How suppliers can gain from fuel efficiency push
|Dustin Walsh covers suppliers for Crain's Detroit Business, an affiliate of Automotive News.|
TRAVERSE CITY, Mich. -- In the era of regulation, fuel efficiency is king.
Automakers, more than ever, are relying on suppliers to innovate fuel saving technology -- even incrementally. Here is one example.
Active grille shutters are among the latest development in the industry on its quest to meet the CAFE fleet standard of 54.5 mpg by 2025.
Chrome-plating supplier SRG Global Inc. plans to capitalize on the projected $50 million North American market for the shutters.
SRG developed its integrated active grille shutters near Detroit at its Taylor Advanced Development Center, which opened in 2010.
Active grille shutters open to allow air to flow through the radiator to cool the engine. However, when that air flow isn't needed, the shutters close to reduce drag, creating a more aerodynamic ride, thus improving fuel economy.
SRG is currently shopping its integrated system, where the shutters and grille are shipped as one component to automakers, CEO Dave Prater said in an interview with Crain's Detroit Business at the 2014 Management Briefing Seminars here.
Competitor shutters are a separate part added to the grille during assembly, he said. Ford Motor Co., General Motors Co., Chrysler Group, BMW AG and others have all incorporated non-integrated active grille shutters in recent models.
Prater said after years of researching new component options for SRG to pursue, integrated grille shutters made the most sense.
"We sought to take our decorative product and create functionality, which led us to take a look at our product and find growth areas," Prater said. "Today's market is driven more and more by innovation, and we're ready to take a chunk of the North American market (for grille shutters)."
SRG tested its integrated active grille shutter technology at a wind tunnel in North Carolina, which is used by NASCAR race teams and engineers. Component testing occurred at the University of Michigan's smaller wind tunnels.
Prater contends SRG's integrated system achieves more than 1 percent better fuel economy savings than competitors. SRG's shutters are integrated much closer to the grille than competitor components, which reduces more drag, he said.
In the meantime, SRG has been expanding its chroming plants globally. In April, SRG announced it would expand its Irapuato, Mexico, plant by more than 215,000 square feet. The expansion is expected to be complete in 2015. The supplier is also expanding its Ibi, Spain, plant.
SRG, a unit of Guardian Industries Corp., ranks No. 85 on the Automotive News list of the top 100 North American suppliers and, on a global basis, posted an estimated $775 million in sales to automakers in 2013.
In late 2012, SRG's parent, Guardian, sold a minority stake of the glassmaker to KGCI LLC, a subsidiary of Wichita, Kan.-based Koch Industries Inc. The company became the largest individual shareholder of Guardian. The deal reduced the stakes of longtime executives and members of the company's founding family, the Davidsons.
Guardian founder Bill Davidson, also the owner of the NBA's Detroit Pistons for many years, died in 2009.
You can reach Dustin Walsh at firstname.lastname@example.org.