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ANALYSIS

MARKET ECONOMIC TECHNICAL
MARKET
ECONOMIC
TECHNICAL
Management DECISIONS
Management
DECISIONS

Robert Eller Associates LLC

CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES

AUTOMOTIVE THERMOPLASTIC COMPOSITES INDUSTRY STRUCTURE AND NEW TECHNOLOGIES RESPOND TO A GLOBAL RECESSION

PRESENTED BY:

Bob Eller Robert Eller Associates LLC Phone: 001-330-670-9566 E-mail: bobeller@robertellerassoc.com

PREPARED FOR:

SPE AUTOMOTIVE COMPOSITES CONFERENCE DETROIT, MI

SEPTEMBER 15, 2009

COMPOSITES CONFERENCE DETROIT, MI SEPTEMBER 15, 2009 Web site: www.robertellerassoc.com b/mydox/papers/composites

Web site: www.robertellerassoc.com

b/mydox/papers/composites 09b.ppt

Robert Eller Associates LLC

11

Robert Eller Associates LLC is a global plastics consulting

company providing analysis in support of technical, marketing, and economic strategic management decision-making

Based in Akron, Ohio, with offices in Paris, Shanghai, New Zealand

Asia: Active in China, India, Middle East

Key Focus Areas: Thermoplastic Composites, TPEs, ETPs, Polyolefins, Automotive, Compounding, and Foams

Multiclient studies:

China TPE Market

North America/Europe TPE Market

Single-client decision support analyses

Mergers and Acquisitions:

Complete management service for small acquisitions

Due diligence support

Technical advisors

service for small acquisitions – Due diligence support – Technical advisors Robert Eller Associates LLC 22

Robert Eller Associates LLC

22

PRESENTATION OUTLINE

Global Macroeconomic Situation/Automotive Impacts

Fuel Price/Vehicle Sales/Electric Battery/Thermoplastic Composite (TPC) Relationships

Automotive Supply Chain Responses

TPCs in the Automotive Market

Paths to the TPC Market

TPC Materials/Fabrication Technology Responses and Applications

Future Vision/Summary

TPC Materials/Fabrication Technology Responses and Applications • Future Vision/Summary Robert Eller Associates LLC 3

Robert Eller Associates LLC

3

THE FAMILIES OF AUTOMOTIVE THERMOPLASTIC COMPOSITES

AUTO TP COMPOSITES MINERAL CARBON GLASS REINFORCED FILLED BIOPOLYMERS AND NATURAL FIBER (a) PARTICLE FIBERS
AUTO TP COMPOSITES
MINERAL
CARBON
GLASS REINFORCED
FILLED
BIOPOLYMERS AND
NATURAL FIBER
(a)
PARTICLE
FIBERS
SHORT
LONG
MAT
MICRO(b)
NANO
MATRIX
FIBERS
GLASS
GLASS
(GMT)
TUBES
NANO
(SGF)
(LGF)
NATURAL
SYNTHETIC
MAIN TARGET FOR
THIS PRESENTATION
GMT
LW-GMT
(s-GMT)
(LW-RT)
Notes:
(a)
Talc, mica, basalt, etc.
(b)
Micro-talcs opening new applications (e.g., exterior panels, hatchback

on Ford Kuga)

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

r/mydox/papers/composites09.ppt

r / m y d o x / p a p e r s / c

Robert Eller Associates LLC

MACROECONOMIC SITUATION/ AUTOMOTIVE IMPACTS

MACROECONOMIC SITUATION/ AUTOMOTIVE IMPACTS Robert Eller Associates LLC 5

Robert Eller Associates LLC

5

GLOBAL ECONOMIC GROWTH: 2 YEAR TROUGH

?

9 ADV. ECON. 8 EMERG. ECON. 7 WORLD 6 5 4 3 2 1 0
9
ADV.
ECON.
8
EMERG. ECON.
7
WORLD
6
5
4
3
2
1
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ANN. % CHANGE (AT PPP)

SOURCE: IMF

SOURCE: IMF

b/mydox/rapra 2008/rapra 2008.xls

B/mydox/papers/jec09.ppt

SOURCE: IMF SOURCE: IMF b/mydox/rapra 2008/rapra 2008.xls B/mydox/papers/jec09.ppt Robert Eller Associates LLC 66

Robert Eller Associates LLC

66

MACROECONOMIC IMPACTS ON GLOBAL AUTO MARKETS

Global GDP slowdown – 2-year trough in West

Slowed (but continued high) growth in Asia (esp. China)

Auto overcapacity in West: Europe/U.S. have 53% of global auto capacity; 12% of global population

Petrodollar export concerns:

- substantial alternative energy investments (esp. battery/electric drive programs) - CAFE rise in U.S. (still lagging other major nations)

Wage deflation/high unemployment

Cash for Clunkers type programs stimulated US/Europe vehicle demand but will likely negatively impact 2010 sales

U.S. credit lockdown (despite stimulus) erosion of consumer purchasing power

OEM market share shift (especially in N. America)

China stimulus package (higher % of GDP), more effective than Western stimulus packages

China stimulus package (higher % of GDP), more effective than Western stimulus packages Robert Eller Associates

Robert Eller Associates LLC

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GLOBAL VEHICLE SALES PROJECTION

GLOBAL VEHICLE SALES OUTLOOK

90 42% IN 15 EMERGING MARKETS; 58% IN EUROPE/U.S./JAPAN Annual Growth 80 1990-2000 2.4% 2000-2005
90
42% IN 15 EMERGING MARKETS; 58% IN EUROPE/U.S./JAPAN
Annual Growth
80
1990-2000
2.4%
2000-2005
3.6%
70
2005-2015
1.3%
60
2015:
77?
2009:
50
9% DECLINE
FOLLOWED BY
RECOVERY IN
40
2000:
2010/2011
57
30
20
10
0
1975
1980
1985
1990
1995
2000
2005
2010
2015
VEHICLE SALES, MM UNITS

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

r/mydox/Auto Industry/Global Ind Volume TW 081209.xls

ROBERT ELLER ASSOCIATES LLC, 2009 r/mydox/Auto Industry/Global Ind Volume TW 081209.xls Robert Eller Associates LLC 8

Robert Eller Associates LLC

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1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

U.S. AND EUROPE LIGHT VEHICLE SALES

20.0 18.0 16.0 14.0 12.0 10.0 8.0 U.S. EUROPE 6.0 SALES, MM UNITS
20.0
18.0
16.0
14.0
12.0
10.0
8.0
U.S.
EUROPE
6.0
SALES, MM UNITS

SOURCE: DEUTSCHE BANK, 2009

B/mydox/auto industry/NA and EUR sales.xls

SALES, MM UNITS SOURCE: DEUTSCHE BANK, 2009 B/mydox/auto industry/NA and EUR sales.xls Robert Eller Associates LLC

Robert Eller Associates LLC

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GLOBAL REGION MARKET SHIFT IS UNDER WAY

LOCATION

2009 YTD SALES GROWTH/DECLINE

Europe*

-18%

N. America*

-26%

Japan*

-21%

Brazil

+ 5%

India

+ 5%

China

+42%

* = Mature markets represent 51% of global sales

Source: Robert Eller Associates LLC, 2009

= Mature markets represent 51% of global sales Source: Robert Eller Associates LLC, 2009 Robert Eller

Robert Eller Associates LLC

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W . EUROPEAN VEHICLE M ARKET SHARE SHIFT

60 2005 50 2009(EST ) 40 30 20 10 0 A/B C/D SALES SHARE, %
60
2005
50
2009(EST )
40
30
20
10
0
A/B
C/D
SALES SHARE, %

FLEET MARKET SEGMENT

b / myd o x/ jec 0 9 / euro mix shif t .xls

S o u rce s:

JD

P o w e r; D e u tsch e

B an k; R o b e rt E lle r Asso c. L L C , 2009

u rce s: JD P o w e r; D e u tsch e B an

Robert Eller Associates LLC

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U.S. FUEL ECONOMY OBJECTIVES: MINIMAL, BUT WITH SIGNIFICANT FLEET MIX & MATERIALS SELECTION IMPLICATIONS

AVERAGE FLEET FUEL ECONOMY BY GLOBAL REGION 60 50 HIGHER CAFE DRIVES 40 COMPOSITES TECH.
AVERAGE FLEET FUEL ECONOMY BY GLOBAL REGION
60
50
HIGHER CAFE DRIVES
40
COMPOSITES
TECH.
30
JAPAN
20
EU
CHINA
10
AUSTRALIA
U.S. CAFE LAG CONTINUES
US
0
2002
2006
2010
2014
2020
SOURCE: PEW CENTER, 2008
SOURCE: PEW CENTER, 2008
b/mydox/papers/RAPRA TPE 08-AvgFleetFuelEcon 08.xls
MPG

Robert Eller Associates LLC

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FUEL PRICES: THERMOPLASTIC COMPOSITE EFFECTS

There are fuel price tipping points shifts in vehicle preference

2008: $3.50-4.00/gal. 100BN fewer miles driven in U.S.

Price will rise and change auto and autoplastics paradigms:

- rising demand/decreasing capacity

- economic expansion (eventually)

- global population jump by 1.0BN in next 12 years

- “middle” class increase by 1.8BN (600MM in China)

- 750 cars/1,000 people 4 cars/1,000 people – If Chinese ½

U.S.:

China:

ownership rate of the U.S., adds 400MM cars

- easy-to-get oil has gotten harder to find

- gas taxes in U.S. (remain constant at $0.18/gal.?)

Plug-in hybrids: emerging, bridge to a (composite intensive) electric car/alternative propulsion world

Global Li-ion auto battery sales will jump from $12BN in 2010 to $35BN in2015

• Global Li-ion auto battery sales will jump from $12BN in 2010 to $35BN in2015 Robert

Robert Eller Associates LLC

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AUTOMOTIVE SUPPLY CHAIN RESPONSES

AUTOMOTIVE SUPPLY CHAIN RESPONSES Robert Eller Associates LLC 14

Robert Eller Associates LLC

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U.S. AUTOPLASTIC SUPPLY CHAIN PRESSURES/RESPONSES

U.S. AUTOPLASTIC SUPPLY CHAIN PRESSURES/RESPONSES BANKRUPTCIES OEM AGGRESSIVE SUPPLY CHAIN COST SAVE PRESSURES SEVERE

BANKRUPTCIES

AUTOPLASTIC SUPPLY CHAIN PRESSURES/RESPONSES BANKRUPTCIES OEM AGGRESSIVE SUPPLY CHAIN COST SAVE PRESSURES SEVERE
OEM AGGRESSIVE SUPPLY CHAIN COST SAVE PRESSURES SEVERE SHIFT TO PRODUCTION SMALLER IMPORTED DECLINE VEHICLES
OEM AGGRESSIVE SUPPLY
CHAIN COST SAVE
PRESSURES
SEVERE
SHIFT TO
PRODUCTION
SMALLER
IMPORTED
DECLINE
VEHICLES
OFFSHORE
COMPETITORS/
GLOBAL
COMPOUNDERS
SUPPLIER
TECHNOLOGY
COMPETITION
ENTER
REDUCTION
HYBRID ELECTRIC
DRIVE SHIFT
TRANSFER
RAW MATERIALS
COMPOUNDER
TIER 1 FABRICATOR
OEM ASSEMBLY
PRICE
IN-LINE (D-LFT)
COMMODITIZATION
TIER 2, 3
SUPPLIERS
COMP'DG. BY
U.S. TP
COMPOSITES
TECHNOLOGY
LAG vs. EUROPE
OEM OWNERSHIP
SHIFT(b)
TIER 1s(a)
SHIFT TO
TRANS-
EUROPEAN/
GLOBAL OEM
- RESIN SUPPLIER
SHIFT TO LOW COST
MONOMER REGIONS
ELIMINATION OF
ASIAN
PARTNERING
EXTRA STEPS
DESIGNS
- REDUCED SERVICE
FOR AUTO ACCOUNTS
PRESSURES PASSED DOWN THE SUPPLY CHAIN
BANKRUPTCIES

ELIMINATE/REDUCE THE INEFFICIENCIES:

- MULTIPLE UNIT OPERATIONS

- EXCESSIVE LOGISTICS

- SCRAP GENERATION

NOTES:

- INEFFICIENT PROCESS TECHNOLOGIES

- SALES/MARKETING COSTS

- EXCESS LABOR COSTS

(a)

STARTED FOR LGF-TPs

(b)

e.g., MAGNA, BID FOR OPEL, FIAT/CHRYSLER, ETC.

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

r/mydox/papers/Comp09-Implosion 071309.vsd // lg/myfiles/visio/Comp09-Implosion 071309.vsd

SUPPLY CHAIN GLOBALIZATION

GLOBAL VEHICLE DESIGNS

VEHICLE DEMAND SLOWDOWN

SPECIFICATIONSGLOBALIZATION GLOBAL VEHICLE DESIGNS VEHICLE DEMAND SLOWDOWN GLOBALIZATION PRESSURES INCREASED EUROPEAN/ JAPANESE

GLOBALIZATION PRESSURESVEHICLE DESIGNS VEHICLE DEMAND SLOWDOWN SPECIFICATIONS INCREASED EUROPEAN/ JAPANESE INFLUENCE Robert Eller

INCREASED EUROPEAN/ JAPANESE INFLUENCE JAPANESE INFLUENCE

SLOWDOWN SPECIFICATIONS GLOBALIZATION PRESSURES INCREASED EUROPEAN/ JAPANESE INFLUENCE Robert Eller Associates LLC 1515

Robert Eller Associates LLC

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THE AUTOMOTIVE MARKET and THERMOPLASTIC (TP) COMPOSITES

THE AUTOMOTIVE MARKET and THERMOPLASTIC (TP) COMPOSITES Robert Eller Associates LLC 16

Robert Eller Associates LLC

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GLOBAL MACROECONOMIC EFFECTS ON AUTO TP COMPOSITES

GLOBAL MACROECONOMIC SITUATION

GLOBAL MACROECONOMIC SITUATION

GLOBAL MACROECONOMIC SITUATION
GLOBAL MACROECONOMIC SITUATION

DEMAND SLOWDOWN BANKRUPTCIES BANK CRISIS

SITUATION DEMAND SLOWDOWN BANKRUPTCIES BANK CRISIS GDP DECLINE CREDIT TIGHTENING REDUCED PURCHASING POWER FLEET

GDP DECLINESITUATION DEMAND SLOWDOWN BANKRUPTCIES BANK CRISIS CREDIT TIGHTENING REDUCED PURCHASING POWER FLEET AUTOMOTIVE

CREDIT TIGHTENINGDEMAND SLOWDOWN BANKRUPTCIES BANK CRISIS GDP DECLINE REDUCED PURCHASING POWER FLEET AUTOMOTIVE DEMAND

REDUCED PURCHASING POWERBANKRUPTCIES BANK CRISIS GDP DECLINE CREDIT TIGHTENING FLEET AUTOMOTIVE DEMAND COMPOSITION - SEVERE DROP IN

GDP DECLINE CREDIT TIGHTENING REDUCED PURCHASING POWER FLEET AUTOMOTIVE DEMAND COMPOSITION - SEVERE DROP IN
FLEET AUTOMOTIVE DEMAND COMPOSITION - SEVERE DROP IN EUROPE/U.S. SHIFT TO - SLOWED GROWTH IN
FLEET
AUTOMOTIVE DEMAND
COMPOSITION
- SEVERE DROP IN EUROPE/U.S.
SHIFT TO
- SLOWED GROWTH IN EMERGING MARKETS (e.g., BRIC)
SMALLER CARS
FUEL ECONOMY
AND ALTERNATE
ENERGY
SUPPORT
VEHICLE
COST
PRESSURES
AUTOMOTIVE OEMs
- PROFIT DECLINE
$18.5BN
- DEEPER COST CUTS
SUPPLY CHAIN
SUBSIDY
- JOB CUTS
- BANKRUPTCY
REQUEST
- TRIM CAPITAL EXPENDITURES
- RESTRUCTURE
(REC'D.
- REDUCE R/D
- GLOBALIZE
$5BN)
- SEEK OEM PARTNER/
GLOBAL SYNERGIES
(U.S.)
- CONTINUED EMERGING MARKET
INVESTMENT
- RE-TOOL FOR SMALLER VEHICLES

GOVERNMENT

SUBSIDIES/

LOANS/ AID

PACKAGES

SMALLER VEHICLES GOVERNMENT SUBSIDIES/ LOANS/ AID PACKAGES - SLOWED CAPITAL FOR NEW TP COMPOSITE TECHNOLOGY? -

- SLOWED CAPITAL FOR NEW TP COMPOSITE TECHNOLOGY?

- INCREASED GLOBAL PLATFORMS

- IN-LINE COMPOUNDING

- AT-PRESS COMPOUNDING

- MULTI-SHOT PROCESSES

- CAPTIVE COMP'DG. BY TIER 1s

- PRESSURE ON INDEPENDENT COMPOUNDERS

- SEEK NON-AUTO OPP'Y.

- INCREASED USE OF TP COMPOSITES

- PART WEIGHT REDUCTION PRESSURES

- PARTS CONSOLIDATION/MODULARIZATION

- INCREASED VALUE OF $/LB. SAVED

- ELECTRIC DRIVE/BATTERY INITIATIVES

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

b/mydox/economics/Comp09-Global MacroEff09.vsd // lg/myfiles/visio/Comp09-Global MacroEff09.vsd

MacroEff09.vsd // lg/myfiles/visio/Comp09-Global MacroEff09.vsd Robert Eller Associates LLC 1717

Robert Eller Associates LLC

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AUTOMOTIVE MARKET DYNAMICS AND TP COMPOSITE SUPPLY CHAIN RESPONSES

TP composite substitution driven by:

Supply chain restructuring

Weight save pressures (value weight savings [10% weight reduction yields 7% fuel economy improvement])

System cost savings potential/parts consolidation

Material cost savings for D-LFT vs. other LGF processes

Green pressures and improved opportunities for natural fiber and carbon fiber TP composites

Other plastic substitution (e.g., exteriors) stimulates TP composites (e.g., hatchback inner panel)

substitution (e.g., exteriors) stimulates TP composites (e.g., hatchback inner panel) Robert Eller Associates LLC 18

Robert Eller Associates LLC

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TP COMPOSITE TECHNOLOGY RESPONSES and OPPORTUNITIES

TP COMPOSITE TECHNOLOGY RESPONSES and OPPORTUNITIES Robert Eller Associates LLC 19

Robert Eller Associates LLC

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PATHS TO THE LGF-TP COMPOSITE MARKET

1. COMPOUND: COMPOUNDER LGF COMPOUND INJECTION PRESS MOLDED PART COMPOUNDING FACILITATED EARLY GROWTH OF LGF-TPs;
1. COMPOUND:
COMPOUNDER
LGF COMPOUND
INJECTION PRESS
MOLDED PART
COMPOUNDING FACILITATED EARLY GROWTH OF LGF-TPs; DOES NOT REQUIRE CAPEX
2. D-LFT:
IN-LINE
COMPRESSION
ROVING
COMPOUNDING
PRESS
EXTRUDER
RESIN
MOLDED PART
IN-LINE
ADDITIVES
COMPOUNDING
INJECTION PRESS
EXTRUDER

HIGH GROWTH POTENTIAL; CAPEX REQUIRED (FAVORED BY MAJOR TIER 1s); LARGE PARTS, HIGH VOLUME REQUIRED FOR COMPETITIVE ECONOMICS, GOOD FIBER LENGTH RETENTION

3. LGF CONCENTRATE CONCENTRATE: INJECTION PRESS MOLDED PART NEAT RESIN USE EXISTING EQUIPMENT 4. GMT
3.
LGF
CONCENTRATE
CONCENTRATE:
INJECTION PRESS
MOLDED PART
NEAT RESIN
USE EXISTING EQUIPMENT
4.
GMT OR LW-RT:
ROVING
COMPRESSION
MAT
EXTRUDER
BLANKS
PREHEAT
PRESS
MOLDED PART
NEAT RESIN

EARLY GMT BEING REPLACED BY HIGH QUALITY; LW-RT COMPETES WITH D-LFT IN UNDERBODY SHIELDS

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

r/mydox/papers/Comp09-LGFTP Comp Mkt 071309 // lg/myfiles/visio/Comp09-LGFTP Comp Mkt 071309

r/mydox/papers/Comp09-LGFTP Comp Mkt 071309 // lg/myfiles/visio/Comp09-LGFTP Comp Mkt 071309 Robert Eller Associates LLC

Robert Eller Associates LLC

AUTO APPLICATIONS FOR TP COMPOSITES(a)

APPLICATION

STATUS / NOTE

Front end module/ carrier*

- Major near-term D-LFT and LGF-PP pellet driver in N. American market

(6-8)

- Established in Europe

Door hardware module* (7-8)

- Facilitates strong trend towards hardware consolidation

- Brose is early leader

Instrument panel substrate*

- Started in Europe (Faurecia and JCI)

(7)

- Both D-LFT injection and compression

Underbody shield* (8)

-W ill come from Europe with OEM transplants

- LW-RT competes with D-LFT

- Add-on acoustic layer being offered

Running board

- Started in N. America

Hatchback door*

- 2012 Ford Escape (see Ford Kuga photo)

- Combination with talc/PP exterior

Overhead console/ Headliner structure

- Stimulated by changes in overhead design and construction

(Cont’d.)

structure - Stimulated by changes in overhead design and construction (Cont’d.) Robert Eller Associates LLC 2121

Robert Eller Associates LLC

2121

AUTO APPLICATIONS FOR TP COMPOSITES(a)(Cont’d.)

APPLICATION

STATUS / NOTE

Instrument panel structural ducts (15-18)

- Early Chrysler innovation (2007)(b)

- Requires vibration welding

Load floor

- Early GMT application

Spare tire well/storage module* (9-10)

- Competes with SMC, GMT; natural fiber candidate?

Seating*

- Competes with SGF-TPs

Engine covers*

- Starting in natural fiber composites in Europe

Battery carriers

- Stimulated by trend to electric drive vehicles?

Notes:

Numbers in ( ) indicate typical weights per vehicle

* = technology transfer from Europe

(a)

Includes both LFTs and GMTs

(b)

First launched on ’97 MY Dakota and Cherokee

Sources: Dieffenbacher; Robert Eller Associates LLC

on ’97 MY Dakota and Cherokee Sources: Dieffenbacher; Robert Eller Associates LLC Robert Eller Associates LLC

Robert Eller Associates LLC

2222

LFT-D-ILC COMPRESSION Fully automated material handling Source: Dieffenbacher
LFT-D-ILC COMPRESSION
Fully automated
material handling
Source: Dieffenbacher
LFT-D-ILC COMPRESSION Fully automated material handling Source: Dieffenbacher Robert Eller Associates LLC

Robert Eller Associates LLC

IMC Injection Molding Compounder

Melt buffer Shut-off nozzle Re-direction valve MX- or CX- clamp
Melt
buffer
Shut-off
nozzle
Re-direction
valve
MX- or CX-
clamp

Weighing, dosing & conveying systems

Start up valve with container

Twin

screw

extruder

Shot-Pot-

Injection

piston

Source: Krauss Maffei

b/mydox/papers/composites09 KraussMaffei.ppt

Shot-Pot- Injection piston Source: Krauss Maffei b/mydox/papers/composites09 KraussMaffei.ppt Robert Eller Associates LLC

Robert Eller Associates LLC

Plasticomp Pushtrusion TM Direct In-Line Compounding

Plasticomp Pushtrusion T M Direct In-Line Compounding Source: PlastiComp Robert Eller Associates LLC

Source: PlastiComp

Plasticomp Pushtrusion T M Direct In-Line Compounding Source: PlastiComp Robert Eller Associates LLC

Robert Eller Associates LLC

LFT COMPOSITE OPPORTUNITY TARGETS

FRONT END MODULE/CARRIER

HATCHBACK HEADLINER (LW-RT)(a) ENGINE THERMAL CONTROL* INSTRUMENT PANEL XCAR BEAM SUBSTRATE STRUCTURAL DUCTS DOOR
HATCHBACK
HEADLINER (LW-RT)(a)
ENGINE THERMAL
CONTROL*
INSTRUMENT PANEL XCAR
BEAM SUBSTRATE
STRUCTURAL DUCTS
DOOR INNER
SEAT STRUCTURE(b)
HATCHBACK
*
FENDER
OVERHEAD CONSOLE/
HEADLINER STRUCTURE
DOOR OUTER
BUMPER
BEAM
UNDER BODY
BUMPER
SHIELDS(a)(c)
DOOR HARDWARE
MODULE
BEAM
FLOOR MODULE/
LOAD FLOOR/
SPARE TIRE CARRIER

NOTES:

* = HIGH PERFORMANCE MINERAL FILLED

(a)

MAY CONTAIN ADDED ACOUSTIC ELEMENTS

(b)

COMPETES WITH SGF-TP

(c)

D-LFT AND LW-RT COMPETE FOR UNDERBODY SHIELD

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

r/mydox/papers/Compo09-LFT Comp Oppy 09.vsd // lg/myfiles/visio/Compo09-LFT Comp Oppy 09.vsd

*

Comp Oppy 09.vsd // lg/myfiles/visio/Compo09-LFT Comp Oppy 09.vsd * Robert Eller Associates LLC 2626

Robert Eller Associates LLC

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FRONT END MODULES: PROVEN HIGH GROWTH TECH

•• HOODHOOD LATCHLATCH POINTPOINT •• CARRIERCARRIER •• COOLINGCOOLING FANSFANS ••
•• HOODHOOD LATCHLATCH POINTPOINT
•• CARRIERCARRIER
•• COOLINGCOOLING
FANSFANS
•• RADIATOR/HEATRADIATOR/HEAT
EXCHANGERSEXCHANGERS
SGF-PP
CHALLENGING
SGF-PA
•• BUMPERBUMPER BEAMBEAM
•• ENERGYENERGY ABSORBERABSORBER
•• FASCIAFASCIA
BUMPERBUMPER BEAMBEAM •• ENERGYENERGY ABSORBERABSORBER •• FASCIAFASCIA Robert Eller Associates LLC 2727 27

Robert Eller Associates LLC

272727

FRONT END CARRIERS: STRONG GROWTH DRIVER FOR D-LFT PROCESSES AND LGF-PP COMPOUND

GROWTH DRIVER FOR D-LFT PROCESSES AND LGF-PP COMPOUND VEHICLE: MATERIAL: PROCESS: WEIGHT: EQUIPMENT: PHOTO: Audi

VEHICLE:

MATERIAL:

PROCESS:

WEIGHT:

EQUIPMENT:

PHOTO:

Audi A3 30% LGF-PP D-LFT (injection) 3 kg Krauss Maffei Krauss Maffei

D-LFT (injection) 3 kg Krauss Maffei Krauss Maffei VEHICLE: MATERIAL: PROCESS: EQUIPMENT: Dieffenbacher PHOTO:

VEHICLE:

MATERIAL:

PROCESS:

EQUIPMENT: Dieffenbacher

PHOTO: Dieffenbacher

Ford Fusion 40% LGF-PP D-LFT (compression)

Dieffenbacher PHOTO: Dieffenbacher Ford Fusion 40% LGF-PP D-LFT (compression) Robert Eller Associates LLC 2828 28

Robert Eller Associates LLC

282828

UNDERBODY PANELS

Established in Europe. Shifting to N. America. (German OEM shift accelerates N.A. penetration)

Substitution driven by:

- Component protection

- Lithium-ion battery/electric drive share gain

- Improved aerodynamics

- Acoustics improvement (new target/value add zone)

Many process/materials contenders:

- GMT

- LW-RT (lightweight GMT gaining share, approvals in place)

- LGF-PP pellets

- D-LFT processes/examples (Compression, Injection, Krauss Maffei, PlastiComp Pushtrusion TM , others)

- Aluminum, steel,thermoset composites

Maffei, PlastiComp Pushtrusion T M , others) - Aluminum, steel,thermoset composites Robert Eller Associates LLC 29

Robert Eller Associates LLC

29

UNDERBODY PANELS

UNDERBODY PANELS Vehicle: BMW 7-SERIES Part: Underbody Shield Material: 30% LGF-PP Supplier: SABIC
UNDERBODY PANELS Vehicle: BMW 7-SERIES Part: Underbody Shield Material: 30% LGF-PP Supplier: SABIC

Vehicle:

BMW 7-SERIES

Part:

Underbody Shield

Material:

30% LGF-PP

Supplier:

SABIC - Stamax 30YK430

Weight:

6.7 kg (total)

Drivers:

- Acoustics

- Aerodynamics

- Component protection

- Cost (vs. GMT)

Note:

Most European BMW passenger cars have LW-RT UB shields

- Cost (vs. GMT) Note: Most European BMW passenger cars have LW-RT UB shields Robert Eller

Robert Eller Associates LLC

3030

EXAMPLE UNDERBODY SHIELD

EXAMPLE UNDERBODY SHIELD Part: Typical underbody shield Process: D-LFT compression Equipment:

Part:

Typical underbody shield

Process:

D-LFT compression

Equipment:

Dieffenbacher

Material:

25-30% LGF-PP

Notes:

- LW-RTP competes

Photo:

- Acoustic function being added (e.g., by Rieter, Carcoustics, others) Dieffenbacher

- Acoustic function being added (e.g ., by Rieter, Carcoustics, others) Dieffenbacher Robert Eller Associates LLC

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INSTRUMENT PANEL CARRIER: GROWTH TARGET

INSTRUMENT PANEL CARRIER: GROWTH TARGET • Filled and fiber-reinforced TPs compete for substrate • LGF-PP pellets

Filled and fiber-reinforced TPs compete for substrate

LGF-PP pellets and D-LFT compete

Combo with 2-shot D-LFT molding saves unit operations

Integrated cross-car beam/structural duct potential

Example shown: Ford C-Max, Mazda 3, Volvo S40

Material supplier: Quadrant Plastic Composites AG

System supplier: Faurecia

• Material supplier: Quad rant Plastic Composites AG • System supplier: Faurecia Robert Eller Associates LLC
• Material supplier: Quad rant Plastic Composites AG • System supplier: Faurecia Robert Eller Associates LLC
• Material supplier: Quad rant Plastic Composites AG • System supplier: Faurecia Robert Eller Associates LLC

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SPARE TIRE WELL: SUBSTITUTION TARGET

SPARE TIRE WELL: SUBSTITUTION TARGET Vehicle: Mercedes C-Class Weight: 4.3 kg Substitution drivers: - Impact strength

Vehicle: Mercedes C-Class

Weight: 4.3 kg Substitution drivers:

- Impact strength for crash resist.

- Ability to integrate shape features

- Corrosion resistance

Material: GMT-PP combination (random glass mat & fabric)

- Corrosion resistance Material: GMT-PP combination (random glass mat & fabric) Robert Eller Associates LLC 33

Robert Eller Associates LLC

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SPARE TIRE WELL: NATURAL FIBER TARGET

SPARE TIRE WELL: NATURAL FIBER TARGET Vehicle: Mercedes A-Class Material: Abaca fiber/PP Substitution drivers: - Good

Vehicle: Mercedes A-Class

Material: Abaca fiber/PP Substitution drivers:

- Good stiffness weight balance

- Green solution

- Energy saving (natural fiber vs. glass roving)

stiffness weight balance - Green solution - Energy saving (natural fiber vs. glass roving) Robert Eller

Robert Eller Associates LLC

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DOOR HARDWARE MODULES: GROWTH APPLICATION

FORD FIESTA

DOOR HARDWARE MODULES: GROWTH APPLICATION FORD FIESTA Front Rear • LGF-PP • Front Door Carrier plate
Front
Front
Rear
Rear
HARDWARE MODULES: GROWTH APPLICATION FORD FIESTA Front Rear • LGF-PP • Front Door Carrier plate wt.

LGF-PP

Front Door Carrier plate wt. = 1042 grams

Rear Door Carrier plate wt. = 670 grams

• Front Door Carrier plate wt. = 1042 grams • Rear Door Carrier plate wt. =

Robert Eller Associates LLC

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DOOR HARDWARE MODULE: GROWTH APPLICATION

DOOR HARDWARE MODULE: GROWTH APPLICATION VEHICLE: Chrysler Sebring convertible MATERIAL: 40% LGF-PP PROCESS:

VEHICLE:

Chrysler Sebring convertible

MATERIAL:

40% LGF-PP

PROCESS:

D-LFT (injection compression)

EQUIPMENT:

Krauss Maffei

PHOTO:

Krauss Maffei

D-LFT (injection compression) EQUIPMENT: Krauss Maffei PHOTO: Krauss Maffei Robert Eller Associates LLC 36

Robert Eller Associates LLC

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HATCHBACK DOOR INNER: GROWTH APPLICATION

HATCHBACK DOOR INNER: GROWTH APPLICATION VEHICLE: APPLICATION: Roof spoile r and tailgate outer panel Ford Kuga
HATCHBACK DOOR INNER: GROWTH APPLICATION VEHICLE: APPLICATION: Roof spoile r and tailgate outer panel Ford Kuga
HATCHBACK DOOR INNER: GROWTH APPLICATION VEHICLE: APPLICATION: Roof spoile r and tailgate outer panel Ford Kuga

VEHICLE:

APPLICATION: Roof spoiler and tailgate outer panel

Ford Kuga (2010)

GRADE:

LyondellBasell Hifax TRC 280X

MOLDER:

Plastal

REA NOTES:

- Inner panel is Stamax (SABIC)

- Potential for design transfer to the U.S. (2010)

PHOTO:

Robert Eller Associates LLC

PART:

MATERIAL:

Hatchback door inner panel 40% LGF-PP

STATUS:

Prototype

PROCESS:

D-LFT (injection)

EQUIPMENT:

Krauss Maffei

COMPETITION: LGF-PP compound

PHOTO:

Krauss Maffei

EQUIPMENT: Krauss Maffei COMPETITION: LGF-PP compound PHOTO: Krauss Maffei Robert Eller Associates LLC 37

Robert Eller Associates LLC

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MERCEDES SMART FORTWO TAILGATE:

PRECURSOR FOR LGF-PP IN BODY STRUCTURES?

FORTWO TAILGATE: PRECURSOR FOR LGF-PP IN BODY STRUCTURES? • 20% Stiffness increase vs. earlier version •

20% Stiffness increase vs. earlier version

LGF-PP move into body structures

Early use of E-LF-PP (endless long fiber polypropylene)

E-LF-PP gives high load bearing and impact absorbency

Translation potential for rear seat backrest

Source: Weber Automotive; ESORO AG

• Translation potential for rear seat backrest Source: Weber Automotive; ESORO AG Robert Eller Associates LLC

Robert Eller Associates LLC

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EXAMPLE OF LGF-PP and E-LF-PP DIRECT PROCESS

EXAMPLE OF LGF-PP and E-LF-PP DIRECT PROCESS Source: Robert Elle r Associates LLC, 2009 Robert Eller

Source: Robert Eller Associates LLC, 2009

EXAMPLE OF LGF-PP and E-LF-PP DIRECT PROCESS Source: Robert Elle r Associates LLC, 2009 Robert Eller

Robert Eller Associates LLC

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DESIGN CONCEPT FOR E-LGF-PP BASED COMPACT CAR BODY STRUCTURE

DESIGN CONCEPT FOR E-LGF-PP BASED COMPACT CAR BODY STRUCTURE Metallic front and rear elements Double shell

Metallic front and rear elements

Double shell floor

Source: Weber Automotive; ESORO AG

Metallic front and rear elements Double shell floor Source: Weber Automotive; ESORO AG Robert Eller Associates

Robert Eller Associates LLC

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BIOPOLYMER CANDIDATES FOR AUTOMOTIVE APPLICATIONS

BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS

BIOPOLYMERS

BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS
BIOPOLYMERS
MATRIX FIBERS NATURAL SYNTHETIC HC-BASED BIOPOLYMER (E.G., PP) -PLA -POLYAL- VEGETABLE HC-BASED BIO-BASED
MATRIX
FIBERS
NATURAL
SYNTHETIC
HC-BASED
BIOPOLYMER
(E.G., PP)
-PLA
-POLYAL-
VEGETABLE
HC-BASED
BIO-BASED
KANOATE
ANIMAL
(E.G., WOOL, HAIR)
(BIOFIBERS)
-SOY
VIRGIN
REGEN-
PLA
POLYAL-
ERATED
KANOATE
BRO-
BAST
LEAF
SEED
FRUIT
WOOD
MELIAD
FIBERS
-CURAUA
-FLAX
-SISAL
-COTTON
-COCONUT
-PINE
(a)
-HEMP
-CURANA
-KAPOTE
-OTHERS
-KENAF
-BANANA
-HENNEQUIN
-BAMBOO
-JUTE
WOOD
WOOD
FLOUR
FIBER

NOTE: (a) USED IN BRAZIL, RECENT U.S. INTRODUCTION IN NYLON

SOURCE: ROBERT ELLER ASSOCIATES LLC, 2009

b/mydox/biopolymers/BioBased Composites Auto 09.vsd lg/myfiles/visio/BioBased Composites Auto 09.vsd

Composites Auto 09.vsd lg/myfiles/visio/BioBased Composites Auto 09.vsd Robert Eller Associates LLC 41

Robert Eller Associates LLC

41

FUTURE VISION/SUMMARY

Like other auto plastics, TP composites (especially LF- RTPs) are affected by:

The global economic downturn

Market growth shift to Asia

Sharp global automotive production downturn

European/Asian OEM share gain in N. America

Share gain for smaller vehicles in the global fleet

Expected fuel price increase and slow penetration of hybrids and electric drive vehicles

Expected fuel price increase and slow penetration of hybrids and electric drive vehicles Robert Eller Associates

Robert Eller Associates LLC

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FUTURE VISION/SUMMARY (Cont’d.)

The LF-RTPs have strong growth potential:

Substitution on multiple (high weight) applications

Growth in modular construction

Renewed weight/cost save pressures

Supply chain restructuring/direct fabrication savings

Parts consolidation potential

Front end modules/carriers, door hardware modules, and underbody shields will be near-term growth driver

European/Asian share gain in N. America brings technology and designs to accommodate vehicle market shifts

gain in N. America brings technology and designs to accommodate vehicle market shifts Robert Eller Associates

Robert Eller Associates LLC

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FUTURE VISION/SUMMARY (Cont'd.)

Intermaterial and inter-process competition:

Multiple materials/processes are competing.

D-LFT will make rapid share gains due to cost savings but could be restricted by capex requirements in a difficult investment environment.

Natural fiber reinforcement will gain some share

Carbon fiber TPCs will be pulled into the auto market

TP composites bring opportunities for adding value,

Parts consolidation/weight savings in most applications

Improved energy management/space savings

Adding acoustic functionality to underbody shield

Crosscar beam/structural duct integration in instrument panels

AUTOMOTIVE TP COMPOSITES: PART OF MANAGING IN A DOWNTURN

Thank You!

Thank You! Robert Eller Associates LLC 4545
Thank You! Robert Eller Associates LLC 4545

Robert Eller Associates LLC

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