In 1909 Henry Ford offered his Model T with a windshield as an option. Nowadays, the windscreen does far more than protect the car occupants from the wind while on the move. Like so many other parts of the car, environmental, design, safety, security and comfort factors are driving automotive glass technology. The major glassmakers are working on rain-repellent glazing, plastic glazing and ‘smart’ sunroof glazing. Laminated side glass is also a growth area, both for security and safety reasons, while heated front windscreens are commonplace. But we can expect far more from tomorrow’s windscreens. They will feature all sorts of technical wizardry, enabling drivers to connect with toll collection devices, global positioning systems and the internet.
In this £4 billion global OE auto-glazing sector, one of the biggest issues facing glassmakers is how to suppress cost and weight, but add to the differentiation of the vehicle. Although introducing complex and intricate glazing designs makes a new car stand out from the rest, it also makes the manufacturing process slow and expensive. Shedding weight is also a major issue, especially for the small and lower-end cars. While thinner glass can adversely affect sound insulation, thick glass impacts on carmakers’ aims to improve fuel economy and meet emissions targets. Glassmaker profits, meanwhile, are being continually squeezed. Faced with annual price cuts, they must achieve higher productivity levels and fewer defects per million parts. The value-added element to car glazing coupled with productivity efficiencies has meant that glassmakers have, to some extent, been able to stem the slide in profits. The UK’s Pilkington leads the global automotive OE glazing market, closely followed by Japan’s Asahi Glass and the French group Sekurit Saint-Gobain. These three collectively share 67% of the worldwide market. Other competitors include PPG Industries which has strong positions in the US, Guardian Industries (also US) and Nippon Sheet Glass.
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The global automotive glazing aftermarket is reckoned to be worth £3 billion, of which around £1.9 billion relates to windscreen business-because the windscreen is the most commonly broken piece of glass. Industry sources estimate the glazing aftermarket volume is growing at around 3.5% per year. Still the most challenging issue in the global glazing aftermarket is price compression.
Here we take a brief look at some glazing innovations and challenges facing the industry.
- Weight watchers. Shedding weight is a major problem, especially for the small and lower-end cars. Thinner glass can adversely affect sound insulation. Thick glass impacts on carmakers’ aims to improve fuel economy and meet emissions targets. Currently, safety issues dictate that most cars in the US have 5mm front and rear glass, whereas the dictum for the Japanese and European markets is for 4mm glass. Side windows made from tempered glass often have a thickness of just 3mm. Shaving off a millimetre of glass from each sidelight could save 3 – 4lb in vehicle weight. Faced with these constraints, some carmakers are exploring the opportunities for plastic glazing to reduce weight. Although the idea of replacing glass with lighter weight plastic seems an obvious innovation, it is not new. For over 30 years, experts in the glass industry have explored the potential for plastic as a replacement to glass. The main problem is still rigidity. Glass is not only an essential part of a vehicle because it allows the driver to see, it also forms an important part of the structure. Plastic windows with the same 3mm thickness as glass would not offer that rigidity. Hence, most designs range between 4 – 6mm thickness.
- Another important consideration is noise control. Glazing is now seen as an important method of controlling vibration and providing insulation. But as carmakers reduce the thickness of the door metal to save weight, windows are more likely to vibrate in a thinner setting. In response, some glassmakers are developing laminated glazing sets to alter acoustic properties.
- Laminated side glass. Thanks to a cocktail of rising crime and consumer demands for greater in-car safety and drive comfort, demand for laminated side glass looks set to take off. Laminated side glass also means the occupant is not thrown out of the vehicle in rollover accidents, and offers anti-theft protection and improved acoustic comfort. In Europe, the accent is on greater personal security, whereas in the US the emphasis is on safety.
- Vehicle sealing systems. These systems will also be improved for better acoustics and permit the use of thinner, lightweight all-round glass. As one industry source said: “You’re seeing side glass companies that have the capability to go down to 1.2mm thickness, compared to the standard door glass of around 3mm. So, there can be major, major reductions in weight which equates to fuel economy. You can be looking at reducing the weight of vehicles by as much as 8-10lbs.”
- Water repellent glass gathers momentum. Another application that shows potential for growth is rain repellent glass. It is already well known in the aircraft industry and in Japan. Known in the business as hydrophobic, or “slick”, it is likely to become a familiar feature in the automotive world within the next five years.
- Glass surface area is increasing. Industry estimates suggest that the quantity of glass in each vehicle is steadily rising – by around 15% in the last 10 years. A mid-range saloon carries around 100lb of glass today, compared to around 85lb in 1990. That’s about 5% of the total weight of the average car. The growth of MPVs (multi-purpose vehicles, or people carriers) over this decade, amongst other car segments, points towards an increase in the total glazing area of vehicles. An average saloon carries around four square metres of side and rear glass, whereas a minivan (or MPV) may typically carry around 7.5 square metres of glass, of which the windscreen accounts for 1.5 square metres. Surface area will continue to grow as demand for vehicles with ‘open air’ sunroofs gains momentum.
- Solar control glass to get better still. Solar-control glass reduces the heat and light entering the vehicle. As the US market reaches near saturation point, up from around 50% in 1996, carmakers will look for a 10 -15% improvement in solar-controlled glass.
- There’s a lot going on in light reactive windows or ‘smart glass’, too. Auto applications include sunroofs, sunvisors, rear-view mirrors, instrument panels and navigation systems. It means that you can simply turn a dial to block out the light, eliminating the need for a sliding shade panel altogether. That’s important for the sunroof makers as they move towards offering ‘open sky’ roof designs.
- Differentiation of the vehicle. One of the biggest issues facing glassmakers is how to suppress cost and weight but add to the differentiation of the vehicle. Although introducing complex and intricate glazing designs does help to make a car stand out from the rest, it makes the manufacturing process slow and expensive.
- Glassmaker profits, meanwhile, are being continually squeezed. Faced with annual price cuts, glass manufacturers must achieve higher productivity levels and fewer defects per million parts. The value-added element to car glazing, coupled with productivity efficiencies, has meant that glassmakers have, to some extent, been able to stem the slide in profits.
Market trends
Market size – OE windscreen and window glass
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By GlobalDataThe global OE glass market is reckoned to be worth £4 billion for the 55 million vehicles produced annually. The size of this market is determined by three main factors:
- the number of vehicles produced;
- the dimension of the glass, i.e. the number of square metres of glass that are fitted to vehicles; and
- the amount of value added.
As far as the first factor is concerned, the market is cyclical. According to Tamglass Ltd, automotive production was 52 million units in 2000. That number will rise to 102 million units in 2020. They estimate that the amount of glass surface will double by 2020. They predict that a major growth area will be in developing countries with medium-sized plants. The company states that float glass production was 33 million tonnes in 2000, of which five million tonnes (15%) was used in the automotive market. Of that, 95% was safety glass.
Industry estimates suggest that the quantity of glass in each vehicle is steadily rising-by around 15% in the last 10 years. A mid-range saloon carries around 100lb of glass today, compared to approximately 85lb in 1990. That’s about 5% of the total weight of the average car. The growth of MPVs (multi-purpose vehicles, or people carriers) over this decade, amongst other car segments, points towards an increase in the total glazing area of vehicles. An average saloon carries around four square metres of side and rear glass, whereas a minivan (or MPV) may typically carry around 7.5 square metres of glass, of which the windscreen accounts for 1.5 square metres.
Figure 1: Renault Espace
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Source: Renault |
The value-added element offered by the glassmakers also continues to grow, i.e. encapsulated glass, extruded glass and metal assemblies on glass. Some manufacturers cite the back window as an example where the value has doubled since 1980 thanks to the addition of a defroster, solar control and antenna. It may also need to be moulded into a more complex shape or encapsulated into a plastic surround.
Demand for auto glazing rising at 5% pa –
Pilkington expect to see vehicle build worldwide growing at a rate of 2.5% annually through this decade whereas demand for automotive glazing will rise by 5% per annum. The unit value of automotive glazing is also rising, says Pilkington, reflecting the introduction of more high-tech products, such as solar control glass and security glass, complex shapes and the incorporation of added-value as the carmakers seek fully integrated glazing modules.
– but profits still squeezed
Glassmaker profits, meanwhile, are being continually squeezed. Faced with annual price cuts, glass manufacturers must achieve higher productivity levels and fewer defects per million parts. The value-added element to car glazing coupled with productivity efficiencies has meant that glassmakers have, to some extent, been able to stem the slide in profits.
But with so much development work needed to fund future glazing products, how can the glassmaker afford to give a price cut? “Sometimes customers will pay for tooling,” says Brad Watterworth, senior business manager for Pilkington Automotive Plc based in Sterling Heights, Michigan. “But we basically try to recover the cost (of development) through the piece cost. There is a delay, though. But some of our customers are now paying for tooling and development upfront. A lot of these agreements revolve around the design issues where the savings can be shared between our company and the vehicle manufacturer. We come up with the design idea and the savings get shared for the first year and then in year two, the savings go to the car manufacturer.”
Average complete glazing set worth around $150
We estimate that a complete glazing set for an average saloon costs the carmaker around $150, of which the windscreen accounts for about $40 – $50.
Market size-aftermarket windscreen and window glass
The global automotive glazing aftermarket is reckoned to be worth £3 billion, of which around £1.9 billion relates to windscreen business because it is the most commonly broken piece of glass. Industry sources estimate the glazing aftermarket volume is growing at around 3.5% per year.
In the UK retail aftermarket, Auto Glass are number one and Auto Windscreen is number two. Collectively, these two companies have 70% of the UK market. The leader in Europe is Belron.
Some market dynamics
Demand for automotive glass is influenced by several factors. Replacement volume increases as the total vehicle population and the number of miles driven increases. Severe weather and road conditions can also increase demand for automotive glass repair and replacement. However, consumers may defer fixing minor damage to a windscreen until a vehicle trade-in or sale or vehicle inspection. Therefore, new vehicle sales, turnover of used vehicles and vehicle inspection laws influence automotive glass demand from one country to the next.
On the one hand there is a tendency on the part of legislators to be more severe about their requirements for the windscreen of the vehicle. Safety legislation is driving volume and value growth. On the other hand, the carmakers are becoming more powerful. The fitters of the glass are becoming more international, rather than the smaller, independent stores. The market is more specialised. In the early 1980s, a glass repair shop did not exist. It was part of a body repair shop. Insurance companies are also driving greater efficiencies and savings. The emphasis is now on repair, not replacement, which limits the growth of the aftermarket. Since the early 1990s, the glass industry has been consolidating and will continue to do so as insurance companies and fleet leasing operators demand national and regional coverage, while seeking to reduce costs by outsourcing their automotive glass claims. Despite this trend, there are still well over 20,000 small installers in the US alone who do not have either the national networks or sophisticated information systems required to effectively compete in a national market.
Nine million windscreens replaced each year in Europe –
According to industry estimates, around nine million windscreens are replaced each year in Europe. The vehicle manufacturers themselves control a third of this market, through dealer networks. The so-called ‘free’ market for auto replacement glass in Europe therefore amounts to six million replacement windscreens per annum, together with two million side and rear windows.
– and 12-13 million window pieces in the US
In North America, industry sources reckon that motorists replace around 12 – 13 million windscreens and windows in their vehicles each year. In a recent securities filing detailing how Ragen Inc will acquire common stock in Pro Glass technologies, Nevada-based Pro Glass presented some interesting industry projections. Pro Glass expect that, on an annual basis, ‘over 10% of all vehicles on North American roads will require replacement or repair. The near-term market outlook for the industry is that it will continue its growth pattern mainly due to increased population growth along with increased economic factors for individuals and their families (two-car families). … With increased auto sales comes increased auto glass replacement and repair, especially in cold climates.’ Pro Glass estimate that the market in Canada has annual growth revenues exceeding US$415 million, with around 1,200 auto glass repair shops. In the US, Pro Glass estimate that the aftermarket is some ten times greater than in Canada. The industry is predominantly made up of Ma and Pa (or Mom and Pop) type operations, representing around 65% of all retail outlets in the States.
Cost of windscreen replacement
Of course, the cost to the consumer of a replacement windscreen inevitably varies from model to model. “If you replace a windscreen for a 1967 Chevy S10-a vehicle that has been out for that long with no bells and whistles – that would cost around $125,” says Dee Uttermohlen, marketing manager at Safelite Inc. “But for a Porsche with on-screen everything, then you’re talking about a four-figure replacement cost. That on-screen would typically include a rain sensor, an on-star system, antenna, heater, etc. And pricing in the US is based on NAGS, a method in which to calculate the actual cost of the product and the estimated cost of the labour.”
Pro Glass’ filing also referred to a study carried out by Urton, Engele, Kook Associated of Saskatoon, Saskatchewan, who estimated that windscreen replacement in western Canada occurs with approximately 12% of the region’s vehicle registrations and 6% in other parts of the country. ‘The annual growth rate is approximately 5% and is estimated that there were 650,000 replacement windscreens for western Canada in 1999. At an average blended cost of $375 per replacement windscreen (insurance/no insurance), the market alone for western Canada is approximately $243,750,000.’
Price compression a major issue
Still the most challenging issue in the global glazing aftermarket is price compression. “In the same way that medical insurers compressed the price on medical claims, the same thing has happened in the auto glass industry,” says Dee Uttermohlen. “Auto insurers are saying that maybe in the past they were paying more than they should have for auto glass. Now, they’re coming back and saying ‘this is how much we’ll pay for auto glass’. But you can go down so low, you cut away so much fat but then you are cutting into the muscle and bone.”
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