourses to respond quickly.”
According to Deloitte's GASS, pro- ducers of electric drivetrains, batteries, fuel cells and advanced driver-assis- tance systems have experienced sig- nificant growth and may continue to see exponential growth of as much as 475 percent from 2020 through 2025. “Meanwhile, growth for certain other traditional automotive components is projected to stagnate or even shrink,” El-Aswad offers.
To stay relevant, according to Deloitte, suppliers need to adapt, and quickly. For starters, “keep abreast of
BEV
BATTERY ELECTRIC VEHICLES
21 Nameplates 2019 11,500 on 242,000 Units
2024 62 Nameplates 29,000 on 1.8M Units
2028 98 Nameplates 32,000 on 3.15M Units
the turbulent supply chain by improv- ing and standardizing data retention and significantly invest in digital tech- nology, like robotic process automation solutions, artificial intelligence and predictive analytic technology,” El- Aswad surmises.
Where does the industry stand on making the needed investments? Con- sider these data points from the OESA Automotive Supplier Barometer Q4 2021:
• Forty-one percent of suppliers are very confident that their company will move ahead and implement the need- ed capital investment to meet their 2022/2023 demand requirements.
• Thirty-eight percent of suppliers believe that they are ahead of the industry’s pace of innovation while 28 percent feel that they are behind.
Automotive Tooling Outlook
On the tooling front, “the next decade is being forecast as generally favorable for suppliers of automotive tooling” shared Laurie Harbour, pres- ident and CEO of Harbour Results Inc. (HRI), during her 2021 Automotive Tooling Outlook report.
“The performance of manufactur- ing overall is really quite good,” Har- bour said. “Durable goods demand is very strong, driving not only new vol- ume but new programs, so lots of new models.”
Harbour reported that 76 percent of the tool and die makers that HRI surveyed eye 2022 generally optimisti- cally, expecting an average of 10-per- cent revenue growth; 90 percent of those surveyed projected more than 3-percent growth in earnings before interest and taxes at end of 2021.
Promising for tooling suppliers: OEMs are investing to develop a lot of new nameplates. In 2019, the industry supported 361 nameplates for internal combustion engine vehicles and 21 for battery electric vehicles, reported HRI business analysis manager Matt Trenta- cost. By 2028, those figures are expected to increase to 405 and 98 (Fig. 1), respectively, driving new-tool devel- opment. MF
Fig. 1—From Harbour Results Inc.: A slew of new nameplates are on the horizon from OEMs by 2028, driving new-tool development.
16 MetalForming/February 2022
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