Commentary: Automotive woes hot topic at EPCA

05 October 2009 00:00  [Source: ICB]

The perilous state of the automotive sector is likely to top the agenda at this week's European Petrochemical Association annual meeting in Berlin, Germany.

Collapsing demand from the automotive sector at the end of 2008 and early this year had a massive impact on the chemical industry, showing how reliant it is on this key end-use sector. Even now, despite all the "cash for clunkers" and other scrappage schemes, demand is down by 25-35% and recovery may not return to peak 2007 levels before 2013.

In Europe and the US, some say demand may never fully recover, because of permanent, structural changes: there is less easy money available to finance purchases, and people are choosing smaller, cheaper, more fuel-efficient vehicles.

It's pretty obvious that chemical manufacturers who rely heavily on the auto industry are in for a tough few years, even if they are able to take advantage of growth in Asia. Perhaps a new approach is needed for future prosperity, using some original thinking. Germany-based Roland Berger Strategy Consultants believes the two sectors need to forge a much closer relationship where more direct communication takes place on a long-term, strategic level (see page 28).

Increasing fuel efficiency and the trend towards lighter vehicles presents massive opportunities, with bio-engineering plastics providing a new avenue for growth.

Do you agree? Email: or visit the commentary blog

By: Will Beacham
+44 20 8652 3214

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