Emerging Opportunities for Chemicals and Emerging Opportunities for Chemicals and Materials in Transportation Materials in Transportation Mega Trends to Trigger New Product Development Mega Trends to Trigger New Product Development Analyst Briefing Analyst Briefing 26 26 th th March 2014 March 2014
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Emerging Opportunities for Chemicals and Materials in Transportation
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Emerging Opportunities for Chemicals and Emerging Opportunities for Chemicals and Materials in TransportationMaterials in Transportation
Mega Trends to Trigger New Product DevelopmentMega Trends to Trigger New Product Development
Analyst BriefingAnalyst Briefing
2626thth March 2014March 2014
Today's Presenters
Soundarya Shankar
Research Analyst
Frost & Sullivan
K. Deepan Kannan
Industry Manager
Frost & Sullivan
2
• Chemicals & Materials
• Company expert on lightweight materials, paints and coatings
• Recent experience in researching lubricants
• Chemicals and Materials in Transportation
• 7 years' research experience at Frost & Sullivan
Our Chemicals Market ApproachFocus on end-markets and mega trends
Functionality and performance
Health and wellness
Food Drugs &
Cosmetics
Each Mega Trend affects the use of chemicals in Transportation differently
3
Globalisation Low carbon economy
Construction
& UtilitiesTransportation
Source: Frost & Sullivan analysis
IntroductionMega Trends Impact a Range of Chemical Markets in Transportation
Lightweight Materials
Engineering Plastics and High Temperature Plastics
Biofuels and Lubricants
4
Advanced Coatings & Adhesives
Tires
Fibres and Automotive Textiles
High Speed Rail, Marine, Aerospace
Source: Frost & Sullivan analysis
Chemicals and Materials in Transportation
Automotive applications are the largest transportation sector for chemical companies.
• For many individual product groups, automotive applications represent 50 to 75% of total usage across all transportation applications.
o Other transportation applications include heavy commercial vehicle, bus, rail, aerospace and marine.
Aerospace � The global automotive industry represented a
Increasing urbanisation will change the types of vehicles needed.
Chemicals and Materials in the Automotive Market: Summary of Individual Globalisation Trends
Social Globalisation Factors
Globalisation within the Automotive Industry
Supply chain
Vehicle design and engineering
OEMs increasingly have design centres in multiple regions around the world.
Globalisation
7
Changes in buyer demographics
Middle classes in developing economies are growing.
Development of road infrastructure
Better road infrastructure will increase vehicle demand.
Changes in buyers’ desires
Despite the global standardisation of design, consumers still want more personalised vehicles.
Manufacturing
Despite the globalisation of car assembly, local factors still matter.
Supply chain
Vehicle industry supply chain and platform strategy are increasingly globalised.
Aftermarket
Globalisation of standards prompt changes to aftermarket product
requirements.Source: Frost & Sullivan analysis
Impact of Globalisation Trends on the Chemical Industry
Overall Level of Impact
Urbanisation
Supply chainManufacturing
Aftermarket
Rele
van
ce o
f C
hem
icals
Chemicals & Materials in Transportation: Criticality and Relevance of Globalisation Trends, Global, 2012–2020
8
Note: External global factors are shown as blue points.
Globalisation trends within the automotive industry are shown as green points.
Source: Frost & Sullivan analysis
InfrastructureDemographics
Personalisation
Design
Rele
van
ce o
f C
hem
icals
Rate of Globalisation
Health & Wellness Trends in Automotive
Impact of health and wellness as a megatrend can be seen as a function of increased safety, comfort and health features in passenger cars
HealthSafety Comfort
Wet Grip and Low Rolling Resistance Tires
All weather grip tyres design is gaining
NVH Materials
Growing demand for NVH materials create opportunities for hot melt
Low Emission Materials and Coatings
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All weather grip tyres design is gaining interest. Focus will be on to develop tires with a balance of wet grip, ice/snow traction and rolling resistance values.
This will create opportunities for innovative rubber formulations and tread design.Flexible Design and Smart Airbags
Textile materials to enable longer inflation of airbags for enhanced protection during rollovers of the vehicles in the event of accidents.
New textiles and coating materials for easier design and assembly of airbags.
Smart airbags that avoid collision altogether is a likely development in passenger safety.
create opportunities for hot melt adhesives.
Hot melt adhesives are also preferred as a replacement for solvent-based ones to eliminate any residual odor.
Developing PU foams in seating applications that contribute to noise and vibration reduction.
Automotive Glazing
The trend towards larger glazing areas has created opportunities for specialty coatings and films, that give protection from infrared and ultra-violet radiation.
Low emission plastics to be used in interior applications.
Trend towards waterborne coatings from solvent borne to improve the interior air quality of the vehicle.
Focus on allergen-free materials such as Acella® Eco Green from Benecke-Kaliko, used in interior applications.
Source: Frost & Sullivan analysis
Functionality & Performance Trends in Automotive
Focus on functionality and performance of the automotive vehicles by OEMs has given rise to opportunities for chemical companies
Improved Performance
and Reduced
Maintenance
• Increased opportunities for high performance lubricants.• Improved performance characteristics such as durability, thermal,
corrosion and chemical resistance have led to the increased the penetration of powder coatings.
• Powder coatings also aid in reducing the number of coating layers.
Advanced Engine Technologies
Durability Requirements
Parts consolidation • High performance materials enable OEMs and component
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Greater design
flexibility
Parts consolidation
Easy processability
• High performance materials enable OEMs and component manufacturers by offering improved flexibility and design freedom.
• Radiation-cured coatings, quick drying systems and coatings that reduce throughput for the body shops will gain focus.
Specialty Appearanc
e Care
Extended vehicle life
Innovative car care solutions
• Innovative products such as self healing coatings and scratch resistant films.
• Advancements in refinish coatings will require reformulation of car care chemicals to keep pace with the developments.
Greater Design
Flexibility
Specialty Appearance
Care
Source: Frost & Sullivan analysis
• Choice of plastics and composites over metals has proven to offer
50.0% weight reduction along with a 25.0-30.0% savings in fuel
consumption. Furthermore, 1Kg weight reduction aids in
reducing CO2 emissions by 20 Kg.
• Plastic and composite manufacturers are working
closely with automotive OEMs and component
manufacturers to develop lightweight solutions in
the marketplace.
• Rapid substitution of metal by plastics have steered
the use of adhesive and sealants in the
automotive industry.
Low Carbon Economy Trends in Automotive
• The European parliament and Council Directive 2000/53/EC has
taken initiatives to collect, store, treat, reuse and
recycle end of life vehicles.
• The directive mandates its member
states to achieve a recovery and
recycling target of 95% by 1st January
2015. It further places limits on the
amount of heavy metals/other
hazardous substances in the ELV
Light Weighting Materials
Material Recycling Trend
11
automotive industry.
• The European commission as well
as the US ozone commission
model has set limits for VOC
emissions from automotive
refinish coatings. Water-borne and
high solids solvent borne coatings
are therefore poised to witness
strong growth.
• In the automotive OEM coatings market,
powder coatings are gaining momentum
due to superior environmental profile.
• Automotive OEMs are relentlessly
focussing on increasing the use of bio
plastics to enhance the environmental
footprint of the vehicle. Furthermore,
regulatory bodies are striving to accelerate
the share of recycled plastics.
• Bio-based and biodegradable lubricants are becoming
increasingly important in applications such as wheel
bearings, chassis, steering linkages, where lubricants
come in direct contact with the environment.
Use of Bio-based Materials
Sustainable Coating Technologies
Source: Frost & Sullivan analysis
Why Light weighting?
Vehicle Weight Reduction Trend in the Automotive Industry
1500
2000
1850 kg1810 kg
(0.79) %CAGR
1730
Av
era
ge V
eh
icle
Weig
ht
(kg
)
10.0% reduction in vehicle weight offer 3-4% fuel
savings
This equates to 0.46 l of
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1000
1500
2002 2004 2006 2008 2010 2012
USA EUROPE
1282 kg 1250 kg
(0.68%)CAGR
1200A
vera
ge V
eh
icle
Weig
ht
(kg
)
Year
Increase in small car demand to drive down average vehicle
weight, with a reduction of 8 to 15 kg year on year in the
United States and Europe
This equates to 0.46 l of gasoline saved per 100 km driven for each 100 Kg of
mass reduced
This offers savings in CO2emissions of 25.3 Kg for each kilogram of weight
reduced over the life of the vehicle
Source: Frost & Sullivan analysis
Evolution of Weight Reduction by OEMs
Vehicle Weight Reduction Versus CO2 Emission (Europe), 2010 and 2017
13
Automotive Plastics Market: Plastic and Composite
Content per Vehicle (World), 2007-2017
Automotive Plastics Market: Plastic and Composite
Content as Percent of Vehicle Weight (World), 2007-2017