The Circular Economy Applied to the Automotive Industry
The dependence of the automotive industry upon raw materials and certain precious metals is a major obstacle and presents very strategic challenges for supply management. With 60% of the global supply going into car manufacturing, the automotive industry is the top consumer of lead in the world and according to some studies, these reserves will run out in 2030. One Besides the shortages and supply challenges of the metals, infrequent or not, the rise in global request for raw materials has created extreme price increases. For the automotive industry, these added costs are going up by several million euros year on year.
Being able to anticipate any shortages and securing supply are the primary concerns for the manufacturers, and this is consequently why technological solutions are being developed to limit current dependence on earth metals. Identically, the geopolitical issues around raw materials are being integrated at EU level – and one of the other policies in discussion is towards recycling. Twelve million vehicles are taken off the roads every year in the European Union, which amounts to millions of tonnes of what actually constitutes a valuable resource. Two The utilisation of this secondary resource, investing in recycling technologies and enlargening the use of recycled material has been found to provide a promising outlook.
Choisy-le-Roi in detail
Remanufacturing and reconditioning involves the ‘putting back’ of a part or a product in as close to its original state and characteristics as possible. On an indicative basis, in the United States of America, the sector employs 350,000 people whereas for Europe, this figure is only 35,000 for an equivalent fleet of automobiles.
The production of remanufactured automobiles parts began in one thousand nine hundred forty nine in Choisy-le-Roi, since then, the factory has been steadily diversifying its output: injection pumps (1989), gearboxes (2003), injectors (2010) and turbocompressors (2013). Today, three hundred twenty five employees work on the site – manufacturing on request, ensuring the engineering and production of six types of mechanisms. The remanufactured parts are exclusively for the repairing of vehicles presently in-use.
The parts destined for remanufacturing, called ’scraps’, which can be used in 90% of cars in our range, are dropped-off to vehicles in-use /possessed. By using switch sides logistics of distribution of spare parts, the scraps are collected by the commercial network.
– Laurent Claude, Business Developer Renault Environnement
Numerous advantages
Other than being 30-50% less expensive, the remanufactured parts have the same assure and are submitted to the same quality control tests as fresh parts. It is also the only available way in which to create a part which has otherwise been discontinued.
By prolonging the life of the vehicles, retaining value and saving on energy whilst reducing waste, the factory in Choisy has created a comprehensive circular model. Moreover, this activity involved a skilled workforce and creates jobs locally: in order to be economically interesting, remanufacturing has to be performed within the market in which vehicles are used (shipping engines abroad to be worked on would negate the savings).
The suggesting of a standard exchange as well as suggesting fresh parts is a sound commercial argument, because it permits a repair with a part which is relative to the life-span of the repaired vehicle at an affordable price – which is also relative to the residual value of the car. On this basis, the standard exchange suggest prolongs the length of usage for vehicles. It avoids ‘writing them off’ – when the cost to repair is more than their market value.”
Savings on every level
Eventually, economies which rely on energy consumption and raw materials are losing out to the potential of this process which bears enormous potential. On a global scale, the energy saved as a result of remanufacturing could be equivalent to the amount of electro-stimulation produced by eight nuclear power stations. Three At Choisy-le-Roi, the figures speak for themselves. The savings from the production of a remanufactured part compared to a fresh part are as goes after:
92% less chemical products
70% less waster production
In terms of raw materials, the Choisy-de-Roi factory does not send any waste to landfill:
43% of the carcasses are re-usable Four
48% are recycled in the company’s foundries to produce fresh parts
The remaining 9% is valorised in treatment centres meaning the entire process is waste-free.
Despite the time and investment needed, this process remains profitable for the manufacturer. It permits them to increase their sales of parts for exchange through suggesting the product at a lower price; it creates loyalty with clients in the brand’s network and facilitates the longevity of the exchange parts, at managed costs, even for discontinued products / mechanisms.
Looking ahead
Mechanical parts are generally made with the view to be repaired, but it is possible to go further in research to improve materials and parts. Studies are being undertaken with the engineering sector to find the future of mechanical parts to improve the design, with a view to make disassembly lighter and to increase the recyclability of materials. Other studies are delving into a revision of acceptance criteria and the interchangeability of components. It is still too early to evaluate the benefits / profits of these different initiatives, but the research is heading in the right direction displaying it as a very promising market. For the automotive remanufacturing market alone, the figures will reach 104.8 million dollars by 2015.
According to the CLEPA (European Association of Automotive Suppliers), the remanufacturing market in Europe is estimated at inbetween eight and ten billions Euros.
The Choisy-le-Roi factory in numbers
The production of spare parts at Choisy-le-Roi produces a turnover of one hundred million euros
Parts remanufactured in 2012:
Injection pumps: 32,691
Injectors / nozzles: 151,325
Cylinder goes: Trio,540
1 U.S. Geological Survey (USGS).
Two According to European regulations (End of Life Vehicle Directive), vehicles must be recycled to 85% from 2015.
Three International Federation of Remanufacturers and Engine Rebuilders.
Four 72% of the mass of a gearbox and 37% of the mass of a motor (metal, steel, aluminium).
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