Frost & Sullivan Outlines Opportunities for Chemical Companies in the Changing Automotive Sector
03 August 2010
According to Frost & Sullivan, opportunities exist for chemical companies in the automotive sector as dramatic shifts in business models occur and the types of vehicles being produced change. Electric vehicles provide just one example of many new revenue streams available to chemical companies this decade. However, chemical companies must develop products for the unmet needs of automotive OEMs rather than simply pushing an existing product in a new sector, the consultancy said.
Despite pressure to lighten vehicles in order to meet CO2 emissions targets, metal remains the material of choice for automotive manufacturers, not only because it is traditional and easy to work with, but also because it may well be the best material to address increasingly stringent end of life of vehicle (ELV) legislation. In a new insight entitled “Frost & Sullivan: Green Materials in the Automotive Industry”, Global Program Manager for Transportation Chemicals Robert Outram notes that:
Plastics and composites need to be greener, more recyclable and sustainably sourced in order to meet future ELV targets and escape fiscal penalties. Therefore, recycling, performance and sustainable production should be key focus points of R&D programs with clear objectives and targets based on unmet needs.
To increase the uptake of non-metallic parts in vehicles, chemical companies should be developing a strong, light and economically recyclable product made from sustainable sources and doing more to specifically address the needs of the automotive industry.
BMW’s joint venture with SGL Group to provide composites for its new electric vehicle fleet, Nissan starting its own electric battery production for its UK electric vehicles plant and Caterpillar producing its own line of hydraulic fluids for its plant vehicles are recent examples of OEMs taking matters into their own hands because the chemicals industry has failed to provide adequate materials for the automotive industry to use in future vehicle projects.—Robert Outram
In addition to focusing more on innovation, the chemical industry needs to collaborate more closely in order to secure favorable legislation and to better educate the public and parliamentarians about the green aspects of chemicals and materials, for example plastics incineration as an alternative means of vehicle disposal. Chemical companies should consider pushing harder for enforcement of ELV legislation and also for the automotive industry to be subject to tight life cycle emissions measurements, as metal production and processing is one of the most energy intense processes on the planet.
Taking an example from the agricultural sector, which has always dynamically leveraged its environmental lobbying capabilities to shape markets, the chemicals industry should lead from the front while lobbying about energy generation and green practices to shape the industry in favour of its own financial interest, the consultancy suggests.
As the agriculture and chemical sectors begin to merge as sustainable sources of feedstock are sought, much can be learnt from the agriculture industry by the chemical companies.
Biodiesel production by big agricultural companies, for instance, has enjoyed tax rebates and political support while the oleochemical sector, which produces very similar fatty acid based products from identical vegetable oil feedstocks, has never organized itself properly to push for similar fiscal concessions based on green credentials.—Robert Outram
One of the business dreams was selling Coca Cola to a billion Chinese. They are flooding Walmart and may soon be selling us cars. The model was Japan and Korea, but the Chinese government takes no prisoners and will keep rolling.
We may think that we will build the machines for their factories, but that only last just so long. When you have $1 per hour labor, that wipes away all advantages. In a fast moving world, your "edge" only lasts as long as it lasts. We are in the slow lane, reducing speed and running out of gas.
Posted by: SJC | 03 August 2010 at 10:33 AM
The Walmart phenom may hit the rocks soon. Consider it to be the engine of the "throw away" consumerism we are seeing. At some point, with education and expereince at work, people are going to tire of buying low cost crap they gotta throw out after six months.
A friend just bought a light weight folding chair. After 5-6 uses the thing collapsed. Shoddy manufacturing and design. Throw away low cost products fill the world's landfills and encourage low quality standards.
One of the reasons to reinvent the manufacturing sectors in the west is to reintroduce the VALUE of high quality design and craftwork. Well made stuff lasts longer and you get your money's worth. It also means jobs, pride of workmanship and support for local economies.
I can't buy a decent pair of shoes not made in Asia today. That's just wrong. I want to pay more for better quality so I don't have to THROW AWAY my freakin shoes after six months wear!!
IMHO, shoemakers willing to retool and start again in North America should pay little or no income taxes until well established. Their contribution to community and quality is enough benefit to start.
NOTE: apologies for OT wandering
Posted by: Reel$$ | 03 August 2010 at 11:39 AM
There is no "off topic" as long as it is relevant. This is a Congress after all and we can wander and mumble as much as we want :)
Posted by: SJC | 03 August 2010 at 12:48 PM
That is pretty much the response I hear from several places, quality lacks. The same was said of Japan in the 50s. The idea here is plastics. Car makers have used more over time and now it is the accepted material for dashes and such.
We may see materials changes to save weight and to make the product more affordable. This is not just a materials science challenge but a buyer perception one. Progress in this area may be slow because people may not accept the changes being made.
Posted by: SJC | 04 August 2010 at 08:25 AM
We all want the largest, fastest, highest quality vehicle at the lowest cost. That is not always possible to get. Higher quality products cost more. Roll-Royce went under doing it. Mercedes and BMW (and a few others) have done it. Our Big-s have failed without trying.
It is interesting to learn that BMW (a quality product manufacturer) will produce a limited quantity of lighter vehicles by replacing steel with fibers. Mercedes and Audi may follow by I can't see the Big-3 moving in that direction soon. GM could do it (if they wanted to) in China with their Buick. Lower labor cost could allow the use of fiber bodies at little extra cost.
Posted by: HarveyD | 04 August 2010 at 08:39 AM
Mercedes has a high end SL with carbon fiber body panels. We could see aluminum space frames with carbon body panels that are lighter and safer. They would cost more, but performance and safety can command a premium. Then we could see people saying that you should not have to be rich to drive a safer car and then who knows where it might end up.
Posted by: SJC | 04 August 2010 at 09:50 AM
I believe Tesla stock is going to skyrocket. Here's why. "Litroenergy Power Cell" batteries. Take radioactive tritium, add glowing phosporous, roll it into a plastic sheet. It glows for 12 years, ( half life of tritium), actually would only deplete to about 30 percent after 20 years,...
Anyway, make this sheet flexible, and ROLL thin photovoltaic up with it, into "Litroenergy Batteries". IF, the production cost of these two things is around 1.00 per battery, say the 6831 cell Tesla battery pack is replaced with these?... Cost, around 7000 X 1.00 = $7,000.00. Which is around $33,000 dollars cheaper than current lithium Ion battery. If correct, this lowers the MSRP of Tesla Roadster to a more bearable $76,000. Subtract the 7500 credit, puts it at 68,500. Better than $109,000. Now apply the cost reduction to the Model S. Loosely, if the current battery costs around 30,000 for the model S, subtract about 20,000 from that, reduces the $57,000 MSRP to $37,000, then subtract the 7500 takes it down to $29,500. Which is reasonable for an average range family sedan. The neat thing is, you could drive this vehicle FOR 20 YEARS TO DEPLETE THE BATTERY TO 30 PERCENT OF CHARGE. Nonstop...... No gasoline costs. Lower maintenance costs. No green house gasses. To validate any of this data, google: litrospheres, litroenergy, Michael P.Kohnen. So with this information in mind, do you see why I am bullish on Tesla Stock? driverguy7.wordpress.com
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