Did you know that corrosion is responsible for over $2.5 trillion in annual losses to auto businesses, worldwide? According to a study by The International Measures of Prevention, Application, and Economics of Corrosion Technology (IMPACT), losses due to corrosion include lost revenue, labour, and productivity for companies, resulting in annual losses to the tune of 3% of the world’s total GDP (as of June 2022).
This disquieting statistic assumes particular significance if you are an MSME supplying auto parts and components, because corrosion alone could be responsible for eroding your margins by as much as 35% annually. A report by NACE Impact places the potential cost savings by implementing best practices to control rusting at anywhere between 15% and 35% of net production costs.
Corrosion is often referred to as the silent killer. And for small businesses in the automotive sector, its dangers are all too real.
Business losses due to corrosion – A closer look
As individuals, most of us are resigned to the phenomenon of rusting damaging our vehicles, our electronic equipment and devices with metallic components. Corrosion creeps up on us quietly, and the only way to prevent it from happening is by opting for expensive anti-rusting coating or chemical treatments.
For MSMEs dealing in production of automotive components and automobile parts, however, corrosion is more than a nuisance. Left unchecked, it can wipe out entire businesses. While most businesses factor abstracted losses due to part corrosion as part of their operating costs (wear and tear), these estimates are often conservative and do not reflect the true scale of the losses. In addition, significant losses can accrue due to one-off adverse events -
Losses due to recalls and cancelled orders - Corroded parts can result in recalls and cancelled orders, impacting your revenue forecasts and damaging your firm’s reputation irrevocably.
Lost inventory due to corrosion – Parts stored in warehouse inventory, or delayed in transit are likely to be affected by rusting, resulting in significant losses to the firm.
Losses due to repairs – MSMEs committing to repair damage due to rust (instead of discarding the inventory) are likely to find themselves footing a costly bill that would eat into their quarterly earnings.
Legal costs – Even with limited liability arrangements, MSMEs are at risk of legal action initiative by the OEM, client, or end customer if QC fails and a batch of corroded automotive components is supplied.
The operational losses due to corrosion for a business depends on several factors, including -
The type of product (for example, if it is an automobile or an industrial machine)
The type of material being used (for example, steel or iron)
The environmental conditions (for example, moisture or air pollution)
The type of operation that caused the corrosion (for example, rusting caused by rainwater).
It is clear that preventive measures are a must to deal with the problem of rusting at scale. But what can you do, as an MSME? Let’s take a closer look at the phenomenon to find an answer.
Why does corrosion occur – and what are its early warning signs?
Corrosion occurs because of steel's natural tendency to rust. It is the result of an electrochemical reaction, in which metal wears away when it comes into contact with an acidic or a basic substance. The process is accelerated by the presence of water in the environment; humidity promotes the formation of rust, which can then attack other components. Once the corrosion takes hold, it is difficult to detect any symptoms until a part fractures or fails. Nevertheless, there are tell-tale signs that indicate the onset of corrosion -
1. Rusting - Rust is a reddish-brown discolouration that is often the first sign that a vehicle or component is suffering from corrosion. It is caused by road salt, acid rain, and other environmental factors.
2. Paint discoloration - Peeling, fading, or flaking of paint is another early sign that the metal has started to corrode.
Five techniques for MSMEs to prevent corrosion and achieve cost savings
1.Invest into magnesium-based corrosion protection solutions
Magnesium is a wonder metal for combatting the ill-effects of corrosion. It can be used as part of an anti-corrosion solution or as a corrosion protection solution.
When used as an anti-corrosion solution, magnesium is added directly to the water that is being used to clean the vehicle. This prevents calcium and other minerals from reacting with the metal components inside the vehicle, which would cause them to rust if left untreated.
When used as a corrosion protection solution, magnesium must be applied before any damage has occurred, since it is meant as a preventive measure. Magnesium Corrosion and Corrosion Protection Solutions provide protection against both galvanic and thermal degradation caused by exposure to water, oxygen-containing gases (such as exhaust fumes), and acids like sulfuric acid or hydrochloric acid found in brake fluids.
2.Reducing the galvanic corrosion between carbon-fibre-reinforced polymer and metal
Carbon fibre-reinforced polymers (CFRPs) are used in the automotive industry to make parts lighter and more durable. However, this property can also be a source of corrosion. Carbon fibre-reinforced polymers have a similar composition to steel, which makes them susceptible to galvanic corrosion. It can lead to cracks in the material and structural failure. The resulting damage can be costly if not caught early on during production or repair work on an automobile body or chassis.
To prevent galvanic corrosion between carbon fibre-reinforced polymers and metals, manufacturers must consider the following:
Make sure that the metal surface is properly cleaned and free of any deposits or other contaminants
Use thermal spray coating on the metal surfaces, when possible, as this can help prevent corrosion from starting in the first place
Use stainless steel fasteners whenever possible
Some companies have developed a method called Lab-to-field correlation, which starts with actual lab tests performed on new materials before they are put into cars. This allows them to know exactly how much of their new material has been affected by corrosion so that they can make adjustments as necessary.
To prevent corrosion in automobiles, it is important to follow a process of correlation and standardization. Corrosion standards can also be used as a reference point for measuring the performance of materials in different environments.
By using this technique many uncertainties (including corrosion susceptibility) involved in various stages like testing to the product launch can be minimised.
4.Using simulation models to accurately predict corrosion
In a simulation, the component is not exposed directly to corrosive salts. Instead, it is first coated with a protective layer (e.g., epoxy) and then placed in an environment that simulates that in which it will be used. The protective coating prevents any contact with corrosive agents until after it has been exposed to these agents. Once exposed, however, it is subject to corrosion by these agents and must be removed or replaced before it can be used again.
They are faster than salt spray tests because no actual corrosion occurs during testing; instead, only changes occur in surface properties over time due to exposure (i.e., erosion/oxidation).
5.Leverage new technologies in the auto industry to stay ahead of corrosive damage
The technology used to manufacture vehicles has evolved significantly, and so has the potential for preventing steel corrosion. Automobiles now incorporate a significant number of "smart" functions such as tire pressure monitoring and other intelligent diagnostic systems that have become an industry standard; corrosion monitoring systems are currently under research and may find their way into the automotive sector within the next decade.
For example, the usage of sensors, with the potential for real-time monitoring of the corrosion rates at critical locations, could provide warnings before critical system failure. Furthermore, artificial intelligence and machine learning may help collate field corrosion data leading to more accurate lab-to-field correlation.
Prevention, as they say, is always better than the cure – automotive MSMEs can benefit by adopting these best practices. With adequate precautions, investment into the latest anti-corrosion technologies, and the right engineering, corrosion does not have to be a small business killer.
Smart businesses also partner with dependable external suppliers like JSW One for their supply of 100% certified, corrosion-resistant steel products. Check out our steel portfolio today to get exclusive discounts on select products.
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