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COVID-19 Updates: Auto Makers Revving Up Production To Drive Market Recovery

COVID-19 Updates: Auto Makers Revving Up Production To Drive Market Recovery

In the wake of the continuing impact of the COVID-19 pandemic, global light vehicle sales in 2020 are now forecast to drop to 69.6 million units, 22 percent lower than in 2019, with risks to the forecast still skewed to the downside, according to IHS Markit.

In Southeast Asia, sales of new vehicles in the region’s six largest markets combined are estimated to have declined by over 19 percent to 700,528 units in the first quarter of 2020, according to GlobalData. Thailand saw first quarter sales down 24 percent as its economy reeled under the impact of much-reduced travel and tourism. Malaysia Q1 vehicle sales were down by 26 percent and Vietnam saw a slump of almost 32 percent.

Although 2020 is seeing a setback for the automotive sector in ASEAN markets, long-term prospects for the region remain very strong. GlobalData’s analysis points to strong indicators for long-term demand as motorisation rates rise with high economic growth—especially in Indonesia with its increasingly transportation hungry population of 273 million. Its market of around one million new vehicles a year is forecast to double to two million vehicles a year by the end of this decade.

In addition to strong long-term market prospects, the automotive manufacturing industry in the region benefits from relatively low costs, favourable government policies for investment, as well as free trading regimes for vehicles and components, according to GlobalData.

Here’s a roundup of the latest activities being done by automakers, parts manufacturers, and government units in ASEAN to drive the industry’s market recovery after the COVID-19 pandemic.

Thailand

  • According to the Federation of Thai Industries (FTI) automotive club, Thailand’s automotive production is likely to plunge 37 percent to 1.33 million units this year and could drop even further to 50 percent (to one million units) if the pandemic lasts till June.
    • Proposed measures to boost demand includes: a car trade-in scheme, 50 percent excise tax reduction until the end of the year and a delay in enforcement of Euro 5 emission standards
  • According to MarkLines Data Center, April vehicle sales in Thailand declined by 65 percent YoY to 30,109 units
  • Japan’s Isuzu Motors Ltd forecasts that demand for pickup trucks and other light commercial vehicles in Thailand is likely to fall 35 percent this year
  • Nissan Thailand has resumed production in its first Thai plant as well as plant 2 (on 1st June)
  • Mercedez-Benz Thailand plans to postpone the launch of the EQC BEV in Thailand to 2021 amid the coronavirus crisis, according to MarketLines, quoting a report from (Thansettakij)
  • Summit Auto Body Industry Co. Ltd (SAB) will continue with its project despite the pandemic, investing THB810 million—mostly for its plant expansion and purchase of new machines. SAB initially targeted THB8.8 billion for its 2020 revenue; but because of COVID-19, it revised down its forecast by 50 percent. (Prachachat Turakij)
  • TAPMA (Thai Auto Parts Manufacturers Association) expects exports of Thailand’s auto parts to drop in the second quarter of 2020 (2Q 2020) following the temporary suspension of car manufacturing plants both in Thailand and overseas amid the COVID-19 pandemic. However, recovery is expected in Q3 as plants are reopening (Marklines).

Indonesia

  • Gaikindo, Indonesia’s automotive manufacturers association, have reported that Indonesia’s total vehicle sales in April 2020 were 7,871 units, down by 90.7 percent YoY due to the coronavirus, according to MarkLines. January-April sales were down by 28 percent to 244,762 units.
    • In terms of automaker sales in April, Toyota was down by 90.3percent YoY to 2,056 units (26.1 percent market share); Daihatsu was down 91.8 percent to 1,330 units (16.9 percent market share); Honda was down 89.8 percent to 1,183 units (15 percent market share); Suzuki was down 86.4 percent to 1,042 units (13.2 percent market share); and Mitsubishi was down by 89.7 percent to 808 units (10.3 percent market share).
  • The Indonesia Coordinating Ministry for Economic Affairs has announced incentives in the form of stimulus, amounting to IDR 70 trillion, for the automotive industry players to minimise the impact of COVID-19.
  • Toyota Motor Manufacturing Indonesia (TMMIN) is set to resume operations this month after it suspended manufacturing operations from May 1 to June 1, 2020.
  • PT Toyota Astra Motor also announced to restart production around the same time, according to VietnamPlus.
  • PT Astra International: Its automotive sales drop by 91.2 percent year-on-year (yoy) in April to 3,807 units, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo).
  • Suzuki Indonesia: Gradually resumed operating the plant starting on May 26, 2020. Before this, Suzuki Indonesia had temporarily suspended factory operations from April 13 to May 22, 2020.

Vietnam

  • According to a report from the Vietnam Automobile Manufacturers’ Association (VAMA), the automotive market suffered a decline of 36 percent over the first four months and only 11,761 units were registered in April 2020
    • Sales of passenger cars decreased by 40 percent, commercial vehicles by 26 percent and specialised vehicles by 16 percent, compared to the previous month.
  • On May 20, the government approved a plan to reduce auto registration fees by 50 percent until the end of the year which could help domestic enterprises recover and stimulate car consumption for domestically-made cars over imports

Malaysia

  • Malaysian Automotive Association: Malaysia recorded just 141 sales of new automobiles in April, down 99.7 percent compared to the same period in 2019 (49,939 units)
    • Estimates point to a plunge to 400,000 this year. Sales for the first four months of the year declined 45 percent to 106,600 autos.

Philippines

  • The Chamber of Automotive Manufacturers of the Philippines (CAMPI) expects vehicle sales to decline by at least 20 percent in 2020 amid the COVID-19 lockdown. Earlier, the Association of Vehicle Importers and Distributors Inc. (AVID) expects total vehicle sales to decline by 40 percent. Total automotive sales covering vehicles sold by both CAMPI and AVID reached more than 410,000 units last year.
    • Toyota Motor Corp. restarted production in the Philippines, Pakistan, and Russia, on May 22. Toyota’s vehicle plant in the Philippines, which produces models such as Vios, resumed operations on a single shift on May 18. The six overseas plants where Toyota has not resumed plant operations yet include Indonesia, Brazil, India, Venezuela, Portugal, and Czech Republic.

 

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Hwacheon On VMCs Vs. HMCs

Hwacheon on VMCs vs. HMCs

Hwacheon Machine Tools Co. Ltd compares and contrasts horizontal machining centres (HMCs) and vertical machining centres (VMCs) and explains the uses of each. Article by Stephen Las Marias.

South Korea-based Hwacheon Machine Tools Co. Ltd is a pioneer in the Korean machine tool industry, and one of the first companies in the world to develop smart operating systems and automation software for CNC machine tools.

Its roots come from a local foundry, where founder Kwon Seung Gwan initially worked as an apprentice mould maker. His grit, determination and attention to quality earned him the confidence and respect of the owner, who eventually entrusted the stewardship of the foundry to Kwon in August 1945. The company was later established on December 20, 1945 and became the foundation of Hwacheon.

Hwacheon uses lines of Horizontal Machining Centers A600 with fast overhead gantry systems in its own automotive part production, where the company manufactures crankshafts and cylinder blocks.

Hwacheon uses lines of Horizontal Machining Centers A600 with fast overhead gantry systems in its own automotive part production, where the company manufactures crankshafts and cylinder blocks.

First known as Hwacheon Machine Works, Kwon incorporated Hwacheon Machine Tools Co. Ltd. Designing and building the first lathe machine in Korea, Kwon played a key role empowering Korea’s fledgling manufacturing sector, which was just recovering from the Korean War.

Kwon built on his success later in 1959 with the development of the country’s first direct-coupled belt-driven lathe machine. In 1964, Hwacheon added a feather on its cap with the development of the country’s first gear-driven automatic lathe.

Over the next two decades, Hwacheon focused its energies on R&D. Around this time, the company also established its own manufacturing division. This set the stage for a string of other ‘firsts’ within the South Korean Industry, such as the first NC lathe machine; the first NC milling machine; the first CNC copy milling machine; and the first NC four-axis lathe machine. In 1987, Hwacheon developed the country’s first horizontal machining centre, a multiplex machine tool with automatic tool changer.

The next era saw Hwacheon enjoying steady growth as it shifted its gears towards modern R&D, focusing on using information technology (IT) to reduce manual work. During this period, the company built larger and semi-automated machine tools, including a vertical high-speed machining centre. In 2001, it started its automobile parts business—producing initially up to 30,000 cylinder blocks—with its horizontal machining centre (HMC).

More than 70 years since its founding, Hwacheon has grown to become one of world’s leading CNC machine tool manufacturer with a solid reputation for reliable quality products. Today, the company is a fully integrated machine tool maker offering highly specialised CNC lathes, CNC milling machines, multi-axis machines, and smart machines for a wide spectrum of industries.

In an interview with Asia Pacific Metalworking News (APMEN) magazine, Hwacheon’s Klaus Ludwig, managing director of Hwacheon Asia Pacific Pte Ltd, and vice president of Hwacheon Machine Tools Co. Ltd, talks about the current trends shaping the machining industry, and their customers’ challenges and how they are helping them address those issues. He also talks about horizontal machining centres (HMCs) and vertical machining centres (VMCs), the uses of each, and their advantages and disadvantages.

Name one of your company’s key competitive advantages.

Klaus Ludwig, Hwacheon

Klaus Ludwig, Hwacheon

Klaus Ludwig (KL): Strong mechanical design and build. All machines are designed and built in-house. Only components like CNC control, bearing and linear guides are purchased from reputable suppliers in Japan and Germany.

From casting to machining of its spindles—all are manufactured by the company in South Korea.

What challenges are your customers facing?

KL: This very much depends on the area and industry. However, one common obstacle being faced practically everywhere is the lack of qualified and motivated manpower. That’s why automation, even the simplest automation solutions, are increasingly implemented around the world in manufacturing.

How is your company helping your customers address their problems?

KL: Our company offers a number of effective automation solutions for our turning and machining centres. At a higher level, our SMART machines are developed to minimise the effect of human involvements and the potential for errors.

We have started with this technology many years ago. Today, we are the only company that is able to offer a real smart machine—just sending the CAD file to the machine, press four buttons, and the SMART Machine does the rest.

Tell us more about HMC and VMC.

KL: VMCs are mainly standard three-axis machines, where the milling head/spindle is positioned vertically. Such VMCs can be designed in a traditional C-frame design or as double-column machining centres.

Five-axis solutions are available too, such as our M-series or the newer D2 five-axis machining centre. All have their spindle vertically positioned.

Standard VMC are the most sold machining centres in the market. They are generally lower in price compared to an HMC, subject to specification and quality, of course.

Meanwhile, HMCs are, in a basic configuration, 3+1 machining centres. Three-axis linear (X–Y–Z) plus one rotary axis (B-axis) to position the mounted workpiece. The spindle is positioned horizontal, providing the possibility to work on four sides of a workpiece by rotating/positioning the part to the spindle.

There are also full four-axis versions available, where the workpiece mounted on the B-axis can be rotated as an axis and synchronised to the three linear axes.

HMCs are normally used for higher production volumes as they usually have an integrated pallet changer. Also, as materials and parts can be replaced/exchanged while the machine is operating, HMCs provide reduced downtime.

Horizontal Machining Center AF-30 and AF-16 (in the background) with automatic pallet changers.

Horizontal Machining Center AF-30 and AF-16 (in the background) with automatic pallet changers.

How would you differentiate a HMC from VMC? Are there specific applications wherein one is better to use than the other?

KL: Standard VMCs require lower investments for job shops—as such they are more commonly used. They are also easy to use and operate.

VMCs are typically used in two- to three-axis operations. A fourth axis (NC Rotary Table) is optional, available but smaller in sizes. Usually, they come without a pallet changer system, while automation is done by robots. However, VMCs used for mould and die are precision machining centres with higher spindle speeds.

On the other hand, HMCs require higher investment—but they are cost-effective when it comes to mass production. One advantage of an HMC is chip removal—due to the nature of its design, chips easily fall to the chip conveyor. Its multi clamping features offer more economical and efficient production solutions. Their pallet system also provides higher productivity. However, HMCs are rarely used in mould and die. Our H8 however, is being used due to its rigidity, available spindle design and speed, as well as achievable accuracy.

How do you position your machining centre solutions in the market?

KL: Hwacheon has solutions for mass production of automotive parts—the A600 is especially designed for this application. This machine is designed to be used as a line machine, meaning, several machines will be placed next to each other and loaded/unloaded by an overhead Gantry system. To save space, the machine width is very slim; in this way, the point to point distance for the loading system is kept very short.

In fact, we use a line of 10 machines with a fast overhead gantry system in our own automotive part production, where we manufacture crankshafts and cylinder blocks.

For extreme tough material and operations, we have our H6 and H8 HMCs. Their extreme rigidity, highest overall machine weight, and the strongest spindle in the market—at 1,650Nm torque—set them apart from any competitor.

For large, heavy and accurate parts, our AF 16 and AF 30 are providing excellent machining platforms and capacities. Whether oil & gas or machine tool parts, these machines provide excellent performances.

Whether a customer is looking for mass production or for a machine that can handle even the toughest material, Hwacheon has a solution available.

Machining parts on Vertical Machining Center SIRIUS-1350/1750/2500.

Machining parts on Vertical Machining
Center SIRIUS-1350/1750/2500.

What trends do you see as you look out at the metalworking industry in Asia?

KL: Over the past years, the trend has been toward more complex machines and effective automation solutions. Of course, there are still those customers who believe a ‘cheap’ machine and equipment makes them competitive; but the industry in Asia is evolving—and it must evolve from cheap manufacturing to more quality products.

Batch sizes have become smaller, while real mass production is rare. Faster deliveries and cost-effective operations are the key today. And this requires good equipment and machines, as well as higher level of operators—because one operator is able to handle multiple machines. This has become the norm.

Finally, what advice would you give your customers when it comes to their machining processes?

KL: First, look at your current standard first. Can you receive orders for the higher quality parts—which come with higher benefits—or should you decline it? How fast can you switch from one part order to the next? What is your level of scrap? How many set-ups do you need to produce your parts? What makes a manufacturer different from the others? Cheaper machines and equipment or higher level capabilities?

Plan your machine purchase in advance, not only when you have the order to produce and you are forced to buy any available machine in the market. You may finally not get what you need and wanted.

With a few simple questions, a customer can determine their level of competitiveness, and where they should improve or focus their efforts on.

For more information on Hwacheon, visit https://hwacheonasia.com.

 

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Sandvik Acquires Stake In Additive Manufacturing Service Provider Beam IT

Sandvik Acquires Stake In Additive Manufacturing Service Provider Beam IT

Sandvik AB has acquired a 30 percent stake in privately owned Italian company Beam IT, a provider of metal additive manufacturing (AM) services and advanced end-use components.

“The investment in Beam IT will complement our existing offer in additive manufacturing. It is also in line with Sandvik’s strategic ambition to become a leading solution provider for the wider component manufacturing industry,” said Lars Bergström, president of Sandvik Machining Solutions.

Beam IT is a trusted supplier of metal AM end-components to demanding industries, including automotive, energy and aerospace, and holds several relevant quality certifications to serve these industries. The company has more than 20 years of experience within additive manufacturing (AM) and has more than 20 powder bed fusion printers installed.

“The AM sector is developing fast and there is a need for AM-specialist-partners with the advanced skills and resources required to help industrial customers develop and launch their AM programmes. With this investment we provide our customers with the opportunity to access the complementary and combined power of Sandvik and Beam IT,” said Kristian Egeberg, president of the Additive Manufacturing division in Sandvik.

In 2018, Beam IT generated revenues of about SEK70 million, with its 38 employees. Sandvik has the right to further increase its stake over time. The parties have agreed not to disclose the purchase price.

 

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