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March 14, 2016

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Home » Business » Autotalk Special

Auto-parts makers seek greener pastures

TRADITIONAL auto-parts makers are rushing to secure a spot in the future of green cars. The products may not be in such hot demand now, but manufacturers want to master the technology so they can be ready.

China is the world’s largest car market and one of the biggest promoters of new energy cars. Parts makers like MANN+HUMMEL, the world’s largest automotive filter supplier, and Faurecia, the world’s largest exhaust-control systems provider, have started pitching their newly acquired skills for hybrids, pure battery cars and even fuel cell cars — long before their traditional businesses catering to internal combustion engines have fallen out of touch with the times.

The auto market in China, like anywhere else in the world, is still dominated by conventional vehicles, which require filters for fuel, oil and air to ensure a smooth-running engine. Cars also need particulate filters and catalytic converters to eliminate emissions pollutants. But as alternative drive-trains quickly rise in prominence, ahead of 2020 Chinese standards mandating average fuel consumption of 5 liters per 100 kilometers, parts makers who have long focused on components for fossil fuel cars see the need for radical self-transformation.

“Today we are a company that provides exhaust systems,” Mathias Miedreich, president of Faurecia Emissions Control Technology Asia, told a recent media gathering. “Electric cars, however, normally have no exhaust systems. It is important for us to understand how we can address the new trends. Our employees frequently ask me: ‘What is our future?’”

The future may be that fossil fuel cars are destined to become fossils themselves. Electric cars and fuel cell cars don’t emit harmful pollutants. Electric cars don’t even have exhaust pipes, while fuel cell cars emit only water from the chemical reaction of a hydrogen-oxygen mix. Instead, heat becomes the main by-product of both cars, posing a new demand for discharge management. It is a realm where Faurecia might enjoy a leg up.

At the recent Geneva Auto Show, Faurecia unveiled for the first time its compact Exhaust Heat Recovery System. The technology that can gather lost heat and use it to warm both the engine and the cabin, saving the trouble for a hybrid car’s electrical system so that it can operate more often in electric drive mode. Many Chinese carmakers are showing great interest in the technology, which promises improved energy efficiency of as much as 7 percent.

Talking with Shanghai Daily on the sidelines of the media gathering, Miedreich said he expects the technology to greatly benefit its big client Geely. The Hangzhou-based domestic carmaker announced an ambitious green offensive last November, with plans for 90 percent of its sales to come from alternative-energy cars by 2020. Hybrids are forecast to comprise up to 65 percent of that volume.

A car should be well-equipped to not only gather heat, but also to recycle it back into the power system, said Miedreich. Beginning in 2020, Faurecia’s exhaust heat power generation system and thermo-electric generator are expected to hit the market, making it possible to convert exhaust heat into mechanical or electrical power.

The company is also exploring its role in the fuel cell car, a more futuristic idea of green mobility. It wants to adapt its manufacturing expertise in high-precision metal stamping to the production of bipolar plates, an important component in the critical fuel cell stack, where electricity is produced by the chemical reaction between hydrogen and oxygen.

Other possibilities may open up through mergers and acquisitions, with Faurecia sitting on cash after it closes the sale of its exteriors business for 665 million euros (US$730 million) to Plastic Omnium.

Also sharpening its focus on technologies critical to the future is Johnson Controls. Having spun off its seating and interiors units into a new automotive business entity called Adient in early January, it now retains a presence in only one car-related area — batteries.

Auto-parts makers are betting their futures on different types of green cars until one emerges that is technically and commercially viable enough to lead the future.

In either case, MANN+HUMMEL is confident that it can find new applications for its experience in separation and filtration, with the same focus on safety as in the past.

For hybrid cars, it offers a degassing unit for high-voltage lithium-ion batteries. It protects individual battery cell against dust and humidity from outside, as well as pressure change during its operation. Battery cell malfunction could lead to overpressuring and explosion in extreme cases. In fuel cell cars, it ensures that inflammable hydrogen is stored in a properly sealed tank to prevent leakage.

In an exclusive interview with Shanghai Daily, Christian M. Moeser, vice president for Asia-Pacific research and development at MANN+HUMMEL, said the company’s knowledge about filtration and technical plastic parts is evolving and moving further into new energy vehicles.

“You can make the fanciest product for the most environmentally friendly car, but you may fail on the commercial side,” he said.

A product’s commercial viability can never be overlooked in China’s new energy car market, even though the government is striving to buttress the field with hefty subsidies.

The volume of new energy cars is still very small, partly due to high price tags. China accounts for the largest sales of green cars worldwide, but that amounted to little more than 300,000 units last year. Low volumes, in turn, hinder efforts to spread costs and lower green car prices.

MANN+HUMMEL, which has been conducting on-again, off-again studies of fuel cell supply for 15 years, said it has found a way out of this chicken-egg dilemma, allowing economies of scale through standard supply and cross-industry applications.

For ion-exchange filters in fuel cell cooling, it has come up with a design that fits most applications needed by clients, many of whom buy only a few hundred parts per year. In the past, the only filter available was from the water industry, which has no experience in dealing with temperature and vibration of vehicles. MANN+HUMMEL’s latest ion-exchange filter, now at half the size of the last-generation model, was displayed at the Tokyo Fuel Cell Expo this month.

I-2-M, which stands for “innovation to market,” is a small, flexible startup of MANN+HUMMEL, which is taking on the task of promoting innovations such as fuel cell products for wider market consumption. It is going after industrial customers that adopt the combined heat and power system, an area where fuel cells have settled in much earlier and begun rising. Chinese customers are very interested in fuel cell products, for both cars and the combined heat and power system, the company said.

Last but not the least, the silver lining of affordability lies in new materials. One of the most expensive components in fuel cells is a humidifier costing several thousands of dollars. For the special membrane at the heart of the high cost, the company has developed a cheaper alternative, drawing on its specialty in filter media.

“Some Chinese have been asking us whether we have a solution. This price is exorbitant,” said Charles Vaillant, vice president of innovation and corporate strategy at Mann+Hummel. “If you consider it a part for conventional vehicles, it should be ten or one hundred times cheaper.”

Still, both Faurecia and MANN+HUMMEL see fuel cell vehicles far from mass industrialization in the near future and find hybrids more attractive. Combining an internal combustion engine with an electric drive system, the hybrid offers the best of both worlds and the most lucrative business opportunities for auto-parts makers during a period of transition.

Miedreich said the biggest push for leapfrogging development into fuel cell cars would be serious green initiatives arising from concern about global warming.

That would promote fuel cell cars even at higher costs. If that’s the case, fuel cell technology might become such a core technology that carmakers would strive to develop all by themselves.


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