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India’s resources demand in auto sector:
Preliminary findings from baseline analysis
India’s automobile sector overview
Indian auto industry is one of the largest
in the world with an annual production of
more than 23 million vehicles
Production more than doubled in last 10
years (CAGR 11%)
2-wheelers account more than ¾ of total
production, passenger cars 14%,
commercial and 3-wheelers 4% each.
Exports 15% of production. (avg gr. 8%)
Rising middle class, increasing aspiration
and affordability are key drivers to
automobile demand in India
Estimated vehicles to retire in the next 1-
2 years is 8 mn; 2025, it would be more
than 20 million
Current and future demand of autombiles
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
100000000
2014 2020 2025 2030
M & HCVs
LCVs
3-wheelers
Cars
2-wheelers
• Categorization by tonnage
• Projection based on production growth rates under individual
categories in the last 7 years
Auto component sector in India Component localization since 90s made it a
leading, diverse and vibrant industry.
Market size approximately US$ 35 billion;
US$ 10.2 billion exports.
700 organized manufacturers (85% of total
production); 6000 unorganized
Indian players contribute 43%, while global
majors e.g Bosch, Magna, Visteon, Fedral-
Mogul corporation and Denso contributes
around 15%
By 2020 industry likely to grow to US$ 115
billion’; domestic market at US$ 84 billion
Revenue share by segment
Body & structural = 40%
Engine & exhaust = 20%
Transmission & steering=10%
Suspension & baking = 10%
Other = 20%
Objectives
Understand percent composition of resource use in various automotive
categories
Learn current and future demand of selected resources in India’s
automobile industry using MFA
Study indicators that would drive such demand
Examine best manufacturing practices and policies of resource efficiency
in the automobile sector in India, Germany & in other countries
Engage with stakeholders for sharing findings and undertake capacity
building exercises
Use of major resources in automobiles
Steel finds the largest application in the automobile
production
Recent development light weighting has resulted in use of
lighter materials like aluminium, plastics and composites
On an average, there share largely remain constant
Other metallic and non –metallic resources include rubber,
copper, zinc, nickel, etc.
Resources considered for analysis:
IRON, STEEL, PLASTICS & COMPOSITES, ALUMINIUM,
NICKEL & ZINC
Material Flow Analysis
Mining
Metal
processing
Product
development/
fabrication, use
Domestic
resources
(metals/plastics)
Imported
resources
(metals/plastics)
Processing of ores
for refined metal
production
Ore Scrap Refined Ore Scrap
Processing of scrap
for refined metal
production
Total metal production in an economy
Domestic
consumption
Export of refined
resource
Consumption in
auto sector
Use of resource in
other sector
Heady Duty
Vehicles
Light
Commercial
Vehicles
2 Wheelers
(scooters,
bikes, mopeds)
3 Wheelers
(Autos)
4 Wheelers
(Sedans,
hatchbacks,
SUVs)
Auto
Comp’nts
Auto sector (OES’/OEMs)
O
ES
’
O
E
M
s
Wastes
Waste reused
Wastes
Waste reused
Inventory
Average Kerb weight of representative vehicle for each segment
Trucks Buses Four Wheelers Three wheelersTwo
wheelers
6980 5050 1100 371 103
3116
(8x2)MAV Fuel
Saver
http://internat
ional.ashokleyl
and.com/3116
.php
Starbus 32
http://www.buses.ta
tamotors.com/produ
cts/City-Bus/starbus-
32-
bs4.aspx?comefrom=
fbb
Maruti Swift Hatch back
http://www.indianauto.com/cars-in-
india/maruti/maruti-swift.html
Maruti SX4
http://www.indianauto.com/cars-in-
india/maruti/maruti-swift.html
Diesel Fuel Optima
http://www.bajajauto.co
m/bajajre/diesel-optima-
tech-specs.html
Honda Activa
Overview of iron and steel sector in India
3rd largest steel producer > 90 million
tonnes
Between 2001 & 2007, India was a net
exporter of finished steel.
Since 2008 India’s exports started falling
(net importer); net import >3 mn tonnes
Keys issues: growing demand and
competitiveness of domestic
manufacturers
Auto 3rd largest consumer by sector
Estimated demand for iron and steel in auto
On an average iron and steel account 65 percent of the kerb weight of an
automobile
Average rejects generation in components manufacturing is 20-25%*
Total demand for iron and steel is estimated at 80 mn tonnes by 2030
This is approximately 87% of current production
Recycling potential of iron and steel
Material
consumed in
economy
Component
manufacturing
Vehicle use
ELV
95
mn
tons
11
mn
tons
8.3
mn
tons
2.7
mn
tons*
8.3
mn
tonne
s
2.8
mn
tons**? mn
tons
8.2
mn
tons**
*20
mn
tons#
8.3
mn
tons
* 25% reject generation in component manufacturing industry (estimates not know how much is
recycled/reused)
** Based on the assumption that 8.7 mn vehicles reaching ELV stag
*** Based on estimation that 21 mn vehicles retire by 2025
# saving from components at from rejects by 2030
Overview of aluminium sector in India
Production of aluminium >1.7
million tonnes
Exports of aluminium alloys &
scrap 0.5 mn tonnes
Import of alloys & scrap 1.3 mn
tonnes
Growth of import more than export
Transport one leading consumer s
of aluminium
Aluminium use in auto sector (1/2)
Aluminium being much lighter than steel, and having the same strength, is
gradually replacing steel in the automobile industry
Traditionally aluminium used for wheels, cylinder blocks, and other engine parts;
now even used in interior decorations, bumper beams, brake components, etc.
(avg share increased from 4 to 8%)
Aluminium replacing steel in autos in other countries
Current share can increase to 15-20%
Aluminium use in auto sector (2/2)
Total demand for aluminium with current share of 8% will be 11 mn tonnes by
2030.
However, increased use of aluminium (share of 15% of kerb weight) will imply
increased demand to 18 mn tonne
It is learnt Al is recycled. However, increased recycling has substantial
economic & env benefit.
1 ton of aluminum recycled saves
1 square meter of land use
24 barrels of crude oil equivalent
of energy
5 tons of fresh water,
9 tons of CO2 equivalent of GHG
2.5 tons of solid waste
Recycling potential of aluminium
Material
consumed in
economy
Component
manufacturing
Vehicle use
ELV
4 mn
tons
1.4
mn
tons
1.1
mn
tons
0.3
mn
tons*
1.1
mn
tonne
s
0.3
mn
tons**? mn
tons
* 25% reject generation in component manufacturing industry (estimates not know how much is
recycled/reused)
** Based on the assumption that 8.7 mn vehicles reaching ELV stag
*** Based on estimation that 21 mn vehicles retire by 2025
# saving from components from rejects by 2030
1 mn
tons**
*
3 mn
tons#
1.1
mn
tons
Overview of copper
Production of aluminium 0.8 million
tonnes
Per capita consumption of copper in
India is around 0.5 kg ; 6 kg in
China, 10kg in developed nations
Export of copper > import of copper,
however, import growth exceeds
exports
Percent share in auto industry is 8
percent; can increased to 10 – 12%
in coming years
Recent issues
India’s import dependency can increase to over 90% by 2017,
Mined production of copper was very low and stagnant for the last five years.
IBM) data reveal total metal availability from copper reserves in India, is 4.8-million ton, with resources standing at 12.3-million tons.
HCL, the sole miner-refiner of copper produced 3.12-million tons of ore and refined 30 000 t of metal, accounting for a mere 5% of total demand for the metal.
PC working group report forecast growth in GDP of 8% lead to increased in demand for copper by 2016 would be 1.2-million tons,
90% of which would have to be met through import of copper concentrates.
Copper use in auto sector in India
Amount of copper normally used in today's cars is approximately 23 kilograms
(including 18 kilograms of electrical components), which corresponds to about 1-
2% of the total vehicle weight
Demand increase from 0.21 million tonnes to about 1.6 million tonnes over the
next 15 years
This is more than the total production of copper in India.
Recycling rate of copper is low in India compared to other nations; high
recyclability potential of copper particularly from radiators from retired cars.
Recycling potential of copper
Material
consumed in
economy
Component
manufacturing
Vehicle use
ELV
0.8
mn
tons
0.2 mn
tons
0.16
mn
tons
0.05
mn
tons*
1.1
mn
tonne
s
0.06
mn
tons**? mn
tons
* 25% reject generation in component manufacturing industry (estimates not know how much is
recycled/reused)
** Based on the assumption that 8.7 mn vehicles reaching ELV stag
*** Based on estimation that 21 mn vehicles retire by 2025
# saving from components from rejects by 2030
0.17
mn
tons***
0.4
mn
tons#
0.16 mn
tons
Overview of plastics and composites sector
Indian plastic industry over the years has
emerged as a leading industry
Polyethylene (3.5 mn tonnes), mostly used
plastic, polypropylene at 2.1 mn tonnes
and polyvinyl chloride (PVC) close to 2 mn
tonnes.
Polystyrene (PS) demand in 2013 has been
estimated at 0.25 mn tonnes while other
polymers stands at 0.15 mn tonnes
Production capacity increased only from
5.8 mn tonnes to 8.5 mn tonnes between
2007 and 2013
Gross imports of polymers increased from
0.7 to 3.1 mn tonnes reflecting a more that
4 times increase, CAGR 23%
Plastics application in automobile sector (1/2)
Avg. automobile may contain
13 different high quality
plastics
Application of 3 types of
plastics account for 66
percent
Polypropylene (32 percent),
polyurethane (17 percent)
and polyvinyl chloride (16
percent).
Engineered plastics and composites are increasingly finding application in the
production of noncritical car components like bumpers, fuel systems, lighting,
upholstery, under bonnet components, electrical wiring, etc.
Plastics application in automobile sector (2/2)
Increased demand from its current estimated level of 1.13 mn tonnes to more 8 mn
tons over the next 15 years.
A 50% and 100% increase in penetration rate will increase demand to 12 and 16
mn tonnes.
Plastics Composites
Recycling potential of plastics
Material
consumed in
economy
Component
manufacturing
Vehicle use
ELV
9 mn
tons
1.1 mn
tons
1 mn
tons
0.1 mn
tons*
1.1
mn
tonne
s
0.03
mn
tons**? mn
tons
* 25% reject generation in component manufacturing industry (estimates not know how much is
recycled/reused)
** Based on the assumption that 8.7 mn vehicles reaching ELV stag
*** Based on estimation that 21 mn vehicles retire by 2025
# saving from components from rejects by 2030
1 mn
tons***
0.8
mn
tons#
0.16 mn
tons
Overview of Zinc and Nickel sector in India
Indian consumption of zinc has been steady
(0.7 mn tonnes); production has increased
However, export import gap over the years
have been falling
Estimated annual demand for nickel in India
is between 30 to 40 thousand MT and market
totally dependent on imports
0
50000
100000
150000
200000
250000
300000
350000
Import
Export
0
5000
10000
15000
20000
25000
30000
35000
40000
Imports
Exports
Zinc and Nickel use in automobiles
Data/information with regard to use of zinc and nickel in auto is very limited
Some grey literature suggest share in the range of 0.25-0.5%
Using this estimate demand of zinc + nickel will increase from 0.1 mn tonne to 0.6
million tonnes over next 15 years
Total demand for resources
0.000
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
90.000
100.000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Zn/Nickel*
Plastics/Composites
Copper
Aluminum
Iron+steel
Ways to achieve resource efficiency
Resource Efficiency
The end-of-pipe
technology
Increasing the efficiency and
life of the product
manufactured
Recycling and re-using the waste in the production
process
Design for dematerializing
Design for revalorization
Better trained staff
International best practices
Type of
intervention
Organizatio
n
Intervention
Design to
dematerialize
USEPA USEPA and automotive industry have agreed
to reduce copper in brake pads to 5% and
0.5% by 2021 and 2025 respectively.
Design for
revalorization
TOYOTA Vehicles are now designed at TOYOTA in such
a way that it is easy to dismantle and separate
parts at the end of life.
Recycling and re-
use of waste in
production process
Ellen
Macarthur
Foundation
A reverse logistic system is established in the
market to collect scrap and vehicle carcass; to
eventually efficiently use it in manufacturing
process.
Some common ways to achieve RE
Type of intervention Intervention
Increasing the efficiency
and life of the product
manufactured
For example - an engine manufacturing company
must view themselves as service providers who
are responsible for providing good quality power of
the vehicle (i.e. engine) and not just some
company which merely sells engine units in the
market.
The end-of-pipe
technology
This is mainly used to reduce the environmental
impacts of manufacturing process. However,
useful applications can also be found in case of
material recovery.
Better trained staff The staff involved in the manufacturing process
and handling valuable resources could be trained
regularly with a motive to improve their skills and
minimize the production losses during the
manufacturing
Indian Best Practices
Recovery from end of life vehicles : The Ministry of Heavy Industry and the Society of Indian automobile manufactures have taken efforts to promote resource recovery at the end-of-life of the vehicle. An automobile dismantling center at the Global Auto Research Centre, at Oragadum near Chennai, which is the hub of automobile manufacturing in India
Recovery of resources from paint sludge: Paint sludge contains high concentrations of heavy metals like Zinc, Nickel, Chromium etc. These metals are expensive and have limited availability. Moreover, disposal of waste water with high content of these metals is a challenge.
‘Maharani Paints’ have developed technology to re-process, recover or recycle paint sludge fromautomobile sector to produce reprocessed primer.