A number of factors are shaping the lead-acid automotive starter battery market.  While some are market driven, others are outside manufacturers' control. Matthew Beecham recharges just-auto's annual review of the battery market.

It all starts here

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. In May 2006, a metric ton of lead cost about €700.  Today, the price has risen to about €2,200 per ton.  Given that approximately 60% of the battery price is directly impacted by the price of lead, hikes in the raw material mean manufacturers have no option but to raise battery prices. The price of oil is also driving up the cost of polypropylene used in battery manufacture. 

Consolidation among the major battery manufacturers continues to shape the industry.  Three valve regulated lead-acid battery manufacturers have emerged as global players:  Johnson Controls, Exide Technologies and GS Yuasa.  These three companies collectively control over 60% of the global OE and aftermarket for starter batteries. Others, such as Banner Batteries, Fiamm, East Penn Manufacturing and Amara Raja Batteries have national or regional market strengths.

Austria's Banner Batteries, for example, exports over 90% of its products to Europe, Africa and Asia via distribution partners. Banner sells its products via a European sales network consisting of 13 national companies with some 27 outlets.  Its sales to a further 50 countries take place via distribution partners. In addition to pursuing its strategy of founding sales companies in promising markets, Banner is in the process of expanding sales of starter batteries for the aftermarket, support automakers as they move to central and eastern Europe countries.

Günther Lemmerer, marketing manager and company speaker for Banner Batteries, told us:  "We can say that we have two regions where we are booming - the French market and the eastern European market. In eastern European countries, Banner either has its own companies or its own distributors over there.  This is where we want to grow.  The eastern European countries are the future for Banner. We can see good potential there. We made 3.3 million batteries to the year ended 31 March 2007.  In the year ending 31 March 2008, we expect to produce some 3.5 - 3.6 million batteries. In the OE business, we have seen significant increases with BMW, notably supplying them with an AGM battery for the Series 3 and 5 efficient dynamics project.  This is good business for us because it is the most innovative battery that we have."

OEM sales of batteries are driven mainly by new vehicle build sales, which are driven by consumer demand for vehicles.  The OEM market is characterized by an increasing preference by OEM's for suppliers with established global production capabilities that can meet their needs as they expand internationally and increase platform standardisation across multiple markets.

On the flipside, 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 three to five-year replacement cycle. The main buyers of replacement batteries consist of a limited number of large, knowledgeable and price-sensitive companies that are in a position to obtain more favourable purchasing conditions.

Another notable trend in the battery aftermarket relates to the sheer complexity of the starter battery itself and the extent to which an independent garage has the know-how and equipment to install a replacement battery. 

Starting anew

In manufacturers' R&D departments, there are a variety of technical developments underway that are aimed at improving the comfort, safety, environmental compatibility and cost-effectiveness of conventional vehicles through the use of new electrical components.  As a result, modern vehicles show an increasing need for electrical performance and power. 

The increasing use of power-hungry options in modern passenger cars, such as heated seats, quick-defrost glass, electrically powered brakes, steering, water pumps, heated catalysts and advanced powertrains, is placing unprecedented demands on automotive batteries.  The average power consumption of a passenger car is now about 85kW, up from barely 60kW in the early 1990s.  To compound the problem, the operating environment has become far more hostile.  Under bonnet temperatures now range from 75 - 100ºC.  Today's battery must also cope with an increasing number of shorter stop-start journeys at lower average speeds, leading to a greater drain on the starter battery.  Batteries for these new electrical power systems represent a particular area of focus for most battery producers.  In the 1950s, the auto industry switched from 6-volts to 12-volts to help run more powerful headlights and starter motors as well as moving to more compact batteries. 

Last July, Banner began equipping the BMW 1 (3/5 doors) and 3 Series (coupé) with its 90Ah AGM technology batteries.  The product offers the special cyclical resistance, which is needed for use in BMW's gentle hybrid (micro-hybrid) concept. The use of AGM technology by BMW became necessary due to its 'efficient dynamics' project series.  This involved the introduction of a variety of measures to improve fuel consumption and reduce CO2 emissions. To help achieve this, BMW is also using a gentle hybrid concept which places increased demands on the starter battery. The recovery of braking energy charges the battery during coasting, while in the case of acceleration, the in-board network is supplied from the battery in order to ease the load on the dynamo.

In addition to pushing back the technical boundaries, the major automotive battery producers are also addressing ways in which their products may be recycled.  For example, Johnson Controls has been fine-tuning a 'closed-loop' process in the US. Its process works as follows:

  1. Johnson Controls' factories build batteries using equipment and processes designed with pollution control in mind.
  2. The company delivers fresh batteries to some 10,000 customer locations on a regular basis
  3. On delivery, the company picks up spent batteries at each location.
  4. The spent batteries are shipped to a smelter for recycling where the lead is separated from the polypropylene and fed into a furnace for smelting.
  5. The lead is then returned to Johnson Controls for use in new batteries.
  6. The polypropylene is washed and recycled.
  7. Finally, the acid is treated in the smelter's wastewater treatment plan and neutralized.

Johnson Controls reports that lead-acid automotive batteries are one of the most highly recycled consumer products, with return rates "exceeding 95%" in the US.

Advanced batteries are also being recycled, typically being melted down and some materials recovered.  Research being conducted by OnTo Technology LLC is currently underway into determining the most cost-effective methods for recycling such batteries and whether more of the high-value materials can be recovered, like lithium, cobalt and some polymers.

In addition to supplying new batteries for OEMs, Bosch operates a thriving aftermarket business.  At last year's Equip Auto press conference in Paris, Robert Hanser, president, Automotive Aftermarket Division, Bosch, said:  "The ecological factor plays an important role in the production and disposal of starter batteries.  Bosch ensures that used batteries are recycled in an environmentally friendly and professional manner, and that potentially recyclable materials are processed to allow them to be reused in battery manufacturing.  In Europe, almost 100% of batteries are recycled."

Bosch recently started manufacturing an Electronic Battery Sensor (EBS) system to help avoid the most common cause of vehicle breakdowns - a discharged battery. Using some clever electronics, the sensor measures the battery voltage, current and temperature, calculating from these all the information that establishes the condition of the battery.

For its part, Continental has also developed a so-called Intelligent Battery Sensor (IBS) which provides an early warning when a battery is running down due to age, thereby preventing breakdowns. The company says the sensor will go into production this year. The IBS is one of the components of Continental's 'Battery and Energy Management' approach.  This approach aims to ensure that energy management will be optimised in tomorrow's vehicles.  To achieve this, the various devices that consume electricity in the vehicle will trade back and forth in a type of 'electricity exchange.' In this scenario, electronics that are required purely for comfort reasons, such as heating, will reduce their consumption for a short time to free-up energy for safety electronics, thereby ensuring that the other vehicle systems continue to function properly.

Although lead-acid starter batteries may not appear to have changed over the last four decades, internally, technological advances have been made to ensure that they keep up with modern demands. Lead-acid batteries will continue to start cars for many years, but the search continues for lighter, more efficient and cleaner replacements.

Matthew Beecham

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