Automotive Plastics Market Analysis

Automotive Plastics Market (Global, 2023)

Introduction

The world market for plastics in the field of automobiles is going through a period of transformation. This is mainly due to the increasing demand for lightweight materials, which can improve fuel economy and lower emissions. The integration of new plastics into the design and manufacture of automobiles is now an essential prerequisite for meeting the increasingly stricter regulations and the expectations of consumers in this area. These developments are being driven by technological innovations in the field of polymer technology, which are enabling the development of high-performance plastics that not only combine good looks and mechanical properties with a high degree of safety and are also able to contribute to the overall performance and safety of automobiles. Also, the shift to electric and hybrid vehicles is driving the demand for plastics in the automobile industry, as they play an important role in optimising the design of the battery systems and in reducing the weight of the vehicle. This dynamic market offers opportunities and challenges for all those involved in the supply chain, from raw material suppliers to automobile manufacturers.

PESTLE Analysis

Political

In 2023, the automobile industry is influenced by government policies designed to reduce carbon emissions. For example, the European Union has set a target of a minimum reduction of greenhouse gas emissions of at least 55 per cent by 2030 compared with the level of 1990. This has a direct bearing on the materials used in vehicle construction. The use of sustainable plastics in the automobile industry has increased significantly. The European Union has allocated a budget of about 1.8 billion to research and development of sustainable materials and technology for the automobile industry.

Economic

The market for automobile plastics is also affected by economic factors, such as the price of raw materials and the purchasing power of consumers. In 2023, the average price of polypropylene, the main material used in the manufacture of automobile plastics, is expected to reach approximately € 1,200 per tonne, a 15 per cent increase on the previous year, due to supply difficulties and rising demand. In addition, the price of cars is expected to increase by 4 per cent in 2023, which will increase the demand for automobile plastics as manufacturers try to improve the performance and lighten the weight of cars.

Social

In the automobile industry, as in the rest of the industry, trends towards sustainability and the environment are influencing consumer preferences. A survey carried out in early 2023 showed that 68 per cent of consumers are willing to pay up to 10 per cent more for a car made from sustainable materials, including recycled plastics. This growing awareness is pushing car manufacturers to adopt more sustainable practices, and this is increasing the demand for sustainable plastics that meet consumers’ expectations.

Technological

In the field of car plastics, technical progress is playing an increasingly important role, especially in the field of lightweight and durable materials. By 2023, the introduction of advanced injection molding has improved the efficiency of automobile components by about 20 percent. And the bioplastics trend is growing, and companies are investing over 500 million in R & D to develop new materials that can replace the current car plastics.

Legal

The legal restrictions on automobile emissions and safety are becoming increasingly strict. The NHTSA (National Highway Traffic Safety Administration) of the United States has decreed that by 2025 all new vehicles must have a minimum of 54.5 mpg. The manufactures, in order to meet the legal requirements, are compelled to use lighter materials, such as advanced polymers, for the fuel efficiency and hence the market growth.

Environmental

In the automobile industry, the environment is becoming increasingly important, with a focus on recycling and waste reduction. In 2023, it is estimated that 30 percent of the plastics used in cars come from recycled materials, a substantial increase over the 20 percent in 2021. By then, the number of tons of plastic waste generated by the automobile industry will have dropped considerably.

Porter's Five Forces

Threat of New Entrants

The barriers to entry into the market for automobile plastics are moderate because of the need for a considerable investment in technology and in production equipment. In addition, the scale economies and brand loyalty of the established companies provide an additional deterrent to new entrants. But the development of technology and the increasing demand for lightweight materials could encourage new companies to enter the market.

Bargaining Power of Suppliers

The bargaining power of the suppliers in the automobile plastics market is relatively low. There are many suppliers of raw materials, such as polymers and additives, which leads to a very competitive situation. The automobile manufacturers can easily change suppliers if prices rise or quality declines, which further reduces the bargaining power of the suppliers.

Bargaining Power of Buyers

The buyers of the automobile industry, especially the large automobile manufacturers, have great power of monopoly. They buy in large quantities and, thanks to their size and influence, they can get favorable terms. In addition, the availability of alternative materials gives them an additional advantage in negotiations.

Threat of Substitutes

The threat of substitutes in the market for car-plastics is moderate. Although there are alternative materials such as metals and composites, the special properties of plastics, such as lightness and rust-resistance, make it difficult to fully replace them. However, as technology advances, the development of new materials may become a threat to the market for traditional car-plastics.

Competitive Rivalry

The competition in the automobile plastics market is fierce, and many companies compete for market share. The competition is based on the price, quality and innovation of the products. The rapid development of technology and the trend towards a sustainable economy intensify competition even further. New materials and new production processes are developed.

SWOT Analysis

Strengths

• Lightweight properties leading to improved fuel efficiency.
• Corrosion resistance enhancing vehicle longevity.
• Versatile applications across various automotive components.

Weaknesses

• High initial production costs compared to traditional materials.
• Limited recycling options for certain types of automotive plastics.
• Potential perception issues regarding durability and safety.

Opportunities

• Growing demand for electric vehicles increasing the need for lightweight materials.
• Advancements in bioplastics and sustainable materials.
• Expansion into emerging markets with rising automotive production.

Threats

• Volatility in raw material prices affecting production costs.
• Stringent regulations on plastic use and recycling.
• Competition from alternative materials such as metals and composites.

Summary

The Automotive Polymers Market in 2023 is characterized by its strength in lightweight and rust-proof materials, which enhance the performance of the vehicle. The main challenges are high production costs and limited recycling options. Opportunities arise from the development of electric vehicles and the development of sustainable materials. Threats arise from raw material price fluctuations and regulatory restrictions. The focus of the market is on innovation and sustainability.