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.