Strong demand from China driving automotive plastics market in BRIC

Demand for automotive plastics is surging in the developing regions of Brazil, Russia, India, and China (BRIC) on account of enhanced focus on safety and comfort among OEMs. China is the largest market for automotive plastics in BRIC; of the estimated US$15 bln in revenues in 2016, China is expected to account for US$9 bln, as per Future Market Insights. The automotive market in BRIC has not yet reached the level of saturation as the western markets. OEMs are especially eyeing the lucrative markets of China and India, where millions of people are yet to buy their first car. Demand for automotives is also robust in the commercial sector, as BRIC nations are still working on upgrading their freight network. Steady demand for automotives is supporting the plastic industry in these countries. Application-wise, FMI has segmented the BRIC automotive plastics market into interior, exterior, and under bonnet. Demand for plastics for interior use in automotives generated revenues worth US$ 6.67 billion in 2014; FMI expects demand to expand at over 14% through 2020. Application of plastics in exterior and under-bonnet is also expected to expand at a high CAGR through 2020. On the basis of product type, the automotive plastic market is segmented into Polypropylene, Polycarbonates, Polyvinyl chloride, Polyurethane, Acrylonitrile butadiene styrene (ABS), Others (HDPE, LDPE, PPA, PPE, PMMA Polypropylene is the most sought-after automotive plastic, and finds applications in bumpers and petrol tank. Demand for polypropylene in BRIC is expected to expand at a CAGR of nearly 17% through 2020. Polyurethane is used in the manufacture of seat cushions, foam seals, and gaskets. Revenues from polyurethane totalled nearly US$2 bln in 2014; FMI expects demand for polyurethane to expand at a high double-digit CAGR through 2020. The automotive plastics market in Brazil is expected to expand at a robust pace, owing to surging demand from the automotive industry in the country. Brazil is one of the most lucrative markets in Latin America and availability of affordable labour have made it a hub for automotive component manufacturing. Rising disposable income and growing urbanisation trend has led to strong demand for low-range hatchbacks and light commercial vehicles. Leading OEMs including Toyota, General Motors, and Daimler Chrysler have set up their R&D centres in Brazil, and are focussed towards expanding their technological capabilities. Revenues from automotive plastics are expected to reach US$2.64 bln by 2020. Rising disposable income, expanding middle class population, extensive resource reserves and highly-skilled workforce in Russia are factors expected to boost growth of the automotive plastics market. Russia GDP growth is supported by the growing automotive industry in the country, which is fueling growth of automotive plastics market. Due to 100% foreign Direct Investment (FDI) in the automotive industry in India, major global players are expanding their footprint in the country to benefit from various government benefits such as tax exemption for localisation. The India automotive plastics market is expected to witness strong growth in the near future. China is the largest market for automotive plastics in BRIC. China is proactive in development of proprietary technologies at competitive cost as compared to other countries in Asia. The automotive market in China is expected to surpass US$9 bln in revenues by 2016.