Automotive supplier Plasan Carbon Composites Inc. has a major challenge on its hands.
While the Tier 1 manufacturer of carbon fiber body panels used mostly in high-end sport cars pursues an aggressive growth strategy aimed at expanding its market into luxury automobiles, it must continue to improve its manufacturing processes to cut cycle times for the typically labor-intensive material.
“As (carbon fiber) as a whole becomes more prevalent in automotive, we are seeing a lot of people that are willing to partner with us in joint projects and technologies to revolutionize the carbon fiber arena,” said Michael Newell, Plasan’s vice president of commercial operations. “There’s a lot going on, and this industry is just scratching the surface in terms of its potential.”
As more OEMs embrace lightweighting and increase their adoption of carbon fiber components, Plasan sees its components penetrating the luxury car market within the next five years — a move that would triple the company’s production volume to service about 150,000 vehicles per year, Newell said.
Plasan currently supplies body panel components such as hoods and roof assemblies for sports cars including the Chevrolet Corvette and Dodge Viper. The carbon fiber components can lead to a weight savings ranging from 35 pounds to 150 pounds.
While carbon fiber is mostly used in high-performance sports cars for structural and body panel applications, sources believe the material could spread throughout the automotive market, starting first with higher-end vehicles, as costs and cycle times come down.
Plasan expects to generate about $60 million in sales this year, up from just $5 million in 2011, as it continues to develop its programming and work with OEMs on new carbon fiber applications.
The supplier anticipates the luxury car market to adopt carbon fiber along a similar trajectory as sports cars, starting first with option packages and then moving across the model range, said Jim Staargaard, president of Plasan Carbon Composites.
Despite its “controlled growth” strategy while validating its technology on lower production programs, Plasan plans substantial expansion in West Michigan moving forward, Newell said.
The automotive carbon fiber industry is expected to expand at a 13.5 percent compound annual growth rate from 2013 to 2018, according to the “Growth Opportunities” report from Lucintel, a global market research firm based in Irving, Texas.
“Our growth won’t be as controlled as it was over the last two years,” Newell said.
Currently, Plasan is actively engaged in the prototyping process with three transportation OEMs, which the company declined to identify.
Plasan’s 180,000-square-foot facility in Walker, a western suburb of Grand Rapids, operates at 70-percent capacity and has room to accommodate future growth, Newell said. The company currently employs about 320 employees in its manufacturing facility and plans to hire an additional 100 people over the next year.
However, increasing output in Walker relies heavily on the company’s ability to cut its cycle times, Newell said. In the past, carbon fiber components needed to be hand-woven and then left to cure in an autoclave — a process that took between 90 minutes and 120 minutes per part.
While the company’s carbon fiber products are still laid by hand, the advent of new manufacturing techniques and the use of compression molding technology has allowed Plasan to shrink cycle times to about 20 minutes. While a marked improvement, those cycle times will need to be cut in half to accommodate future volume increases, Newell said.
“We made significant investments during the downturn in technology to produce carbon components faster,” Staargaard said. “It’s three years before we’ve seen the returns.”
Staargaard cautions that the use of carbon fiber beyond the luxury market could be a tough sell because of its higher production costs than traditional materials. Since the majority of carbon fiber components in the automotive industry come from aerospace-grade sources — which is overkill in automotive applications — there has been a significant push to formulate a lower-cost automotive-grade carbon fiber to cut production costs and allow for greater volume.
Aerospace-grade carbon fiber averaged $29 per pound in 2013 and is expected to remain around the same price through 2018, according to the Lucintel report.
“Carbon fiber is without question the material that people want to get into cars because it meets all the performance standards but the roadblock is when it comes to cost,” said Jay Baron, president of the Center for Automotive Research, citing both the high raw material and production costs of carbon fiber.
“You’ll continue to see modest growth, but it will be a long time before it competes head-to-head with steel and aluminum.”
Some of Plasan’s gains to date have come as manufacturers added more carbon fiber with each successive model generation. With the latest Corvette, for example, Plasan’s carbon fiber components are used across the entire model range, not just in expensive option packages and high-end models like the ZR1. That deeper model penetration led Plasan to increase its production to support 50,000 vehicles last year, up from 3,000 vehicles, Staargaard said.
Plasan also plans to add semi-structural components to its portfolio within the next year, he said. A semi-structural engine brace prototype it developed for a customer was 50 percent lighter than an aluminum part and had the same performance, Staargaard said.
The company was established in 2006 after the Israel-based defense contractor Plasan Sasa Ltd. — a manufacturer of composite armor for military and commercial vehicles — acquired Vermont Composites Inc.’s fender program for the Corvette Z06 as it looked to establish a North American manufacturing footprint, Staargaard said. The company has operated as a standalone entity since 2010.
“(Plasan Sasa) wasn’t looking to get involved in automotive,” Staargaard said. “It’s been the success of Plasan Carbon over the last couple years that had them looking at us as more of a complementary revenue stream and balance for the defense business.”