The stock market and overall manufacturing economy are wobbly, but low oil prices, favorable interest rates and high employment are driving strong demand for cars in North America.
Sales of cars and light trucks in the U.S. could top 18 million this year after hitting a record 17.5 million vehicles last year, according to preliminary reports.
The effect on plastics is particularly favorable because government-mandated Corporate Average Fuel Economy (CAFE) regulations will require an average fleet-wide fuel efficiency of 54.5 miles per gallon by 2025 compared to 34.1 miles per gallon this year.
DSM is beefing up its U.S. presence with a new Americas headquarters to Troy, Michigan, that includes a dedicated Application Development Center. DSM supplies polyamides, polyphenylene sulfide, and polyesters.
Lanxess doubled capacity in Gastonia, North Carolina, to 40,000 metric tons annually to compound polyamide and polybutylene terephthalate used primarily in the automotive industry to manufacture lighter-weight plastic components that can replace metal parts. Lanxess plans to further invest €50 to 100 million for organic growth in its high-performance plastics business.
Lanxess expects global demand for engineering plastics in automotive applications to grow by 7 percent annually (CAGR 2015-2020). “The U.S. automotive sector remains strong, and the demand for engineering plastics in cars is growing,” said Lanxess CEO Antonis Papadourakis. “With our expanded capacity, we are in a position to support this growth and remain a reliable supplier to our North American customers.”
Some major players are undergoing change. The Dow-DuPont merger will create a $51 billion materials company that will include important assets targeting the automotive industry. DuPont operates a large, sophisticated application and development centers in Troy, Michigan.
One of the other elite plastics development centers in the Detroit area is operated by SABIC, which last year disbanded its Innovative Plastics business unit and completed a reorganization Jan. 1. SABIC offers development and low-volume production of polycarbonate components at its location near Detroit, in addition to other work. While other SABIC plastics development will be consolidated in New York, the Glazing Technical Department Center will remain near Detroit.
A company spokesperson told The Molding Blog: “SABIC has strengthened the dedicated global team it has in place to serve the automotive industry.”