|Frost & Sullivan Market Insight||Published: 24 Apr 2002|
By Max Crosetti, MSc
Adhesives have become a key technology in the automotive industry, since they continue to replace other bonding methods. In Europe, around 9 percent of the total adhesive production go into automobile manufacturing and a car today contains between 12 and 18 kilograms of adhesive. Adhesives are used under the hood, in the body and in the interior and exterior trims of the car, where they offer a number of benefits over traditional joining technologies.
As shown in Figure 1, production of light vehicles in Europe has remained stagnant since 1999, due to a long-standing over-capacity situation in the market. Vehicle production is likely to stay stable at around 16.5 million units per year through to 2004, as the worldwide automobile market continues to restructure. Despite these hard facts, adhesives used in automotive manufacture might still be driving on the road to profit. Industry experts believe that the sector can grow a couple of percentage points faster that the automotive industry as a whole driven by the continuous replacement of traditional bonding methods.
Applications for adhesives in the automotive industry include direct glazing, where they contribute to an increased rigidity of the car body, high temperature-resistant adhesives used in the engine and pressure-sensitive materials for interior door panels, which offer a number of benefits in the assembly line.
Key Driving Factors
Compared to traditional manufacturing methods, adhesives offer greater flexibility to the production process of automobiles and automotive sub-components. This is a very important factor driving adhesive consumption in the automotive industry. Automatic adhesive dispensing equipment is easily adapted to changes in the sub-component design, making the use of the technology very attractive to the car industry, as vehicle manufacturers continue to accelerate the pace of change in automotive design.
Another important advantage of adhesives is the relatively high speed with which they can be applied on the production line. As a result, savings can be realised in set-up and processing time and volume of material processed. These potential cost savings are extremely important to car manufacturers and their continuos drive to reduce costs. Consequently, per-vehicle adhesive consumption is likely to remain in upward trend as car designers continue to exploit the cost-saving potential of adhesives.
There are, of course, other reasons why manufacturers continue to expand the use of adhesives in cars. For example, improved noise, vibration and harshness (NVH) characteristics and the increasing use of plastics and aluminium in vehicle manufacture. However, as the competitive pressures continue to hit OEM's profit margins, enhanced performance at lower costs will remain the key reason behind the advance of adhesives in the automotive industry.
Implication for Companies
The automotive OEM industry is a large and important market for adhesive suppliers and the job now entails far more than simply providing a product for customers. Increasingly the market is becoming heavily reliant on service. Once a product is delivered, the real work begins. Suppliers must provide new and innovative adhesive technologies that address a multitude of issues ranging from cost saving to durability to efficiency to environmental compliance.
The key is to maintain very close relationships with customers and work with them in identifying what their product needs will be and where the cost-saving opportunities will lie early on in the product development cycle.
Success in the auto adhesive industry relies heavily on being able to produce new and innovative products. Automakers are always searching for new products that can make their cars stand out from the pack in terms of cost and performance.
There are plenty of opportunities for adhesive manufacturers to help car manufacturers achieve these objectives and grow the adhesive sector despite the stagnation trends in the automotive sector. However, this takes significant efforts in building close relationships with the OEMs at all stages of the product life cycle. Only the largest and most dynamic adhesive suppliers are likely to succeed and emerge stronger when the European car industry picks up again.