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Impact of Automotive Trends on the Chemical Markets
Frost & Sullivan, Aug 2009, Pages: 96
This study on the automotive plastic additives provides an insight into various trends affecting the industry. It discusses in detail the key trends by product type in addition to providing competitive trends. Also provided are strategic recommendations that industry participants believe as measures for growth.
This Frost & Sullivan research service titled Impact of Automotive Trends on the Chemical Markets provides an in-depth analysis of market drivers and restraints, industry structure, and competitive environment, besides dealing with the challenges and issues faced by the market participants. In this research, Frost & Sullivan's expert analysts thoroughly examine the following markets: plasticizers, impact modifiers, UV stabilizers, antioxidants, and flame retardants.
Market Overview
Additives Market Slated for Growth with Enhanced Uptake of Plastics in the Automotive Segment and Demand Hike for Automobiles in Emerging Economies
Demand for additives from the automotive market is poised for better growth, with automakers increasingly using plastics instead of metals, thereby driving the overall sales volumes of additives used in compounding these plastics.. Regulations for reduced carbon dioxide emissions have enhanced the penetration of plastics in automotive construction, thus boosting the additives market. However, the decline in vehicle production in North America, Europe, Japan, and other regions, due to the global economic situation, has hampered the growth of both the additives and automotive plastics markets. Stimulus packages provided by the various federal governments to spur economic revival are expected to revitalize the automotive additives market. 'Long-term recovery is likely to be driven by growth in the markets of Brazil, Russia, India, and China (BRIC) as well as through the emerging technologies in passenger vehicles such as energy-efficient vehicles and electric vehicles,' notes the analyst of this research service. 'India and China, in particular, will be the countries of importance, and they are likely to be among the very few countries that will not experience a fall in vehicle production.' Hence, suppliers will have to develop strategies targeting these regions to negate the loss of demand in the western economies.
The additives used in the automotive market are dependant on the increased usage of plastics used in automotive construction. Different plastics require different types of additives for both functioning and processing. Polypropylene is a type of plastic that requires more additives, and it is the largest consumed material that accounted for 46 percent of the total plastics utilized in the passenger car segment during 2008. The widespread adoption of polypropylene in the passenger car segment has amplified the growth of additives used in the automotive market. Although the prospects look upbeat, recycling has remained a major issue facing the automotive plastics market. This is likely to negatively impact the usage of plastics in some of its current applications. The European end-of-life vehicle regulation makes the recycling mandate even more stringent. By the end of 2015, it requires 85 percent of the vehicle’s weight to be reused and recycled and 95 percent of the vehicle’s weight to be reused and recovered. Several automakers have displayed keen interest in exploring new materials and processes to deliver parts and systems that are easier to recycle.
In this scenario, additives manufacturers must focus on consistent supply of quality additives with a superior technical service that would ensure coatings formulators’ customer confidence and loyalty. Additive companies should devise strategies that address the key challenges faced by customers and develop products that provide excellent cost and performance benefits as well as help them comply with regulations. In addition, customized solutions must be provided through product differentiation. More importantly, additive companies must strive to advance green chemistry and sustainability. 'Environmental sustainability initiatives are likely to continue to create massive opportunities for chemical companies through various forms such as lightweight plastics, materials in fuel cells, and electric vehicles and others,' says the analyst. 'Companies with a global footprint are best placed to benefit from the immense growth forecast in the emerging economies.' Smart strategizing will help energize business prospects and pave way for successful outcomes in the highly demanding automotive market.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Plasticizers
- Impact modifiers
- UV stabilizers
- Antioxidants
- Flame retardants
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