June 2005

Japanese PM shows three years' growth as automotive parts make steady gains

The news from SAE100 was that when Motown gets the wobbles PM in the US holds its breath. But in Japan powder metallurgy is making steady gains in the important automotive sector, a trend that if anything is increasing...

With growth for the past three years and record figures for the last two years, Japan's PM industry has cause for quiet satisfaction at least, if nothing more overt. Production of machine parts - a category that includes automotive parts and others in a ratio of roughly 90:10 - was more than 95 000 tonnes during 2004, an increase of 8.5 per cent on 2003. However, 2003 was itself a record, having grown by 6.6 per cent over the 2002 figure. In total, Japanese PM machine parts production has grown some 15.6 per cent in the two years 2003/04.

The Japan Powder Metallurgy Association (JPMA) says that is in part because the Japanese economy has benefited from growth in facility investment and exports, but also because domestic automobile production exceeded 10 million vehicles per years for three consecutive years. Quality and reliability have helped PM parts move forward says the JPMA.

Traffic in Tokyo. Increasing sophistication of engines, added to raised awareness of the environment means new opportunities for PM in modern car engines. Systems such as variable valve timing (VVT) are ideal candidates for the PM approach.

The quarterly PM machine part returns for last year compared with 2003 show an 8 per cent increase between January and March; an 11.6 per cent rise between April and June; an 8.9 per cent increase between July and September; and a 5.6 per cent increase between October and December. The value of production was ¥111.6 billion, an increase of 6.1 per cent over the previous year.

The automobile industry is the largest consumer by far of machine parts, and, naturally enough, it follows on that it is also the largest user of sintered parts. The percentage of parts going to the automotive industry has slowly climbed over five years, from 87.8 per cent in 1999 to 90.2 per cent last year. This, says the JPMA, indicates the greater dependence of the PM industry on automobile manufacturing.

Production volumes for vehicle applications jumped 9 per cent to 85 921 tonnes (another record). However, according to the Japan Automobile Manufacturers Association, although the domestic industry built 10 511 518 units in 2004 this represented only 2.2 per cent growth. The JPMA draws the conclusion that the growth in use of sintered parts exceeds the simple growth pattern for automobiles, extrapolating that to the increase in the number of vehicles incorporating eco-friendly parts such as VVT and VTC, expanded adoption of sintered parts for car air conditioning, engine and transmission parts and production increases in engines using sinter-forged con rods

Figure 1. There is growth in the machine parts sector. Overall bearings production is static.

Until 2001, the classification of machine parts use apart from those destined for automotive separated out industrial machines, electrical machines and others. But due to declines in quantity, they were reclassified as merely "others" in 2002. Production under this heading in 2004 stood at 9362 tonnes, a 4.4 per cent increase over the previous year and the second consecutive year of growth. According to JPMA statistics, use for electrical machines and industrial machines showed positive growth of 4.5 per cent and 4.2 per cent respectively in 2004.

In the industrial machine sector, mower parts for agricultural machines and general purpose engine parts increased, while demand for office machine parts declined due to overseas procurement.

In the electrical sector, the transfer overseas of refrigerator production caused a decline, but a heat wave boosted air conditioner sales, returning the sector to positive growth.

Apart from machine parts, the other major sector surveyed this year by the JPMA was Bearings. Production in the sector increased in 2004 by 6 per cent, the first positive for three years. This was seen to be a result of the generally favourable economic and business conditions in Japan during the period.

The quarterly trends during the year showed positive growth for four consecutive quarters: the period from January to March saw a 9.2 per cent increase; from April to June the industry grew by 3.4 per cent over the previous year's results. Between July and September, production was 5.6 per cent up and between October and December 5.7 per cent. The value of production was ¥14.4 billion, a 5 per cent increase over the previous year.

Just over half the bearings produced were consumed by the automobile industry, around the same ratio as 2003. Some 4200 tonnes of bearings were produced for the vehicle sector, a 5.7 per cent increase after an interval of two years. The JPMA attributed the increase to the generally favourable conditions that saw automotive production increase by 2.2 per cent in 2004.
Production for uses other than automotive rose 6.2 per cent to 3803 tonnes, the first positive result for five years. Like the Machine Parts sector, bearings usage for electrical and industrial machines was unified in 2002 under the heading "other".

According to JPMA statistics, use for industrial machines showed a 30.5 per cent jump over the previous year, while electrical machines showed a 0.2 per cent fall. The growth rate in the industrial machine sector was large because PM bearings are used now across wider model ranges on industrial machines. Demand for copier bearings increased to as countermeasures were taken by government and industry to slow what they call the "hollowing out" of the domestic industry. In the electrical sector, while there was more demand for cellular phone bearings, the shift of production overseas more or less balanced out the advantage gained, leaving production volumes unchanged.