Robust growth in the passenger vehicles sector has enabled the polypropylene compounds market in the Indian passenger vehicles segment to grow in leaps and bounds as per Research and Markets. This, coupled with the provisional anti-dumping duties levied on polypropylene imports, has led to emergence of new participants in the polypropylene market in India. The Indian passenger vehicles market has grown from 0.2 mln units in 2001 to 2 mln units in 2009, at an average annual growth rate of 13.6%. The market is expected to continue on its high growth trajectory, with the rollout of new low cost passenger vehicles from Tata and Bajaj. India is slowly emerging as a hub for the export of small passenger cars. Tata has been exporting small passenger cars since 2005. Hyundai Motor Company and Nissan have also joined the bandwagon, exporting small passenger cars manufactured in India to a host of other countries. Compared to global standards, the amount of polypropylene used in Indian passenger vehicles is low. However, with the entry of global auto manufacturers such as Volkswagen in India, this trend is set to change. India will soon attain the global standard of roughly 55 kilograms of polypropylene per passenger vehicle from the current 35 kilograms. Though the prospects for the market look upbeat, there are some challenges restraining its progression. Escalating crude oil price poses a major impediment. Price of polypropylene is directly dependant on the price of oil, which is one of its key raw materials. If polypropylene loses its cost advantage, then automotive OEMs are likely to opt for the most economical material available for manufacturing automotive components. The price of crude oil has remained volatile since the economic downturn in mid 2008. For instance, in 2010, the price per barrel of crude increased from US$74 in January to US$85 in April and decreased to US$76 in July. It started to climb again in August. Global companies such as Volkswagen, GM, and BMW use higher grades of polypropylene, to abide by the stringent safety and environmental policies of their companies, says the analyst. This has contributed to the uptrend in material costs. Although these regulations have not been enforced in India, they are expected to come into effect in the future and participants will have to utilize high-grade polypropylene. This is likely to further push the cost per unit for polypropylene used in Indian passenger vehicles in the future. New advances in polypropylene technology are revving up its attraction quotient. A Japanese car maker is in the process of developing a second-generation bio-plastic based on polypropylene, using non-edible cellulose-rich plants. Others are experimenting with self-reinforced polymers, which eliminate the need for a filler. These new materials could prove to be a boon for the polypropylene market. Polypropylene resin manufacturers in India must step up collaborative efforts with automotive OEMs to provide the requisite polypropylene grades, as a variety of grades are imported into India, despite the heavy anti-dumping duties levied on them.