9/15/2023 Markets & Industries Experts Know-how

The industry needs a restart

The deindustrialization of Germany is currently the dominant topic of many economic experts. The current situation, but above all the future of German industry, is predominantly critically assessed. Germany is lagging in terms of economic growth and, according to current forecasts, could bring up the rear in Europe in 2023. The whitepaper "Restart", written by Johannes Messer, analyses the current situation in the die casting sector and gives recommendations for the future.

Johannes Messer, consultant and author of the whitepaper "Restart"

This also affects the aluminium foundry industry in Germany and Europe in particular. Regarding the foundry industry, the transformation (ICE to BEV) and the rapidly rising energy costs are often identified as the causes of the crisis. This is true, but only part of the truth.

The complete truth is that the aluminium foundry industry in Germany and Europe has been in an environment of unresolved challenges and risks for some time now. The increases in demand, which have been going on for years, have been able to cover up some of the problems, but unfortunately, they have not solved them.

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Casting production of German aluminium foundries from 2010 to 2023 (in 1,000 t)

Since the end of 2018, this positive trend has been interrupted. Dramatic declines in sales of up to 40 percent in combination with the unresolved challenges have led to critical economic difficulties for many companies in the entire foundry network.
In contrast to the crises of 94/95 and 08/09, there is no longer “unrestricted” protection of these companies by customers (OEMs, Tier 1). As a result, companies or at least production capacities have already disappeared from the market.

In a recent study (12/2022), Ducker assumes that the average use of cast aluminium in vehicles in Europe will increase by 22 kilograms to 145 kilograms by 2030. This represents an increase of 18 percent.

Whether these increases come about at the end of the day and whether companies in Germany/Europe benefit individually from them is constantly being determined anew and predominantly by economic and technological factors.

It is worth fighting for the opportunities that arise.

The guarantee for “secure” success is the full use of the know-how and technologies available in Germany/Europe along the aluminium die casting value chain while at the same time focusing on a common goal.

The goal of the entire aluminum die casting value chain must be to develop and industrialize the economically and technologically best parts for the product (car) together with the customers (OEMs and Tier 1). The focus must be on the product (car). Total Cost of Ownership, Time to Market and Technological Lead are the targets that influence success and make it measurable.

To be successful, the industry needs a restart.
The scope of opportunities and risks justifies any effort. However, speed is essential.

Knowing the Past: Review
Understanding the Present: Analysis
Shaping the future: assessments, expectations, and recommendations

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Read about the EUROGUSS Executive Circle in the interview with Johanns Messer and Christopher Boss. A format for the C-level of the die casting industry that addresses questions about future viability. To the interview.

Author

Johannes Messer

Consultant with focus on strategy development, management consulting, interim management, networking (In the environment of the aluminium casting Industry) and company analysis