In defiance of forecasts heralding the end of the internal combustion engine (ICE) era, major automotive conglomerate Stellantis is intensifying its focus on piston-powered vehicles. With ownership of 14 brands under its umbrella, Stellantis is funnelling a staggering $6 billion investment into South America, earmarked for the development of new ICE technology and vehicles.
This mammoth investment, touted as the largest in South America’s automotive realm, is set to underpin the introduction of over 40 new vehicle models and the advancement of flex-fuel engines capable of running on both petrol and ethanol. In addition, Stellantis is charting the course for the rollout of hybrid-flex and plug-in hybrid-flex configurations to enhance efficiency, with plans for at least one fully electric vehicle slated to debut in the region between 2025 and 2030.
One of Britain’s most cherished automakers, Land Rover, is no more. As the custodian of the four brands Jaguar, Range Rover, Discovery, and Defender, it is currently known simply as JLR.
They are all turning electric now and a significant £15 billion (RM82.6 billion) investment in the UK automobile industry proves it.
There are likely to be many who grieve JLR’s decision to stop using the Land Rover name; it receives not a single mention in the press releases.
America has always had an attractive car market which was once the largest in the world. Though overtaken by China in 2009, the US market is still huge and has averaged 17 million units annually over the past few years. Many brands are present in the market and competition is tough, besides the fact that emission and safety regulations are also stringent.
Nevertheless, Vietnam’s Vinfast intends to enter the market and its ambitious plans are not only to sell SUVs there but also make them in the country. After looking at incentives offered by various states, it settled on North Carolina to build its factory with an initial investment of US$2 billion. It is the state’s first vehicle manufacturing plant and the largest economic development announcement in North Carolina’s history. VinFast’s project is estimated to grow the state’s economy by at least US$71.59 billion over the next 32 years,
The factory, on an 800-hectare site, will have an annual capacity of 150,000 vehicles and start rolling them out from the second half of 2024. Besides SUVs, the factory will also make EV battery packs and electric buses.
Vinfast’s first factory in Haiphong, Hanoi.
“Having a production facility right in the market will help VinFast to proactively manage its supply chain, maintain stabilized prices and shorten product supply time, making VinFast’s EVs more accessible to customers, contributing to the realization of local environmental improvement goals,” said Le Thi Thu Thuy, VinFast Global CEO and Vice Chair of the Vingroup. The Vingroup was founded by Pham Nhat Vuong, Vietnam’s first billionaire and its richest person.
The US factory will be Vinfast’s third production site following the first one in Haiphong, Vietnam. It also acquired a GM factory in Hanoi as well as GM’s proving grounds in Australia. However, it decided to later sell off the proving grounds.
For its US business, Vinfast plans to spend $200+ million for a headquarters in Los Angeles and set up a network of more than 60 outlets with aftersales centres this year.
The 5-year old carmaker currently has 2 fully electric SUVs, the VF8 and VF9 (previously known as VF e35 and VF e36), which were styled by Pininfarina. The smaller VF8 has 2-wheel drive and all-wheel drive with one or two electric motors and a 90 kWh battery claimed to give 500 kms of range. The larger VF9 has three rows of seats and dual motors for all wheel drive. The battery pack has a capacity of 106 kWh which is claimed to be good for around 482 kms of cruising range.
Like other Asian brands that entered the US market, it’s a gamble that Vinfast is taking, especially as it is so new. However, its lack of reputation may also work as people will not have preconceived notions about the brand and may assume that being Asian, it will have the sort of quality and reliability for which Japanese products have long been known. Being ‘Made-in-America’ may also be helpful in gaining acceptance but ultimately, Vinfast will still have to fight for its place in the market against other established brands.
While Toyota has expressed a view that suggests it will not stop producing internal combustion engines so quickly – to provide customers with greater choice and not leave any customer behind – it is no less committed to electrification of its products in the quest to achieve carbon neutrality. As a pioneer in hybrid electric vehicle (HEV) technology, having introduced the first mass-produced car with a hybrid powertrain in the late 1990s, the carmaker has naturally been promoting the technology which also contributes to reducing toxic exhaust emissions and fuel consumption.
Long history of EV developments
However, in the longer term, fully electric vehicles are going to become mainstream products, beginning with battery electric vehicles (BEVs) and progressing to fuel cell electric vehicles (FCEVs). In fact, the company has an EV development division since 1992 and an early production EV that went on sale in 1996 was the RAV4 EV, Today, besides a wide range of HEVs, Toyota already offers BEVs and even FCEVs, the latter now in the second generation with the Mirai.
Toyota sold (in limited numbers) a fully electric model – the RAV4 EV – in 1996 and today, it has even begun selling electric vehicles powered by hydrogen fuel cells like the Mirai (below).
The crucial technology
Battery technology is obviously crucial for every carmaker and Toyota will invest greatly in R&D for this area as well as in the supply system. The carmaker has had a subsidiary fully involved in battery development and manufacturing and has aimed to bring about cost reduction of at least 50% per vehicle during this decade. At the same time, safety, longer service life and high quality will be advanced.
Battery technology is a crucial area for electric vehicles and Toyota will be spending heavily to develop more advanced technologies as well as push battery cost down.
“Over the past 26 years, we have invested nearly 1 trillion yen and produced more than 19 million batteries. We believe that our accumulated experience is an asset that gives us a competitive edge. Going forward, we will increase our new investment in batteries from the 1.5 trillion yen announced in September to 2 trillion yen, aiming to realize even more-advanced, high-quality, and affordable batteries,” said Akio Toyoda, President of Toyota Motor Corporation, at a press conference in Tokyo this afternoon.
1 trillion yen = approximately RM37.2 billion
The bZ4x is the first of the new range of BEVs and production is now underway with sales set to begin in 2022.
Toyota’s range of BEVs by the end of the decade will look something like this.
As long as Akio Toyoda is leading Toyota, we will still get sportscars – even if they run on electricity instead of petrol (although the company is now exploring use of hydrogen as a fuel in combustion engines).
Sales volume of BEVs raised
Besides outlining the company’s BEV strategies, Mr. Toyoda also revealed 16 Toyota and Lexus BEV models that it is readying for market launch, starting with the Toyota bZ4X which has already had been shown in production form and will begin sales in 2022. By 2030, the company is going to roll out 30 BEV models and is anticipating sales of 3.5 million BEVs globally. This is an increase of 75% on the previous annual sales projection of 2 million BEVs mentioned in May this year. The Lexus brand aims to have BEVs, which will be in every segment, account for 100% of the total sales in Europe, North America, and China by 2030.
Lexus will develop a full range of electrically-powered models, including sportscars that may look like the one below.
Lexus RZ BEV prototype during development testing. First teaser image of production model shown below. It will go on sale in 2022.
In this diversified and uncharted era, it is important to flexibly change the type and quantity of products produced while keeping an eye on market trends. At the same time, energy plays a critical role in achieving carbon neutrality. For this reason, Toyota wants to provide a diversified range of carbon-neutral options to meet whatever might be the needs and situations in every country and region.
Toyota Hilux BEV of the future?
Just like today, Toyota will have something for every segment of the market to suit different requirements and conditions.
Markets and customers decide
“It is not us but local markets and our customers who decide which options to choose. As for why we try to keep so many options, in terms of business management, one might think it would be more efficient to focus on fewer choices. However, we believe that quickly adapting to changes in the future is more important than trying to predict the future, which is uncertain. That is why we want to keep options available for our customers until the right path is clear,” said Mr. Toyoda.
At different periods, manufacturers have different strategies which require investments in different parts of the world. In the 1990s, Ford decided that it must ‘control its own destiny’ in the ASEAN region and was attracted by the ASEAN Free Trade Area (AFTA). This would be a single trading region and those who made their products in any country in the region could export to another ASEAN country with no import duties imposed. For a mass producer like Ford (and the company was the one that introduced mass production to the auto industry), this was ideal as it meant that a mega-factory could be set up in one country to supply to other countries. Great for cost efficiencies which would also mean more competitive prices in the markets.
So Ford invested US$500 million (RM2.107 billion) to establish a brand new factory in Rayong, on the Eastern Seaboard of Thailand. The factory, called Auto Alliance Thailand (AAT), was a joint-venture with Mazda, which was then an affiliate. Its main product would be the new Ford Ranger truck and Mazda equivalent, the BT-50, with the Everest SUV being added later. Besides supplying the Asian market, the factory also supplied to other global markets which was helpful during the regional downturn when the Asian Financial Crisis hit.
Auto Alliance Thailand, the factory set up in the mid-1990s as a joint-venture between Ford and Mazda. Its first product was the Ranger (below) which was exported around the ASEAN region as well as globally.
17 years after AAT began operations, Ford set up another factory in the same area with an investment of US$450 million (about RM1.9 billion) and it was wholly owned by the carmaker. Known as Ford Thailand Manufacturing (FTM), it was initially producing passenger car models like the Fiesta and Focus but when Ford decided to change strategies in the Asian region and focus on trucks, the factory switched to making only Rangers.
Ford built the second factory as demand for the Ranger grew. This was necessary as the 270,000-unit output from AAT was strictly fixed at 50:50 for each of the brands. This meant that Ford could get no more than 135,000 vehicles a year, even if Mazda did not use up its full allocation. Mazda too would have experienced the same frustration as the popularity of its models grew and one solution has been that its new BT-50 truck is now being produced at Isuzu’s factory (also in Thailand). In order to raise its output, Ford moved some production of the Ranger to FTM in 2016.
Next year will see the new generation of the Ranger entering the market and Ford expects demand to be even higher. Since its output from AAT remains capped, it is expanding FTM and is spending another US$900 million (about RM3.8 billion) on upgrading its manufacturing facilities and capabilities in Thailand, at both FTM and AAT. Over 44% of the investment is in the supply chain network to provide opportunities for local supply chain partners.
Ford Thailand Manufacturing, located 14 kms from AAT, began operations in 2012. It produced the Fiesta, Focus and EcoSport models but now only does the Ranger, and has been upgraded to produce the new Ranger (below) next year.
This is the largest-ever single investment in Ford’s 25-year history in Thailand and is recognition of the importance of the country as a global export production base for the company. “This is an important milestone to build on our quarter-century of commitment to producing vehicles in Thailand, enabling us to further modernize and upgrade our local operations, and support production for the exciting upcoming launch of the next-gen Ranger, one of Ford’s highest volume and most successful vehicles anywhere in the world, and the next-gen Everest SUV,” said Yukontorn ‘Vickie’ Wisadkosin, President, Ford ASEAN and Asia Pacific Distributors Markets.
Besides adding a second shift at FTM which provides over 1,200 new jobs, the overall investment also brings Ford’s manufacturing facilities in Thailand in line with the latest global efficiency, flexibility, and quality processes through extensive upgrades and new state-of-the-art manufacturing technologies.
The company is almost doubling the number of robots at both FTM and AAT, with the addition of 356 robots at the body shop and paint shop. This brings the level of automation at the body shop at FTM and AAT from 34% to 80% and 69%, respectively.
Ford also has increased its production capability for multi-variant truck production in FTM. By increasing model flexibility, the plant can produce multiple cab styles – single cab, open cab and double cab – on the same production line. This allows more flexibility in planning and scheduling so the plant can react more quickly to customer demand and reduce customer waiting time for a new vehicle.
As part of the investment, Ford is the first auto manufacturer to implement ScanBox technology in Southeast Asia. This latest surface scan capability improves the time used to accurately measure the whole vehicle by 5 times during the assembly process, helping Ford to increase efficiency in problem solving for better quality control.
In addition, FTM and AAT are making significant efforts to support environmentally friendly initiatives, including using renewable energy, reducing CO2 emissions, and practicing zero waste to landfill.
Exporting vehicles is a significant part of Ford’s manufacturing business in Thailand, with the Ranger going to over 180 markets around the world. AAT will be the lead production hub for the upcoming next-gen Everest SUV which would almost certainly be based on the new Ranger.
Proton today held a ground-breaking ceremony to mark the commencement of construction work on a new stamping facility at its Tanjung Malim factory. The factory, built in the late 1990s, already has stamping facilities and this new one will complement them. It is scheduled to be completed by the third quarter of 2022.
The new facility will house a new Superlarge stamping machine which allows making larger metal panels for vehicles and other parts. The investment of RM200 million in the facility is part of Proton’s plan to increase levels of localisation, both for current and future models.
Proton was the first carmaker in Malaysia to have its own stamping facilities when its original factory was built. The picture above shows the stamping area under construction in 1984. Stamping its own body panels (below) increases the level of localisation in its models.
This is on top of the RM1.2 billion already spent on upgrading the factory with the aim of making it a world-class vehicle manufacturing plant that will be able to produce more model lines. It is also in line with Proton’s technology strategy as the new facility will have state-of-the-art tools as well as systems.
“While we are happy with our progress so far, Proton must continue to look to the future”, said Dr.Li Chunrong, Chief Executive Officer of Proton. “This new addition is part of our strategy to ensure that we can grow continuously as well as increase our model footprint when we have to. This means having the ability to build more variants but more importantly, to be able to build them to the highest standards as well as to incorporate new technology.”
Proton has seen a huge turnaround in fortunes over the last three years since Geely became DRB-HICOM’s partner in the company. Besides introducing brand new models, it has also had increased sales volumes and gained market share. At the same time, quality has been improved in products and services and the entire dealer network has been revamped with most outlets upgrading to 3S status.
“We are very clear about direction and growth for Proton. While Malaysia will always be our primary market, we must be able to compete beyond our shores. This facility is one small part of that journey. It is especially important for us because it means we can do far more localisation going forward. This will have a spill-over effect which will see us engaging with more vendors and further growing the local automotive ecosystem,” said Dr. Li.
With increasing emphasis on electrification of vehicles in the industry, demand for battery packs has also been accelerating. It is crucial that higher volumes be achieved in order to get economies of scale and push production costs down. Different manufacturers have different strategies to address this demand and for Mercedes-Benz, the approach taken is to establish a global battery production network.
Daimler is investing more than one billion euros in this global battery production network which will consist of 9 factories at 7 locations on 3 continents. Four factories have already started operations, with the most recent one being in Thailand.
100 million euros invested
The Thai production facility in the Bangkok region is a joint effort with local partners Thonburi Automotive Assembly Plant (TAAP) and Thonburi Energy Storage Systems (TESM). Mercedes-Benz AG has invested a total of more than 100 million euros in the battery production and a plant expansion of the existing vehicle production plant. In doing so, the partners are responding to the high demand for electric mobility and, in particular, for plug-in hybrid vehicles in Thailand. At the same time, they are driving the shift towards sustainable mobility as well as a carbon neutral and resource-efficient production.
The production facilities for plug-in hybrid battery packs are highly standardised and flexible. As a result, they can be adapted to local market conditions in a short time. “We have been successfully producing Mercedes-Benz vehicles for the local market at our Thai plant for more than 40 years. With the start of production of our battery factory in Bangkok, we are taking another important step in the expansion of our global battery production network at Mercedes-Benz Cars with nine factories worldwide. The local production of batteries enables us to make the best possible use of the potential for e-mobility in Thailand. As in the case of vehicle manufacturing, we have optimized all processes in terms of efficiency, flexibility and sustainability in the battery factory. We show how sustainable products can be produced sustainably,” said Jorg Burzer, Member of the Board of Management of Mercedes-Benz AG, Production and Supply Chain Management.
The battery packs are used for plug-in hybrid variants for the current Mercedes-Benz C-Class, E-Class, S-Class as well as for the Mercedes-Benz GLC and GLC Coupe. The high variety of product variants of the local market require very flexible and efficient production and facility concepts. Central assembly stations were set up in the same way as in the battery factory in Germany and were further developed for site-specific requirements. In this way, all battery types can be manufactured in the new line for all current and future plug-in hybrids.
Mercedes-Benz C300e – one of the models which will use Thai-made battery packs
Decision to locate in Thailand
The decision for a local battery production in Thailand supports Mercedes-Benz’s overall sustainability goals under the heading ‘Ambition2039’ as well. The aim is a carbon neutral new car fleet until 2039. By 2030, at least every second vehicle sold should have an electric drive – this includes full-electric vehicles and Plug-In hybrids.
On the way to sustainable mobility, apart from products production plays a central role: All European Mercedes-Benz plants are to produce completely carbon neutral from 2022. The battery factory in Bangkok will meet this requirement by using large solar systems on the roofs of the production buildings. Excess solar power, for example, is temporarily stored in so-called 2nd-life battery storage systems from recycled electric vehicle batteries. The plant works closely with the Mercedes-Benz Energy GmbH. The stationary storage systems, which can compensate for local energy fluctuations and contribute significantly to grid stabilization, enable economical and resource-saving reuse for disused batteries of electric and hybrid vehicles. This is an important contribution to the economic efficiency and environmental balance of electric vehicles.
