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Defensive drivers: automotive suppliers continue to face a rocky road as they dodge cost pressures & competition.

It's no surprise to hear that cost is of paramount importance in the automotive market today. Cutting costs. Controlling costs. Adding value. Increasing efficiency. Reducing waste. Streamlining manufacturing. Consolidating supply. All of these and more are key selling points for nonwovens in a fully globalized market facing high volumes, severe competition and economic pressures from all sides. As one supplier put it, "The constant for all OEM (original equipment manufacturer) product development is this: cost is king." Another executive's description of the latest product and market trends in this segment was simply: "Cheap, cheap, cheap."

Making matters worse are raw material price hikes that--although they are now subsiding somewhat--have nevertheless impacted suppliers up and down the automotive supply chain. Due to automakers' sharp focus on keeping costs as low as possible, this market has only very reluctantly accepted price increases, especially for commodity products.

"After the major impact of Hurricanes Rita and Katrina--and the resulting escalation of oil and synthetic oil-based fibers--raw material costs have thankfully receded to reasonable cost levels over the last year," stated Foss Manufacturing's Dave Rowell, executive vice president of sales and marketing. "Auto builds are down, or at least stagnant, but updated needlepunch designs have created new looks for cars that have allowed us to take marketshare away from cloth offerings. This has helped growth even though builds are not necessarily up."

From Freudenberg Vitech's point of view, the answer for the North American market lies in developing more capable raw material suppliers. "The transplant OEMs have concluded that their risk is reduced with a proven supplier that invests and commits resources in the domestic market," observed William Preininger, North American automotive market manager for Freudenberg Vitech, L.P. USA. "The traditional 'Detroit Three' suppliers are financially distressed and have suffered from exploitation of annual cost reductions, material increases and the realignment of the full service 'interior system integrator' to a specialized component provider," he said.

These conditions leave nonwovens suppliers facing a familiar scenario: to survive, they must remain cost-competitive and become more cost-efficient by optimizing manufacturing processes and raw material input. Simultaneously, suppliers need to address global availability constraints for certain raw materials, such as polyolefin, by sourcing products in regions with more favorable raw material pricing and developing alternative supply chains.

The North American OEM automotive market is being described by suppliers as never having been more complex. "More commercial and development resources are being demanded to serve a relatively flat market with many more OEM manufacturers and platforms," stated Freudenberg's Mr. Preininger. "Material costs are regulated by global market forces and chemical companies are insulated from automotive supplier constraints. The lose-lose proposition is to absorb material costs to forfeit profit or pass on increases to forfeit future contract activities. The automotive supplier has become a flawed business model."

The environment in the U.S. automotive market is so exigent, in fact, that some suppliers are just opting out. According to Mike Hodge, vice president of staple fiber sales for Fiber Innovation Technology, although the company is working on select new binder fiber projects for headliners and package trays, FIT does not see much future in the business. "U.S. auto makers are focused only on cutting cost and will not pay for innovation," he said. "U.S. auto makers continue to force their Tier-One suppliers to lower prices to the point that business is not attractive. One of our customers was recently told by one of the Big Three U.S. automakers to lower their quality to a point just above the minimum acceptable limits. We have lost significant market-share and business to cheap imported fabrics from Korea that do not perform."

Despite this situation, Foss' Mr. Rowell still feels that quality needs to come first. "Quality has to be top-notch. This is a pretty tough, cost-conscious and quality-conscious business to be in. Nonwovens is an industry that, if you want to focus on it, can make you a better company but you have to be creative and offer value--something worthwhile that people will pay for," he said.

Simplified Supply

One result of the highly competitive and cost-sensitive environment in the auto market is a shifting of traditional relationships among suppliers and manufacturers. At the roll goods level, this has translated into a consolidation of processes so that car companies are dealing with fewer suppliers. "We have identified a trend toward added-value products where the sub-supplier already combines materials into composites to allow the Tier-One supplier to work with fewer suppliers," offered Gunther Hoffmann, marketing director of the automotive division of Precision Textiles, a part of Precision Custom Coatings.

Additionally, there has been a move toward increasingly higher interest and participation of the OEM in Tier-Two and -Three product sourcing and product development. "We have also recognized initiatives to have the component supplier spearhead the development of the 'right' product for the application and participate in the construction of the finished product," added Mr. Hoffmann.

Freudenberg Vitech is also witnessing increased coordination among OEMs and suppliers. "The demand for cost-effective interior solutions remains high with appearance and performance expectations uncompromised," explained Mr. Preininger. "New constructions and improved appearance/harmony requirements by OEM product development teams require upstream coordination between OEM design and the material supplier." Freudenberg has reportedly seen increased design activity for headliner, seat and package tray facings planned for future models.

OEMs are also looking to simplify the supply chain by working with companies that can offer a variety of technologies at many locations worldwide. According to Detlev Kappel, global sales director at eswegee Vliesstoff GmbH and managing director of Techtex GmbH, the company holds an advantage over its competitors, as it is able to offer a range of almost all technologies. "Also, our global presence enables us to be an interesting partner for Tier-One suppliers as they want to have fewer suppliers in the future but with higher performance," he said.

Mr. Preininger also stressed the importance of suppliers' global capabilities. "There is an effort at both the OEM and Tier-One supplier levels to capture best practices and design themes to execute globally. In other words, the automotive OEM desires a single material execution that has global availability, can be supplied locally and will meet the same specification and appearance standard." He warned that single continent manufacturers are limiting their product to a regional market that most likely will be replaced by globally available material.

Cutting Car Costs (The Value-Added Way)

Partially in response to cost cutting initiatives, nonwovens suppliers have rolled out a host of new product features deigned to boost performance and add value to functional automotive components. One such company is Precision Textiles, which has unveiled value-added products such as laminated and/or specialty adhesive coated materials for use in headliners and sunshades to enhance performance of the complete composite, either in manufacturing of the part or its functionality in the vehicle.

Precision Textiles will also introduce a new line of scrim products, some of them enhanced with new FR (flame retardant) technology, for hood and dash insulation. The products are designed to address the OEMs' more stringent requirements on the insulator parts that have filtered down to the component suppliers (Tier-Two). These products are expected to allow for more efficient molding due to better stretch characteristics and lesser mold contamination.

New from Foss in the automotive floor carpeting segment is its improved 16-20 opsy Summit product with upgraded construction. Developed for General Motors, the new Summit carpet passes 2000 wear cycles and is in line with a new trend being driven by lower cost and weight requirements. "It's almost a flat, technical looking carpet for the floor and then, for high-wear drop-in mats, a tufted product is being used. In Europe, most vehicles have nonwoven carpet on the floor, which is a market closely protected by tufted carpet producers, who, not coincidentally, also manufacture floor molding. This is starting to change." Mr. Rowell added that Foss is working closely with Honda on its Civic vehicle and a number of other carmakers to develop automotive floor carpet prototypes. "We are also working on wear tests in DaimlerChrysler taxis," he said. "This shift is coming but it may be two to three years before we see a change."

Foss is also promoting an antimicrobial fiber additive under its Fosshield Plus brand based on copper silver. Created to prohibit growth of bacteria and protect fabrics inside the car, the new product responds to demands from consumers who are not only more in-tune with health concerns but are spending an increasing amount of time in their vehicles. "It's really germ warfare out there, with these issues popping up in the news all the time. Baby Boomers are looking at what it's worth to live to be 100 and the car is now a place where we are all living. It's a little 4x4x6 closet. The average commute is 40 minutes and there is more mold and mildew being generated by people eating and spilling in their cars. Fosshield Plus protects fabrics and breaks down the cell membrane of germs."

According to Foss, copper silver is an inert, non-leaching additive that is environmentally safe, long-lasting and effective. "The competition is topical," explained Mr. Rowell. The Fosshield Plus antimicrobial can be combined with colors as well as UV (ultraviolet) and FR treatments. Future possibilities for the new bacteria-fighting additive are apparel, filtration, facemasks and household applications (for odor reduction).

At eswegee Vliesstoff GmbH, lower weight and cost facing scrims have been introduced for the acoustic market such as hoodliner, dash and tunnel components. Also, new flame retardant nonwovens were developed to meet the stringent requirements of carmakers such as Volkswagen, Ford and Toyota. Also new are headliner and package tray facing stitchbonded materials with lower weights to provide cost saving options for Tier-One/OEMs.

At its U.S.-based sister company HofTextiles, progress is being made on a capacity expansion for the production of automotive nonwovens. The new line is already running at full utilization and new products were introduced with high stretch characteristics and high performance flame retardency to meet the Japanese specifications from Honda and Toyota in the U.S.

Also in the area of acoustics, German roll goods producer Sandler AG is promoting a range of sawasorb lightweight, absorbent nonwovens for acoustic applications throughout the interior of a vehicle. These highly efficient nonwoven sound absorbers are produced for different sound absorbency levels for individual applications. Temperature-stable versions are also available. For exterior applications, hydrophobic and oleophobic versions feature quick drying time and resistance to engine fluids. These nonwovens can be thermally molded without additional lamination, for example as textile wheel house liners. For visible applications in the vehicle, all absorbers are available in anthracite under the sawasorb shadow brand.

As an acoustic headliner, sawaform is used as a mechanically stable, self-supporting component that is lightweight and 100% recyclable. "Due to its outstanding thermal moldability as well as the excellent formability in deep draw areas after the molding process, many different interior trim parts can be produced out of this nonwoven," remarked Urlich Hornfeck, Sandler's sales director.

In upholstery applications, Sandler's Minibond/SoftTouch nonwovens are being used. They offer a high recovery rate for applications in seats, headliners, headrests and door panels. "Due to the continuously increasing number of application areas for single-polymer and multifunctional polyester, Sandler nonwovens are being applied in the interior and exterior of more than 30 different car models," noted Dr. Hornfeck.

Despite these recent advancements, OEMs are constantly looking for more from nonwovens, specifically when it comes to cutting edge designs and appealing textures. Mary Dovell, materials engineer for Honda R&D Americas, feels that nonwovens haven't yet reached their potential. "The major challenges to North American suppliers for automotive applications are texture and design. There has been a slight improvement over the past two years, but I believe they're capable of much more. They should investigate design variations and hand/feel softness," she suggested. In the meantime, Ms. Dovell forecasts that more nonwovens will be applied to entry-level vehicles. "I'm hoping our domestic suppliers create nonwovens for applications other than floors that rival European and Japanese products." She added that the company's 2007 Acura MDX features an attractive needlepunch dilour product on the cargo lid and side linings.

Even with their work cut out for them, nonwovens still benefit from the advantages they offer over conventional fabrics. "Nonwoven products will continue to replace traditional products," predicted PCC's Mr. Hoffmann, "even to the extent of eventually becoming components on their own or in conjunction with other materials, such as textile wheelhouse liners and HVAC ducts, where they are clearly providing an advantage over commonly used materials. Because nonwovens are generally far more cost-competitive than other products, and the sheer endless design and performance features, as well as possibilities of rather quick modification without high re-tooling costs, they pose many advantages. At this point, it is safe to say that nonwoven products have already established their position in the automobile market and have become an integral part of every automobile produced worldwide."

For its part, eswegee has seen opportunities for nonwovens as replacement materials for both foam and PVC films. "We have now successfully implemented our new technology from Mittweida into production for foam substitution under seat fabrics," stated Mr. Kappel. "The OEMs (especially BMW, DaimlerChrysler and Audi) proved the material to have many benefits compared to foam such as better air permeability, lower fogging, no odor, pleasant seating climate and recyclability. A lot of new models over the next years are scheduled to use our Multiknit."

Also part of Textilgruppe Hof, Techtex GmbH has developed a new generation of Malivlies products to be used as a substitute for PVC films for luggage covers in the French automotive market. The product offers cost savings over current materials, fewer fogging issues and an appealing textile surface.

By many accounts, nonwovens can only successfully compete against traditional materials in automotive applications if they can prove themselves to be as good or better than the products currently being used. On the other hand, for Mr. Hodge of FIT, it all boils down to cost, not performance. "The only way to convince automakers to switch to a new product is lower cost," he said.

Ms. Dovell of Honda questions whether nonwovens manufacturers are doing a good enough job of convincing carmakers that nonwovens are a better option. "From an engineering standpoint, side by side comparisons of nonwovens versus current products for material and part performance are very welcome, but rarely offered. Knowing where the nonwoven contenders are being successfully applied and for how long is important also. And finally, cost should be compared in such a way that the entire part cost is considered, not only the material it is replacing," she said.

From the perspective of Freudenberg's Mr. Preininger, nonwovens may indeed have many benefits but they are not the answer to every automotive component demand. "Nonwovens are truly an engineered material that can be customized to meet a specific need. But nonwovens are not a substitution for all applications. The challenge is to continue to educate the customer on relevant capabilities that will enable them to choose application-based materials that meet design themes and cost targets."

Take A Deep Breath

Filtration is a key application area for nonwovens in the automotive sector. One company leading the way here is DuPont, which has introduced a line of automotive DuPont Premium Interior Air Filters featuring exclusive filtering technology that cleans the outside air before it enters the cabin of the car. DuPont Premium Interior Air Filters capture up to 96% of fine dust, pollen, allergens and other airborne particles and are also available with an added Activated Carbon Laver that reduces unpleasant odors inside the vehicle. The air filters are the latest offering from DuPont Separations Solutions. a growth initiative dedicated to developing and implementing technologies for filtration.

"Many airborne particles found inside cars are less than one micron in diameter. Yet, these fine particles, according to research, pose health risks because their small size can penetrate the deepest portions of the lungs," said Matt Trerotola, vice president and general manager of DuPont Nonwovens. "Every day the average American spends 100 minutes in a car going to work, school or running errands. With DuPont Premium Interior Air Filters, drivers and their families can now spend that time breathing cleaner air."

The air inside the vehicle may contain more particles than the outside air because it draws in vehicle exhaust, fine road dust. pollutants, allergens and other harmful airborne particles through the fresh air vent. Approximately 40% of new cars built in the U.S. today are equipped with interior air filters, while more than 70% of cars made in Europe and Asia now include such filters, sometimes referred to as cabin air filters. Similar to furnace or air conditioning system filters for the home, in-car air filters need to be changed regularly to be most effective.

Environmental Excellence

When it comes to environmental requirements, the automotive market continues to tailor products that follow legislative guidelines as well as offer earth friendly or recyclability benefits. "Environmental regulations have always been a major concern in all development work at Precision Textiles," said the company's Mr. Hoffmann. "They are consequently addressed with every new product that is introduced. But even beyond the legislative restrictions are efforts of the OEMs to have components that are environmentally friendly and/or fully recyclable. Several commonly used raw materials have to be either explicitly declared or are even banned by the OEM (i.e. certain flame retardant chemicals, for the manufacturing of automotive components)," he said.

Meanwhile. Freudenberg Vitech is responding to OEMs' directives to offer post-consumer recycled material with lower VOC content. "Our final product is considered a post-consumer recycled material with our manufacturing strategy upgraded to recycle post-manufactured materials (closed loop) as an environmental and cost reduction initiative," explained Mr. Preininger. "OEMs a Tier-One manufacturers expect a no-cost impact to move from virgin to post-consumer recycled materials."

By Ellen Wuagneux

Associate Editor
COPYRIGHT 2006 Rodman Publishing
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Copyright 2006 Gale, Cengage Learning. All rights reserved.

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Title Annotation:The Automotive Market
Author:Wuagneux, Ellen
Publication:Nonwovens Industry
Article Type:Company overview
Date:Dec 1, 2006
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