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TSE Industries - Millable polyurethane rubbers

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Automotive Industry Outlook And Review For March 2011

3/14/2011 - According to a report from Zacks Equity Research, "The auto industry is a highly concentrated one, with roughly ten global automakers accounting for over 77 percent of total production worldwide. In 2010, General Motors led with a 19.1 percent market share in the U.S., followed by Ford Motor with a 16.7 percent market share, Toyota Motors with a 15.2 percent market share, Honda Motor with a 10.6 percent market share, Chrysler-Fiat with a 9.4 percent market share and Nissan Motor with a 7.8 percent market share. The economic downturn provided the impetus for a massive structural change in the auto industry, setting the stage for growth over the next decade. Given the high barriers to entry and the need for scale economies (in operations, supply chain and marketing), the global auto industry landscape is expected to be ruled by global automakers and suppliers based in the six major auto markets, including China, India, Japan, Korea, Western Europe and the U.S. To remain competitive, automakers will need to design vehicles that meet the requirements of consumers in both mature and emerging markets. Automakers will focus on more user-friendly and low-cost vehicles that are also the most advanced technologically. The automakers will continue to shift their production facilities from high-cost regions such as North America and the European Union to lower-cost regions such as China, India and South America. For example, Greater China and South America together are projected to represent more than 50 percent of growth in global light vehicle production from 2008 to 2015. There are two underlying factors behind this location shift in the auto industry. The first is the cost factor. The cost of labor in emerging auto markets continues to be a fraction of that in the developed world. The second is the demand factor. Many low-cost regions, including the emerging auto markets, have high potential for growth. Thus, the shift in auto industry production facilities will lead to a localization of the manufacturing base that will bring down transportation costs. The emergence of trading blocs is also giving this process a push in the auto market. It is likely that over time there will be fewer car imports from outside a trade zone. The role of governments must not be overlooked. Governments in all major countries have become active auto industry players. Their environmental policies will be strongly responsible in molding the auto industry in the coming years. Further, automakers have started to reduce the number of technological platforms with a greater diversity of models produced from each platform in order to remain cost competitive. For example, Honda, with its flexible common platform, has developed three dimensionally distinct versions of the Accord, allowing for designs where 60 percent of the components are common. Ford aims to build 680,000 vehicles per core global platform by 2015, up from the current level of 345,000 units. Higher fuel prices and concerns over global warming have pooled attention on the auto industry that either rely less on traditional fossil fuels or use renewable sources of less expensive energy. Thus, “green alternatives such as fuel-efficient electric vehicles (EVs) and hybrids will attract consumers in the wealthier countries, while flex-fuels such as ethanol and natural gas will be highly sought-after in the emerging auto markets where the local climate or resource base favors their usage. Consequently, there will be a variety of power-train technologies in the auto industry by the next decade. It is likely that “green" cars will represent up to a third of total global sales in developed auto markets and up to 20 percent in urban areas of emerging auto markets by 2020. Some of the “green" cars have already generated a huge response in the auto industry. These include the Ford Focus, GM Volt, Nissan Leaf, Toyota Prius and Daimler AG’s Smart fortwo micro EV. The market for hybrid cars was dealt a severe blow by the global economic downturn due to poor availability of consumer credit, low gas prices and other unfavorable economic conditions. However, they are projected to become a popular option for car buyers, particularly in the U.S. and Europe. Globally, the hybrid market is ruled by Toyota and Honda at present. But other automakers such as Ford, General Motors and Nissan are also aggressively pursuing a plan to push hybrid sales. The U.S. is the largest hybrid car market in the world, with sales accounting for 60 percent to 70 percent of global hybrid sales. According to J.D. Power and Associates, hybrid-electric vehicle sales volumes in the country are expected to grow by 268 percent between 2005 and 2012. Presently, there are only 12 hybrid models available in the U.S., which would increase to 52 by 2012. The ‘Big Three’ Detroit automakers, GM, Ford and Chrysler, lost consumer confidence in 2009 after they were severely hit by the global economic crisis. The crisis also exposed the inherent problem with the Big Three’s product portfolio, which lacked up-to-date engineering and extensive research and development. Further, the majority of their sales comprised pickup trucks and SUVs rather than fuel-efficient vehicles such as the small cars that the consumers have started to prefer. This skewed portfolio was further aggravated by the government’s push for fuel-efficient and environment-friendly cars. Ford rallied better than its hometown rivals, with an early response to the shift in consumer preference towards small cars. However, the Detroit automakers, especially Ford and GM, bounced back with a recovery in the global market and restructuring of the product portfolio at the end of 2009. In 2010, Ford’s sales went up 19 percent to 1.94 million vehicles, while sales of GM and Chrysler grew 7 percent to 2.22 million vehicles and 17 percent to 1.09 million vehicles during the year, respectively. Ford focuses on its Ford, Lincoln and Mercury branded cars, shedding the Volvo cars, while GM concentrates on four core brands, including Chevrolet, Buick, GMC and Cadillac, withdrawing Saturn, Hummer, Pontiac and Saab. Further, Ford has decided to expand its luxury Lincoln line-up at the cost of its Mercury line-up, which has been phased out at the end of 2010. The company plans to launch as many as seven new Lincoln vehicles in the next four years, including a small car. The Asian countries, especially China and India, are expected to account for 40 percent of growth in the auto industry over the next five to seven years. According to Global Insight, a U.S. based provider of economic and financial information, 14.7 percent of growth is expected to come from India and 8.3 percent from China by 2013 (compared with 2008 levels) based on their rapidly growing economy. Domestic automakers are likely to rule the key growth market of China as the government plans to consolidate the top 14 domestic automotive players into ten. These automakers would capture a share of more than 90 percent in the local market. The Chinese automakers have been struggling hard to enhance their global profile by upgrading their technology to meet the international standards. To this end, Beijing Automotive Industry Holding Group (BAIC) purchased the intellectual property rights from GM’s Saab in 2009 in order to develop its own brands and introduce new models. BAIC purchased the rights to certain powertrain, engine and gear-box technology for Saab's 9-5 and 9-3 sedans. In a similar move, Zhejiang Geely Holding Group bought Volvo cars from Ford in order to tap China 's high-growth auto market by acquiring modern, innovative technologies from the Swedish brand to upgrade its car lineup. In December 2009, Geely also signed up with Johnson Controls to be its global parts supplier. The Indian automakers are also contemplating entry in the international markets by introducing their innovative products that could meet consumers demand abroad. Tata Motors has revealed it will launch its European version of the small car, Nano Europa, in 2011 and a U.S. version of the same car by 2012. On the other hand, India’s utility vehicle maker Mahindra & Mahindra has announced launching TR20 and TR40 pickups in the U.S. that are more economical compared to other pickups sold in the country. Although automakers continue to focus on shifting their production facilities to new regions driven by cost and demand factors, developing the supplier networks remains one of the greatest challenges they face. Existing suppliers often lack the financial background to expand capacity in new markets. On the other hand, auto market suppliers are sensitive to technology transfers to local third parties, which may result in new and lower-cost competitors. Since 1999, more than 20 of the largest global auto parts suppliers have filed for bankruptcy. The financial condition of the majority of auto market suppliers continues to remain weak, owing largely to historically weak demand and heavy dependence on automakers. Higher dependence on a handful of global automakers makes suppliers vulnerable on several fronts, primarily pricing pressure and production cuts. Pricing pressure from automakers is constricting auto market suppliers’ margins. On the other hand, production cuts by automakers driven by frequent market adjustments are negatively affecting their operations. Some of the auto industry suppliers who have a high reliance on a few automakers such as General Motors, Ford, Chrysler and Volkswagen include American Axle and Manufacturing, ArvinMeritor, Goodyear Tire and Rubber, Magna International, Superior Industries, Tenneco and TRW Automotive. The shift in auto market consumer preferences towards hi-tech, fuel-efficient, environmentally-friendly vehicles, such as small cars/hybrids/EVs, is another issue. Auto market suppliers are expected to quickly adapt to the new technologies by investing in research and development, putting heavy capital burdens on them. The automakers also face significant challenges in transforming their existing power-train technologies, as far as marketability is concerned. They are adapting the internal combustion engines to alternative energy, including ethanol and bio-fuels. Ultimately, a time may come when they switch to the all-electric power-train as their sole solution. However, the shift in power-train solution technology needs to be supported by adequate charging outlets in order to recharge batteries. Automotive safety recalls were brought into focus by Toyota’s recalls in late 2009. Since November 2009, Toyota has recalled more than 14 million vehicles globally in about 20 recalls, crossing all other automakers. The U.S. Transportation Department had to impose a fine of $48.4 million due to late recall of millions of defective vehicles. Toyota’s recalls were related to problems such as faulty accelerator gas pedals, slipping floor mats and defective braking systems. They led the automaker to suspend the sale of its models several times and halt new car launches for the year. However, Toyota has revealed that it has repaired five million vehicles related to its three biggest recalls announced in late 2009 and early 2010. Through the on-site SMART evaluation program since April 2010, the automaker has also noticed a sharp 80 percent drop in customer complaints related to the sudden acceleration problem. Following Toyota, other automakers had to issue recalls as well. They include Chrysler, Ford, GM, Honda and Nissan. Among them, GM recalled most frequently, followed by Ford. Since the beginning of 2010, GM recalled more than 3 million vehicles in the U.S., Canada, Mexico and South Korea. Among these, the largest recall occurred in June, involving 1.5 million vehicles, in order to fix a problem with a heated windshield wiper fluid system that had been causing fire in the vehicles. Meanwhile, Ford recalled nearly 600,000 vehicles throughout 2010 and more than 1 million vehicles in 2011-to date. The 2011 recall included 507,000 units of F-150 pickups and 525,000 units of its Windstar minivans due to a corrosion related problem."

Zacks Equity Research
www.zacks.com


Market Report

Global petrochemical prices fell 4 percent in October - 11/20/2014
U.S. Demand For Gaskets And Seals To Reach $10.6 Billion In 2018 - 11/6/2014
Europe Tire Market Forecast And Opportunities - 2019 - 8/28/2014
Sustainability In The Tire Industry 2014 - 8/27/2014
Demand For Rubber Products In China To Reach 740 Billion Yuan - 8/14/2014
New Nanomaterials Promise A Sustainable Future For The Tire Industry - 8/4/2014
IRSG Offers Latest World Rubber Industry Outlook - 7/24/2014
Chloroprene Rubber 2014 Global Strategic Business Report Released - 7/18/2014
Italian Rubber And Plastics Machinery Exports Report Encouraging First Quarter - 7/15/2014
Rubber industry report available from IRSG - 7/8/2014
Lucrative Growth Market For Silicones - 6/13/2014
Global thermoplastic elastomers market to hit $15 billion valuation - 6/11/2014
Resurgent Demand From End-Use Markets To Fuel Growth In Global Industrial Rubber Products Market - 5/29/2014
World Demand For Kaolin To Reach 28.7 Million Metric Tons - 4/29/2014
International Rubber Study Group Report Examines First Quarter Of 2014 - 3/26/2014
Chemical Plants To Evolve - 3/26/2014
Profound Changes Expected For The Stabilizers Market - 3/18/2014
OTR Tire Market Industry Report - 2/24/2014
Rubber Product Manufacturing In Canada Examined - 1/27/2014
China Tire Industry Report, 2013-2017 - 1/3/2014
2013 Forecast For Italian Plastics And Rubber Machinery Industry Released - 1/3/2014
Vietnam To Become Third Largest Rubber Exporter - 1/2/2014
World Rubber Consumption Seen Climbing As Tire Demand Grows - 11/18/2013
International Rubber Study Group Reports On Third Quarter Of 2013 - 11/18/2013
Strong Growth Projected For Americas Composites Industry - 11/12/2013
Manifold Developments On The Market For Butadiene - 10/23/2013
Synthetic Latex Polymers, A $30 Billion Plus Market That Is Building Globally - 10/22/2013
Global Petrochemical Prices Rose Nearly 2 Percent In September - 10/7/2013
Global Demand For Thermoplastic Elastomers To Reach 5.8 Million Metric Tons In 2017 - 8/30/2013
International Rubber Study Group reports on second quarter of 2013 - 7/15/2013
Automotive industry outlook and review presented - 7/11/2013
Hankook Tire Gauge Index shows decline in summer driving - 7/9/2013
Global and Chinese tire mold industry examined - 7/8/2013
Ceresana provides complete analysis of global market for rubber - 7/8/2013
Italian rubber and plastics machinery exports face uncertain start to the year - 7/8/2013
Worldwide Industrial Rubber Products Market To Witness Steady Growth - 1/8/2013
No growth for 2012 tire shipments; two percent rebound anticipated in 2013 - 12/31/2012
European Tire Market Opportunities Reviewed - 10/5/2012
Tire and Rubber Recycling Industry Has Grown 1.7 Percent Annually For Past Five Years - 9/14/2012
2012 Tire Shipments Expected To Grow By 1.2 Percent - 8/13/2012
Transportation To Drive Global Thermoplastic Composites Market - 7/25/2012
Top Ten States For Manufacturing Jobs - 7/25/2012
Rubber Machinery Trade Back On Track - 7/19/2012
Global Automotive Tire Market Forecast To Reach $187 Billion In 2017 - 7/14/2012
Thermoplastics Bucking TPE Industry Trends - 6/26/2012
Rubber Consumption Increased Four Percent In 2011 - 6/13/2012
Global Demand For Industrial Rubber Products To Reach $140 Billion In 2016 - 5/31/2012
U.S. Demand For Gaskets & Seals To Reach $9.6 Billion In 2016 - 5/29/2012
Sustained Demand From Industrial And Automotive Sectors Drives Global Nitrile Butadiene Rubber Market - 5/17/2012
Rubber Consumption To Approach 31 Million Metric Tons In 2015 - 5/10/2012
Buying Tires Over Internet Reported To Be More Attractive For Drivers - 4/20/2012
World Demand For Rubber Processing Chemicals To Rise 4.7 Percent Annually Through 2015 - 4/10/2012
Global Rubber Consumption To Approach 31 Million Metric Tons In 2015 - 3/29/2012
Tire shipments to increase by approximately 2 percent - 3/8/2012
Global Demand For Tires To Reach 3.3 Billion Units In 2015 - 2/29/2012
Global Demand For Kaolin To Exceed 28 Million Metric Tons In 2015 - 2/28/2012
Indian Tire Market Expected To Grow Through 2017 - 2/28/2012
New Epichlorohydrin Manufacturing Technologies Based On Renewable Resources Boost Chinese Production - 2/28/2012
Global Gaskets And Seals Market To Reach $30 Billion By 2017 - 2/23/2012
Positive Outlook Predicted For Russian Rubber And Plastics Market - 2/8/2012
U.S. Carbon Black Trade Back On Track - 2/8/2012
Global Rubber Demand Forecast To Reach 27.2 Million Metric Tons In 2012 - 1/25/2012
IRSG Expects Five Percent Growth In Rubber Consumption - 1/9/2012
Heavy Duty OTR Tire Manufacturing To Gain Traction Over The Next Five Years - 12/2/2011
Global Chloroprene Rubber Market To Reach 445.3 Thousand Metric Tons By 2017 - 11/21/2011
Global Tires Market To Reach 1.8 Billion Units By 2017 - 11/11/2011
World Demand For Thermoplastic Elastomers To Approach 5.6 Million Metric Tons in 2015, Freedonia Reports - 10/17/2011
Global Long Fiber Thermoplastics Market To Reach 313.4 Thousand Tons By 2017 - 10/5/2011
IRSG Forecasts Rubber Consumption Growth - 9/29/2011
U.S. Tire Imports, Exports Continue Growth - 9/9/2011
Global Silicone Market Forecast To Reach $17.2 Billion By 2017 - 8/26/2011
Improving Economic Outlook On Tap For Chemical Processing Industry - 8/18/2011
2011 Tire Shipments To Grow Nearly 4 Percent - 8/5/2011
Yokohama Senior VP Of Sales And Marketing Gives Mid-Year Report - 7/25/2011
Latest Rubber Statistical Bulletin/Rubber Industry Report Available From IRSG - 7/5/2011
China Imports More Natural Rubber To Meet Booming Demand - 6/15/2011
U.S. Demand For Specialty Silicas To Reach $1.7 Billion In 2015 - 5/19/2011
U.S. Farm Tire Market Examined - 5/11/2011
Global Styrene-Butadiene-Styrene (SBS) Block Copolymer Market To Reach 1.9 Million Tons By 2017 - 4/20/2011
Global Nitrile Butadiene Rubber Market To Exceed 645 Thousand Tons By 2017 - 4/11/2011
Global Tetrahydrofuran Market To Exceed 800 Thousand Tons By 2017 - 4/11/2011
Global Market For Chloroprene Rubber To Reach 445.3 Thousand Metric Tons By 2017 - 4/5/2011
2011 Tire Shipments To Grow Three Percent - 3/24/2011
Automotive Industry Outlook And Review For March 2011 - 3/14/2011
U.S, Tire Shipments Increase More Than 10 Percent In 2010 - 2/17/2011
Rubber Demand Bounces Back, More Growth Seen - 2/8/2011
Automotive Coating, Adhesive And Sealant Demand To Rise 9.4 Percent - 2/8/2011
Growing Optimism In Manufacturing As 49% Plan To Increase Hiring In Next Six Months - 1/27/2011
Polyurethane Processors, Suppliers Head Into 2011 With Optimistic Outlook - 1/5/2011
Economic Growth Continues In 2011 - 12/8/2010
2010 U.S. Tire Shipments To Post Nine Percent Increase - 12/2/2010
Tire Manufacturers Emphasize Design As Low Rolling Resistant And Eco-Friendly Tires Gain Popularity - 11/22/2010
Automotive Industry Outlook Highlighted - 11/4/2010
Global Industrial Rubber Products Market To Reach $88.5 Billion By 2015 - 10/18/2010
Indian Tire Industry Analyzed - 10/6/2010
IRSG Says Global Output Of Rubber Increased 8.9 Percent - 10/4/2010
Indian Tire Industry Forecasted To 2014 - 9/1/2010
Platts Global Petrochemical Index Ended July Higher On Late Rally - 8/12/2010
2010 Tire Shipments To Increase Eight Percent - 8/11/2010
World Demand For Specialty Silicas To Reach 2.7 Million Metric Tons In 2014 - 6/11/2010
Rate Of Decline In Petrochemical Prices Picks Up Pace In May - 6/11/2010
Global and China Automotive Tire Companies Will See Revenue Growth, But Profit Fall in 2010 - 6/9/2010
Rubber Loses Support Of Crude Oil, Currencies And Commodity Stocks - 5/26/2010
Chinese Tire Industry Predictions for 2010-2011 - 5/19/2010
Rubber Crisis Looms, May Hit India Hard - 5/3/2010
U.S. Industrial Rubber Products Market To Reach $17.7 Billion In 2014 - 4/27/2010
Global Tire Cord Market To Exceed 1.3 Million Metric Tons By 2015 - 4/14/2010
Auto Industry Outlook for 2010 - 4/14/2010
World Industrial Rubber Products Demand To Grow By 4.5 Percent - 4/12/2010
Tire Industry Market Report 2010 - 3/29/2010
2010 Tire Shipments To Increase Three Percent - 3/22/2010
World Demand For Carbon Black To Reach 11.6 MMT In 2013 - 3/12/2010
Acrylonitrile Butadiene Styrene Copolymer Demand To Grow In 2010 - 2/22/2010
World Rubber Consumption To Reach 26.9 Million Metric Tons In 2013 - 2/22/2010
Signs of Timid Recovery in 2009 - 2/12/2010
Elastomers Distributor Sees Signs of Market Recovery - 2/1/2010
IRSG Offers Latest Rubber Statistical Bulletin - 1/6/2010
2009 Tire Shipments To Post Thirteen Percent Decline - 12/14/2009
Research Report On Chinese Rubber Industry, 2008-2009 - 10/7/2009
2009 Tire Shipments Revised To Drop 16 Percent - 8/12/2009
NR Supply Heading Into A Historical Fall - Review Of 12 Months Ended June 2009 - 7/21/2009
Natural Rubber Supply And Demand Forecast And Price Outlook - 6/30/2009
More Old Tires Put To New Uses; Scrap Tire Piles Receding - 6/24/2009
Global rubber consumption drops to lowest level since 2006 - 6/15/2009
Natural Rubber Production Dropped Drastically During January To April 2009 - 6/2/2009
High Growth Forecasted For The Global And China Tire Market, 2008-2009 - 5/8/2009
Global Production Of Natural Rubber On The Decline - 4/17/2009
U.S. Demand For Specialty Silicas To Reach $1.7 Billion In 2013 - 4/15/2009
World Natural Rubber Output To See Biggest Fall Since 1993 - 4/15/2009
China Holds Key To Rubber Production Rebound - 4/3/2009
World Demand For Nonwovens To Approach 8 Million Metric Tons In 2012 - 4/1/2009
China Is Leading Rubber Importer From Viet Nam - 3/26/2009
Poor Car Sales May Curb Global Demand For Rubber - 3/26/2009
2009 Tire Shipments To Drop Seven Percent - 3/17/2009
Dubai Rubber Imports And Exports Hit AED 7.8 Billion In 2008 - 3/16/2009
IRSG Forecast:: Rubber Consumption Will Decline - 3/10/2009
2008 Tire Shipments Drop More Than 6%, Says RMA - 2/24/2009
Natural Rubber Prices In India Decline In Fourth Quarter - 2/24/2009
Thailand May Purchase 200,000 Metric Tons Of Rubber - 2/24/2009
Vietnamese Rubber Sector Deals With Economic Crisis - 2/24/2009



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