Executive Briefings

As Auto Industry Takes Off, Chemicals Sector Hitches Ridev

Since 2009, global production has increased by about 25 million units, according to KPMG, and estimates put the current revenue for the auto industry at more than $2tr. Many analysts estimate that about 4 to 5 million new cars and light trucks will be in use each year in the near future. This isn't just good news for automakers - chemical manufacturers will also see a boost because of how the two industries are linked.

As Auto Industry Takes Off, Chemicals Sector Hitches Ride

"Chemicals are so reliant on the auto and housing industries … and having auto on the upswing means having more chemicals go into the cars," says Mike Shannon, Global Chair, Chemicals & Performance Technologies at KPMG.

Because plastics make up about 15 percent of materials in a mid-sized car, KPMG estimates that growth in autos could translate to higher plastics demand to the tune of 11.3 million tons by 2018, at an expected growth rate of 8 percent annually. Other common chemically derived components for cars include films, coolants, insulation, batteries, tires and fuel additives.

What's driving up demand?

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"Chemicals are so reliant on the auto and housing industries … and having auto on the upswing means having more chemicals go into the cars," says Mike Shannon, Global Chair, Chemicals & Performance Technologies at KPMG.

Because plastics make up about 15 percent of materials in a mid-sized car, KPMG estimates that growth in autos could translate to higher plastics demand to the tune of 11.3 million tons by 2018, at an expected growth rate of 8 percent annually. Other common chemically derived components for cars include films, coolants, insulation, batteries, tires and fuel additives.

What's driving up demand?

Read Full Article

As Auto Industry Takes Off, Chemicals Sector Hitches Ride