23 December 2008 05:20 [Source: ICIS news]
By Bohan Loh
SINGAPORE (ICIS news)--Regional automakers such as Japan’s Nissan and Toyota have announced dismal car sales ahead of the year-end holidays, bringing little cheer to regional petrochemical makers, said industry sources on Tuesday.
Top car maker Toyota Motors has forecasted its first operating loss in 70 years at Yen (Y) 150bn ($1.67bn) for its fiscal year ending 31 March 2009 after it reported marked declines in car sales for the month of November 2008 in all its divisions.
Tumbling car sales throughout Asia and around the world have resulted in severe cutbacks in production, with car makers like Nissan Motors Co slashing production by 78,000 units in addition to the 272,000 units announced just under two months ago.
“The fall-out of the financial crisis [has] hit auto manufacturers hard, as the credit crunch makes it more difficult for the sector to finance daily operations and, at the same time, also weakens demand for new cars,” said the European Automobile Manufacturers’ Association (ACEA).
“Consumers are increasingly hesitant to make large expenditures and find it more difficult to get their purchase financed,” it added.
Automobiles are an important chemical end market, in that each vehicle has an average of $2,200 (€1,584) worth of chemistry, according to estimates from the American Chemistry Council (ACC).
Regional producers of polymers like polymethyl methacrylate (PMMA) which, is used in windscreens and side windows, and other accessories have already faced a big squeeze in the past month due to shrinking demand, said a northeast Asian PMMA producer.
The regional impact of the faltering auto sector on solvent usage, especially for higher end solvents used for automotive coatings is expected to be high, said a solvents distributor in southeast Asia.
Car production in both Thailand and Indonesia, where Japanese automakers have production facilities, are expected to drop sharply, resulting in shrinking demand for solvents like glycol ethers and higher prices ketones, he said.
Indonesia’s car production is expected to tumbled over 33% to 400,000 cars in 2009 from the 600,000 estimated during 2008, said market sources.
Imports of acrylonitrile butadiene styrene (ABS), which is widely used in both the electronics and automotive sectors, into China had declined more than 20% year on year for the month of November as a result of waning consumer confidence and a massive decline demand from end-markets that is expected to worsen next year, said an ABS trader in southern China.
Tyre makers like styrene butadiene rubber (SBR) have also been hit hard by the fall in auto sales.
Despite the US government’s $17.4bn emergency loan package to struggling automobile giants General Motors (GM), Chrysler and Ford , most observers remain sceptical that the cash infusion would make much difference in turning around those companies.
($1 = Y90.00/ $1 = €0.72)
With additional reporting from Clive Ong and Anu Agarwal
To discuss issues facing the chemical industry go to ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections