The rapid growth shown by the automotive adhesive & sealant market is being driven by fuel economy regulations, vehicles safety standards and regulations, and increasing focus on the usage of lightweight materials.
Lightweight materials being used by the automotive industry include plastic, composites and aluminium, which are replacing the use of steel by automotive manufacturers. However, the focus on increasing fuel efficiency is not affecting the prime motive of automotive manufacturers - ie, safety.
Research and development is going on to develop new technologies and tools, which can be used to design vehicles having better fuel efficiency and safety. Unlike steel or cast iron components, lightweight materials can't be welded or bolted to keep them together. In order to maintain the integrity of lightweight vehicles, the usage of adhesive and sealants is getting increased by automotive manufacturers across the globe. F150 truck by FORD is an example of lightweight vehicle. The increasing production of lightweight vehicles is anticipated to boost the growth of the global automotive adhesive and sealant market during the forecast period.
Electric vehicles emerge as an upcoming demand segment for adhesive and sealants. The global electric vehicles market has exhibited tremendous growth, especially post 2011. Various industry level initiatives are aiming to ensure the penetration of 20 million electric vehicles on road by 2020 - ie, from a share of less than 0.02% in 2012 to a share of 2% by 2020. Various investments are being directed in R&D of electric vehicles to make them competitive and acceptable in the market. Though the investments are reaping benefits to a large extent, but still there lies a lot of scope in the improvement of structural integrity of vehicles.
The use of automotive adhesives and sealants in electric vehicles is low due to less engine related assemblies, but as the focus on increasing structural integrity picks up the pace along with reducing the overall weight, the demand for adhesives in such vehicles is expected to pick up. With high weight of batteries in such vehicles, it becomes even more important for the OEMs to reduce the overall weight of the car by substituting traditional materials like steel with light weight substrates, such as aluminium, and carbon fibre. Such substrates cannot be welded together, and hence, rely on automotive adhesives and sealants for proper bond. Therefore, the increased focus on enhancing design and integrity, along with the highly growing demand of electric vehicles could create a lot of growth opportunities for automotive adhesive manufacturers.
In 2014, the global hot melts segment held the largest share in the type category of the global market; and it is expected to grow with a CAGR of 10.5% during the forecast period in terms of value. Based on application, the BIW segment held the largest market of 398.0 Kilo Tons (by volume) in 2014, and it is expected to reach 584.9 Kilo Tons by 2020, growing with a CAGR of 6.6% during the period 2015-2020.
The global automotive adhesive & sealants market was valued at $4,879.3 million in 2014, and it is expected to grow with a CAGR of 8.8% during 2015-2020. Asia-Pacific is the largest market of automotive adhesives and sealants in the world, with 530.0 KT of adhesives and sealants consumed in 2014. The consumption of automotive adhesives and sealants volume per vehicle is estimated to be 12.0 kg, which is lowest globally. Although it consumes the lowest volume of adhesives and sealants per vehicle, it accounts for more than 50% of the total vehicles manufactured globally, thus leading the overall adhesive & sealant market.
Europe is the second largest market in the global automotive adhesive & sealant market. Europe is the leading region driving innovation in the usage of substrates, other than iron and steel in vehicles. All major European OEMs in the region, such as BMW and Volkswagen, are incorporating more varied forms of substrates into their vehicles, hence requiring more adhesives and sealants volume. For instance, i3 and i5, recent offerings from BMW, utilises carbon fibre for its body, so requiring adhesives for bonding needs.
The key companies operating in the global automotive adhesive & sealants market include: Dow Chemical, Henkel, KGaA, 3M, Kommerling, PPG Industries, Permatex, Krayden and Sika AG.
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