Innovative Technology and Environment-friendly Trends Drive the Market for Chemicals Used in Transportation
Even as the market for chemicals used in transportation recovers from the economic downturn, technologies that reduce costs, enhance performance and differentiate vehicles continue to be in high demand. Additionally, materials and components for electric vehicles are a priority as this new market sector gains momentum. New analysis from Frost & Sullivan, A CEO 360 Degree View of Chemicals used in Transportation, finds that electric vehicles, bio lubricants, advanced composites and automotive plastics will penetrate the market in the next 5 years.
“Light weighting of vehicles is a key market driver,” says Robert Outram, Frost & Sullivan’s Global Programme Manager - Transportation Chemicals. “The development of more fuel efficient vehicles with reduced emissions spurs the demand for innovative materials and technologies.”
Automotive plastics and composites help lower the weight of the vehicle, while increasing the ability to recycle materials at the vehicle’s end of life.
Legislative requirements also drive demand for more fuel-efficient vehicles, lower emissions and for the use of sustainable and recyclable materials during construction. For example, the need to limit carbon dioxide emissions will drive the market for precipitated silica systems in tyres and weight reducing fillers in vehicles. Similarly, the 2010 European Pedestrian Impact Phase 2 standard will encourage the use of malleable steel, polyurethane foams and other energy absorbing materials in automotive bumper systems to meet pedestrian lower-leg impact requirements. Furthermore, the EU End of Life vehicle legislation, which will increase recyclability requirements from 80 per cent to 85 per cent in 2015, will increase demand for more plastics and new adhesives.
Although progressive legislation, together with customer demand for more fuel-efficient vehicles, add impetus to the market, the economic recession has had an adverse effect on the automotive sector - much more than on any other manufacturing industry. Several plants have closed down, and big automotive companies are taking financial assistance from the government.
“Plummeting car sales and lack of cash flow have impelled automotive companies to implement new technologies, which have affected chemical companies that are now struggling to sell their recently developed products and technologies to such a troubled market,” explains Outram.
Innovative strategies must be devised to overcome such challenges. For example, in the high-performance fillers market, customer focus is vital. A close relationship between high-performance filler manufacturers and customers is mutually beneficial, as the customer can obtain advice on the products, while the manufacturer receives feedback on potential improvements or an insight into new applications.
“Developing technologies which help auto original equipment manufacturers (OEMs) reduce production costs while increasing the performance and enhancing differentiation will be the key to penetrating a tough market,” concludes Outram. “Focusing on helping auto OEM’s meet mandatory legislation requirements will also be desired.”
Other news from the department business & finance
