Qatar has set its sights on being a significant force in the global auto industry – and has established Qatar Automotive Gateway (Ag) to make it happen by leveraging industrial and financial strengths.
This is part of the Qatar 2030 game-plan, which sees the kingdom diversifying its economy and creating knowledge-based industries and creating skilled jobs in the country. What makes the automotive sector so attractive is its position as a key industry in the global economy, with a direct employment of 25 million jobs and total revenues of more than 5% of global GDP. Qatar Ag plans to leverage Qatar’s strengths – the country is located in the Arabian Gulf, and has one third of the world’s total reserves of natural gas. The Qatari economy has grown 27% a year from 2005-2009). The 2010 GDP is estimated at US$125-bn, of which more than half comes from the non-oil and gas sector.
Most estimates put growth at 10% a year at least for the next five years, with further growth of at least 7% per annum foreseen beyond that. Qatar Ag believes the country has much to offer in areas such as aluminum components, lithium-ion battery materials, lightweight advanced materials, and specialized automotive assembly. As the demand for electric and hybrid vehicles ramps up, and xEVs become a standard product offering, it is expected to create a new value chain worth approximately US$250-bn by 2020, of which more than US$65-bn will be for lithium ion batteries and components.
“Most experts also expect that this increase in demand due to the increasing use of aluminum components will cause a significant shortage of global capacity by 2016, creating an opportunity for Qatar Ag to produce hi-quality automotive aluminum components while leveraging Qatalum’s (Qatar’s premier aluminum manufacturer) significant aluminum capacity and capabilities,” says Ahmed M Sorour, chief executive officer of Qatar Ag. Automotive investments are expected to boost related industries such as iron, steel, rubber, glass, plastic, petroleum, textiles, oil and gas, paints and coatings, and transportation. One of Qatar Ag’s first milestones is signing a memorandum of understanding with Prodrive, one of the world’s leading automotive technology and motorsport businesses.
The MoU, which was signed at the 2012 Qatar International Motor Show, is to form a strategic partnership for the development and production of advanced carbon fiber composite automotive parts and assemblies. “We firmly believe that Qatar AG will help foster the growth of a diversified socioeconomic system in Qatar and one which relies on a knowledgebased industry and create valuable job opportunities for Qatar’s youth. We are also confident in the path we are following to place our nation on the world’s automotive production map of the future,” said Ghanim Bin Saad Al Saad, Chairman of Qatar Ag at a press conference.
Al Saad says that the transformation in the automotive industry is also taking place from a technical perspective. Hybrid and electric vehicles are being adopted because they are more environmentally friendly and fuel-efficient. Even though commercial production only started in 2010, extensive government support from around the world is expected to speed up adoption, such that by 2020, nearly 40% of all passenger vehicles will be some form of hybrid or electric vehicle. “We place very high importance on investing into knowledge-based industries which come at the forefront of the new automotive value chain, and particularly when Qatar’s resources offer a significant competitive advantage to our customers.
Lightweight-material technology, illustrated perfectly by carbon composites, is an excellent strategic fit. Prodrive is an exceptional company, demonstrating an enviable track record in designing and producing carbon fiber composites for several prestigious brands such as Bentley, Jaguar and McLaren as well as many other long-standing and successful business activities across the world. We look forward to developing our relationship with Prodrive and exploring long-term opportunities for business in this exciting area of lightweight materials technology,” added Sorour.
Automotive Industries asked David Richards CBE, chairman and chief executive of Prodrive, to tell us more about Prodrive’s MoU with Qatar Ag.
Richards: Prodrive has been involved in the manufacture of carbon composite components for nearly 20 years for our own race and rally cars. In the last decade, we have expanded this part of our business dramatically and now manufacture carbon fiber components for car manufacturers such as Jaguar, Bentley and McLaren, as well as Formula One teams and businesses in the aerospace, marine and defense industries.
The high cost and complex manufacturing processes used to mean that carbon fiber was reserved for use in Formula One and military jets. Today costs have fallen dramatically, and the manufacturing processes have evolved such that the benefits of this lightweight and yet very strong material can now be applied to a wide range of applications that were never thought possible before. For instance, the latest passenger airliners such as the Boeing Dreamliner and the Airbus A380, have a high level of carbon fiber content, while vehicle manufacturers are using an increasing amount of carbon fiber in their vehicles to reduce weight in order to help meet emissions legislation.
Qatar Ag and Prodrive have identified a significant opportunity to combine their skills and resources to meet the rapidly expanding demand for lightweight, cost-effective carbon composite-based products in the automotive and other market sectors.
AI: What makes Qatar an ideal location for such a project?
Richards: Qatar is committed to diversifying its economy and Qatar Ag has a clear strategy for how it wishes to invest in specific, high value aspects of the automotive supply chain, focused on lightweight materials and battery technologies. The engineering and production of carbon fiber composite parts and assemblies is a natural fit to Qatar Ag’s strategy.
AI: How would you rate Qatar as an automotive destination?
Richards: Qatar Ag’s commitment to create a world class, high technology automotive cluster by 2020, makes Qatar a very attractive base for expanding and extending our capacity and, as the cluster grows, Qatar will quickly become a very attractive destination for continued investment by the automotive industry.