Acceptable in the Eighties? A False Start for the Electric Vehicle

3 – 5 DECEMBER 2024

MESSE STUTTGART (HALL 1), GERMANY

MESSE STUTTGART (HALL 1), GERMANY

3 – 5 DECEMBER 2024

BLOG POST

spacer

What does the remainder of 2023 have in store for the polyurethane industry? 

The 14-15 June saw the annual EUROPUR and EURO-MOULDERS conference in Budapest, Hungary. Over 500 delegates from across the polyurethane (PU) supply chain came together to discuss the latest industry trends and challenges. 

It was fantastic to see so many new companies joining the industry organisation and to get a snapshot of the hot topics gripping the industry at the end of Q2. 


Industry forecast 

With contributions from Belvedere & Partner, CMA, IAL Consultants, CSIL, and LMC Automotive, the opening panel shed light on the current statistics and a forecast on how 2023 may look for the PU market. 

The headline for Europe in 2023 has been the slow demand for products and services. The increased cost of living is having a knock-on effect on consumer spending and orders for the PU market. 2021 saw a slight increase in production which petered out over the course of 2022 as the ramifications of the pandemic, Russia’s invasion of Ukraine, and supply chain disruptions set in. The panel encouraged companies to be as innovative as possible in their approach to fulfilling customer needs for 2023 and beyond. Where costs can be reduced, it presents an opportunity to keep operations lean until demand increases. 

Agility came up again and again as key advice for European companies looking to meet their customer requirements. Stringent regulations on material development and the shift towards electric vehicles within the EU have led to prolonged research and development processes. There is also a need to stay ahead of global competitors who could be able to produce cheaper materials due to lessened labour costs and have the ability to pivot production at a faster rate. China, for example, has seen its automotive production increase steadily in 2023 with New Energy Vehicles (NEVs) playing a key role in this growth. 


Opportunities for 2023 

According to the panel of experts, the bedding, furniture, and automotive markets showed signs of growth and were worthy of the most attention moving into the second half of 2023. Despite the overall drop in consumer spending, these larger ticket items have still been performing positively. 

A move towards the bed-in-a-box e-commerce model has been a huge disruptor for the bedding market. Beds have become easier to transport, easier to purchase, and have brought costs down due to generally cheaper materials. The panel reminded manufacturers to keep a close eye on these trends and to adjust quickly to meet this new demand. 

The automotive sector also saw growth in 2023 and whilst demand left room for improvement there is reason to be optimistic in the second half of the year. Electric vehicles (EVs) require high-spec insulation products as well as the perpetual objective to reduce weight. Whilst the research and development process is taking longer and is more costly, there is plenty of opportunity for new products and services. 


Environmentally conscious initiatives 

Key to every discussion at the event was environmental sustainability. According to a poll conducted with the audience, the vast majority saw sustainability as an integral part of the industry’s future growth strategy. 

A key challenge for the PU supply chain will be balancing sustainability with cost effectiveness especially during a period of reduced demand and with the increasingly high-performance requirements being set by OEMs. With the adoption of EVs and the need for thermal interface materials to enhance energy storage capabilities, sustainability must be counterbalanced with health and safety specifications. 

Simultaneously, the REACH initiative continues to evolve and restrict potentially hazardous chemicals from use in production. With imminent updates coming, the supply chain must ensure they are ahead of the curve. 


Conclusion

Moving into Q3, the PU industry faces a number of challenges to be overcome as well as having multiple opportunities to grasp. The short term sees reduced demand seen in 2022 with some promising areas of growth. 

Environmental imperatives must be balanced with performance and cost to ensure a bright future. Equally, businesses must remain agile to keep up with global competition and not be undercut. 

spacer
spacer