What's Driving the North American

Automotive Market and the Role of

Plastics in the Ride

Michael D. Taylor

Senior Director, International Affairs and Trade

The 2nd Asian Automotive World Class Manufacturing Summit

Jakarta, Indonesia

August 3-4, 2015

Agenda Background on SPI

Brief Overview of the U.S. Plastics Industry

Plastics Market Watch Series

Key Drivers of the North American Automotive Market

Future Demand and the Role of Plastics

Q&A

Founded in 1937, SPI is the only U.S.

trade association representing ALL

segments of the plastics industry

The U.S. Plastics Industry

In 2012…

• Shipped more than $373 billion

in goods

• Employed 892,000 people

• Operated 15,949 facilities in every

U.S. state

In 2014…

• Domestic demand

– Up 6.0% to $298 billion

In 2014…

• 3rd largest industry in U.S.

• Record-breaking domestic demand

– Up 11.5% to $298.3 billion

U.S. Demand for Plastics sets

New High Level

$0

$50

$100

$150

$200

$250

$300

$350

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

$ in b

illio

ns

Machinery Molds Plastic Products Resin

Apparent Consumption = Shipments + Imports – Exports

Source: SPI “Global Business Trends” (2015)

SPI has launched a new series of reports looking at the

impact of the consumer on the business of plastics,

including demographics, economics, policy developments

and technological improvements for markets including:

Automotive & Transportation

Healthcare & Medical Devices

Packaging

Housing & Construction

This first publication under the SPI Market Watch series

explores the current state of plastics' role in the automotive

and transportation sector and looks into what the future

holds for the material.

Issue 1:

Automotive and

Transportation

Now Available for

Free!

Key Drivers for End Markets

Economic Indicators

Demographics

Technology

Policy

Consumer Trends

Resources

Market

What is

impacting the

demand for cars

and plastics?

Positive

trade balance

of $12.6 billion

$49.5B PLASTICS 7.3%

2014 Trade Statistics

In 2014, the U.S. plastics industry exported goods valued at $62.1 billion, up 3.1

percent from 2013

$35.1B RESINS 1.8%

$25.0B PRODUCTS 5.1%

$528.3M MOLDS 10.1%

$1.7B MACHINERY 7.7%

Source: U.S. International Trade Commission

Top Industry Export Markets

$0

$5

$10

$15

$20

$25

$30

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

U.S

. $

Bill

ion

s

Mexico Canada China Belgium Brazil All Others

Top Plastics Industry

Export Markets 2014

All Others $23.5 billion

Mexico $15.8 billion

Canada $13.2 billion

China $5.2 billion

Belgium $2.4 billion

Brazil $2.1 billion

Total $62.1 billion

Trans-Pacific Partnership Trans-Atlantic Trade &

Investment Partnership

Global Opportunities

11

• 2014: U.S. plastics

industry exports to the

11 TPP countries were

more than $34B

• Since 2000: plastics

exports to TPP

countries increased

more than 91%

• 2014: plastics industry

trade surplus with TPP

countries was $13.7B

• A high-standard TTIP

would advance trade

and investment

liberalization and

address regulatory and

other non-tariff barriers

• Based on 2011 trade

flows, the U.S. plastics

industry would be one

of the top benefiting

sectors with a total

potential tariff savings

of $465M

U.S. Plastics Trade Balance

by Segment 2000-2014

Source: U.S. International Trade Commission

-10

-5

0

5

10

15

20

25

Resin Products Machinery Molds

U.S. Plastics Trade Balance with

FTA Countries by Segment

2000-2014

Source: U.S. International Trade Commission

-2

0

2

4

6

8

10

12

Resin Products Machinery Molds

U.S. Live Births 1905-2002

Num

bers

of

Bir

ths in M

illio

ns

Industry Drivers of Profitable

Growth

• Innovation and technology

• Dramatic changes to the automobile

• Light weighting and part commonization initiatives will provide opportunities for plastics processors

• Effective commercial relationships, especially related to:

• Pricing and costing transparency (including resin cost management)

• Engineering, technical support, warranty responsibility

• Fewer and combined vehicle architectures

• Drive up production volumes for suppliers, but reduce the number of suppliers

• Investing in targeted vehicle platforms will be critical to long term growth

• Manufacturing launch efficiency

• Growing number of vehicle introductions each year

• More extensive supplier technical support required

• Geographic growth strategies crucial to OEM support…China, Brazil, Russia, Mexico and many other emerging markets

Estimated Light Vehicle Sales

for North America

19,600

19,700

19,800

19,900

20,000

20,100

20,200

20,300

20,400

20,500

20,600

20,700

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Th

ou

sa

nd

s o

f V

eh

icle

Sa

les

Source: IHS

In Summary…

• Policy

CAFE Standards

FTAs (TPP, TTIP)

• Demographics

Immigration

• Policy

Taxes, bans, deselection

• Demographics

Gen Y

• Resources

Skilled Labor Shortage

• Economic Indicators

Economic Growth/Employment

Consumer Confidence/Disposable Income

• Technology

Additive Manufacturing, Nanotechnology, Carbon

Fiber Technology, Recycling

• Consumer Trends

Green Mainstreaming

Urbanization, Suburbanization, Exurbanization

The Future Role of Plastics in

the Automotive Market

“By 2030,” says the American Chemistry Council, “the automotive industry and society

will recognize plastics and polymer composites as preferred material solutions that meet

and, in many cases set, automotive performance and sustainability requirements.”

The prospect of 100 percent plastic automobiles and trucks on the road is increasingly

plausible—because prototypes are already on display in R&D facilities and in some trade

shows. The plastics industry, ever and always in the front ranks of innovation, is on the

leading edge of this movement.

The majority of drivers and their respective key trends suggest a growing automotive and

transportation market, and a market where the overall use of plastics has a good chance

of increasing.

Given the inherent advantages that plastics represent compared to other alternative

materials, it is extremely likely that the transportation choices of the future will use more,

not less.

Thank You!

谢谢 Merci Vielen Dank

Grazie ありがとうございました 감사합니다

Obrigado Спасибо Gracias Teşekkürler

Questions & Answers

Michael Taylor

mtaylor@plasticsindustry.org

202-974-5232