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Expert Article

 Johannes Messer

Johannes Messer

Owner, Johannes Messer-Consulting GmbH

Automotive Industry Estimates of German Al Castings Demand from 2020 to 2025

Author / Editor: Johannes Messer / Nicole Kareta

While many uncertain forecasts have been made in recent weeks and months about the current development of the automotive industry, there is hardly any talk about the future demand for aluminum castings. In order to give the Al foundries an orientation for answering the upcoming strategic questions, an Al castings demand forecast 2020-2025 for Germany has been made.

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Industry experts agree that the classic crisis levers of the past will not be sufficient for the challenges ahead this time.
Industry experts agree that the classic crisis levers of the past will not be sufficient for the challenges ahead this time.
(Source: gemeinfrei / Unsplash)

Based on existing general forecasts, the market and technology knowledge of foundry and market experts was used to obtain an assessment of the development of the demand for aluminum castings in Germany. 20 experts from the following fields were interviewed: foundry, mold making, machine manufacturers, universities, foundry consulting, customers (OEM, Tier 1). As a result, best, worst and realistic case scenarios for the aluminum castings demand in Germany for the years 2020 to 2025 were developed. The factors that play a central role in this are the economic situation, car sales, the transformation of the automotive industry and substitutions of, for example, chassis and structural parts.

All experts assume that the aluminium cast production figures 2017 (base year = 100%) will be reached again in Germany in 2025 at the earliest.
All experts assume that the aluminium cast production figures 2017 (base year = 100%) will be reached again in Germany in 2025 at the earliest.
(Source: Johannes Messer)

As the most important and in principle unanimous estimation, all experts assume that the aluminum castings production figures of 2017 (base year = 100 %) will be reached again in Germany in 2025 at the earliest. The diagram shows what the worldwide development in terms of aluminum castings production figures has looked like in the past and what the current status in Germany is. In addition to the diesel affair, trade conflicts, the CO2 discussion and the transformation in the automotive industry, the corona crisis is now making things more difficult, which is why experts are assuming a flat increase. In addition to the forecast values, there are further findings:

  • in the area of chassis and structural parts, opportunities are seen in smaller vehicle classes in addition to the applications already known (mid-range and luxury class vehicles). However, strong competition from other production processes is expected here
  • in the growth markets of chassis and structural parts, as well as battery boxes, growth is expected primarily in the upper clamping force ranges (HPDC)
  • a trend towards shifting casting production to the growth markets is still expected
  • it is expected that technology issues will or must become more important than in the recent past
  • economic and technological competition will also gain in importance due to overcapacities
  • liquidity remains a key issue

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Here, too, there is a high level of agreement among experts. Above all, there is agreement that the classic crisis levers of the past will not be sufficient for the challenges ahead this time. Some of the challenges listed were already in existence before the corona crisis.The coronavirus has further intensified the field of tension. Foundries are currently at an epochal milestone with enormous risks and considerable opportunities:

  • capacities in all areas must be adjusted to the expected development in the coming years
  • fixed costs must be converted into variable costs. Flexibility is gaining a new and much higher significance
  • the corporate strategy must be developed or revised individually and in the context of risks and opportunities
  • the technology roadmap must now be geared to current requirements. Technology topics can only be successfully implemented along the entire value chain with all participants (partners)
  • the tasks facing companies and management are complex. Technological, economic and strategic knowledge is required. Cooperation, partnerships and exchange/consulting are valuable and should be strived for
  • in addition to the companies, the main stakeholders (politics, associations, banks, trade unions) must also take on their role and task on their own responsibility Accompanying support is an obligation and absolutely necessary
  • the upcoming measures cannot be delayed. Necessary changes should be implemented as soon as possible

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About the author

 Johannes Messer

Johannes Messer

Owner, Johannes Messer-Consulting GmbH