The auto sector in 2012: China, composites, calamities, and an electric boost

PlasticsToday's Stephen Moore offers his outlook for the automotive industry, which endured natural disasters in Asia in 2011, after surving economic catastrophes in 2009 and 2010. Whatever happens in 2012, Stephen assures us that draconian car-ownership fees where he lives in Singapore mean that despite writing about the automotive plastics industry for us, he'll remain a bike, and not a car, owner.

1. Economic uncertainty aside, what will 2012 hold for the global automobile industry? One thing that's close to a certainty is that electric and "almost electric" vehicles will be more widely available than ever to private users. Slated for launch in the U.S. market in 2012 are the Ford Focus Electric, the high-performance electric Audi E-Tron, the hybrid Cadillac Converj, the hybrid Chevrolet Volt MPV5, the electric Tesla Model S, and the electric Toyota Scion IQ EV, among others. What I can't predict is how many of these environmentally friendly vehicles will actually sell.

2. Japanese automakers were hit severely in 2011 by natural calamities. Northeastern Japan was devastated by the March earthquake and tsunami and it opened the eyes of the country's car producers given a major earthquake is long overdue in the Tokai area, home to Suzuki and Yamaha. They were also hard-hit in Thailand where massive floods effectively shut down the entire industry for a time. 2012 might be the year where we see Japanese auto OEMs shift more production outside of Japan and step up production in countries like Indonesia and the U.S.

3. Will 2012 be the year in which a mass market vehicle adopts a carbon fiber-reinforced plastic part ? Teijin plans to commence commercial operation at its one minute composite plant in mid 2012. My bet is that a high-performance Japanese sports car might be an earlier adopter of parts from this process.

4. And while coastal regions of China are placing restrictions on car ownership and consumers are finding it harder to secure loans for their vehicle purchases, I think that the western and central regions of China , where car ownership lags but incomes are rising rapidly, will propel car sales to even higher levels in 2012.

5. I can also predict with some certainty that car prices in my host country of Singapore will remain high as the government restricts supply in order to prevent gridlock. Currently the government only allows around 45,000 vehicles to be sold annually in Singapore, a city state with population exceeding 5 million.

The Certificate of Entitlement (COE) that earns you the right to purchase a vehicle was last traded at $70,000 ($54,000) for a 1600-cc-plus car so you're either cash-rich or heavily in debt before you even decide which car is for you. If you choose a Toyota Camry, expect to spend around $102,000 all up. But faced with high prices for Japanese vehicles, car buyers are moving up market if anything, with BMW and Mercedes topping the market for 2011 to date. Looks like I will be sticking to my trusty folding bicycle for some time yet.

 

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