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OEMs meet the challenges of the Brazilian automotive market

High costs, bureaucracy and poor infrastructure present serious challenges to carmakers in South America. This year’s AMS conference in Brazil reveals how they are continuing to overcome problems and develop efficiencies

Returning to Sao Paulo for a second year the AMS conference once again offered presentations from major OEMs and Tier suppliers on a wide range of important topics. Brazil continues to be a growing market for vehicle sales and as such has a seen a similar influx of foreign OEM’s establishing manufacturing plants that other developing markets have experienced. However, in recent years this growth has been stymied by increasing government regulation, high taxes and import duties. Challenging as this might be, our conferenced revealed there was no lack of enthusiasm for continued development of production facilities on the part of the automotive sector.

Although the country’s economic growth has slowed recently it is the potential of the Brazilian market that continues to draw vehicle makers. The conference, held over two days, delivered stimulating plenary sessions and informative presentations from both OEMs and Tier suppliers during the two separate streams. Networking was again a key feature of the conference, with coffee breaks a hive of activity and a gala dinner (sponsored by Siemens) held at the famous Figueira Rubaiyat restaurant in Sao Paulo offering the conference delegates a chance to relax.

For the OEMs two key themes emerged during their presentations; firstly the high cost of manufacturing vehicles in Brazil. This issue seems to be across all aspects of the production process from raw materials to labour rates. Also though most vehicle makers are now pursuing localisation policies there are still some supplier issues, which result in the need for costly importation of equipment. Comparisons were drawn between production costs in Brazil and in other fast developing automotive markets, such as India and China. This clearly illustrated the challenges facing the OEMs, complicated further by regional differences in costs in Brazil. 

A growing skills shortage was perhaps the second major issue. The problem of poor levels of education across Brazil has created ongoing issues with not only staffing OEM production facilities but also with supplier quality through all levels of the chain. Other problems noted were with local infrastructure and logistics.

The Tier suppliers echoed some of these concerns but also discussed what has become the main driver for development of systems and equipment; reducing energy consumption. As one leading paintshop supplier pointed out, all the obvious efficiencies have now largely been achieved; the challenge has moved to searching for smaller savings in every aspect of equipment design.

OEMs – The challenges

OEMs are continuing to develop global vehicle platforms and standardised manufacturing processes but this process is always subject to local market conditions and resources. José Eugênio Pinheiro, vice-president manufacturing for GM South America talked about how the company is investing over $5 billion in its product lines and production operations in the region, to integrate them into more completely with GM’s global manufacturing system. However, he pointed out although the company new product lines, many of which have been developed at engineering departments based in South America, the process of integration in Brazil is not without challenges. Pinheiro explained there remained continuing problems with local logistics, outside suppliers and even seasonal weather conditions when building new production facilities. Also the scarcity of skilled engineering personnel added to the problem of developing and operating plants with higher levels of production technology. These issues, along with the high costs associated with producing vehicles in Brazil, where echoed by many of other OEMs speaking at the conference.

Representing the new wave of Chinese vehicle makers now establishing themselves in Brazil, Alexsandro Godoy de Paula, logistic, imports and purchasing manger for Chery Brasil, discussed the company’s new production plant at Jacarei. He explained that Chery are encouraging suppliers to locate around the plant and that the site will be divided equally between production operations and logistics and supplier companies. This will be the first 100% Chery production plant outside of China. For Mercedes-Benz Truck Brasil, the decision on what production model to adopt, for its restructured manufacturing facilities in Brazil, added to the already complicated process of changing over production from cars to trucks.

Claudio Drumond Frazao, senior manager truck assembly line at the Sao Bernardo do Campo, talked about the implementation of the company’s Truck Operation System (TOS) and finding the right balance of own-manufactured parts and those sourced from outside suppliers for use on the preassembled elements. Frazao explained that the plants had been developed with little outside influence. As such they were better adapted for local conditions and capabilities while still employing TOS production processes.

Lean manufacturing – OEMs and suppliers

Lean manufacturing is now the accepted model for production processes but as Miguel Peinador, president of the Instituto Lean Brasil Argentina (ILBA), explained not all companies have understood the concept, and as such have not properly implemented processes that are ‘lean’. Peinador explained that he frequently visited businesses that believed they had taken all steps to ensure efficient production, however, there was almost always room for improvement. This belief he felt perhaps could limit the potential for development. He cited Brazil’s growing contribution to global GDP (3.6%) as a clear indicator of the opportunity represented by the country’s growing economy.

For MAN it’s very much a modular production process in Brazil, according to Cristian Benito, manager for MAN Latin America. Much of MAN’s production is facilitated through partnerships that provide sub-assembly and assembly services for elements, such as chassis and suspension. Powertrain is delivered through a joint venture and MAN is responsible for vehicle design and sales. Benito explained that MAN employs its CMPS systems for production, this, he said, was an open ended programme of continuous development rather than a short-term project. To facilitate this the company operates what Benito describes as an “inverted pyramid” system that involves the workforce in the process, helping to decide on where improvements to the production process can be made. 

Energy consumption and environmental impact was a topic raised by Cassio Francisco de Andrade, plant manager for Tupy Brazil, cast iron products supplier to the automotive sector. The technical specification for engine blocks has resulted in the company using specialist foundry and milling processes to meet the challenge of producing thin walled castings. As well as meeting the technical challenges the company has also worked at reducing its impact on the environment with energy saving measures and waste-water treatment processes being implemented. This topic was a key consideration to Tier suppliers of equipment, systems and components, who all raised the issue during their respective presentations

Powertrain

Luiz Amaral of Tornos talked on high speed metal cutting using hard turning techniques and highlighted his company’s Sigma 8-axis machining centres and its MultiSwiss machines. He showed a video of multi-operation machining and deburring on automotive engine components, combined with automated loading and unloading using robots on a highly integrated transfer line. As the video ran in real time, it was fascinating to see the 10 second cycle time for the many operations of turning, drilling, honing and internal stepping. While this was illustrated on an aluminium component, Amaral pointed out that hard turning operations on steels and hard alloys could be now achieved in record time and was a very viable alternative to abrasive machining in powertrain production.

Roberto Saruls of BP Castrol gave an insight into the structure of the fuel and lubricant giant, explaining how Castrol had been acquired by BP in 2002 and clarifying the company’s activities in South America. In a global context, he talked about how the group now services the needs of 13 million customers around the world every day and the footprint of the group and its R&D and testing capabilities worldwide. He showed slides illustrating the testing procedures for lubricants in metal cutting, carried out in actual machining of various metals. The history of the company was shown, a timeline from Charles Wakefield’s use of castor bean oil (the root of the name Castrol) to semi-synthetic oils in 1987, to removing the boron element of lubricants to make them more environmentally-friendly. He commented on the excellent anti-bacterial properties of S142Bf, how it prevents bacterial growth compared to polymer-based synthetic oils that can cause machine corrosion if not cleaned off after every use. Also, it does not cause skin irritation and as it is not sourced from a ‘fossil-derived’ base, and so does not attract the same high government and local tariffs as fossil-based oils.

Carecut S142BF is the name of the company’s new product, part of its Ecofluid; this is part of its new generation of biodegradable oils, it breaks down to a safe solution in 15 days. He also talked of TCO – total cost of ownership, comparing it to an iceberg – the purchase cost of a lubricant being the tip of the iceberg and the rest being downtime, tool life expectancy and energy costs. He said that with the company’s Ecofluid range, customers had seen a 23% increase in tool life on a typical crankshaft line, and used 40% less lubricant.

Paintshop (1)

Sustainability and quality issues were, perhaps unsurprisingly, to the fore in the first paintshop session. Eduardo Caldeira, chief paint engineer for Ford South America, discussed how the region’s changing market has created different demands on OEM paintshops. South American consumers are looking for higher quality and environmental issues are now much more of a consideration. This has seen the company move to the use of higher solids paints. Caldeira pointed out that this has helped to address both quality and environmental requirements, providing improved transfer properties (and better colour) plus higher scratch resistance, and a significant reduction in VOCs.

Harun Tetik, manager automotive systems for Eisenmann, highlighted the local challenges relating to complex tax systems, high import duties, underdeveloped infrastructure and skilled labour shortage that have to be dealt with. He also pointed to the potential of the Brazilian market with high investment and growth opportunities. Tetik explained how Eisenmann approached all projects on a case by case basis and the need for good project management and flexibility in a competitive market.

Developing a sustainability ‘road map’ for GEICO’s customers, was discussed by Fabrizio Mina, the company’s executive director for the Americas. He described the latest paintshop technologies being employed on the Qoros project in China and how it was necessary to optimise every kilowatt of energy usage when designing new systems and lines.

Paintshop (2)

In an exclusive presentation for AMS South America, Eric Preuss of General Motors gave a unique insight to the transformation of the Gravatái plant paintshop, showing detailed aerial photos and diagrams of how the site was changed and the new flow of the vehicles and processes. He talked of the six contractors and their 11 sub-contractors. 170 people working on project, installing 44 new robots, mainly working at weekends. He also commented on the difficulty of finding the right suppliers who were available, due to high level of new plant building and refurbishment happening in South America. Now the paintshop has capacity for six (regular, high volume) colours. Large new skid storage meant building a new roof and new elevators for cleaning and storing the skids.

The ELPO (electro coat paint operation – electro coat of phosphate coating) section was expanded with new tanks and new driers. New sealing process robots from Dürr increased automation levels. He showed slides of how the whole side of the building was removed during a three week shutdown to install the new Fanuc paintshop robots. The investment was 80 million rials over two years and the present capacity of 240,000 upa will reach 350-360,000 upa when it moves to three shifts. Expansion was 3,000 sq mtrs. Quality index has improved to 99.7% DRR (direct run rate – when a painted car moves straight on to assembly without any need for rework).

Marcelo Fernandes of Flowcenter Graco presented information on all the company’s partners in South America, suppliers of innovative process equipment, from pumps and pipework to spray guns and bells. He highlighted an innovation in a polyurethane foam supply pump application, with a video of a vehicle rocker panel (door sill cavity) being filled and sealed in three dimensions. This reduces NVH by ‘stratifying’ the filling of the cavities and ensuring complete vertical and horizontal distribution. Fernandes also showed slides on a new EFTEC cavity wax pump and applicator, which uses new pressure and nozzle technology to ensure better coverage and less waste.

Q&A

Olavo Vidal, manager of Manufacturing Engineering, Bodyshop, at Volkswagen do Brasil, asked Eric Preuss what the drivers for the transformation of the Gravatái plant were? Preuss said that the main aim was to increase flexibility of the paintshop to accommodate new and future models on many different platforms. He also said that Gravatái paintshop was originally designed for 30jph and to paint the three-door Celta model; now, with the new modular construction, the facility will cater for many different size vehicles and increased throughput.

Leonardo Sousa, Paintshop Engineer at Scania trucks, asked what the DRR at Gravatái was in the past; Preuss said that it varied greatly and gave a median figure of 80% but stressed that this was more of an estimate than a datum.

Stamping & forming

Using the latest technologies to improve quality and reduce energy consumption in production processes were the subject of presentations in this session. Laser welding brazing techniques produce stronger and more aesthetically pleasing results in certain applications explained Joaquin Piccini, laser expert at PSA Peugeot Citroën Argentina. This is a technology which is becoming more widely used as the benefits are realised. However, it requires greater accuracy in the steel pressings as the gap between the two panels to be joined has to be smaller. So to ensure the correct positioning of the wire feed, a laser tracking device is mounted to the welding head. PSA Argentina has made a large investment in training on this joining technique and has benefited from the experiences gained in Europe and China, said Piccini.

The benefits of laser technology were echoed by Trumpf’s Michael Fritz, who discussed the wide range of applications for joining and cutting that could be processed by laser welders and cutters, offering greater speed, accuracy and reduced energy consumption. The growing demand for new high-strength, lightweight materials has seen Benteler developing and testing new hot forming processes said Robert Frey, the company’s manufacturing engineer. AIDA has developed its servo press range to now cover both light and heavy duty applications. The advantage comes from the pendulum motion of the press, which company says allows a safe increase in speed, improving productivity. AIDA vice-president of international sales, Klaus Rothenhagen, pointed out that the direct drive servo motors are fully electric and offer reduced energy consumption, using condensers to store energy for repeated operation. Press tool and die simulation software is another potentially cost saving tool that has been introduced.

Joao Paulo Milan, Director Vice-President of ROFA Brasil talked of how ROFA had only been established in Brazil for one year and were still manufacturing major machinery in Asia and Germany, but not yet in Brazil. The company has concentrated on AGVs in material handling, and he showed an installation at the Mercedes-Benz truck plant at the Juiz de Fora plant, assembling Accelo and Actros trucks.

These AGVs have a capacity of 3 tonnes and use inductive power from floor strips – in fact buried in the floor. He showed cross section illustrating the requirements for the channel in the floor, how ROFA surveys existing floors to look for steel reinforcements that may interfere with the installation and operation. He explained the difference between AGVs guided by only surface mounted strips and those that have a ‘peg’ that runs in the channel in the floor.

Pre-fabricated channel is dropped into trenches cut into the existing concrete, this hold s the power cables and also a simple data cable that meshes with the plant PLCs etc. Capacity of these AGVs can be up to 30 tonnes and the flexibility of using two AGVs under each truck assembly, one at front, one at rear, means any configuration of chassis/cab can be accommodated. He also showed lines at Scania in Netherlands, MAN in Poland and BMW cars in Dingolfing.

Stephan Roisin of Scheck Rotec outlined the divisions of  Schenck Rotec, talked about the range of balancing machines, first fill, and testing equipment.

Andreas Peinelt then showed a presentation with videos, of a wheel and tyre assembly systems, from a basic model (40jph – 200 wheels per hour), a medium (72 jph – 360 wheels per hour) and a top level model (100 jph (512 wheels per hour). Showed the full automation aspect – conveyor designed to tilt  the tyre onto wheel for next operation.

Balancing is carried out semi-automatically – the conveyor has a station that spins the assembly horizontally to find imbalance and an arm drops down and marks the heavy spot then tilts the wheel to an ergonomically-favourable position for an operator to fix a rim-mounted weight (on a steel wheel) and an adhesive weight on an alloy wheel. The robot or conveyor that tilts the wheel allows an operator who is not fully able to work on the balance weight fixing and this complies with German government regulations to provide employment for disabled persons.

Lucio Queiroz, Director at Tünkers, spoke on how Tünkers has concentrated on conveyors and shuttles and has sought to simplify conveyor technology, using belt drives instead chains. He showed an example of this at Volkswagen’s Bratislava plant; an LAT (Leiritz Automation Technik) system for moving small pallets at table-top height. This system cleverly uses small knobs at the end of each pallet carrier, these knobs disengage the carrier from the belt so that they can be safely stopped by an operator or by contacting the next carrier on the belt. He called this a Accumulating Belt Conveyor System.

Another video showed a ‘stud belt’ system that is made in Brazil. This uses rollers to drive the skids carrying body-in-white assemblies for welding. The height and horizontal positioning of the skid carriers is quickly adjustable using an automated coarse-threaded screw ‘barrel’. This barrel is ‘threaded’ in a custom pattern, allowing the speed of transition to be tuned to the application. This system can be used for transporting assemblies of ‘almost any weight’ – certainly up to 1,500 kilogrammes, Queiroz said.

Q&A

Conference Chairman Simon Duval Smith asked Andreas Peinelt of Schenck Rotec if nitrogen could be used for inflating through the bead, with the ‘ring’ system?

Peinelt replied that this would require a sealed box around the unit to contain escaping gas, this would add too much to the cost at present but some carmakers might specify it in the future.

Peinelt also said that automated balance weight fitting was available on the more expensive level of machines but most OEMs saw this operation as a good operator task.

Peinelt also said that automated balance weight fitting was available on the more expensive level of machines but most OEMs saw this operation as a good operator task.

Caio Bertolini, a paint engineer at Ford asked Joao Paulo Milan if AGVs were being used in passenger vehicle production in Brazil yet?

Joao replied that there were no applications in passenger car yet that he knew of but he was certain that they would gain popularity in the near future.

Lucio Queiroz of Tünkers was asked about the safety element of the exposed belt drives in its LAT system, were they acceptable to health and safety authorities worldwide?

Queiroz replied that Volkswagen had very strict guidelines on operator safety and they had approved the system so he was confident it would be acceptable worldwide.

Automation and control systems

Daniel Coppini gave a thoughtful presentation on Siemens’ ‘holistic’ view of the entire production process. He showed how Siemens fosters development of product design for manufacturing, through PLM software, and explained how its CAD/CAM/CAE via NX software helped prototyping for the Red Bull Formula 1 racing team. He also spoke about the importance of simulating production planning through the use of software modeling, from process validation, layout design, off-line programming of robots and other automation, through to final line commissioning. Virtual machines, making a ‘digital twin’ of processes and equipment to model operations were also discussed. He touched on resource-saving through switching off machines whenever possible and using PROFIenergy protocol, based on PROFINET, to conserve energy.

He said that software innovation may really change production process design, and change the whole way we think about processes.

Julio César dos Santos and Thomas Stähler gave an interactive ‘double act’ presentation with Thomas asking questions about SICK’s offerings in Brazil, as though Thomas was a customer. Julio took Thomas and the audience through SICK’s product and services range, including safety-access and robot-station control and protection for workers, safety innovation, and applications in BIW, on AGVs and in final assembly. The presentation highlighted the company’s Track and Trace systems, with a moving diagram showing where RFID tracking changes to 1D, 2D and 3D scanning of barcodes. He illustrated how this can all be achieved with RFID-based ‘Car Body ID’ with weld-proof, high temperature resistance labels that are read by UHF scanners.

Michael Mulligan from Zebra Technologies talked about the company’s Location Solutions division, asset visibility and material replenishment solutions. He outlined how its passive RFID devices meshed with MES and explained the steps of Lean Material Replenishment Hierarchy, taking the audience through the steps of electronic Kanban, card Kanban and manual picking. Mulligan commented on how electronic Kanban gives tracking and history information and how Zebra have sought to refine this system, calling it flexible material replenishment. He demonstrated the company’s wireless handheld ‘button’ material call request system, and how this can mesh with broadcast triggers, supplier communication, so that the supplier can ‘see’ into its customers’ inventory and thus avoid ‘running out’ situations.

The presentation included a rack and container case study of inventory tracking and control. He showed slides of a finished vehicle where tracking tech helped avoid shipping vehicles that were destined for rework, at Land Rover in the UK. ‘Solution Stack’ illustrated how bar-coding, RFID, the button system etc all fits into the company’s two-way XMLREST full interface.

Q&A

Sergio Caracciolo, Regional Operations and GMS Organisation Manager at General Motors do Brasil asked Daniel Coppini how existing non-digital plants in South America can move to a digital platform?

Daniel Coppini replied that digitisation of plants is easier now as advanced digital tools are more suitable for retro-fitting than previously, and added: “Automation in general is now more powerful and cheaper and gives a much faster return on investment.”

Nivaldo Falcare, President and CEO of Falcare Equipamentos Industriais asked Julio dos Santos of SICK about how durable the RFID tags are – will they survive going into ELPO tanks and into ovens?

Dos Santos replied: “The tags can be removed for hostile processes, and re-fitted afterwards, but they will cope with most adverse conditions, including any temperatures found in paintshop ovens.”


Body-in-white

Production flexibility is key to efficient production and this was point was underlined by Olavo Vidal, manager of manufacturing, bodyshop, Volkswagen do Brasil, during his presentation. Like many other OEMs VW is developing global vehicle platforms with standardised components and configurations to enable the rapid transfer of new models for production in different markets. To achieve this flexibility Tier suppliers are having to develop more sophisticated, adaptable systems and equipment. Kuka Roboter’s automotive product manager, Peter Klüger, highlighted the company’s developments in reducing moving mass and creating more compact robots that take up less space (allowing greater density in the production cells) and reduce energy consumption. And here again the shift towards standardisation could be seen with Kuka offering one ‘family’ of robots that can perform a wider range of bodyshop operations. Kuka had focused on improving the operating software functionality to reduce the need for additional hardware, explained Klüger.

Innovative heating concepts for paintshops were presented by Dürr as part of a focus on sustainability and efficiency. Richard Schweiger explained how paint booths are being designed to be more compact with the integration of more systems and operations. The use of renewable or recycled energy also featured strongly. With the increase in gluing operations on modern vehicles has come the need for improved application technology explained Dürr’s APT business unit director, Uwe Rickert. Automation of the process has increased the efficiency of glue application to vehicle body parts. Electronic heads allow for much higher levels of control, this reduces waste and permits variable application volume in selected areas, such where spot welding will occur. This in turn reduces problem with adhesion commented Rickert.

Weld quality needs to be closely monitored; differences in metal quality or type can result in imperfections in appearance and strength of the weld. To assist with maintaining quality and consistency a virtual simulation system has been developed by Lincoln Electric, explained Antonio Souza. This will provide a ‘score’ depending on the simulated weld’s quality and structural strength.

Future Strategies

The potential for growth in the Brazilian car market had been highlighted throughout the conference with the industry accounting for 21% of the country’s GDP. However, for this potential to be realised it would need a reduction in the bureaucracy and costs involved and improvements to the country’s infrastructure. These were the observations made in the final session of the conference by Alexandre Bernardes, representing ANFAVEA. While there had been fluctuations in sales and production in the Brazilian automotive market, the general trend (for cars) was positive he added, although truck production had seen a steep decline, he hoped improved tax rates for CVs would help leverage sales.

Digital simulations are a tool increasingly being employed to meet the challenges highlighted during the conference. Being able to design and operate (in a virtual environment) a complete production facility offers huge advantages in time and costs, plus ensures efficiency issues are dealt with before construction or production begins. This approach is being used extensively by VW according to Celso Placeres, Director, Manufacturing Engineering for Volkswagen do Brasil. He explained that it was utilised on both new and existing facilities and in addition to production line design it was used for ergonomic analysis of work processes and for optimising logistics.

Renault has experienced similar issues with costs, skill gaps, and logistic and infrastructure shortcomings. But the company is continuing to develop its presence in Brazil said General Manager of Manufacturing, Marcelo Soares, with Sao Paulo now home to Renault’s design centre in the region. Ongoing redevelopment included the building of a new plant inside an existing one.

This final session of the conference concluded with an interactive Q&A, a new feature for this year. Delegates (and speakers) were given the opportunity to answer a series of questions via an electronic vote. When asked what was the main challenge to the automotive industry in Brazil the issue of taxes and government and local legislation gained the majority of votes with the shortage of skilled people and problems of poor levels of education coming in next.

This final session of the conference concluded with an interactive Q&A, a new feature for this year. Delegates (and speakers) were given the opportunity to answer a series of questions via an electronic vote. When asked what was the main challenge to the automotive industry in Brazil the issue of taxes and government and local legislation gained the majority of votes with the shortage of skilled people and problems of poor levels of education coming in next.

The challenges facing OEMs and Tier suppliers operating in Brazil, highlighted throughout the conference go beyond just market forces. But what is clear is that considerable resources are being deployed to overcome the problems and the region continues to be a major focus for manufacturing.

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