AUTOMOTIVE INDUSTRY TURMOIL - HOW CHEMICAL PLAYERS ARE DEALING WITH THE DISRUPTION

 “The automobile industry's change will have an impact on chemical firms. Those who want to thrive in the new normal must confront the changes head-on and address three major themes.”

For chemical firms, the future of mobility looms enormous. Historically, the automotive industry has been a large end market for chemicals, accounting for more than 10% of total sales and even greater percentages for individual substances. The automotive market, on the other hand, has seen a significant increase in uncertainty during the last decade.

Even before the COVID-19 problem, many chemical businesses were feeling the strain of diminishing auto sales and profit margins in the automobile industry. Several reasons have contributed to these figures, including shifting import tariffs, increased and regulatory expenditures, and the slowing of the North American and Chinese car markets. Industry profit margins are likely to shrink dramatically in 2020 and beyond as a result of COVID-19. To make matters worse, OEMs are anticipated to encounter increasing disruptions in the future years, forcing chemical companies to adapt their business models to changing markets.

Read More :- https://www.pukkapartners.com/insight/automotive-industry-turmoil-how-chemical-players-are-dealing-with-the-disruption

Major Market Highlights:

  • BorgWarner Inc. and Delphi Technologies have announced the signing of a formal transaction agreement under which BorgWarner would acquire Delphi Technologies in an all-stock deal valued at approximately USD 3.3 billion. BorgWarner's power electronics products, capabilities, and scale will be strengthened as a result of the acquisition.
  • Denso formed Denso Sales South Africa (Pty) Limited to sell aftermarket products and services in Southern Africa. Denso's product selection will be expanded in South Africa, mostly for automobiles produced by Japanese-affiliated automakers.
  • Continental's new 48V high-power system for HEVs consists of an electric motor with integrated power electronics and a battery that cuts fuel consumption and CO2 emissions by roughly 20% compared to equivalent vehicles with combustion engines. The new 48V technology is also significantly less expensive than previous high-voltage systems.

Conclusion: Companies need to take bolder decisions

Companies must make daring judgments concerning non-core aspects of the business while staying true to the traditional automotive business model. While these components may not have received much attention recently due to the industry's focus on the rapid pace of technological and market developments, now is the time to pay attention to them and maximize the value they provide.


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