- Product differentiation critical to stave off the challenge from low-cost Asian imports
MEXICO CITY, June 5, 2012 /PRNewswire/ -- Engineering polymers, with their ability to improve performance, safety and offer eco-friendly solutions, are finding rapid uptake in the Mexican automotive industry. The polymers' light weight enhances motor performance, which in turn reduces gas consumption and environmental degradation, while increasing the vehicle's resistance. Their cost efficiency, versatility and breadth of applications are helping them gradually edge out the competition from traditional materials such as metal and glass.
New analysis from Frost & Sullivan (http://www.chemicals.frost.com), Mexican Market for Engineering Polymers in the Automotive Industry, finds that the market earned revenues of over $757.5 million in 2011 and estimates this to reach $1.31 billion in 2017 with a compound annual growth rate (CAGR) of 9.6 percent. The following markets are examined within this research: acrylonitrile butadiene styrene (ABS), polyamides (PA), polycarbonate (PC), polyoxymethylate (POM), and polybutylene terephtalate (PBT).
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"While PC and PA are the most common engineering polymer replacements for metal and glass, POM is an effective alternative for metals that have a lot of wear, just as PBT is for electrical components," said Frost & Sullivan Research Analyst Agustina Zarich. "ABS frequently replaces commodity plastics because of its lower price and greater performance properties."
Due to its proximity to the American market, the free trade agreement between both countries, and low labor costs, Mexico has become a favored investment destination within the automotive industry.
Despite the market's potential, the lack of technical preparation by the Mexican transformation sector limits the development of new engineering polymers applications. This in turn can lead to incorrect handling of these polymers.
The market will also be affected by the rise in energy and raw material costs. The oil market's supplies are expected to suffer in 2012, and the tightness in the supply will increase oil prices.
Furthermore, the market is feeling the pressure from low-cost Asian competitors, as they have larger scale production units, making their costs much lower than those in Mexico. Asian products pose the biggest threat within the ABS market, as China and South Korea are the biggest importers.
The Mexican transformation sector needs international-quality personnel to be able to compete at the highest level and this can only be achieved with substantial investments in training. With a more prepared and better trained workforce, the market will have a greater opportunity to succeed.
Meanwhile, new resources for polymer production will prevent the market from being buffeted by the volatility of oil prices and allow it to break free from the trends in the oil and gas industry. In order to counter competition from Asian companies, market participants will have to stand out through product differentiation.
"As the scale of Asian production plants and low labor costs cannot be equaled by Mexican producers, differentiation through superior quality and product technology is the key to compete against Asian producers," notes Zarich.
In Mexico, the focus is on processability, fire retardancy, strength and heat resistance. Many blends are being developed to address these goals, including the PC/ABS blend that balances high-impact strength, surface finish, and a high flow for better processing. These advances are expected to boost the value of engineering polymers and make them the material of choice among automotive manufacturers.
Mexican Market for Engineering Polymers in the Automotive Industry is part of the Chemicals & Materials Growth Partnership Services program, which also includes research in the following markets: Brazilian Automotive Paints and Coatings Market, Engineering Polymers for the Construction Market in Brazil, Argentinean Market for Construction Chemicals, and Latin American Engineering Plastics Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.
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Mexican Market for Engineering Polymers in the Automotive Industry
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SOURCE Frost & Sullivan