Analysis: Rubber production revved up by EU car industry

Article published in ERJ's July/August issue:

Recent movements by leading European rubber manufacturers signal an uptrend in automotive parts demand, an outlook which is corroborated by an unbroken 34 months of growth in new car sales in the region.

Indeed, the European Automobile Manufacturers’ Association (ACEA) has revised its forecast for 2016 car registrations upwards to 5 percent from its initial January prediction of 2 percent growth.

In line with this trend, Cooper Standard and Continental, which incidentally were the only top-ten rubber manufacturers to post stronger sales in 2015, have launched different expansion projects in the continent.

Cooper Standard’s French operation is investing €50 million in upgrading its sealing weather strips production site in Vitré while building a new production plant for AVS systems at its site in Rennes, Brittany.

According to the head of the French operation and European engineering vice-president Sylvain Broux, Cooper Standard, has already secured off-takes for a “big project” with car-maker Ford for the added capacity in Rennes.

And in Vitré, where Cooper Standard produces automotive seals, the company is increasing its production area by 3,000 m2 to 30,000 m2, to expand production.

The site has increased its annual sales from €90 million in 2009 to upwards of €120 million in 2015.

The site, according to Broux, supplies to all European car manufacturers as well as some auto-makers further afield, including South Korea’s Hyundai.

ContiTech AG, the manufacturing arm of Continental AG, is also upping its game in Europe, expanding two of its Hungarian sites.

The company is adding production at both its mobile fluid systems and air spring systems factories in Hungary, in what it described as response to dynamic market demand.

ContiTech Fluid Automotive Hungaria, which produces mobile fluid systems increased its production capacities in Makó by 30 percent, in a €12-million investment.

The expansion includes a hall extension with a floor area of 9,000 m2. This will house new extrusion lines, vulcanisation autoclaves and assembly machines, according to executive director Mihaly Nagy.

The upgraded plant will also have heating and cooling lines production, which will respond to new demands brought about by new cars.

“In modern cars, more applications need to be cooled down (like SCR systems, or batteries).

“In hybrid or full electric cars the amount of the coolant lines is nearly double the amount in cars with combustion engine,” Nagy explained.

Third-ranking Freudenberg has also stepped up its seals production to meet the growing demand from the European automotive industry.

As a major industrial hub, Hungary was on the map for Freudenberg Sealing Technologies, which doubled capacity at its Kecskemet plant in July.

The €13-million investment will go into increased production of radial shaft seal rings for transmission and drivetrain applications.

According to Freudenberg Sealing Technologies CEO Claus Mohlenkamp, the facility will produce about 9 million seals per month and primarily service the automotive industry.

And that’s not all; the company also opened a €10-million plant in Bursa, Turkey, to supply to the automotive industry among others.

“This step will allow us to engage in even closer partnership with a large number of automakers with production plants in the area and other industrial companies,” said Freudenberg Group CEO Mohsen Sohi.

According to Freudenberg, the Turkish automotive industry is a key market for the group, with production growing by 16 percent and exports by 12 percent in 2015.