The need for light-weight materials among automotive original equipment manufacturers (OEMs) and component manufacturers is accelerating the demand for automotive plastics in Europe. The use of plastics can reduce the number of parts required for a specific application, cut down on processing costs and facilitate fuel savings between 5-7% for every 10% drop in vehicle weight. In addition to environmental sustainability, plastics enable enhanced design flexibility and passenger safety features such as shock absorption in bumpers, reduced explosion risks in under-the-hood (UTH) applications and life-saving accessories.
As per Frost & Sullivan study that covers virgin compounds and polymeric blends, the market earned revenues of US$4.22 bln in 2013 and estimates this to reach US$7.26 bln in 2019. While the recent economic slowdown has led to diminished car ownership interest in many countries, especially Germany, France, Italy, Spain, Portugal and Greece, the automotive plastics market will be sustained by the shift in focus towards more fuel-efficient, smaller, economy class vehicles. "Regulations demanding the reduction of carbon dioxide emissions from passenger and light commercial vehicles by 2020 are compelling automotive component manufacturers and OEMs to substitute metal parts," said Frost & Sullivan Chemicals, Materials & Food Research analyst Soundarya Shankar. "The improved heat, chemical and impact resistance, enhanced aesthetics, optimum price-performance index in high performance polymers such as polypropylene (PP), acrylonitrile butadiene styrene, polycarbonates and polyurethanes (PU) coupled with new compounding techniques have made plastics the most preferred material in automotive applications." Plastics also offer significant cost advantages over metals. While metals are cheaper than plastic materials on a cost-per-unit basis, the latter remain a more feasible alternative due to lower processing, assembling and finishing costs. The cost of plastics will fall further when standardisation and mass production commence. The rising use of reinforced and composite material in automotive applications, however, poses a threat to virgin plastic compounds. The maturity of certain polymers for specific applications – such as the use of PU polymers for seating applications and PP polymers for interior applications – further limits growth potential. "Market participants should focus on the exterior and UTH application segments rather than the interior application segment, where opportunities are relatively saturated," advised Shankar. "They must also forge close relationships with customers and gain sound technical expertise and backward-integrated resin manufacturing capability to stand out in the European automotive market.”
As per Frost & Sullivan, the European automotive industry is at the forefront in terms of technological advancements. It is focused on light-weighting strategies and enhancing passenger comfort. Housing the major global automotive manufacturers, European demand for plastics is projected to accelerate during the forecast period of 2012-2019. Growing environmental concerns, along with regulatory trends to reduce carbon footprint, have steered the focus of automotive original equipment manufacturers (OEMs) to continuously reduce fuel consumption and carbon-dioxide (CO2) emissions from vehicles. The use of plastics in automotive applications not only offers advantages such as decreased fuel consumption, weight reduction, environmental sustainability and enhanced design flexibility but also delivers passenger safety features. Safety functionalities such as shock absorption in bumpers, materials to reduce explosion risks in under-the-hood (UTH) applications and life-saving accessories such as air bags and seat belts are accelerating the need for materials that offer increased design freedom, aid in light-weighting and deliver cost-competitiveness. Dynamics in the automotive plastics market centre around metal replacement opportunities in certain applications and the substitution of competing plastic compounds and reinforced and composite materials in different applications.
The economic scenario in Europe, along with the sluggish automotive production trends, has significantly influenced the automotive plastics market. However, the light-weighting trend and the regulatory requirements are expected to drive the use of plastics in the automotive industry. High-level technical expertise and long-term relationships with OEMs are critical in the automotive plastics market. Hence, entry barriers are high for new participants to cater to the rapidly evolving needs of the automotive industry. Metal replacement opportunities for plastics have matured in interior applications while exterior and UTH applications offer immense growth prospects for the penetration of plastics. Composites and reinforced materials pose strong competition for plastics in the automotive industry. Technological advancements in resin manufacturing as well as processing techniques to develop innovative plastic compounds are of importance. Compound manufacturers need to work closely with automotive component manufacturers and OEMs to ensure robust design capabilities. Long-term relationships are even more critical to ensure continuous material supply to the automotive industry. Light-weighting capability, improved aesthetics, design flexibility and cost-competitiveness have helped plastics rapidly replace other competing materials such as metals, rubber and fibres in the automotive industry. PP is the most commonly used polymer in automotive applications, followed by PE. These compounds have a well-established market for themselves, while continuous research and development (R&D) activities are driving the substitution of one over the other for cost, performance and improved aesthetics. The choice of polymers across different applications is based on the OEMs/component manufacturers, along with the capability of their chemical partner to compound the resins to suit the former's requirements. Spoilers, fenders, liftgates and glazing are the key applications that offer profitable metal substitution. PP, PC/ABS and ABS compounds compete closely in different applications such as dashboard panels, bumpers and mirror housing. OEMs, component manufacturers and compound manufacturers work closely with each other for material selection and product design after evaluating the required characteristic properties and cost implications for the specific application. For instance, high-end luxury cars are likely to have more PC/ABS content (to enhance aesthetics) when compared to the PP compounds that are used in economy cars where the cost constraints are much tighter. Another significant dynamic in the automotive plastics market is the competition from reinforced and composite materials for plastic compounds in different applications. UTH applications require the continuous substitution of virgin plastic compounds by reinforced and composite materials. Air intake manifolds (AIMs), engine covers, radiator end caps and fans/shrouds are some examples.
The PP segment is the largest in terms of revenue and volume in the automotive plastics market. The use of PP compounds is maturing in interior applications such as dashboard panels, centre consoles and door panels. The PU segment has penetrated seating applications while noise, vibration, and harshness (NVH) applications will offer significant growth opportunities in future. ABS is projected to find opportunities in interior applications in replacing PP compounds. HPP compounds hold a significant share in terms of revenue; however, they have smaller volume implications as they are predominantly used in niche applications. Automotive applications offer limited prospects for non-reinforced PA compounds when compared to their reinforced and composite counterparts. Other compounds find applications in different areas while competition from PP and ABS compounds has restrained their growth. PC and blends hold a small share while they are poised for strong growth during the forecast period.