Global market review of automotive batteries forecasts to edition

Transcription

1 Global market review of automotive batteries forecasts to edition

2 Page i Global market review of automotive batteries forecasts to edition By Matthew Beecham April 2008 Published by Aroq Limited Seneca House Buntsford Park Road Bromsgrove Worcestershire B60 3DX United Kingdom Tel: +44 (0) Fax: +44 (0) Web: Registered in England no:

3 Page ii Single-user licence edition This report is provided for individual use only. If you would like to share this report with your colleagues, please order additional copies or sign up for a multi-user licence by contacting: Holly Nash Research manager, just-auto.com Tel: +44 (0) holly.nash@just-auto.com Copyright statement 2008 All content copyright Aroq Limited. All rights reserved. This publication, or any part of it, may not be copied, reproduced, stored in a retrieval system, or be transmitted in any form by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of Aroq Limited. This report is the product of extensive research work. It is protected by copyright under the Copyright, Designs and Patents Act The authors of Aroq Limited s research reports are drawn from a wide range of professional and academic disciplines. The facts within this report are believed to be correct at the time of publication but cannot be guaranteed. All information within this study has been reasonably verified to the author s and publisher s ability, but neither accept responsibility for loss arising from decisions based on this report. Incredible ROI for your budget single and multi-user licences We understand the pressure your research budget is under and price our reports realistically. You won t find our reports with four, or even five-figure price tags, but you will find that they make some of the competition look expensive. Each title is available to you on a single-user basis, supplied on the strict understanding that each title is not to be copied or shared. Alternatively, titles can be shared within departments or entire corporations via a costeffective multi-user licence. Multi-user licences can also save you money by avoiding unnecessary order duplication. To further add value, all multi-user

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5 Page iv Contents Contents Single-user licence edition... ii Copyright statement... ii Incredible ROI for your budget single and multi-user licences... ii just-auto.com membership...iii Contents... iv List of figures... vi List of tables... vii Preface... 1 Research methodology... 1 The author... 2 Glossary of terms... 3 Chapter 1 Introduction... 5 Chapter 2 The market... 6 Market trends... 6 Market players... 8 Banner... 8 Exide Technologies... 9 Fiamm GS Yuasa Corp Johnson Controls Shin-Kobe Electric Machinery Emerging markets China Eastern Europe India Market shares Europe North America Market forecasts Chapter 3 Technical review Defining the elements Starter batteries...28 Batteries for alternative drive systems Starter battery developments Alternative drive battery developments Q&A with the US Advanced Battery Consortium... 38

6 Page v Contents Other innovations Chapter 4 Manufacturers Exide Technologies Fiamm GS Yuasa Corp Johnson Controls... 51

7 Page vi List of figures List of figures Figure 1: Lithium-ion automotive battery manufacturing facility, Nersac, France Figure 2: Global OEM and aftermarket market shares of automotive lead-acid starter batteries for passenger cars and light vehicles, 2007 (% of sales volume) Figure 3: European OEM and OES market shares of automotive lead-acid starter batteries for passenger cars and light vehicles, 2007 (% of sales volume) Figure 4: European independent aftermarket market shares of automotive lead-acid starter batteries for passenger cars and light vehicles, 2007 (% of sales volume) Figure 5: German independent aftermarket market shares of automotive lead-acid starter batteries for passenger cars and light vehicles, 2007 (% of sales volume) Figure 6: UK independent aftermarket market shares of automotive lead-acid starter batteries for passenger cars and light vehicles, 2007 (% of sales volume) Figure 7: French independent aftermarket market shares of automotive lead-acid starter batteries for passenger cars and light vehicles, 2007 (% of sales volume) Figure 8: North American OEM market shares of automotive lead-acid starter batteries for passenger cars and light vehicle applications, 2007 (% of sales volume) Figure 9: The Lithium-ion Battery System by Johnson Controls-Saft Advanced Power Solutions. This system was shown in a hybrid SUV at the 2007 North American International Auto Show in Detroit, US... 31

8 Page vii List of tables List of tables Table 1: Market volume of OE lead-acid starter batteries for passenger cars and light trucks, Europe, Japan, North America and China, (units 000s) Table 2: Market value of OE lead-acid starter batteries for passenger cars and light trucks, Europe, Japan, North America and China, (EUR 000s) Table 3: Market volume of lead-acid starter batteries for passenger cars distributed through the OES and independent aftermarket, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden and the UK, (units 000s) Table 4: Market volume of lead-acid starter batteries for commercial vehicles (less than 3.5 ton) distributed through the OES and independent aftermarket, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden and the UK, (units 000s) Table 5: Battery system requirements for alternative drive systems Table 6: Exide Technologies transportation battery manufacturing plants and offices worldwide, Table 7: Johnson Controls Power Solutions plants and distribution centres worldwide,

9 Page 1 Preface Preface Research methodology This report is intended to provide an overview of vehicle starter batteries, providing top-level market volume and value forecasts through Our forecasts are not extrapolative but dependent on the underlying drivers of supply and demand. Our forecasts are largely based on interviews with the author s extensive international network of industry contacts. This allows us to consider and explain the meaning and implications of industry events, rather than offer simple description based on incomplete data. Our approach is divided into two distinct methodologies: qualitative interviews these are generally opinion-based, which aim to build knowledge about future battery market trends and company strategies; and quantitative interviews typically fact-based, focused on establishing market values, shares, and volumes. Our research typically concentrates on applications for light vehicles which include all cars, light trucks and the various cross-over vehicle styles such as sports utility vehicles (SUVs) and people carriers. These vehicles collectively account for about 96% of the global vehicle build. Report coverage In this, the fourth edition of this report, just-auto reviews the key market drivers mainly for starter batteries. Following our market overview in Chapter 1, justauto s product fitment forecasts in Chapter 2 predict in some detail how the OE market for lead-acid starter batteries will evolve in Europe, Japan and North America from 2004 through to This chapter includes our estimates and forecasts for the total (OES or original equipment supply) and independent) aftermarket for lead-acid starter batteries for passenger cars and commercial vehicles across the European Union, i.e. Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, Sweden and the UK. Chapter 3 sets out a review of recent innovations in the starter batteries as well as advanced battery technology including comments from the US Advanced Battery Consortium. Chapter 4 provides brief profiles of

10 Page 2 Preface the major manufacturers, namely Exide Technologies, GS Yuasa, Johnson Controls and Shin-Kobe Electric Machinery. The author Matthew Beecham has more than 15 years experience of researching, writing and analysing market and technical trends in the global automotive components industry. Since 2000, he has served as an associate editor for just-auto. In addition to batteries, he authors a range of global auto components market research reviews including braking systems, coatings, clutches, cockpits, driver assistance systems, door modules, electric motors, engine cooling systems, exhaust systems, front-end modules, fuel injection, fuel tanks, glass, ignitions, interiors, lighting, mirrors, roof systems, shock absorbers, spark plugs, rotating electrics, tyre pressure monitoring systems, tyres, wheels and wipers. Matthew s freelance assignments have included working for AT Kearney, McKinsey, the Kuwait Institute for Scientific Research, Motorsport Industry Association, Motor Industry Research Association and the Economist Intelligence Unit. He has also written for magazines including Car Graphic (Japan), JAMA (Japan) and Automotive Engineer (UK). He was awarded a PhD in automotive technology transfer from Cranfield University.

11 Page 3 Glossary of terms Glossary of terms Accumulator An electromechanical device that can transform electrical energy into stored chemical energy and by reversing the process, release energy again. AGM stands for Absorbant Glass Mat. This is a mat of microglass fibres which is used for fixing the sulphuric acid in lead accumulators. AGM battery a maintenance-free battery with fixed electrolyte. Ambient conditions outside influences affecting battery performance and service life, e.g. ambient temperature, humidity, vibration, height, effects of shock, etc. Ambient temperature the average temperature surrounding the battery. Ampere hours (Ah) product of the current strength (measured in amperes) and the duration (in hours) of the current. The quantity of electricity (capacity) of a battery or cell is usually expressed in ampere hours. Capacity the available quantity of electricity of a battery or cell measured in ampere hours. The capacity is dependent on the battery temperature and the discharging current. Discharge depth the capacity drawn from a battery divided by the rated battery capacity and expressed as a percentage, e.g. 50% discharge depth for a battery with a rated capacity of 50 Ah means that a capacity of 25 Ah is drawn. Discharging drawing electrical energy from a battery in which chemical energy is converted into electrical energy. Discharging current drawing current strength of a battery. It can be expressed in absolute terms (in amperes) or relative terms (as a fraction or multiple of the C current strength). Grid a frame that supports the active mass in an electromechanical cell. Grid plate a grid in an electromechanical cell which is pasted with active mass. Maintenance-free battery with fixed electrolyte lead-acid battery in which the electrolyte is held in place in a gel or AGM (passim). The battery is sealed and equipped with valves. It is highly stable and exhibits good cycling characteristics. Plate an electrode consisting of active mass and conductive carrier.

12 Page 4 Glossary of terms Separator a device used for the physical separation and electrical isolation of electrodes of opposing polarities. Source: VB Autobatterie

13 Page 5 Chapter 1 Introduction Chapter 1 Introduction A number of factors are shaping the lead-acid automotive starter battery market. While some are market driven, others are outside manufacturers control. As the principal raw material used in the manufacture of batteries, a significant rise in the cost per metric ton of lead over the past year has presented challenges for manufacturers. An auto executive told us: A few years ago, a metric ton of lead cost about EURxxx. But last November [2007], the price reached EURx,xxx. Last January [2008], however, the price had fallen to between EURx,xxx and EURx,xxx per ton. At the moment [March 2008], the price has stabilised at that very high level. Given that approximately xx% of the battery price is directly impacted by the price of lead, price hikes in the raw material means we have option but to raise our battery prices. We did this four to six times over the past year, depending on the market. Today, our customers pay xx% more for their batteries than they did two years ago. All the major battery producers have raised their prices. Consolidation among the major battery manufacturers continues to shape the industry. Three North American valve-regulated lead-acid battery manufacturers have emerged as global players: Johnson Controls, Exide Technologies and GS Yuasa. These three companies collectively control xx% of the global OE and aftermarket for starter batteries. The flood of imported batteries from emerging economies is also continuing to pose a serious challenge to European manufacturers. The price of oil is also driving up the cost of polypropylene used in battery manufacture.

14 Page 6 Chapter 2 The market Chapter 2 The market Market trends OEM sales of batteries are driven mainly by new vehicle build sales, which are driven by consumer demand for vehicles. The OEM market is characterised by an increasing preference by OEMs for suppliers with established global production capabilities that can meet their needs as they expand internationally and increase platform standardisation across multiple markets. Battery aftermarket sales are driven by a number of factors including the number of vehicles in use, average battery life, average age of vehicles, average miles driven, weather conditions and population growth. Aftermarket demand historically has been less cyclical than OEM demand due to the threeto five-year replacement cycle. Over the past years, there has been some significant consolidation activity in the automotive battery business. Given the recent move by Johnson Controls to acquire Fiamm, further consolidation is still likely. In 2006, Johnson Controls (through its VB Autobatterie business 1 ) attempted to acquire Fiamm s automotive battery business. Both Johnson Controls and Fiamm are active in the production and sale of automotive batteries. These are bought by manufacturers of passenger cars, trucks and all kinds of commercial vehicles as well as independent providers of repair services, wholesalers for automotive parts and supermarkets in the so-called independent aftermarket. More specifically, Fiamm is a privately-held global player in automotive components (starting batteries, acoustic warning devices, horns and antennae) and stationary batteries. Headquartered in Italy, it has annual sales of EURxxxm. The acquired business would have annual revenues of approximately EURxxxm mainly associated with the automotive aftermarket and includes Fiamm s battery operations in Avezzano and Veronella, Italy, along with sales and warehouse operations across Eastern and Western Europe. Fiamm s Mlada Boleslav Czech Republic plant is not included in the proposed transaction. In announcing the proposed deal, Walther Wever, vice president and general manager of the power solutions business in Europe and 1 VB Autobatterie is the automotive starter battery joint venture of Johnson Controls Inc and Robert Bosch GmbH and one of the largest suppliers of automotive starter batteries in Europe.

15 Page 22 Chapter 2 The market Table 2: Market value of OE lead-acid starter batteries for passenger cars and light trucks, Europe, Japan, North America and China, (EUR 000s) Europe North America Japan China Total Europe North America Japan China Total Note: Data may not sum due to rounding Source: just-auto Turning to the aftermarket, the following set of tables set out our estimates and forecasts for the total (OES and independent) aftermarket for lead-acid starter batteries for passenger cars and commercial vehicles across the European Union. The market is mainly governed by the size of the national car parcs although better-quality starter batteries have to some extent offset this. Manufacturers estimate that an OE starter battery will typically last around six years, although it largely depends on where in Europe the battery is used. In Northern and Southern European countries such as Norway or Spain, starter batteries generally last a little shorter than in the in than in the UK, France or Germany. For a commercial vehicle and motorcycle, manufacturers estimate the useful life of a battery is three or four years. In terms of the average wholesale price of starter batteries sold on the aftermarket, it varies from one country to the next. There are a number of reasons for that. First, in warmer regions of Europe, less powerful batteries are

16 Page 28 Chapter 3 Technical review Chapter 3 Technical review Defining the elements Starter batteries The performance requirements for starter batteries in modern vehicles are constantly increasing. Bosch notes that diesel engines and large-volume gasoline engines have high cold-starting power requirements (high starting currents, particularly at low temperatures). In addition, says Bosch, electrical systems in vehicles with a comprehensive range of electrical equipment require large amounts of energy from the battery if the supply from the alternator is temporarily insufficient or when the engine is at a standstill. The total output power of all installed electrical equipment, which draws electrical energy from the battery for several minutes at a time, often exceeds 2kW. Lead-acid is still, and will be, the dominant technology used in starter batteries due to cost reasons. According to Bosch 4, the 12-volt starter battery contains six series-connected, individually partitioned cells in a polypropylene case. Each cell consists of a positive and negative plate set. These sets, in turn, are composed of plates (lead grid and active materials) and microporous material (separators) which insulates the plates of opposite polarities. The electrolyte is in the form of diluted sulphuric acid which permeates the pores in the plates and separators, and the voids in the cells. The terminal posts, cells and plate straps are made of lead; the openings in the partitions for the cell connectors are tightly sealed. A hot-sealing process is used to permanently bond the onepiece cover to the battery case, providing the battery s upper seal. On conventional batteries, each cell is sealed by its own vent plug, which, when removed, permits initial battery filing and topping-up during service. When screwed in, the ventilation openings allow charge gases to escape. Maintenance-free batteries frequently appear to be completely sealed units, but they also require escape vents. Lead-acid batteries are used for a variety of purposes, but all batteries provide either starting or deep cycle power. The only difference is how much power is delivered and how long it needs to be delivered. Starter batteries provide a 4 Bosch Automotive Handbook, 6 th Edition.

17 Page 45 Chapter 4 Manufacturers Chapter 4 Manufacturers Exide Technologies Exide Technologies is one of the world s largest producers and recyclers of lead-acid batteries. The company reports its results in four business segments: Transportation North America, Transportation Europe and Rest of the World, Industrial Energy North America, and Industrial Energy Europe and Rest of the World. Exide Technologies transportation product range includes starting, lighting and ignition batteries for cars, trucks, off-road vehicles, agricultural and construction vehicles, motorcycles, recreational vehicles, boats and other applications. The market for transportation batteries is divided between sales to OEMs and aftermarket customers. In the financial year ended 31 March 2007, Exide Technologies Transportation America business generated net sales of US$xxx.xm, up x.x% over the previous fiscal year while its Transportation Europe and Rest of the World business posted sales of US$xxx.xm, up x.x% over the year. The company markets its products under various trademarks. Its trademarks include Exide, Exide Select, Champion, Stowaway, SubZero, Trailblazer, Willard, Tudor, DETA, Centra, Fulmen and Prestolite. In North America, the company s aftermarket battery line-up includes: Exide enhanced power cold cranking amps and a 72-month warranty; Exide NASCAR Select officially licensed by NASCAR; Exide Select Orbital can be recharged in less time than needed for conventional batteries, and has high power output and better vibration resistance compared with a conventional lead-acid battery; Champion 7 enhanced power cold cranking amps and a 72-month warranty; Champion Trailblazer targeted at light trucks and sport utility vehicles. In Europe, Exide Technologies has five major company-owned brands: Exide and Tudor, promoted as pan-european brands, and Deta, Centra and Fulmen, 7 Exide Technologies licenses the Champion mark from Federal Mogul.