Automotive industry offers a potential bright spot for the petrochemical industry

The automotive industry offers a potential bright spot for the petrochemical industry even as three factors are making significant changes to the space, Dow Chemical president and chief operating officer Jim Fitterling have said, as per a report by Platts. The industry has been under pressure from safety and efficiency standards, evolving consumer expectations and changing consumer habits and geographies, but there will be opportunities for plastics companies, especially those that can develop innovative solutions, Fitterling said in a speech at the IHS World Petrochemical Conference in Houston. "The good news is that the auto industry is in constant change and is innovation hungry," Fitterling said. "The bad news is that the auto industry is in constant change and innovation hungry. Tomorrow's automotive consumers will be markedly different from today's consumer, in their usage and in their location. The gravity of the auto industry is tilting east, with buying power pivoting away from the US to China and India," he added. A larger part of the consumer base is in this region, and a growing share of consumers live in urban areas. With 50% of the population living in urban areas and that number growing, automobiles will need to become better suited and better sized for city living. The urbanization trend will also impact auto ownership. The concept of two-car families could soon transition into the concept of two-family cars, Fitterling said. "It's clear that tomorrow's consumer will not have that same magical relationship with their car that we have," he said. "It's not something Detroit talks about, but it's something they think about." The need for transportation will remain, but the value will be shifting, he said. Increasingly strict fuel requirements have placed a strain on automotive manufacturers and has driven greater use of plastics in automotive production, so that they compose as much as 50% of the volume of some cars. But a consumer push for safety has counterbalanced efforts to decrease the weight of vehicles, especially with additional cameras and sensors adding to their overall mass. The desire for widespread customization has been a marked change as consumers have shown frustration with the traditional auto lifecycle and expect more tailored offerings with greater "info-tainment" capabilities, Fitterling said. "Research and development can't be ignored. Automakers are increasingly relying on us for solutions," he said, adding that the lines between the automotive and petrochemicals industries have become blurrier than ever. Manufacturers will pay for consistency, he said, but more importantly for innovations that improve their products. "The automotive market looks exceedingly bright for our industry," he said. "But it will be about value and not volume."