Automotive Plastics Market Overview

The Automotive Plastics market size is estimated to reach US$53.8 billion by 2027 after growing at a CAGR of 5.4% during the forecast period 2022-2027. Automotive Plastics are specialty plastic materials that are used to enhance the safety, performance, and functionality of vehicles. Automotive plastics such as polypropylene (PP), polycarbonate (PC), polyvinyl chloride (PVC), polyurethane (PU), acrylonitrile butadiene styrene (ABS), and others have flourishing applications in automotive interiors, exteriors, under the bonnet, and other vehicle components. The superior properties of plastics such as flexibility, corrosion resistance, thermal insulation, and noise reduction for applicability in light commercial vehicles for maximum fuel efficiency are creating a drive in the automotive plastics industry. The covid-19 pandemic disrupted the growth and functioning of the market. The halt in production, demand and supply gap, and other lockdown restrictions resulted in a slowdown. However, with robust demand and recovery in major end-use industries, along with growing automotive vehicle production, the automotive plastics market is anticipated to rise during the forecast period.

Report Coverage

The report: “Automotive Plastics Market Report – Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the automotive plastics market.

Key Takeaways

• Asia-Pacific dominates the automotive plastics market, owing to flourishing lightweight automotive production, established base for light electric vehicles, and rising demand for passenger vehicles in APAC, thereby boosting its growth in the APAC region.
• The passenger vehicles (PV) sector is rapidly growing in the automotive plastics industry due to the rising applicability of plastics such as PP, PU, PVC, PE, and others for various automotive components, along with growing urbanization and demand for light vehicles for transportation, thereby driving the market.
• The rising emphasis on fuel efficiency and lightweight automotive vehicles to reduce carbon emissions and limit fuel consumption creates a drive for the automotive plastics market during the forecast period.
• However, the recyclability issues and emergence of alternatives such as bioplastics, carbon fiber-based plastics, soy, and hemp-based polymers, and others create major challenges and growth slowdown in the automotive plastics market.

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Automotive Plastics Market Segment Analysis – By Type

The Polypropylene (PP) segment held the largest share in the automotive plastics market in 2021 and is forecasted to grow at a CAGR of 5.7% during the forecast period 2022-2027. The growth of polypropylene (PP) plastic in automotive applications is due to its advantages and preference over other automotive plastics. The superior features of PP such as fuel efficiency, cost-effectiveness, lightweight, and high suitability for low-friction applications boost its demand compared to other engineered plastics options that are not cost-effective and lightweight. Moreover, the versatility and preference of PP for light vehicles and fuel-efficient vehicles over other automotive plastics such as polyurethane (PU), acrylonitrile butadiene styrene (ABS), and others are thereby propelling the demand for polypropylene automotive plastics. Polypropylene plastics are used in various automotive components such as dashboards, upholstery, interior trim, car seats, hard plastic parts, and others. With the increasing applicability of polypropylene in automotive to manufacture light and low-cost vehicles, the demand for polypropylene plastics is also substantially rising, thereby supporting the segment growth.

Automotive Plastics Market Segment Analysis – By End-Use Industry

The passenger vehicles (PV) segment held a significant share in the automotive plastics market in 2021 and is forecasted to grow at a CAGR of 6.3% during the forecast period 2022-2027. Automotive plastics such as polycarbonate (PC), polypropylene (PP), polyvinyl chloride (PVC), and others have major applicability in the passenger vehicles for interior trim, lighting, bumper, seating, and others. The passenger vehicle sector is rapidly growing owing to urbanization, demand from the middle-class segment, and an increase in demand for passenger cars, two-wheelers, and three-wheelers as public transportation. According to the Society of Indian Automobile Manufacturers (SIAM), the domestic sales of passenger vehicles in India rose from 2,711,457 units in 2020-21 to 3,069,499 units in 2021-22. According to the International Organization of Motor Vehicle Manufacturers (OICA), the total passenger car production rose from 55,834,456 units in 2020 to 57,054,295 units in 2021. With the flourishing production and increase in demand for passenger cars across the globe, the demand for automotive plastics is anticipated to grow rapidly for applications in exterior, interior components, and others thereby will boost the growth of the passenger vehicles (PV) industry in the automotive plastics market during the forecast period.

Automotive Plastics Market Segment Analysis – By Geography

Asia-Pacific region held the largest share in the automotive plastics market in 2021 up to 43%. The robust growth of automotive plastics in APAC is due to flourished automotive vehicle production, growing vehicle manufacturing units, and high demand for specialty plastics in automotive across major counties such as China, India, Japan, and others. The automotive industry, majorly the passenger vehicles and light commercial vehicles sector is growing due to the high demand for fuel-efficient vehicles among the middle-class segment and urbanization. According to the International Organization of Motor Vehicle Manufacturers (OICA), the total automotive production increased from 3% in 2021 after a fall of 2% in China and increased by 30% in 2021 after a decline of 25% in India in 2020. Furthermore, initiatives such as Make in India and Automotive Mission Plan 2026 plan to boost the automotive sector in India and offer a contribution of 12% by automotive in the GDP by 2026. With the increase in automotive vehicle productions and vehicle manufacturing base, majorly for cars and LCV, the demand for automotive plastics such as polypropylene, polyvinyl chloride, polycarbonate, and others for applications in automotive interior, bonnet, exterior parts, and others is anticipated to grow. This will boost the growth of the automotive plastics industry in the Asia-Pacific during the forecast period.

Automotive Plastics Market Drivers

Bolstering Growth of Light Weight and Fuel-Efficient Materials in Vehicles

The demand for lightweight and fuel-efficient vehicles is growing rapidly. The emphasis by the government on carbon emission and efficiency is boosting the adoption of lightweight and efficient automotive vehicles. Automotive plastics such as polypropylene (PP), polyurethane (PU), and others offer lightweight bodies to the vehicle and have applicability in vehicle roof, engine, fuel tank, lighting, seating, and others, thereby reducing the fuel consumption and carbon emissions. For instance, regulations mandate that the average fuel economy must meet 54.5 miles per gallon in the United States by 2025. Furthermore, the development of light materials such as lighter PP, polymethyl methacrylate (PMMA), biodegradable plastic composites, and others provide lightweight to the automotive body and reduces fuel consumption. Thus, with rising emphasis on lightweight and reduction in carbon emissions, the demand for automotive plastics for applications offering lightweight vehicle components is growing, thereby driving the market.

Rising Production of Electric Vehicles

Automotive plastics such as polypropylene, polycarbonate, acrylonitrile butadiene, polyurethane, and others have major applications in the electric vehicle for various interior, bonnet components, and exterior parts. The electric vehicle sector is growing rapidly with the increase in government initiatives for vehicle electrification and stringent emissions norms for fuel-based vehicles for carbon emissions. For instance, Honda announced plans to invest US$40 billion in the development of electric vehicles and launch 30 EVs by 2030 in India. According to the International Energy Agency (IEA), the global electric car sector saw a growth of 43% in 2020 compared to 2019, hitting a 10 million mark. Furthermore, the number of electric cars on the roads was 16.5 million in 2021, triple the number in 2018. With the increase in demand and production for electric vehicles, the application of automotive plastics such as polypropylene (PP), polyurethane (PU), and others is growing to offer lightweight and fuel efficiency for EVs, thereby driving the market and providing major growth in the market.

Automotive Plastics Market Challenges

Recycling Issues and Emergence of Alternative for Automotive Applications

Automotive plastics face recycling issues owing to factors such as the lack of advanced recyclable technology. This creates environmental impacts and solid waste accumulation, thereby hindering the demand. Furthermore, the emergence of alternatives such as carbon fiber for applications in automotive creates a major challenge in the market. The rising usage of materials prepared from natural fibers, soy and hemp fibers, sheet molding compounds, and others poses a major threat to automotive plastics such as polypropylene, polyurethane, PET, and others. Thus, with the issues in recycling and the threat from other alternative materials, the automotive plastics market faces a major slowdown and challenge.

Automotive Plastics Industry Outlook

Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the automotive plastics market. Automotive plastics top 10 companies are:

1. BASF SE
2. LyondellBasell Industries Holdings BV
3. Covestro AG
4. Evonik Industries
5. Solvay SA
6.  Arkema SA
7. LG Chem
8. Teijin Ltd.
9. Dupont
10. SABIC

 Recent Developments

• In February 2022, the Celanese planned to acquire the mobility and materials division of DuPont, which produces thermoplastics and elastomers with a large share for automotive applications, thereby boosting the product portfolio and growth in the market.
• In December 2021, the Total Energies and Plastic Omnium entered into a partnership for the development of recyclable PP plastic material for applications in the automotive industry. This innovative and recycled PP material will provide reduced carbon emissions and has flourishing applicability and demand in 0electric vehicles, thereby offering growth in the market.
• In May 2021, the Covestro AG launched recycled polyethylene terephthalate (rPET) or fused granule technology. This launch has major applications in the automotive industry for interior vehicle parts, thereby boosting the demand and growth in the automotive plastics market.

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