ROBERT ELLER ASSOCIATES, INC.

Transcription

1 MARKET ECONOMIC TECHNICAL ANALYSIS Management DECISIONS ROBERT ELLER ASSOCIATES, INC. CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES ROLE OF NONWOVENS IN AUTOMOTIVE INTERIOR SURFACE AND CONSTRUCTION APPLICATIONS PRESENTED BY : ROBERT ELLER 4000 Embassy Parkw ay - Suite Akron, Ohio USA Phone: / Fax: bobeller@prodigy.net - Home Page: w w w.robertellerassoc.com PREPARED FOR: AUTO INTERIORS 2003 DETROIT, MI MAY 15, 2003 papers/ai03

2 HIGHLIGHTS THE AUTO INTERIORS MARKET DRIVING FORCES FOR SUBSTITUTION MATERIALS/PROCESS TECHNOLOGY SHIFTS IMPLICATIONS INTERMATERIALS COMPETITION EUROPE/NAFTA DIFFERENCES HEADLINER FLOOR/ACOUSTICS MODULES DOOR TRIM VALUE-ADDED OPPORTUNITIES FOR NONWOVENS

3 AUTOMOTIVE TEXTILES... AN ECUMENICAL PERSPECTIVE COATED FABRICS LEATHER REGENERATED FIBER BATTING (SHODDY) ARTIFICIAL LEATHER AUTO TEXTILES MARKET NONWOVENS FACINGS WOVEN/KNIT TEXTILES NEW LIGHTWEIGHT ACOUSTIC FIBERS FOAMS (COMPETE/COMPLEMENT) SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 ecu persp 03.vsd

4 MARKET ECONOMIC TECHNICAL ANALYSIS Management DECISIONS Automotive Interior Soft Trim: Skins, Foams, Coated Fabrics, Textiles, and Acoustic Barriers COATED FABRICS SKINS FOAMS SUBSTRATES MODULE FABRICATION AND INTEGRATION TECHNOLOGIES TEXTILES (WOVEN, NON-WOVEN) CARPET ACOUSTIC BARRIERS REQUIREMENTS OCCUPANT SAFETY ACOUSTIC REQUIREMENTS WEIGHT ELV LEGISLATION ESTHETICS TELEMATICS INTEGRATION SENSORY SMELL INTERIOR MODULES - COCKPIT - HEADLINER - DOOR - FLOOR/ACOUSTICS - TRUNK LINER - SEATING - PILLAR COVERS CONSTRAINTS MANUFACTURING ECONOMICS QUALITY CRAFTSMANSHIP PRODUCT POSITIONING SUPPLY CHAIN MANAGEMENT Prospectus for a Global Multiclient Industry Analysis Robert Eller Associates, Inc. slide-covautointsofttrim vsd

5 MULTICLIENT PROSPECTUS: NONWOVENS IN AUTOMOTIVE TRIM TECHNOLOGY,ECONOMICS FOR ADVANCED NONWOVENS ANALYSIS/QUANTIFICATION OF CURRENT/FUTURE POTENTIAL MODULE FABRICATION TECHNOLOGY IMPLICATIONS EMPHASIS ON NEW NONWOVENS TECHNOLOGY ALL INTERIOR MODULES INDUSTRY STRUCTURE IMPLICATIONS EUROPE/NAFTA TO BE OFFERED JOINTLY BY ROBERT ELLER ASSOCIATES, INC. AND JOHN R. STARR,INC. PROSPECTUS AVAILABLE

6 SOME OPERATING HYPOTHESES NEW NWs TECHNOLOGY NEW TRIM MARKETS NW VALUE-ADD OPP YS : UNDEREXPLOITED BOTH MATERIAL/PROCESS COST SAVING POSSIBILITIES MODIFICATION POSSIBLE IN FACE FABRIC AND LAYER CONSTRUCTIONS ACOUSTICS PROPERTIES CAN BE TAILORED CURRENT PENETRATION IS PRIMARILY IN HEADLINER, FLOOR SYSTEMS, PACKAGE TRAYS ONLY 17% OF POTENTIAL IS REALIZED TO DATE NO: SEATING(LIMITED), DOOR TRIM, PILLAR TRIM, AIRBAG NWs WILL PARTICIPATE IN NON-STRUCTURAL COMPOSITES NWs AND FOAMS COMPETE AND COMPLEMENT

7 NEW TECHNOLOGY NONWOVENS SUPERIOR ATTRIBUTES IMPROVED PERFORMANCE: SOFTNESS,TACTILE, CONFORMABILITY/DRAPE DURABILITY BREATHABILITY/CONTROLLED POROSITY ACOUSTIC/THERMAL INSULATION, FILTRATION UV RESISTANCE PRINTING,EMBOSSING, DYEABILITY NON-FRAYING(VS. TEXTILES) MICRODENIER FILTRATION

8 SOME NW TARGET MARKETS(NAFTA) MODULE SEATING FLOOR /ACOUSTICS TRUNK LINER HEADLINER DOOR TRIM DASH MAT AREA (MM SM) NOTE/PENETRATION STARTING EUROPE(SIDES) LT WT FIBER OPP Y 13% SHARE 15% FOR FACE FABRIC START MEDALLIONS FOAM LAMINATION OPP Y COMPETE WITH PU FOAMS SOURCE: ROBERT ELLER ASSOCIATES, INC., SOFT TRIM MUTLICLIENT STUDY

9 AUTOMOTIVE FABRICS MARKET VALUE (NAFTA/EUROPE), $ (BILLION) INT. TRIM ACOUST. BKNG / REINF. NOTE: INCLUDES TEXTILE, NONWOVEN, WOVEN, COATED FAB., REGEN. FIBER BATTING SOURCE: ROBERT ELLER ASSOCIATES, INC., JOHN R. STARR INC.

10 AUTOMOTIVE FABRICS MARKET SIZE (NAFTA/EUROPE), DEMAND (Kt) INT. TRIM ACOUST. BKNG / REINF. NOTE: INCLUDES TEXTILE, NONWOVEN, WOVEN, COATED FAB., REGEN. FIBER BATTING SOURCE: ROBERT ELLER ASSOCIATES, INC., JOHN R. STARR INC.

11 OEM/SUPPLIER DYNAMICS OVERSUPPLY SLUGGISH VEHICLE DEMAND OEM PROFIT DECLINE AUTOMOTIVE SOLUTIONS - DECONTENT - GEOGRAPHIC SHIFT - ASSEMBLY EFFICIENCY - PLATFORM CONSOLIDATION COST REDUCTION TIER 1 PRICE PRESSURE SUPPLY CHAIN CONSOLIDATION CRAFTSMANSHIP W/COST SAVINGS PRESSURE TIER 2 SUPPLIERS OUTSOURCE NEW PROCESSES MATERIAL SUBSTITUTION VALUE CHAIN SHIFTS NEW TEXTILE TECH. SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 oem supp dyn 03.vsd

12 NONWOVEN PATH-TO-MARKET OPPORTUNITY FOR ADDING VALUE RESIN NONWOVEN PRODUCTION NONWOVEN PREFORM FOAM LAMINATION PU RESIN? SKIVED PU SHEET PO FOAM SHEET? NW/FOAM LAMINATE PU FOAM RESIN MODULE ASSEMBLY PREFORMED SUBSTRATE MODULE ASSEMBLY MODULE ASSEMBLY SUBSTRATE RESIN ASSEMBLED MODULE OEM NOTE: = VALUE ADD OPPORTUNITIES FOR NONWOVENS SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 nw op val ad 03.vsd

13 AUTOMOTIVE TRIM TARGETS FOR NONWOVENS HEADLINER AIRBAGS/ AIRBAG DOOR PILLAR TRIM PACKAGE TRAY SEAT BACK DASH MAT DOOR: ACOUSTICS/WATER SHIELD, DOOR TRIM SURFACE MEDALLION FLOOR SYSTEMS:(ACOUSTICS, SURFACE LOAD FLOOR) SEATING TRUNK FLOOR SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 foam tgts 02.vsd

14 AUTOM OTIVE FOAM FAM ILIES AND EXAM PLE APPLICATIONS AUTOMOTIVE FOAM S POURED (BACKFOAM) SHEET BLOCK PROFILE PU PU PVC PO SHEET FOAM OTHER (RUBBER) STEAM CHEST MOLDED STRAND FOAM PU EPDM TPV SHEET IN T E G R A L SKIN (U E V ) XLPO NON- XLPO EPP EPPO IN S T. GASKETS PANEL, SEAT, ACOUSTIC BARRIERS TEXTILE LAM IN- ATES SKINS GASKETS BUMPER SYSTEMS, LOAD FLOOR IN T E R IO R ENERGY ABSORBERS BODY SEALS SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 fo a m fa m ilie s 0 2.v s d

15 RIGID SEMI-STRUCTURAL FOAM SANDWICH STRUCTURE BARE: RIGID FIBER MAT SKIN BEAD FOAM MAY BE COLLAPSED TO FORM INTEGRAL HINGE CARPET/NON-W OVEN/W OVEN TEXTILE LAMINATE: CARPET OR W OVEN OR NON-W OVEN BACKING RIGID FIBER MAT SKIN BEAD FOAM RIGID SKIN OR NON-W OVEN BACKING SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 rs foam sandwich 02.vsd

16 DRIVING FORCES FOR NONWOVEN GROWTH DRIVING FORCE ACTUAL OR POTENTIAL CHANGE MATERIALS/PROCESS IMPLICATIONS AND EXAMPLES PROCESS COST REDUCTION ACOUSTIC PERFORMANCE INTERIOR EMISSIONS OCCUPANT SAFETY END OF LIFE FLOOR SPACE MANAGEMENT UTILITY FUNCTION/LOOK MODULARIZATION -PARTS CONSOLIDATION -SANDWICH CONSOL. -REDUCED NOISE -EARLYACOUST INVOLV. -TAILORED ACOUSTICS -NO-SMELL INTERIOR -REDUCED V.O.C./FOG HEAD/SIDE IMPACT REGULATIONS -ELV LEGISLATION SEMI-STRUCTURAL SANDWICHES -NON-CARPET FLOOR -INVISIBLE AIRBAG DOORS ON-BOARD ACOUSTIC BARRIERS -"POPULATED" PANELS -ON-BOARD ACOUSTICS -ELIM. HOT POUR PU FOAM SEATING -ENHANCED MICRODENIER POSITION -REDUCED COATINGS -MATERIAL SHIFT -BINDERS? -ENERGY ABSORBING FOAMS GROWTH -AIRBAG SOLUTIONS -MONOMATERIAL SANDWICHES -RECYCLATE CONTENT, NFCs -AZDEL SUPERLITE -BEAD FOAMS -NONWOVENS -IMPROVED ESTHETICS - CRAFTMANSHIP

17 EUROPE/NAFTA DIFFERENCES PARAMETER NON WOVEN STATUS HEADLINER FACE FABRIC FLOOR/SURFACE ACOUSTIC PERFORMANCE PRESSURES COST SAVE PRESSURES WEIGHT SAVE PREMUIM POLYOLEFIN PRESSURES WT. SAVE VALUE HIGHLY PENETRATED - EUROPE HIGHLY PENETRATED- EUROPE SAME SAME? HIGHER IN EUROPE HIGHER IN EUROPE FAVORS MONOMATERIALS HIGHER IN EUROPE

18 HEADLINER FACE FABRICS: NAFTA HAS LOWEST NW PENETRATION(15% 20% IN 2004,FORD,GM) TRICOT WILL DECLINE LOW VALUE MODULE PROFIT IS IN THE OVERHEAD SYSTEMS COST REDUCTION MAJOR DRIVER PP NONWOVEN OPPORTUNITY? HYDROENTANGLED NWs SHARE GAIN SUBSTRATES PP FOAMS, AZDEL SUPERLITE GLASS/PU LOSING MARKET SHARE EUROPEAN PENETRATION NW GROWTH ACOUSTICS ARE CRITICAL ROLE FOR MICRODENIER NWs

19 MARKET SHARE,% NON WOVEN HEADLINER SHARES EUROPE NAFTA KOREA JAPAN SOURCE: FREUDENBERG VITECH OTHER NONWOVEN TRICOT

20 FLOOR/ACOUSTICS 3-5 LAYERS INCREASED FUNCTION(E.G. LOAD FLOORS) SPUNBOND PET HAS 43% SHARE IN NAFTA BACKING IMPROVED ACOUSTICS REQUIRED HEAVY LAYER ELIMINATION NEW CONSTRUCTIONS HIGH NW PENETRATION IN EUROPE LT. WT. FIBER WILL CHANGE CONSTRUCTION FIBER/FOAM COMPETITION IN UNDERLAY ABILITY TO VARY IN XY AND Z-PLANES IS NONWOVEN ADVANTAGE MONOMATERIALS CONSTRUCTION OPPORTUNITY

21 COMPARISON OF REGIONAL TRENDS IN AUTOMOTIVE CARPET (2002) 120 NEEDLE TUFTED PERCENT EUROPE JAPAN NAFTA SOURCE: ROBERT ELLER ASSOCIATES, INC.; SOFT TRIM MULTICLIENT STUDY

22 INCUMBENTS/CHALLENGERS IN AUTO ACOUSTICS INCUMBENT BARRIER TYPE CHALLENGER EXAMPLE LOCATION DAMP INSUL ATE GLASS FIBER X -PLASTICS/CELL. -NONWOVENS HOOD, OH SYSTEM HEAVY LAYER X -METALLOCENES -ELIMINATE LT. WT. FIBERS DASH, FIREWALL, FLOOR, FENDER LINERS MASTIC X -BETTER MASTIC FLOOR -ELIMINATE? PU FOAM (SKIVED) X POLYOLEFIN SHEET FOAMS FLOOR, DASH, OH SYSTEM PU FOAM (POURED) X EPP BEAD FOAMS FLOOR PANELS REGEN. FIBERS X TAILORED FIBERS FLOOR, DOOR

23 ACOUSTIC BARRIER MATERIALS IN AUTOMOTIVE FLOORING MATERIALS CURRENT SHARE % NOTE EUR NAFTA REGENERATED CELLULOSE FIBERS (SHODDY) SHODDY USE WILL DECLINE PU FOAM TUNED ACOUSTICS ACCELERATE PENETRATION OTHER 5 5 AZDEL SUPERLITE PO FOAMS PET/PP FIBERS LT. WT FIBERS NATURAL FIBERS

24 DOOR TRIM VERY LOW PENETRATION RATE TARGETS ARE: -MEDALLIONS(PO FOAM LAMINATION OPP Y) -ACOUSTIC PADS/WATER SHIELDS -FACE FABRICS CRAFTSMANSHIP OPPORTUNITY 3D FORMING IS CHALLENGE IN MOLD FORMING OPPORTUNITY INTEGRATION WITH LOW PRESSURE MOLDING TEXTILE USUALLY MATCHES SEAT

25 NONWOVEN COMPETITIVE INTERFACES MODULE FLOOR: CARPET BACKING INCUMBENT TUFTED NYLON(NAFTA) NOTE HI NW PENET. (EUROPE) SPUNBOND PET HAS 43%(NAFTA) UNDERLAY HEADLINER FACE FABRIC DOOR MEDALLION SEATING SIDE PANELS SHODDY, PU FOAM TRICOT WOVENS, KNITS COATED FABRIC, PVC COATED FABRIC WOVENS, KNITS LT. WT FIBER/FOAM COMPETITION 15%(NAFTA) INCREASING NW STARTING (EUROPE) PO FOAM LAM. OPP Y PP IS MAJOR SUBSTRATE NW STARTING(EUROPE) TPO COATED FABRIC START(EUROPE)

26 VALUE-ADDED DECORATION WITH NONWOVENS TPE VENEER: COLORED TPE NONWOVEN SUBSTRATE IN-MOLD DECORATION (IMD): BACK-PRINTED LAMINATES IN-MOLD DECORATION (IMD): CO-EX FILM/SHEET CLEAR SURFACE FILM BACK PRINTED(PATTERN OR COLOR) NONWOVEN SUBSTRATE CLEAR SURFACE FILM CO-EX COLOR LAYER SUPPORT/SUBSTRATE LAYER SOURCE: ROBERT ELLER ASSOCIATES, INC., 2003 vadecoalt02.vsd

27 WHAT WILL DRIVE NONWOVEN GROWTH? CONTINUED SEVERE PRICE PRESSURE MATERIAL COST SAVE PROCESS COST SAVE PERFORMANCE IMPROVEMENT -UV RESISTANCE -VOC/FOG REDUCTION -OCCUPANT SAFETY -ACOUSTICS -FILTRATION MONOMATERIAL CONSTRUCTION PO SHEET FOAM/TEXTILE LAMINATION SURFACE ESTHETICS IMPROVEMENT VALUE ADD OPPORTUNITIES

28 VALUE ADDED OPPORTUNITIES FOR AUTOMOTIVE NONWOVENS IMPROVED SURFACE ESTHETICS AVOID PREFORMS IN-MOLD FABRICATION CRAFTSMANSHIP WITH COST SAVINGS DIRECT PU FOAM LAMINATION POLYOLEFIN FOAM LAMINATION IMPROVED/TAILORED ACOUSTICS IMPROVED PP NONWOVENS TARGET ALL-PP CONSTRUCTIONS X,Y AND Z-AXIS MODIFICATION

29 SUMMARY MATERIAL/PROCESS DRIVERS FAVOR NONWOVENS: -ACOUSTIC REQUIREMENTS, WT. SAVINGS -PROCESS COST REDUCTION -MATERIALS COST REDUCTION NONWOVENS AND FOAMS WILL COMPETE CONTINUED SEVERE PRICE PRESSURES LIKELY RECYCLING - NOT U.S. DRIVER, SIGNIFICANT EUROPE DRIVER EUROPE- EARLY TECHNOLOGY LEADER EURO/NAFTA USE PATTERN WILL CONVERGE SYSTEMS/PROCESS TECHNOLOGIES ADD VALUE HEADLINER, FLOOR-MAJOR EARLY TARGETS SEAT, DOOR TRIM, PACKAGE TRAY,PILLAR TRIM-NEXT TARGETS BARE ROLL GOODS VS SYSTEM SUPPLIER ROLE? POTENTIAL UNDER-EXPLOITED

30 ABOUT ROBERT ELLER ASSOCIATES, INC. TECHNICAL, MARKET AND ECONOMIC ANALYSIS IN SUPPORT OF MANAGEMENT DECISION AUTOMOTIVE SPECIALTY OFFICES IN US AND EUROPE RECENTLY COMPLETED SOFT TRIM MULTICLIENT STUDY

31 ABOUT JOHN R. STARR, INC. MANAGEMENT AND TECHNICAL CONSULTING FIRM SPECIALIZING IN NONWOVEN PRODUCTS FIELD, WORLWIDE FOR 30 YEARS. AUTOMOTIVE NONWOVEN AN IMPORTANT PART OF THE PRACTICE. PARTICULAR FOCUS ON LEADING EDGE NONWOVEN TECHNOLOGIES WITH POTENTIAL TO DISPLACE OTHER NONWOVENS, WOVENS, KNITS AND OTHER MATERIALS