InterviewUS light-car trend boon for plastics

15 June 2008 19:47  [Source: ICIS news]

HOUSTON (ICIS news)--Changing US consumer trends could lead to lighter, more fuel-efficient automobiles - even before new federal regulations take effect, which in turn could increase plastics demand, a university scientist said on Thursday.

Such a trend could increase demand for plastic components, since these make automobiles lighter and more fuel efficient, said Bruce Belzowski, assistant research scientist for the University of Michigan Transportation Research Institute.

"This is a real opportunity for the plastics folks, " he said.

Automobile producers could also use more aluminium to take weight off of their vehicles, he said.

Aluminium is made from alumina, which, in turn, is extracted from bauxite using caustic soda.

The trend could even increase demand for carbon fibre, which is currently limited to such exotic cars as the Tesla, Belzowski said. "Everything is on the table right now."

Already, the May sales statistics for US automobiles show that Americans buying trends are moving away from heavier vehicles.

Soaring gasoline prices are driving consumer demand for fuel-efficient automobiles, he said.

On Thursday, the average retail price of a US regular gasoline was $3.99/gal (€0.69/litre), up from $3.14 during the same time last year, according to AAA automobile club.

If gasoline prices remain high, consumer demand could increase fuel-efficiency rates beyond levels required by US regulators, Belzowski said.

The National Highway Transportation Safety Authority (NHTSA) will require cars to reach a fuel-efficiency standard of 35.7 miles/gal (15km/litre) by 2015, up from 27.5 miles/gal. For light trucks, the standard will reach 23.5 miles/gal in 2010 and 28.6 miles/gal in 2015.

To meet such standards, Belzowski said some models would need a 40% improvement in fuel efficiency.

However, fuel-efficiency rates alone will not increase sales for automobile makers, he said.

Automobile companies need to properly price the vehicles, he said. The wrong price could cost them billions.

Companies could immediately increase fuel efficiency by producing cars with just two seats - but there is little demand for such vehicles, he said.

Other vehicles, such as the Tesla, has a price tag that exceeds $100,000 (€65,000), beyond most consumers' budgets.

"It's a demanding, very tough situation they are in," Belzowski said. "Now there is a really bigger sense of urgency."

May US automobile sales

	May 08 Car	May 07 Car	May 08 Truck	May 07 Truck
Chrysler	42,124	62,621	106,623	136,772
Ford	91,634	89,126	126,364	170,344
GM	130,115	150,979	138,777	220,077
Honda	114,796	87,064	53,201	58,303
Nissan	71,097	59,911	29,777	33,151
Toyota*	152,652	154,038	78,159	92,277
TOTAL	602,418	603,739	532,901	710,924

*Toyota 2007 sales were calculated using 2008 figures and the year-over-year percent change

source: automobile companies

($1 = €0.65)

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By: Al Greenwood
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