INTRODUCTION

In the period from the 1960s plastic use on vehicles has
grown considerably, both as a proportion of the total vehicle weight and in absolute
terms. Plastics of various types have become the material choice for vehicle interiors and
bumper fascias, and are increasingly used in other applications such as fuel tanks and
inlet manifolds. However, it is still the case that plastics consumption by the automotive
industry world-wide is an order of magnitude less than steel on a weight basis.

Table 1
provides a forecast of global materials consumption in the automotive industry on a
‘business as usual’ basis.

Table 1 Forecast changes in total materials demand: 2000
to 2020 (mtpa), business as usual scenario.

Material

1997

2000

2005

2010

2015

2020

Steel

55.460

53.462

55.320

45.646

43.420

43.003

Iron

9.694

9.225

8.212

7.100

5.829

5.952

Aluminium

5.343

6.493

8.472

8.886

9.745

10.118

Plastic

6.733

6.917

7.740

7.158

7.389

7.905

Elastomers

3.487

3.308

3.473

2.845

2.428

2.375

Glass

2.012

1.931

2.027

1.926

1.965

1.996

Copper

0.910

0.965

1.158

1.089

1.055

1.203

Zinc, etc

0.945

0.978

1.302

1.626

2.054

2.374

Other

2.357

2.067

2.432

2.609

2.361

2.523

(Source: Wells and Nieuwenhuis, 1998)

Without going into detail on the assumptions underpinning
the forecast, the point of Table 1 is that it illustrates the threat facing the plastics
industry – unless significant new applications are secured growth in consumption by
the automotive industry will be modest.

The key issue is the vehicle body and the material used for
its’ construction. While there have been many examples of cars with plastic bodies or
occasional plastic panels, penetration of the vehicle body market has been marginal
overall. In this paper it is argued that the main problems for the plastics industry have
been a) seeking to compete directly with steel and b) failing to take a ‘total
business case’ view. Specifically, the paper introduces the concept of Micro Factory
Retailing that fundamentally shifts the terms of competition in favour of plastics.

First, the recent history and current status of plastics
use in cars is reviewed. In essence, plastics use for car bodies has been confined to
three main categories: low volume cars; occasional panels; and highly expensive structural
plastic monocoques. This is followed by a brief outline of the Micro Factory Retailing
(MFR) concept together with a comparison with contemporary automotive industry practice.
The TH!NK car is used as an illustration. Equally important however is the contribution
that MFR makes to wider social, economic and environmental issues – a brief analysis
of some of the advantages of MFR is presented. Finally, the conclusions comment on the
prospects for plastic intensive vehicles and the need for the plastics industry to go
beyond a narrow definition of the engineering case for plastics, and include the wider
business and social case.

PLASTICS: FIGHTING THE WRONG BATTLES?

It is the case that plastics of many types have been
employed in a wide range of applications in cars, novel plastic materials and components
continue to emerge. These applications should not be discounted, but the real volume
opportunities are with vehicle bodies. Plastics penetration of vehicle body applications
have been in three main areas:

  • Low volume, niche vehicles.
  • Occasional panels on vehicles that are largely steel.
  • Structural plastics in very high performance motorsport
    racing cars.

In none of these cases does plastic present a significant
threat to the dominance of steel as the material of choice for vehicle bodies.

Low volume, niche vehicles
Applications for thermosets and thermoplastics are evident in several cars built in small
numbers, but these are never going to be significant volume users of plastics. In a sense,
this is avoiding competition with the all-steel body where, because of the high capital
cost of equipment and tooling, it is uneconomic to produce in very low volumes.

Still, the use of non-structural plastic on exteriors for
cars such as the Renault Espace, and on sports cars such as those produced by TVR and
Marcos do show the potential of the material and give vehicle manufacturers valuable
experience. In the case of the McC Smart, plastic content reached 95 kg (or 14% of total
weight) including body panels, headlights and rear windows and, at least in the original
plans, production volumes were to be around 200,000 units per year. With the Smart, an
attempt has been made to capture at least one additional benefit from the use of plastic
external panels – customers are able to ‘refresh’ the car by changing the
panels.

Occasional panels
It is relatively commonplace to find plastic panels employed on cars that are otherwise
all-steel in body construction. In North America it is often SMC that is preferred, in
Europe the choice tends to be more varied. The use of plastic on these occasions tends to
be a pragmatic and essentially ‘tactical’ decision to meet a particular need.
The panel may be of a design that is difficult to execute in a pressed and welded steel
assembly, or the panels may be for a variant that is produced in very low volumes for
example. Such applications again provide manufacturers with experience with the material,
as well as customer reaction to the material. However under these circumstances plastic is
more or less reduced to complying with the production demands of the all-steel body. That
is, the plastic part will have to be tolerant of the paint shop (or able to be fitted
post-painting); it will have to provide a colour match with the steel body paint; it will
require fixtures to adapt it to the steel body. In these circumstances some of the
potential advantages of plastic components, such as parts consolidation, are unable to be
realised.

Again, these applications do not amount to a fundamental
challenge to the all-steel body. Penetration of the external panel market world-wide is a
fraction of a percent. Rather, this is competing with steel on steel’s terms and as
such these applications are vulnerable to substitution.

Structural plastics
More recently the use of structural plastics has been advocated (Lovins et al, 1997). This
would certainly represent a radical departure for the automotive industry and, if it
occurred, would usher-in the era of the plastic intensive vehicle. While the use of carbon
fibre reinforced plastic has many advantages in terms of weight, stiffness, formability
and strength there remain many uncertainties with the overall concept. At present, the use
of such materials is confined to high performance sports cars such as those used in
Formula 1 racing. The merit of the structural plastic approach is that it does seek to
change the terms of competition with the all-steel body. However, it is too expensive and
there are many other concerns in, for example, the environmental cost of carbon fibre
production.

Here, the thinking is in terms of displacing aluminium and
steel entirely to create an all-plastic vehicle body. The approach is essentially
product-driven in that it starts with the (relatively) poor performance of the all-steel
body in terms of fuel economy. However, there is not a convincing response to the
manufacturing per-unit cost advantage of steel. Such visions for the future of the
automotive industry are useful in highlighting the long term prospects for plastics, but
do not yet appear to offer a realistic hope of displacing steel in the immediate future.

Indeed, it is evident from the decisions made by several
vehicle manufacturers that aluminium offers the greatest immediate potential as a low to
intermediate volume alternative to the all-steel body (Crosse, 1999). Moreover, with the
technologies employed on the Multipla model, Fiat has demonstrated an intermediate volume
approach that retains the all-steel body.

CHANGING THE TERMS OF COMPETITION WITH MICRO FACTORY
RETAILING

The key to unlocking the potential of plastic in the
automotive industry lies in the weaknesses of the existing approach to manufacturing and
selling cars, including the in-use phase of vehicle life. In their different ways, both
specialist low-volume producers and the Smart show elements of the thinking that could
displace the traditional approach.

In brief, the traditional approach involves the
construction of large car plants able to manufacture and assemble all-steel cars in large
numbers. In so doing, manufacturing economies of scale are realised and per-unit
ex-factory costs are low. In order to sell this many cars, extensive geographic markets
are required – which in turn means long logistic chains and a network of retail
outlets. To date, it has largely been the case that the vehicle manufacturers did not bear
a great deal of the investment cost in the franchised dealer network and neither did they
capture a high proportion of the total lifetime revenue stream created by a car in use.
Long logistics chains were managed by a combination of stock and waiting times. The entire
traditional product-manufacturing-retail system is increasingly inappropriate to the
demands of the market (Wells and Nieuwenhuis, 1997).

Table 2 Total global vehicle production by the leading
vehicle manufacturers, 1998

Manufacturer Total volume
General Motors (includes Saab,
Vauxhall, Opel)

7,560,000

Ford Motor Co. (includes Jaguar,
Volvo)

7,306,270

Toyota Motor Corp. (includes
Daihatsu)

5,290,000

Renault-Nissan (inlcudes Mack
Truck and RVI)

4,839,303

Volkswagen AG (includes Audi,
SEAT, Skoda)

4,822,679

DaimlerChrysler AG (includes
Freightliner, Setra)

4,422,800

Fiat Auto SpA (includes Alfa
Romeo, Ferrari, Iveco, Lancia, Maserati)

2,660,000

Honda

2,330,000

PSA Peugeot Citroen

2,269,900

Suzuki Motor Co.

1,671,804

Mitsubishi

1,664,161

BMW (includes Rover, Land Rover)

1,204,000

Mazda

1,005,561

(Source: Derived from Automotive News Europe, 1999.
Includes commercial vehicles.)

The fundamental reason for the pressures for consolidation
in the automotive industry is the ‘gap’ between the technical maximum economies
of scale demanded by the technologies used in car manufacturing, and the (considerably
lower) actual economies of scale realised by the current structure of production. In
theory, maximum per-model economies of scale are in the region of two million units per
annum. In 1998 global car production was 42.8 million units. This is sufficient to support
four vehicle manufacturers – each with a five-model range, with each model selling
two million units. In practice, no vehicle manufacturer has total volume of ten million
units (see Table 2) or a single model in production at volumes of two million units (see
Tables 3, 4 and 5). European producers in particular have been able to sustain smaller
per-model volumes through product-differentiation and strong branding.

Table 3 Vehicle manufacturers production in Europe: brand
volume and highest volume model, 1998

Brand

Brand volume

Highest volume
model

Volume

BMW

638,217

3 series

318,887

Land Rover

136,885

Freelander

60,577

Rover

328,666

200 series

145,048

FIAT

1,024,641

Punto

568,745

Alfa Romeo

197,681

156

109,325

Lancia

175,216

Ypsilon

137,147

Ford

1,536,496

Fiesta

414,856

Jaguar

50,025

Daimler

36,805

GM

0

na

0

Opel

1,485,146

Corsa

559,462

Saab

124,707

93

70,564

Vauxhall

267,768

Vectra

154,444

Honda

112,089

Civic

81,411

Mercedes

868,684

C class

319,987

Chrysler

75,831

Voyager

52,971

Mitsubishi

91,974

Carisma

78,295

Nissan

288,818

Micra

159,340

Peugeot

1,037,457

306

353,379

Citroen

686,197

Xsara

285,408

Porsche

40,885

911

21,633

Renault

1,656,423

Megane

641,656

Toyota

172,342

Avensis

157,796

Volvo

398,414

S/V 40

151,015

VW

2,047,323

Golf

810,821

Audi

605,348

A4

265,414

SEAT

391,443

Ibiza

176,453

(Source: Automotive News Europe, 1999. Note: Excludes low
volume producers. Western Europe only. Mitsubishi production at Nedcar, joint venture
plant with Volvo in the Netherlands.)

Table 4 Vehicle manufacturers production in Japan: brand
volume and highest volume model, 1998

Brand

Brand volume

Highest volume model

Volume

Daihatsu

556,100

Move

157,763

Honda

1,243,468

CRV

223,203

Mazda

838,170

Familia

263,907

Mitsubishi

1,081,130

Lancer

121,720

Nissan

1,551,813

Pulsar

196,307

Subaru

426,651

Forester

106,578

Suzuki

807,452

Cultus

112,416

Toyota

3,165,805

Corolla

390,523

(Source: Automotive News Europe, 1999. Note: Includes truck
production in brand volume figures.)

Table 5 Vehicle manufacturers production in North America:
brand volume and highest volume model, 1998

Brand

Brand volume

Highest volume
model

Volume

BMW

56,734

Z3/M Coupe

54,802

Ford

3,619,672

F Series

600,961

Lincoln

200,454

Town Car

110,7189

Mercury

406,414

Grand Marquis

134,155

Mazda

46,837

B Series

46,837

GM

125

EV1

125

Buick

425,536

LeSabre

142,155

Cadillac

181,699

DeVille

105,206

Chevrolet

2,517,337

Silverado

571,713

GMC

518,193

Sierra

165,188

Oldsmobile

363,573

Intrigue

95,255

Pontiac

592,630

Grand Am

184,335

Saturn

243,796

Saturn

243,796

Honda

881,694

Civic

367,651

Mercedes

69,454

M Class

68,732

Chrysler

368,680

Concorde

87,843

Dodge

1,664,943

Ram

469,187

Jeep

522,985

Grand Cherokee

238,696

Plymouth

350,499

Voyager

189,957

Nissan

498,624

Altima

162,273

Subaru

216,198

Legacy

104,229

Toyota

647,942

Camry

297,012

VW

338,959

Jetta

123,037

Volvo

8,171

V70

8,171

(Source: Automotive News Europe, 1999. Note: Includes light
truck production; includes Mexico and Canada.)

As Tables 2,3,4 and 5 show, no vehicle manufacturer in the
world is able to reach either a total annual production volume of ten million units, or a
per-model production volume of two million units per annum. There are many reasons for
this state of affairs, and many strategies undertaken to ameliorate the failure to achieve
maximum economies of scale. However, the closer any vehicle manufacturer is able to reach
the theoretical ideal, the greater will be the competitive advantage that manufacturer
will enjoy. It is probably the case that the cost difference between one and two million
units per annum is only about 5% per unit – but in the automotive industry this is
the difference between profit and loss. The most significant attempt to resolve the
problem is the adoption of so-called platform strategies. In brief, this approach allows
the basic structure of the car to be common to several different models or variants, so
achieving underlying economies of scale. It is likely, for example, that by the year 2000
the VW B platform (which includes the Golf model) will reach two million units per year.
Other measures such as those embodied in the ULSAB programme have been used to improve
aspects of the performance of all-steel bodies (Kochan, 1999).

In the 1990s however the vehicle manufacturers have
virtually ceased to make money making cars. Revenues are earned in other areas, such as
finance provision or replacement parts, but despite this profitability across the industry
is generally very poor. In Europe, several vehicle manufacturers have moved downstream
into direct control over retail and distribution in order to capture a greater share of
the value of the vehicle. At the same time, vehicle manufacturers world-wide have been
selling non-core operations in components production (e.g. Ford – Visteon; GM –
Delphi) as part of this overall shift from manufacturing focus to design, systems
integration and retail.

The business case for MFR has many aspects, not all of
which can be captured in a like-for-like comparison with traditional manufacture and
distribution. However, it is useful to consider the basic investment costs of the two.
Table 6 provides a summary of a hypothetical case to produce 250,000 cars per annum.

Table 6 The investment costs of MFR compared with
traditional manufacture and distribution

Item

MFR

Traditional

Volume per plant

5,000

250,000

No. of plants

50

1

Workers per plant

100

3,000

Total staff in production

5,000

3,000

Investment per plant

£50 m

£1.5 bn

Total investment in production

£2.5 bn

£1.5 bn

Model R&D cost

£100 m

£500 m

Model specific dies, etc.

£250 m

£500 m

Total investment in model

£350 m

£1.0 bn

No. of dealerships

0

500

Staff in distribution

0

5,000

Investment per dealer

£0

£3 m

Total investment in distribution

£0

£1.5 bn

Total investment

£2.85 bn

£4.0 bn

(Source: Wells and Nieuwenhuis, 1999a. Note: Assumes 500
new car sales per dealer, investment cost of £3 million per dealer and 50 staff per
dealer for traditional retail. Assumes £5 million per micro factory in model specific
dies, etc.)

Perhaps more important than the simple investment cost
comparison are the many strategic possibilities which flow from MFR. A few potential
advantages are listed below:

  • Investments in productive capacity can be incremental, and
    thereby expand or contract in line with the market.
  • The incremental expansion of capacity can also have a
    geographic component in that new plants can be added to develop new markets.
  • New products can also be introduced incrementally, on a
    factory-by-factory basis.
  • The factory also becomes the location for repair, spare
    parts, in-use modification (e.g. external panel refresh) which allows the manufacturer to
    benefit directly from profitable aftermarket activities.
  • The factory can undergo a transition over time from an
    essentially new car production focus, to one more involved in service and repair. That is,
    the factory does not depend absolutely on the continued sale of new cars.
  • Customers can be taken around the plant, can meet the people
    who will make their car, and can thereby feel ‘closer’ to the product.
  • There is no conflict of interest between production and
    retailing. The vehicle manufacturer can have direct control over the retail business and
    captures a greater share of the downstream value chain.
  • The inherent flexibility of MFR is the practical basis upon
    which new levels of customer care can be built. MFR makes possible flexible response,
    shorter lead times, and late configuration.
  • The MFR concept takes advantage of the possibilities offered
    by the internet, which becomes the main medium by which customers order vehicles, spares,
    etc.
  • Stronger worker commitment to the product and to customers.
    These small factories escape from the ‘mass’ culture of traditional high volume
    manufacturing.
  • MFR is the best means to take advantage of modular supply
    strategies combined with commodity or off-the-shelf purchasing. In transport terms, it is
    more efficient to move components and sub-assemblies rather than complete vehicles.
  • Product can be customised to local market conditions.
  • Through duplication of the MFR substantial investment
    savings could be realised through the multiple ordering of machines and equipment and the
    use of a standardised layout.

TH!NK: a brief case study

The basic design concept of this car is a two-seat city
battery electric vehicle for urban commuters and utilities (Wells and Nieuwenhuis, 1999b).
Given that the original company behind TH!NK Nordic AS was a specialist in thermoplastic
moulding, it is not surprising that the design called for a largely plastic body. A
further important principle under-pinning the design of TH!NK has been to employ generic
parts where-ever possible, and to utilise the design expertise of suppliers where
necessary. Thus, for example, the running gear is from a Peugeot 106.

The TH!NK employs a lower frame constructed from 90% high
strength steel cut, folded and welded rather than pressed into shape – the design for
which was developed in co-operation with British Steel Automotive Engineering Group.
Normal steel pressings would have required large investments in tooling. Mounted onto the
lower frame is an upper frame constructed from aluminium extrusions, seam welded at the
joints – this time Norsk Hydro provided useful expertise. The thermoplastic body is
moulded in one operation, with separate mouldings for the doors, roof and a few smaller
parts, and is non-structural. A key to the total design is the method of joining the
plastic body panels to the aluminium structure – an area where TH!NK Nodic have several
patents. The car is front-wheel drive, with the electric motor and controller supplied by
Siemens. Power is supplied by 19 blocks of 6 volt water-cooled Ni-Cad batteries, with 114
V nominal voltage and total battery capacity of 11.5 kWh. The batteries are supplied by
Saft, and have a claimed lifetime of 2,000 recharges. The car employs a battery management
system developed by ACTIA in France. The basic specifications are shown in Table 7.

Table 7 Basic specifications of the TH!NK

Item Description
Motor  
Type Three phase a.c. induction,
liquid cooled
Max. power 27kW
Continuous power 17kW at 3,500 rpm
Rated voltage 114 V
Electrical system  
Batteries 19 Ni-Cad modules
Energy content 11.5 kWh, 100Ah
Charger 220 V – 16A/10A – 3.2/2.0 kW
DC/AC converter 70 A continuous at 14.4 V
Transmission  
Drive Front wheel drive
Transmission Direct via fixed 8.6 reduction
differential gearbox
Gear lock Electrically operated
Wheels 155/70 R13 with low rolling
resistance
Steering Rack and pinion, manual
Brakes Front disc, rear drum.
Regenerative braking
Frame and body  
Floorpan Zinc coated steel, 90% high
strength
Upper frame Welded aluminium space frame
Body material Polyethylene
Roof ABS

(Source: TH!NK Nordic AS)

It is notable that of the total kerb-weight of 917 kg,
fully 247 kg is attributable to the batteries. Standard equipment includes driver and
passenger airbags, a high-mounted stop light, heated windscreen and tailgate glass, an
electric heater, and fittings to accept a radio/cassette system and mobile phone charger.

Table 8 summarises the main dimensions and performance of
the TH!NK. At optimum urban performance, the battery pack should therefore be useful for
200,000 km or ten years service life at 20,000 km per year. The car can be recharged fully
in 6 to 8 hours, with an 80% charge delivered in four hours.

Table 8 Dimensions and performance of the TH!NK

Item

Description

Dimensions  
No. of seats

2

No. of doors

3

Length

2,991 mm

Width

1,604 mm

Wheelbase

1,970 mm

Height

1,563 mm

Weight (unladen)

917 kg

Weight (maximum)

1,130 kg

Performance  
Top speed

90 km/h

Acceleration 0 – 50 km/h

7s

Max. climbable gradient

28%

Max. range, urban ECE

100 km

(Source: TH!NK Nordic AS)

As with other electric vehicles, the TH!NK cannot
demonstrate a long range capability or high speed, though acceleration is impressive. The
thermoplastic body panels are available in a limited range of colours, and cannot match
the high-gloss finish of steel body panels. However, the material is resistant to
scratches and dents, has it’s own aesthetic appeal, and it is easy to
‘refresh’ the look of the car by replacement of the external panels. Now that
Ford has a controlling interest in TH!NK it is likely that the product concept will be
developed further.

THE WIDER AGENDA: SUSTAINABILITY AND MICRO FACTORY
RETAILING

The plastic intensive vehicle in the micro factory
retailing framework also offers powerful advantages in terms of meeting wider social,
economic and environmental aspirations. That is to say, the MFR concept speaks to emerging
issues such as product stewardship and good corporate citizenship. A few of the advantages
are:

  • Manufacturing processes have a lower environmental impact
    compared with traditional high-volume manufacturing. There are no paint shop emissions for
    example, while water and energy consumption per car will be lower than traditional
    manufacturing.
  • MFR does not require a large, flat dedicated site with
    extensive support services. A modern car plant occupies several square kilometers of land.
    Compared with this, MFR requires a classic ‘light industrial’ facility.
  • The MFR concept clearly resonates with social and political
    objectives in Europe by creating local employment in high-value manufacturing activities.
    These factories would be more numerous and more dispersed than current plants, and could
    for example be located in low-employment areas.
  • A version of the MFR is therefore also ideally suited to
    investments in emerging markets. In these markets the investment costs of a major plant
    would be prohibitive. MFR could replace the existing approach of kit-assembly in such
    locations while still allowing a high proportion of local added value.
  • For workers, MFR offers a ‘job enrichment’
    opportunity compared with mainstream vehicle manufacturing. Cycle times in MFR are
    considerably longer than the typical 60 seconds found in a high-volume car assembly plant.
    Also, with MFR the car assembly workers could also undertake car servicing, repairs and
    modifications – again making the scope and content of work greater.
  • MFR offers the vehicle manufacturers a means to make the
    transition from car making to mobility provision.
  • Even without the retailing element of the MFR concept, it is
    clear that a technology which allows a break-even volume below 5,000 units per year will
    be extremely useful for vehicle manufacturers to open up emerging niche markets in zero
    emissions and city cars.

Materials choice is rarely about ‘technical’
issues alone. Of course features such as strength, stiffness, surface texture, process
accuracy, etc. are all important when vehicle manufacturers decide between one material
and another. However, the wider agenda of corporate citizenship is of growing importance
and takes the materials choice decision into areas where the current
‘advantages’ of all-steel technologies are seen to be fundamental weaknesses.

CONCLUSIONS

TH!NK is an interesting car because it uses the three major
materials, steel, aluminium and plastic in a manner which optimises their characteristics
at least low-volume cost. It is not a ‘mono-material’ solution. As a transition
towards the structural plastic vehicle, products like TH!NK suggest that for the plastics
industry there is much to be gained from collaboration with other materials suppliers to
provide ‘multi-material’ innovations in vehicle body design. TH!NK also
reinforces the automotive industry trend away from special ‘high performance’
plastics towards commodity grades.

However, the most significant conclusion from the above
analysis is that the plastics industry looks beyond product design and manufacturing
issues. The total business and social view embedded in the MFR concept offers just one
idea to exploit the potential of the plastic intensive vehicle. Many more alternatives to
the traditional structure are possible. The plastics industry must therefore develop the
imagination and vision to create a genuine threat to the all-steel body. At that point,
the plastics intensive car will become commercially viable.