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Annual Report 2016

MARKET REPORT

The automobile industry finds itself on the cusp of change between conventional technology on the one hand and digitization and new drive concepts on the other. Thanks to a strategically clear positioning towards the needs of the sector, Feintool was able to maintain its market share and is looking optimistically towards the technological change among car manufacturers.

Despite major challenges, the international automobile industry is rushing from success to success. After enthusing over record sales in 2015, many experts did not think yet another increase was likely. Despite this, manufacturers – especially in Europe and China – once again produced more cars in 2016 than in the previous year. Feintool achieved around 90 % of its sales directly or indirectly from the automobile industry and benefited likewise from the positive development of their most important markets.

According to the market research institute IHS Automotive, car production in Europe rose by 2.8 %, and in China by as much as 13.9 %. The US recorded an increase in production by 1.4 %, while Japan and Korea remained more or less constant (-0.6 %). Amid these conditions, Feintool has been benefiting from the stable demand for fineblanked and formed automobile components. This good situation is the result of a consistent orientation towards the needs and development of the sector.

Megatrends: Digitization and alternative drives

Two megatrends will continue to stand out in 2017. The automobile industry is taking the leap – from the analog into the digital age and from combustion engines to an era of electromobility or alternative drives. At the leading IAA trade fair in Frankfurt in September, almost every notable manufacturer will be presenting networked, possibly self-driving prototypes and, more than ever, series cars with electric drives.

According to a current survey by auditing company KPMG, 1000 leading car managers from 42 countries named the e-car as the most important trend for 2017. Feintool is now producing housing for hybrid drives in initial projects, which meet especially high precision and residual contamination requirements. But Feintool will also be focusing the product range more on electromobility and other alternative drives. The potential for fineblanking and forming parts in automobile production generally is enormous. Feintool is currently exploring these options in various development projects.

However, many question marks still hang over the subject of electromobility regarding standards, charging infrastructure, areas of application and range. In line with this, more than three quarters of the decision-makers questioned are convinced that classic combustion engines will continue to be relevant. This also mirrors the development of the market.

In a study, experts from consulting firm PriceWaterhouseCoopers (PWC) assume that hybrid and electric vehicles will achieve just under a 14 % share in Europe by 2021, 8 % in America and in the Asian growth markets only 4 %. In many countries where it is a question of affordable mobility, the combustion engine will therefore have a future in the longer term. PWC gives a figure for this increase as 13 % until 2021.

Reduction in consumption

Gas and diesel engines are becoming increasingly more environmentally friendly, driven by ever-tighter emissions regulations. After 2020, car manufacturers in Europe may only produce cars that emit an average of 95 grams of CO2 per kilometer. Similar regulations apply in the USA and in China.

For manufacturers, this means: making the tried-and-tested more efficient by means of consistent continued development. This can be achieved partly by reducing the weight of the vehicles. Fineblanked and formed components made of high-strength but light steel support the lightweight construction being called for. In addition to this, small and lighter engines with lowered capacities but the same performance (downsizing) achieve better consumption and emission values. Feintool also supports this optimization of engine, gear box and ancillary components with the production and development of performance-optimized fineblanking and forming parts for use in the drivetrain.

Digitization

Similar to a world without combustion engines, fully networked and self-driving cars have so far above all been a vision of the future. Although the technology is making great strides in development, at the same time, legal and ethical questions relating to autonomous driving also need to be answered. The application of the corresponding technology will therefore be focusing primarily on semi-automatic drive-assisted systems such as braking, traffic and lane assistants in mid and high-range cars.

This has an indirect effect on the type of gear boxes assembled, since these systems are better supported by automatic and CVT gear boxes than manual transmissions. For Feintool as a manufacturer of fineblanked components for automatic gear boxes such as clutch plates or plate carriers, this development represents a possibility for further growth.

Cost efficiency

In the environment described here, efficient development, production and logistics processes are indispensable. In order to reduce costs, manufacturers are increasingly using standardized product platforms and kits for various models. The demand for series parts in large output quantities is correspondingly high. Feintool is the perfect partner for this.



Feintool is a professional partner for the implementation of the most important trends in the automobile industry.


Because development work in ever-shorter cycles ties up significant resources at the manufacturers, they outsource a large share of their added value to a growing number of suppliers. In particular, processes requiring a great deal of expertise and capital, such as fineblanking, are left to specialist companies like Feintool, which have mastered the technology and provide these capacities direct to the OEM and the large suppliers.

On a regional level, Feintool thus sets itself apart – with production facilities in Europe, the USA, Japan, and China – through its proximity to the international development centers for exacting car technology, and therefore is known for accessibility and just-in-time deliveries.

Quality

Consistently high quality in itself is no longer a bonus – it is a prerequisite. A strategic focus of Feintool is in automatic 100 percent quality management – from the raw material to the monitoring systems that accompany the process, to the finished part. And this has not just been happening since the numerous waves of recalls in recent years. Many fineblanked components in modern cars are in high demand or are safety-relevant. Secure manufacturing processes and zero-error production (0-PPM) are top priorities for Feintool.



Source: PWC + Automobilwoche

Global car production will continue to increase and the proportion of electric and hybrid drives will rise.


Outlook

The demand for individual mobility will continue. Trends such as electrification and digitization, along with discussions surrounding efficiency and emission levels, definitely present challenges. At the same time, according to the market research company IHS, the 20 largest car manufacturers in the world are expecting an increase in production figures over the next five years from 82.8 million cars in 2016 to 90.6 million in 2021. This is equivalent to an increase of 9.4 %. In this overall growth market, the developments in the areas of tension between the offline and online world, between combustion and volts, also offer many opportunities. Feintool is ready to exploit them.