|2010 global automotive materials market by revenue (top) and volume (bottom). Source: Frost & Sullivan. Click to enlarge.|
A new report from Frost & Sullivan, “Prevalent Substitution Trends within Materials and Chemicals in Automotive Lightweighting”, finds that the lightweight automotive materials market (metals and plastics) earned revenues of $38 billion in 2010 and estimates this will reach $95.34 billion in 2017, driven by the need to conform to environmental regulations.
Governments across the world have been passing laws mandating reductions in fuel consumption and/or carbon emissions. These laws have resulted in the lowering of vehicles’ weight through the replacement of heavy materials in certain systems with lighter alternatives, as the weight of the automobile has a direct bearing on its fuel efficiency. A 10% reduction in vehicle weight offers fuel savings of 5 to 7% (in mpg), provided the vehicle's powertrain is also downsized, Frost & Sullivan notes.
These laws...also challenge OEMs to find innovative solutions to comply with them and still stay profitable.—Frost & Sullivan Senior Research Analyst Sandeepan Mondal
As an example, the end-of-life directive in Europe compels automakers to minimize the waste created when a vehicle reaches the end of its useful life. On one hand, it encourages the incorporation of recyclable lightweight materials in passenger vehicles and on the other, it hinders the market growth of thermosets and carbon composites.
Lightweight materials do decrease the overall weight and emissions, but also hike the costs considerably. The business of both OEMs and tier-I suppliers took a hit during the economic downturn and in such unfavorable economic conditions, they will unlikely be enthusiastic about shifting from a metal-based assembly to alternative materials, the report suggests.
The Frost & Sullivan study considers the following materials:
- Advanced High-strength Steels (AHSS)
- Polyamides (PA 6 and PA 66)
- Acrylo-Nitrile Butadiene Styrene (ABS)
- Thermosetting Composites
- High-performance Polymers (PA11, PA12, PA46, PPA, PPS, PEEK)
Frost & Sullivan values the 2010 lightweight automotive metals market at $20,698.1 million by revenue and 10.3 million tonnes by volume. The company projects the automotive metals market to grow to $59,805.6 million in 2017 at a CAGR of 16.4%. Aluminum remains at the forefront of automotive metals usage, both in terms of value and volume.
Frost & Sullivan suggests that exterior and body-in-white components are likely to witness more of metal-metal substitution. Aluminum remains the leading material of choice for exterior body panels, whereas for BIW structures, AHSS is expected to replace lower grade steels.
The company values the 2010 automotive plastics market at $17,305.7 million by revenue and 5.5 million tonnes by volume. The total automotive plastics market is predicted to grow to $35,536.2 million in 2017 at a CAGR of 10.8%. Polypropylene remains at the forefront of automotive plastics usage, both in terms of value and volume.
Interior and under-the-hood components are likely to witness more of plastics-plastics substitution, the company suggests. The majority of the plastics are targeting metal replacement given ongoing trend of weight reduction of vehicles.
Among all lightweight materials, aluminum leads in volume and revenue, while polymers are finding an increasing number of takers, mainly due to the low cost-to-performance ratio depending upon part size, shape and complexity. The adoption rate of plastics will be low in structural parts, which require robust impact resistance properties.
Competitive scenario. Frost & Sullivan notes that the automotive metals market is mainly dominated by global conglomerates such as Arcelor-Mittal; POSCO; US Steel; Alcoa; Alcan; US Magnesium; and Dead Sea Magnesium. However, besides providing the basic raw material, some companies also process and mold these materials for the end users, which comprises tier-I suppliers and automotive OEMs.
The automotive plastics market is dominated by global resin suppliers such as Lyndoll-Basell; Borealis; DuPont; Exxon-Mobil; Rhodia; and Sinopec, which not only supply the basic resin but also mold these polymer resins according to the specifications provided by the tier-I suppliers.
Both automotive metals and plastics markets are also populated by alloy makers, die-casters and molders, which function as a conduit between the raw material supplier and the tier-I manufacturer/OEM.
In terms of number of competitors, the automotive metals market has approximately 55 to 100 key suppliers (including both manufacturers and die-casters), according to the report, whereas the automotive plastics market has approximately 25 to 50 prominent suppliers (including resin manufacturers and molders).
Prices in automotive metals and automotive plastics markets are closely linked to global crude oil prices, Frost & Sullivan observes, and any price fluctuation upstream gets reflected in the downstream products and allied product lines.