Frost & Sullivan Reports Boom in Indian Passenger Vehicles Segment Triggering Growth in Indian Polypropylene Compounds Market

Mumbai, India, Nov 18, 2010 (Washington Bangla Radio / NewswireToday) Robust growth in the passenger vehicles sector has enabled the polypropylene compounds market in the Indian passenger vehicles segment to grow in leaps and bounds.

This, coupled with the provisional anti-dumping duties levied on polypropylene imports, has led to emergence of new participants in the polypropylene compounds market in India. The Indian passenger vehicles market has grown from 0.2 million units in 2001 to 2 million units in 2009, at an average annual growth rate of 13.6 percent.

New analysis from Frost & Sullivan (chemicals.frost.com), Strategic Analysis of the Polypropylene Compounds Market in the Indian Passenger Vehicles Segment, finds that the market achieved volumes of 70,000 metric tons in 2009 and estimates this to reach 185,000 metric tons by 2016.

If you are interested in more information on this study, please send an email to Anish Charles/ Nimisha Iyer, Corporate Communications, at anishc[.]frost.com/ niyer[,]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.

"The market is expected to continue on its high growth trajectory, with the rollout of new low cost passenger vehicles from Tata and Bajaj," says Frost & Sullivan Research Analyst Govind Ramakrishnan. "India is slowly emerging as a hub for the export of small passenger cars.”

Tata has been exporting small passenger cars since 2005. HYUNDAI MOTOR COMPANY and Nissan have also joined the bandwagon, exporting small passenger cars manufactured in India to a host of other countries. Compared to global standards the amount of polypropylene used in Indian passenger vehicles is low. However, with the entry of global automotive manufacturers like Volkswagen in India, this trend is set to change. India is soon likely to attain the global standard of roughly 55 kilograms of polypropylene per passenger vehicle from the current 35 kilograms.

Though the prospects for the market look upbeat, there are some challenges restraining its progression. The escalating price of crude oil poses a major impediment. The price of polypropylene is directly dependant on the price of oil, which is one of its key raw materials. If polypropylene loses its cost advantage, then automotive OEMs are likely to opt for the most economical material available for manufacturing automotive components.

The price of crude oil has remained volatile since the economic downturn in mid 2008. For instance, in 2010, the price per barrel of crude increased from $74 in January to $85 in April and decreased to $76 in July. It started to climb again in August.

"Global companies such as Volkswagen, GM, and BMW use higher grades of polypropylene, to abide by the stringent safety and environmental policies of their companies," says Ramakrishnan. "This has contributed to the uptrend in material costs."

Although these regulations have not been enforced in India, they may come into effect in the future and Indian participants may have to utilize higher grades of polypropylene. This will further push the cost per unit for polypropylene used in passenger vehicles in India in the future.

New advances in polypropylene technology are revving up its attraction quotient. A Japanese car maker is in the process of developing a second-generation bio-plastic based on polypropylene, using non-edible cellulose-rich plants. Others are experimenting with self-reinforced polymers, which eliminate the need for a filler. These new materials could prove to be a boon for the polypropylene market.

Polypropylene resin manufacturers in India must step up collaborative efforts with automotive OEMs to provide the requisite polypropylene grades, as a variety of grades are imported into India, despite the heavy anti-dumping duties levied on them.

Strategic Analysis of the Polypropylene Compounds Market in the Indian Passenger Vehicles Segment is part of the Chemicals & Materials Growth Partnership Services program, which also includes research in the following markets: Impact of Automotive Trends on the Chemical Markets, Strategic Analysis of the Global High Performance Fillers, and Global Automotive Under Hood Plastics Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan (frost.com), the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

- NewswireToday