Automotive Plastics Market

Global Industry Analysis (2017 - 2020) - Growth Trends and Market Forecast (2021 - 2025)

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Industry: Chemicals & Materials | Author Name: Harshad

Stringent Regulations and Changing Consumer Behavior to Drive Demand

Today, there are more than 30,000 parts in a single car, including smallest of screws. These parts utilize a wide range of raw materials and processes. Around 30% of these parts are made up of plastic as against 6.5% in 2000. Plastics have revolutionized the automotive industry in terms of performance, built, safety, and functionality of vehicles. The industry is the third largest consumer of plastics after packaging and construction. It is anticipated that car sales will reach 100 million units in next 5-10 years. In total, more than 39 types of plastic materials are being consumed in the automotive industry. In 2014, average car incorporated 200 kgs of plastics and a 70% rise in usage of plastics was expected by 2020.

In the past few years, the role of plastic in the production and design of cars has increased owing to the stringent regulations regarding emissions and safety in the automotive industry. These legislative requirements coupled with consumers demanding fuel efficient cars has led to automakers to emphasize more on lightweight materials. It is estimated that a 10% car weight reduction can reduce the fuel usage by around 7%-8%. With rising car sales and increasing demand for lightweight materials, automotive plastics are expected to get an ample growth opportunity in the sector over the coming decade.

Polypropylene and Polyurethane to Lead Due to Their Versatility

In 2019, an estimated 12 million tons of plastics was consumed by the automotive industry. A wide range of commodity and engineered plastics such as polypropylene, polyethylene, polyurethane, polycarbonate, polyvinyl chloride (PVC), acrylonitrile butadiene styrene (ABS), polyamides (Nylon 6, Nylon 6/6) are deployed in vehicles. Polypropylene, polyurethane, and PVC are the most used materials and accounted for more than 65% of the demand in 2019. These materials help the automakers to make vehicles lighter and fuel efficient, thus lowering the GHG emissions.

With mass adoption of electric vehicles and electrification of vehicle fleets including light, medium and heavy-duty vehicles, the demand for automotive plastics such as polypropylene, polycarbonate, polyurethane, and polyethylene is expected to rise. Polycarbonate is expected to be the top gainer in EVs and is expected to play a vital role in the current autonomous vehicle and e-mobility landscape. Analysts anticipate that there will be a huge demand for polycarbonate from electrification and lighting components in the vehicles. Polycarbonate meets the demand for electric vehicle battery thermal management and integration of LiDAR sensor in the structure. On the contrary, the demand for some engineered plastics such as ABS is expected to decline owing to better performing of PP, PE composites replacing the interior decorative components. Although, it will sustain its demand in high-end luxury cars owing to the demand for quality and advanced designs from the consumers.

Interior Parts and Components to Remain the Largest Application Segment

Plastics are used in a wide range of applications in vehicles such as interior trims, upholstery, exterior parts, under the hood components, fuel system, bumper, instrumental panels, dashboard, and lighting amongst others. Interior parts and components remain the largest market for automotive plastics. Interior trims, instrument cluster, lighting, seat leather upholstery, door panels and consoles deploys a wide range of plastics such as polypropylene, PVC, ABS, polyurethane, and polyamides. These plastics allow design flexibility, cost-effective production, and reduced noise, vibration, and harshness (NVH) as well as helps in overall weight reduction of vehicle thus offering better fuel economy. Furthermore, automotive plastics also meet the requirements of safety, ergonomics, and aesthetic appearance of vehicle.

Furthermore, there is also huge demand for plastics from automotive exterior parts and components. Automotive plastics have excellent chemical and heat resistance, UV stability, mechanical strengthen, and impact resistance. Automotive plastics are used in exteriors such as door handles, bumper, panoramic roof, body, and wheelhouse amongst others. The demand for plastics in expected to rise in exterior components due to their properties to create complex shapes, bringing high aesthetic value and smooth finishing to the vehicles.

Asia Pacific Continues to be the Largest Market for Automotive Sector

Asia Pacific by far continues to be the largest automobile producing region and accounted for more than 57% of the global production in 2020. China, Japan, India, and South Korea are the major production hubs in Asia Pacific region. Currently, the plastic consumption per vehicle is low in the region as compared to Europe and North America. However, as the automotive production in countries such as China and India grow towards premium vehicles, the amount of plastic consumption is projected to grow as well. Original Equipment Manufacturers (OEM) in these countries are focusing on fuel efficient and light-weight vehicles due to change in consumer preferences. Plastics have become an excellent alternative to the traditional materials such as steel and cast iron, thus the demand for automotive plastics is anticipated to grow in the region over the coming years.

The demand for automotive plastics in Europe and North America is expected to grow owing to large adoption of EVs and autonomous vehicles. Governments in these regions have stringent norms of CO2 emissions, thus accelerating subsidies on EVs and bans on diesel vehicles. This is expected to drive the demand for lightweight materials such as automotive plastics and polymer composites.

Companies Developing New Products to Reduce Environmental Impact Focus on Production Capacity Expansion to Meet the Growing Demand   

The automotive plastics market is dominated by companies with strong global and domestic presence. The competition is intense with maximum focus on new product innovation and developing high-end plastic blends and bioplastics to reduce environmental impact. Growing demand for high temperature resistant plastics, especially in the high-growth application such as under the hood has promoted noteworthy innovations in the sector.

In 2019, SABIC launched XENOY™ HTX resin, a new polyester-based resin technology enabling the production of impact and heat resistant and high-performance structural parts and under the hood components.  In 2019, Ascend Performance Materials launched Vydyne XHT, a new series of heat-stabilized polyamide and copolymers. This series can withstand continued exposure to higher temperature levels up to 2300C. These grades can be used for under the hood applications as well as for battery seals and cable ties.

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