Automotive supplier industry


Four fifths of a modern car hail not from automakers, but from specialized suppliers. The impending shift to zero-emission driving and new mobility services will, without doubt, have a direct impact on suppliers in the automotive industry. Today, the Freudenberg Group is already working on solutions to meet mobility needs in the year 2050. Experts from around the globe are developing innovative technologies to make new concepts suitable for mass production. Partnering with its customers, Freudenberg is at the forefront of current and future market developments.

A ring seal virtually guarantees that not one droplet of engine oil is ever wasted. Cabin air filters safeguard the health and well-being of a car’s occupants. What do these components, however, have in common apart from being manufactured by Freudenberg Group companies? A layperson might only discern the similarity following a much closer look - complementary technologies are used in both the production of seals and filter systems.

“The shift from car sales to mobility services will transform the entire industry”

Injection molding is a process whereby a metallic tool is filled with molten plastic granulate that hardens in the mold in a matter of seconds. “More than fifty percent of our companies use injection molding in one form or another,” says Dr. Matthias Messer whose work includes the early identification of disruptive developments and the evaluation of new technologies at the Freudenberg Group.  Injection molding has faced tough new competition from increasingly powerful 3D printers in recent years. Today, industrial laser printers are already competitive in small series production or rarely-manufactured one-off spare parts – even metal parts can be produced in series quality. “Our job is to facilitate knowledge transfer – relevant to the markets in which Freudenberg operates – between the Business Groups,” says Messer. Freudenberg has established nine technology platforms where the Group’s experts share their know-how. Together, they decide on long-term research and development projects for new materials or production processes. 

Thinking only about the technical possibilities falls short for Messer. The automotive industry is undergoing rapid change not only in terms of technologies but also business models. Messer is convinced, “The shift from car sales to mobility services will transform the entire industry.” Suppliers will be harder hit than automakers. In fact, the industry association, CLEPA, estimates that suppliers have a value-added share of some 80 percent in each new car. European suppliers produce components worth € 600 million a year for the domestic market alone. Virtually all member companies also have production plants in the major car markets of North America and China. CLEPA President, Roberto Varassori, says, “We invest more than € 20 billion each year in research and development. When it comes to advancements in technology, we’re just as important as the automakers.” A sizeable proportion of this budget is currently invested in new drivetrain technologies aimed at reducing CO2 emissions from new vehicles.  In subsequent years, the European Union plans to further tighten the emission target of 95 grams of CO2 per kilometer coming into effect in 2021.

Video: Freudenberg drives New Mobility

Our world in the year 2050

To make sure that limited resources of money and time are channeled into the right developments, Freudenberg launched a project in 2015 that reaches far into the future. A multi-stage process was used to form a comprehensive picture of the world in 2050. One important basic assumption was that 80 percent fewer fossil fuels would be available by the middle of this century. Other assumptions included a growing global middle class and the role of large cities as centers of political and economic power. Expert teams throughout the Group went through a series of scenarios in six different sectors. They worked on studies, spoke to external specialists and weighed in with their own ideas and experience. The “Multipolar World” scenario paints an optimistic picture of the mobility sector – one where urban areas no longer suffocate under the weight of traffic. Smart and multimodal transportation goes without saying. Alongside public transport, self-driving taxis will be on the road to make sure that people can access all corners of the city without a car. However, small electric vehicles, including two and three-wheelers, will still make personal mobility possible - even in the year 2050.

Although the car as we know it will continue to exist, it will be kept mainly out of the cities. Speaking about the future, Messer says, “A completely new way of life is emerging in the cities.” He argues that urban mobility and infrastructure go hand-in-glove. “Power generation in the cities will also change thanks to a significant increase in the number of electric vehicles,” he says.

Nonetheless, how can such a vision of the future be translated into the current scenario of seals, filters, vibration dampers and the many other components the Freudenberg Group produces for today's automobiles? One advantage of Freudenberg’s companies – whether Freudenberg Sealing Technologies, Freudenberg Performance Materials, Freudenberg Filtration Technologies, Freudenberg Chemical Specialities or Vibracoustic – they are all today’s solution providers for tomorrow's automotive developments. The vision of the future determines our long-term strategy, both in research and investment," says Messer. Indeed, when assessing possible takeover candidates, one criterion is whether they have the technologies that are likely to be used in the future. “We regularly review our scenarios and strategy," says Messer. “After all, the future isn’t set in stone; it’s vibrant and highly-competitive.” This also applies to suppliers who want to thrive in the transition to new drivetrain concepts and mobility types.