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Auto industry resilient in 2020, amid COVID pandemic

Auto industry resilient in 2020, amid COVID pandemicFor automakers and suppliers, the last year wasn't just about getting through the COVID-19 pandemic. It was about coming through it stronger and wiser, changed for the better.That may have seemed like an impossible task when the virus began its global spread, shutting down businesses and entire countries, and slowing global industries. Even as the auto industry faced big challenges, it found innovative ways to address emerging concerns.Jeff Schuster, LMC Automotive's president of Americas operations and global vehicle forecasting, said he is not surprised."The industry innovates and finds ways to deal with whatever the situation is," he said. "I think, when there is an event like this, the industry and society tend to come out stronger and really know that they can fight through anything."Coming into 2020, the auto industry expected to see unit sales of about 17 million in the U.S. and 90 million globally, according to Schuster. The pandemic put a dent in those expectations, particularly early on when production levels plummeted.At one point in the spring, U.S. auto production fell to nearly zero, Schuster said, adding that global production levels fell by 60 percent.But things picked up in the second half of the year, and the market quickly rebounded. By the summer, U.S. automakers not only had revived production, they skipped their traditional summer shutdowns to make up for lost time."So we do see continued recovery," Schuster said. "Things are better than expected, considering we had a pretty significant drop (in production)."What bolstered the industry during the toughest points of the pandemic was an unwavering demand for new vehicles. Yes, sales trailed off when dealers were forced to close their doors during lockdowns, but new vehicle sales surged upon reopening."Sales, overall, were much stronger than we thought they would be (early in the crisis)," said Kristin Dziczek, vice president of industry, labor and economics at the Center for Automotive Research.By the end of 2020, North American vehicle sales reached 14.5 million and global auto sales hit the 78 million mark, according to LMC data.Road to recoverySchuster remains hopeful that the industry will continue its recovery trajectory, though he said it may take a few years for unit sales to reach or surpass pre-pandemic levels. LMC Automotive is projecting sales of around 16 million in North America this year, about 1.5 million ahead of 2020.This year stands out as a pivotal one for other reasons, too. The ability to contain and control the spread of the coronavirus also will determine the pace at which the auto industry recovers. That's because the vaccine rollout and the U.S. government's latest stimulus response remain key factors for holistic economic recovery."There is a lot that can go wrong (in 2021)," Dziczek said. "But there is a lot that can go right this year, too."In many ways, the outlook for this year "depends on if you are a glass-half-full or glass-half-empty kind of person," Dziczek said.Count Matthew Portu as one of those glass-is-half-full people. As president of Freudenberg NOK Sealing Technologies, he's encouraged by the recovery his company has experienced since the second half of 2020. He expects the recovery to continue fairly smoothly, barring any major hiccups."I think we are nipping at full strength right now. We are very close," Portu said."Early in the crisis, it was assumed and universally thought that we would not return to normal until 2024 or 2025. We had these thoughts as well, and the reality was nobody really knew. We certainly started to see a robust recovery happening, first in China and then in Europe and then in the U.S. I think we are really very, very close to being back to a 'normal' and healthy automobile sector."That's not to say that there won't be additional hurdles along the way. The industry-wide microchip shortage already is posing problems for auto production.The root of the issue, Dziczek said, is that the pandemic created a demand for consumer electronics, which increased demand for the chips, many of which also are used in vehicle electronics. Shifts to remote work and remote learning led to a surge in purchases of office electronics, desktops and laptops.Stay-at-home orders also led to increased demand for entertainment electronics such as video game consoles. This surge was compounded by the release of some newer, in-demand consumer electronics such as the Play Station 5 and the latest Apple iPhone."Everyone tricked out their home office or home school space, and that had a big impact on demand," Dziczek said. "Shifting that demand back to the auto industry is going to take some time."Schuster agrees that the microchip shortage will remain a hurdle for the auto industry moving forward, but he does not see it as being a long-term issue."That may not have a lasting impact," Schuster said of the chip shortage. "But it is going to cause some disruption in the structure of the recovery path in the spring and into the summer."Moments of self-reflectionThe pandemic did expose the strengths and weaknesses within the auto industry. Every company along the supply chain wrestled with big problems and the industry, as a whole, tackled some together."I think the (industry's) strengths and weaknesses are the same thing," Dziczek said. "Depending on what context you are in determines whether (something) is a strength or a weakness."For instance, the global supply chain, which had been a critical strength of the auto industry, just wasn't a strength in 2020. Early in the pandemic, components makers couldn't produce what was needed due to parts shortages or shutdowns. At other points, shipping complications prevented completed parts from getting to the auto makers.Dziczek does not believe the pandemic will change how auto makers view their supply chains — it will remain a global industry, sourcing parts from around the world."It has always been a strength to have many eggs in many baskets," Dziczek said.Portu noted that the complications experienced during the pandemic went far beyond typical supply chain disruptions and likely will not be replicated often."This was different — noticeably different — in that everybody was in the same boat at the same time," Portu said. "Typically, you have one segment that might be impacted or one supplier or one OE. But this was everywhere; it was happening to everybody very rapidly."It is likely that, moving ahead, the auto industry will have a better idea of how to approach major supply chain disruptions that occur simultaneously. It likely also will have a plan for addressing shortages.Schuster speculated that in the months and years ahead, OEMs and suppliers will rethink what it means to run lean operations."The industry has been running quite lean, which has been considered healthy," Schuster said. "When you're running lean, you have to adapt quickly if things decline, but it also means when there is something like this and you don't have production, you don't have enough of a buffer to handle that."Chance to growMichelin North America Inc. saw 2020 as a chance to adapt and position itself as a leader in a newly defined automotive landscape."The last 12 months have been really, for us, a transformation," Alexis Garcin, chairman and president of Michelin North America Inc. told Automotive News recently. "We have been transforming ourselves quite a lot in the way we work with a lot more work from home."Internally, the biggest changes for Michelin came when the company was challenged to examine how it communicates. With in-person visits and meetings sidelined, the company, like many others, turned to technology as a way to connect."Before the pandemic, our internal communication with employees was 80 percent top-down through monthly or quarterly meetings," Garcin said in an email to Rubber & Plastics News. "So, we completely flipped our approach and began to reserve 80 percent of our time to answer employees' questions, and on a much more frequent basis — weekly — via company-wide town halls."Those changes proved to be more effective for Michelin, especially in the ways it brought employees together. During a time when physical distancing was essential to employees' health, connections were essential to employees' well-being.FNST experienced much of the same when it came to communication. Portu said that was a direct result of the company's ability to harness technology in new and effective ways."In a strange way, I would say that our collaboration actually increased throughout this time," Portu said. "We were forced to pay attention in meetings—that's not to say that we didn't pay attention before, but this was different. It became more difficult to focus, so we had to be more creative and more innovative in collaborations."From the start, FNST responded to the crisis in the way many businesses did. Those employees who could transition to work remotely from home did so. This allowed FNST to close office spaces, limiting possible community transmission.As much as possible, Portu said, FNST tried to keep its manufacturing operations going without disruption. As industries around the globe ground operations to a halt, that became more difficult.During the end of the second quarter and into the early part of the third quarter, the company was among those to implement furloughs. The good news, Portu said, is that FNST has rebounded quickly. All of those furloughed employees have returned, and operations are running at or near pre-pandemic levels.To best protect its employees, FNST implemented safety practices across all of its facilities to ensure workers could return to work. These measures included temperature checks, social distancing and wellness checks.Portu said he is proud of the fact that none of the North American operations were forced to close as a result of a COVID-19 outbreak. And while there were employees who contracted the virus, there is no indication of community spread at work, he said."In all of our tracking, we never found a case that we believed was transmitted within our facility," Portu said. "It tended to be from the normal day-to-day things that happen when you are out and meet people or have contact with someone in your inner circle who is sick."Portu believes the ability of his company to weather one of the toughest years in recent memory is the direct result of the people who make up the FNST family."A lot of companies would say that your employees are your most important asset, but it's really true," Portu said, noting every employee across the North American operations stepped up and did what it took to pull through the difficult time. "This crisis really put a spotlight on our team, and everybody could feel we were in a pretty tough spot, so it naturally became an all hands on deck type thing."source : https://www.plasticsnews.com/news/auto-industry-resilient-2020-amid-covid-pandemicEdit : HANDLER

editor 2021-04-21

Lightening up vehicle batteries with carbon fiber

Lightening up vehicle batteries with carbon fiberA United Kingdom-based make of lightweight composite battery systems for electric vehicles is collaborating with a carbon fiber supplier in a program is intends to put to use at its Richmond, Ky., facility. TRB Lightweight Structures, a global high-volume composites manufacturing company and a manufacturer of composite battery enclosures for Evs has initiated a collaboration with Kordsa, a specialized Turkey-based carbon fiber fabric supplier, in a bid to is lighten up the composite housings it produces. The TRB Lightweight Structures site in Kentucky is a joint venture with Toyota Tsusho America. The project originated at TRB’s facilities in the UK but will be expanded to include the company's US facilities in Kentucky. Kordsa’s strong global supply chain will enable the company to provide carbon fiber fabrics to TRB both from Turkey and its US-based company, Fabric Development Inc. Kordsa shipped the first orders to the UK in November. For Kordsa, the new supplier contract has opened up a new opportunity for Kordsa, said CEO Ali Çalışkan. “Through this project, we are now reinforcing a wider area of life with our new collaborations in the field of composites. We are pleased to work with TRB, with whom we share a similar vision for the future — to contribute to the world's successful transition to sustainable transportation.” Kordsa is a leading global supplier to the tire reinforcement technologies market, but has also invested heavily in the development of composite technologies, mainly targeted at sectors such as aerospace and automotive, as well as sports equipment and yachts. With R&D and innovation an integral part of Kordsa’s corporate culture, the company has established, in collaboration with Sabancı University in Turkey, one of the most important development centers in the world in this field: the Composite Technologies Center of Excellence, a 15,000-sq-meter state-of-the-art building situated at the Technopark İstanbul, the largest technopark in Turkey. The center brings together among others researchers, designers, engineers, producers, Ph.D. students entrepreneurs from incubators, in order to be able to serve stakeholders at every stage of the R&D cycle, from idea through mass production.source : https://www.plasticsnews.com/news/lightening-vehicle-batteries-carbon-fiberedit : plastics handler http://www.ihandler.co.kr

Editor 2021-01-22

PP 'at risk' of losing recycling acceptance

PP 'at risk' of losing recycling acceptancePolypropylene is one of the most widely used plastics in packaging. But difficulties with recycling are potentially putting its acceptance at risk.At least that's the view of one of the leaders of the Polypropylene Recycling Coalition, a new industry group aiming to change the trajectory of PP recycling and keep it accepted in the marketplace as a sustainable packaging material."We're at risk of losing polypropylene as a recycled and accepted recyclable material," said Ali Blandina, director of circular ventures at The Recycling Partnership. "We believe that there are actions to take to improve the circularity of this material so that it doesn't go away."Blandina's group is the lead organizer of the new PP recycling group, which formally launched in July with $35 million in funding from coalition members including Keurig Dr Pepper, Braskem and the Walmart Foundation.She spoke on a panel on recycling issues at the 2020 Plastics News Caps & Closures Conference, held Sept. 21-25, and she outlined the goals and challenges facing the coalition.One of the immediate catalysts for bringing the PP coalition together was the decision in January by the Sustainable Packaging Coalition to downgrade the status of PP from "widely recycled" to "check locally," a change that potentially sends a big signal to local recycling programs. SPC noted "uncertainty" around PP recycling.The first goal of the effort will be to regain the "widely recycled" status, Blandina said, as she outlined some of the larger challenges facing PP recycling."The Sustainable Packaging Coalition has downgraded polypropylene from 'widely recycled' to 'check locally,' and different activists are challenging the use of polypropylene in general as a recycled material," she said. "As well … we have communities and recyclers that are dropping 3-7s, which includes polypropylene, from their recycling programs."There's just this immediate need to ensure the long-term viability of polypropylene as an accepted and recycled material," she said.Longer term, the group wants PP to be in the same recycling position as PET and high density polyethylene and has set an official goal of having PP packaging hit a 30 percent recycling rate.That would be more than 10 times the current rate, though.Statistics from the U.S. Environmental Protection Agency say that polypropylene containers and packaging had only a 2.7 percent recycling rate in 2017, the last year statistics were available. EPA said 7.7 percent of PP bottles were recycled in 2017, compared with 29.1 percent of PET bottles and 31.2 percent of HDPE bottles.But the coalition is aiming for 30 percent for PP packaging because that's the rate target set by the Ellen MacArthur Foundation and its New Plastics Economy project, she said.Many global consumer product companies are partnering with EMF on their plastics sustainability goals and meeting the foundation's targets will be key for them, she said."Reaching that 30 percent recycling rate [is important] because we know that all the companies and brands and manufacturers that are signed on to Ellen MacArthur have to hit that for their packaging to be considered recyclable," she said. "We want polypropylene to be part of that."The partnership is an industry-funded organization based in Falls Church, Va., that provides grants, technical advice and research around boosting recycling.Opportunities to buildWhile Blandina noted the substantial challenges around PP recycling, she and others on the panel pointed to what they see as opportunities to build on.There are end markets for PP recyclate and the demand is there, if more of it can be tapped, Blandina said.Estimates from the polypropylene coalition say there's about 1.65 billion pounds of PP used in packaging in U.S. single-family homes. That's only one-third of the amount of PET used, but the group argues it's still a very sizable base to draw from.They also argue that more demand for recycled PP is coming, as consumer brand companies and packaging makers have set much higher recycled content targets for plastics packaging, including PP.The Association of Plastic Recyclers estimates that collecting about 350 million pounds of PP a year could support a national recycling effort.Others are not so sure. Greenpeace issued a detailed report in February that showed, based on surveys of 367 materials recovery facilities in the U.S., that only about half of them accepted PP for recycling, compared with 100 percent acceptance for PET.The environmental group argued that the economics of collecting PP don't make sense for municipal programs, particularly after China cut off imports of lower-value plastic recyclate in 2018.Blandina acknowledged the questions around PP recycling but told the panel it can have a place in a circular economy for plastics. Polypropylene has unique performance qualities that make it a good material for many packages, she said."There are definitely people left wondering what is the future of this material, but we want people to know that its viability in a circular economy is real," Blandina said. "Recycling facilities are definitely facing issues in terms of access to advanced sortation technology, like optical sorters for polypropylene, but it is a valuable commodity to recycle and it can be remanufactured into new products."source : https://www.plasticsnews.com/news/partnership-pp-risk-losing-recycling-acceptance

Editor 2020-10-23

To expand, electromobility needs batteries. BMW plans to produce them — sustainably

To expand, electromobility needs batteries. BMW plans to produce them — sustainablyCarmaker BMW has seen the future, and it is electric."By 2023, the BMW Group will have 25 electrified models on the roads, as it systematically increases electrification across all brands and model series," said Frank Weber, member of the Board of Management of BMW AG, Development.A quarter of the BMW Group vehicles sold in Europe are projected to have electric drivetrains by 2021, a third in 2025 and half in 2030.The lithium-ion batteries that power electric vehicles today are for the most part produced in China, with Europe lagging far behind. Demand, however, is projected to grow strongly in the coming decade.To tap into this market, the Federal Ministry of Economic Affairs and Energy (BMWi) is currently working with German and European industry on two programs to support battery cell innovation. The aim is to establish an innovation-oriented value chain in Germany and Europe that meets the highest standards for sustainability and production carbon intensity. The programs are being realized as "Important Projects of Common European Interest," or IPCEI.BMW has been analyzing battery cells since 2008 and, thanks to this long-standing experience, already has extensive knowledge in the field of cell analysis. In November 2019, it opened a separate Battery Cell Competence Centre in Munich. Taking this a step further, BMW has now announced that it will be building a new, 14,000-square-meter pilot plant for battery cell manufacture. The project is being supported within the framework of the European IPCEI funding process.Using production processes and systems also employed in standard production, the company will be able to demonstrate the industrial feasibility of future battery cell generations. The main focus will be on optimizing production efficiency, costs and quality. Currently, up to 40 percent of a fully electric vehicle's CO2 emissions come from battery cell production.Milan Nedeljković, member of the board of management of BMW AG responsible for production, said: "Our goal is to optimize near-standard production of battery cells from the perspective of quality, performance and costs. The new pilot plant will enable us to close the final gap in the value chain from battery cell development, to production of modules and powertrain components, all the way to installation of fully assembled high-voltage batteries at our vehicle plants. This makes us the first car manufacturer to cover the entire process chain for electric driving."The pilot plant will be built in Parsdorf, near Munich, and is scheduled to go into service in late 2022. The total project volume is almost 110 million euros ($129 million) and about 50 employees will work at the plant.BMW is working as part of a technology consortium with the Swedish battery manufacturer, Northvolt AB, and Umicore NV, a Belgian developer of battery materials, which will focus on recyclable cell design.Recycling of batteries at the end of their life is complex. Companies must consider how to recycle the components and the potential to reuse raw materials in the best possible way.Northvolt will produce the battery cells at its own gigafactory currently under construction in Skellefteå in northern Sweden from 2024 on. Wind and hydroelectric power generated regionally in northern Sweden will provide the energy needed to produce the battery cells.BMW has already reached a contractual agreement with its cell manufacturers that they will only use green power to produce fifth-generation battery cells. These cells will be installed for the first time later this year in the BMW iX3, followed by the BMW iNEXT and the BMW i4.source : https://www.plasticsnews.com/news/expand-electromobility-needs-batteries-bmw-plans-produce-them-sustainably

Editor 2020-08-21

Antimicrobial silicone material finding medical, food and beverage applications

Antimicrobial silicone material finding medical, food and beverage applicationsBlackburn, England — Silicone Engineering Ltd. has introduced an antimicrobial silicone material that it claims is ideal for use in face shields used by frontline workers in health care, retail and hospitality.To combat bacteria — including MRSA, e-coli, salmonella — the neutraSil material utilizes silver ion technology, which Silicone Engineering said is highly efficient at inhibiting bacterial growth. The material combats the spread of bacteria by disabling their proton pumps and interfering with sulfhydryl proteins. This process disrupts cell wall synthesis and therefore the bacteria's functioning, according to the Blackburn-based silicones specialist.The technology is not effective against the COVID-19 virus, but it does protect against bacterias when used in face shield parts, particularly head straps and the protective cushion at the forehead.NeutraSil's useage also is not limited to faceshields."Like all of our silicone products, neutraSil is incredibly versatile," Silicone Engineering said in a statement. "Most recently, neutraSil has been used in the efforts to combat the COVID-19 virus, providing applications for critical PPE equipment including head straps and comfort strips for face protection shields, hospital door handles and surgical tray liners for the medical and health care sectors, where hygiene and sterility are so vital. It's also FDA-approved, making neutraSil ideal for use within the food and beverage and dairy industries."NeutraSil is offered in a variety of forms: sheets and rolls, extrusions (profiles, strips, cords, tubes and sections), tubing and hoses.source: https://www.plasticsnews.com/news/antimicrobial-silicone-material-finding-medical-food-and-beverage-applications

editor 2020-07-26

Buying a car is increasingly becoming more about the interior, says survey

Buying a car is increasingly becoming more about the interior, says surveyAsahi Kasei Radar sensors play an important part in intelligent driver assistance systemsintelligent driver assistance systemA survey conducted by Asahi Kasei Europe in October 2019 and published earlier this month reveals that the key decision factors influencing car purchases among consumers are shifting. The survey, carried out in collaboration with Cologne-based market research institute SKOPOS, included interviews with 1,200 car users in Germany, France, Italy and the United Kingdom, who were asked about their preferences with regard to mobility and what they expected of cars, and especially of car interiors, in the future.Over the years, many different concepts of the interior of the future have been presented. Yet what do car users truly look for? Unsurprisingly the survey revealed that the way car users interact with their vehicle is evolving rapidly.Megatrends, such as connectivity, autonomy, sharing and electric mobility, are strongly impacting user needs, directing the focus towards the interior of the car. While traditional metrics such as fuel consumption, running costs or driving performance still represent key decision factors, interior features, such as acoustic systems, including noise cancellation systems, and overall advanced driver assistance systems (ADAS) are becoming increasingly important.Good acoustic systems are welcome, as for users of autonomous vehicles, the perception of sound will change dramatically, as will the overall driving experience. While noise can be to some extent controlled through material selection, from synthetic rubber for the tires to sound-absorbing plastics and textiles, every second respondent reported seeing personal benefit in noise-canceling acoustic systems and every third respondent that they would be willing to pay extra for them.The same held for acoustic systems optimizing the input of voice commands, with 49.5 percent respondents viewing these as a benefit and 31.9 percent willing to pay for them. As a feature for acoustic systems for in-car entertainment, 39.5 percent saw a benefit in systems that direct music and audio towards the passengers in a private sound zone. With 26.5 percent However, only every fourth car user — 26.5 percent — would be willing to pay extra for these to be installed — a sign that this technology is just finding its way into the automotive industry.As traffic and the need for connectivity increases, advanced driver assistance systems are showing a tremendous market growth — a development driven by both legislation and demand. With Regulation (EU) 2019/2144 announced by the European Union in November 2019, all new cars introduced to the EU market must be equipped with enhanced safety systems, including a wide range of advanced driving assistance systems, such as lane departure warning or braking assistance systems, from mid-2022. Acceptance of the use of ADAS is growing, a trend found across all 4 countries. According to the survey, 54.3 percent of all car users would take the availability of an assistance system into consideration when purchasing their next car, versus only 39.9 percent, who looked at this feature when buying their current car.“The rising number of ADAS on the street is an essential milestone on the path towards fully autonomous vehicles. Two decades ago, the key problem had been to familiarize drivers with features like adaptive cruise control or forward alert. Today, the end user is aware of the benefits of such systems. The challenge now is to offer these systems for an affordable price,” said Heiko Rother, general manager Business Development Automotive at Asahi Kasei Europe.“Radar MMIC -monolithic microwave integrated circuit- chips from Asahi Kasei Microdevices leveraging CMOS complementary metal oxide semiconductor technology support this process of making active safety feature available down to smaller car segments,” he added.source : https://www.plasticsnews.com/news/buying-car-increasingly-becoming-more-about-interior-says-survey

Editor 2020-07-05

Mexico's auto suppliers scramble to meet US need

Mexico's auto suppliers scramble to meet US needMexico's auto industry is scrambling to meet U.S. demand for supplier parts and high-demand vehicles after falling weeks behind in battling the coronavirus pandemic and restarting its manufacturing base. But to catch up, it must navigate both delicate economic conditions and steadily rising COVID-19 deaths.The challenges there, in America's largest base of imported U.S. vehicle content, are myriad.Mexican parts suppliers face liquidity issues that could get worse as orders stack up. Local auto sales have collapsed. Health experts don't agree on Mexico's new phase of reopening the economy. And with coronavirus infections spiking, Mexico's restart may be vulnerable to another shock that could ripple through U.S. and Canadian auto factories.The complexity of the moment can be glimpsed in the Mexican state of Puebla, which is home to a sprawling Volkswagen assembly complex, a 4-year-old Audi plant and hundreds of suppliers. While Mexico's federal government approved a May 18 date for the country to start a gradual return to auto manufacturing, Puebla Gov. Miguel Barbosa is resisting at the state level because of virus cases there. Puebla now is targeting mid-June for a restart.The good news was that Mexican parts suppliers—who shipped about $70 billion worth of components to the U.S. last year—have mostly restarted production. And auto makers such as General Motors, which makes popular pickups and crossovers at Mexican plants, are gradually increasing their output to replenish U.S. inventories. Likewise, Ford, Fiat Chrysler, Toyota, BMW, Nissan and others said they had returned to auto production there, or will this week."It's a slow and delicate return," cautioned Eduardo Solis, an industry consultant and board member of Mexican industrial chamber Concamin. "Producers are going to start at 5 percent to 10 percent and increase production day by day. I think they will be recovering production over the course of June, but we won't be back to pre-coronavirus levels."Solis, who was president of Mexico's auto industry association for 12 years, had argued publicly for the Mexican government to allow the auto sector to return at the same time as its trade partners in the U.S. and Canada—in early May rather than at the end of the month. Restarting takes time, he pointed out. Even U.S. suppliers that had a head start are still ramping up."This is not the fault of Mexico or any other country," Solis told Automotive News. "But with Mexico being the No. 1 parts supplier to the U.S., it's very important that suppliers return to production and the majority of them have."Mexican President Andres Manuel Lopez Obrador, who has been skeptical of stay-at-home measures, presented a government report on the broader transportation sector's return to work. The report said that 75 percent of the more than 5,000 companies in the sector had submitted worker safety plans to health officials and received permission to restart operations. Mexico is home to about 1,500 auto supplier factories.But as Mexico moves to a new level of economic activity starting June 1, government health authorities acknowledged last week that coronavirus cases continue to rise nationally despite a stay-at-home program that began March 23 and was to end May 31. Reuters reported that Mexico had more than 81,000 coronavirus cases and 9,000 deaths as of last week."No one should be confused that the overall epidemic in the country has reached its peak and is in decline," said Hugo Lopez-Gatell, assistant secretary at the Health Ministry and spokesman for the coronavirus program. "That is not the case."Indeed, a new coronavirus map released by the government shows every Mexican state except one marked in red to signify "maximum risk."But Mexico is still under tremendous pressure to reactivate its economy—especially when it comes to manufacturing for the deeply integrated North American market. Analysts say it is difficult to overstate how important the Mexican auto sector is to its U.S. and Canadian counterparts."A huge part of the industry is dependent on Mexico," said Bernard Swiecki, assistant director of research at the Center for Automotive Research in Ann Arbor, Mich. "It's our biggest international source of parts and components, so I don't think there's an auto maker that's immune to these concerns."Mercedes-Benz U.S. International in Alabama, which in late April became one of the first auto makers to resume assembly in the U.S., had to close down again after it ran out of components from Mexico. GM said that moving to a second shift at its U.S. truck plants was dependent on whether its Mexican suppliers can restart their operations.Manuel Montoya, director of the Nuevo Leon Automotive Cluster in northern Mexico, said assembly plants and suppliers there were mostly back on line last week, but not at 100 percent strength.Kia has a large assembly plant in the U.S. border state of Nuevo Leon, and Fiat Chrysler and GM have plants in the neighboring state of Coahuila. And some 450 Tier 1 and Tier 2 suppliers in that region have been under pressure for weeks, as U.S. customer plants returned to making vehicles in late April and early May while the Mexican auto industry remained under lockdown."There was very strong pressure by the automakers to reactivate all of their suppliers," Montoya said.Concern remainsAsked about fears of a resurgence in coronavirus cases, Montoya said, "It's a fear we all have. We know that we have to return to work. The economy can't remain at a standstill."He said safety measures are being taken very seriously, and protocols are in place to suspend production and reclean facilities should workers test positive for the virus.But Guillermo Rosales, co-director of the Mexican Automobile Distributors Association, believes the government plan for the auto industry during the coronavirus pandemic has been too restrictive. In-store sales were banned nationwide beginning in March, contributing to a national sales drop of 65 percent in March and April. The industry overall lost about 100,000 sales.In general, he said, auto industry activities should have been declared essential because they generate significant economic activity and tax revenue while being in a unique position to protect workers and customers."The auto industry," he said, "is one of the few activities that fulfills these two variables—wealth generation and very low risk."source: https://www.plasticsnews.com/news/mexicos-auto-suppliers-scramble-meet-us-need

Editor 2020-06-06

CPRJ survey finds Chinese plastics industry optimistic about post-pandemic market recovery

CPRJ survey finds Chinese plastics industry optimistic about post-pandemic market recoveryThe coronavirus pandemic is hitting the global economy. To what extent it is affecting the Chinese plastics industry and its future outlook? A survey conducted by AdsaleCPRJ.com to find out the situations has received valid feedback from 355 respondents between February 21 and March 5. It was found that most of the respondents expected this year's turnover to be flat or down from last year for their companies. However, over 70% of them said they are optimistic about the future. Meanwhile, more than 30% said they will strengthen their online marketing tools as a way to improve their business.More than 70% of the respondents are optimistic that the market will return to normal in the next six to 12 months. Industry and firm size of the respondents Most of the respondents from the upstream sector come from chemicals and raw materials industries (23.38%), followed by machinery and equipment industries (11.27%). The respondents from the downstream sector come from automotive, packaging, and consumer electronics/home appliance industries (about 15% each), medical industry (7.61%), as well as construction/infrastructure and testing services industries. In terms of firm size, the number of employees of the respondents' companies ranges from fewer than 50 to more than 500. Among them, 26.20% come from companies with more than 500 employees, and 24.79% come from companies with 101-300 employees. The respondents come from companies with fewer than 50 employees and 301-500 employees accounted for about 19.44% and 10% respectively. In addition, 20.85% of the respondents said the products of their companies are all for domestic sales in China, 38.31% said their products are mainly for domestic sales, 21.69% said their products are equally for domestic and overseas sales while 10.7% said their products are mainly for overseas markets. For those who said their products are all for export accounted for only 8.45%. About 40% of the respondents’ companies have resumed production Regarding the current production and operation status, as of the end of the survey, 39.35% of the respondents said their companies has resumed normal production, 23.94% said part of the production has been restarted while 13.18% said their companies have increased production output. Besides, 7.10% said their companies have halted production. About 20% of the respondents considered “fixed expenditure” as the main problem they are facing after operation was postponed, while some said “rising raw material prices” and “rising logistics costs” were their main difficulties (about 15% each). 16.63% said the main problem was a lack of workers and 13.4% said a decrease in market demand has affected them most.. Automotive industry most negatively affected At a recent press conference of the State Council Information Office of China, the authorities said the coronavirus outbreak has an impact on China's economic operation in the short term. They also remarked that labor-intensive industries, as well as industries that heavily rely on a supply chain, such as electronics and automotive industries, will be particularly affected in the short term. In the CPRJ survey, respondents were asked to choose an industry which they thought would be most affected by the pandemic. 23.42% of respondents believed that the automotive industry would be hit hardest, while 17.82% and 16.51% thought the construction industry and the FMCG packaging industry respectively would suffer most. Other industries are home appliances (13.91%), consumer electronics (12.48%) and infrastructure (9.36%)23.42% of respondents believed that the automotive industry would be hit hardest.The four major impacts of the pandemic on the overseas markets include: declined import by China, resulting in a market slump (22.69%); a disrupted global supply chain (21.45%); price fluctuation of some raw materials (21.09%) and some products missing the sales season (20.96%). Medical and healthcare sectors expected to grow When asked to predict the post-pandemic market situation, 21.13% of respondents anticipated growth in the home medical devices sector. Home healthcare appliances, medical and healthcare products, as well as consumer electronics sectors were also considered to have good growth potential. (Refers to the diagram below) Turnover expected to be flat or down this year In terms of companies’ turnover, only about 10% of the respondents expected an increase for this year. More than 70% forecast a decrease. Among them, most predicted a decrease of 10%-20%. Meanwhile, 14.93% of the respondents anticipated that the turnover will be flat.In terms of companies’ turnover, only about 10% of the respondents expected an increase for this year.Strengthening online marketing tools a popular solution In order to counteract the negative effects, 34.18% of respondents said they will strengthen their online marketing tools, compared with 21.4% who said they will look for financing channels. Other respondents said they will adopt cross-industry business model (14.12%), reduce product prices (12.63%) and resort to layoffs or pay cuts (11.29%). Besides, about 27% of respondents hope to receive tax relief or subsidies from the govenrment, while about 20% look for more financing services. About 14% wish to expand their businesses through online webinars/online classrooms/live broadcasts. Only about 5% of the respondents chose to develop their businesses through offline business meetings. Over 70% of respondents expressed optimism Most importantly, more than 70% of the respondents are optimistic that the market will return to normal in the next six to 12 months, compared with 17.46% who are less optimistic. At a glance: AdsaleCPRJ.com conducted a survey to find out the impacts of the coronavirus outbreak on the Chinese plastics industry, and received valid feedback from 355 respondents from February 21 to March 5. 39.35% of respondents said their companies have resumed normal production while 21.46% said they are facing financial difficulties. About 90% of respondents expected their companies’ turnover to be flat or down this year. However, over 70% of respondents are optimistic that the market will return to normal in the next six to 12 months. Most of respondents (21.13%) expected the household medical devices sector to grow after the pandemic is over. 34.18% of respondents said they will strengthen online marketing tools for their businesses.Source：Adsale Plastics Network link : https://www.adsalecprj.com/en/news_show-68222.html

Editor 2020-04-01