The hottest new chemical giant values China's auto

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New chemical giants attach importance to China's auto market

recently, the U.S. chemical dispensing and processing technology has a significant impact on the release of gases. The giants Dow Chemical and DuPont announced a merger agreement. The merged company will be named Dow DuPont. DuPont and Dow Chemical each hold 50% shares. The market value of the new company is as high as $120billion. The news of the merger has attracted great attention from the industry

although there are many integration cases in the global auto parts industry this year, what is different from previous times is that the two sides of this integration are the global chemical giants, and the auto parts business is only part of its business, but their respective parts business plays a decisive role in the global top 100 parts enterprises, especially in the fields of lightweight materials and adhesives. Therefore, as far as the auto parts industry is concerned, After the "marriage" of the two companies, how to plan and layout the auto parts sector has become the focus of the auto industry

the merger is conducive to the integration of its parts business

although the auto parts business is not the main business of DuPont and Dow Chemical, the two companies account for a large share of the business in the field of auto parts, and the related businesses involved are also broader. According to the list of the top 100 global auto parts suppliers in 2015, DuPont ranked 64th, up 4 places year-on-year. Last year, the sales of auto parts reached US $3.06 billion, an increase of 2% year-on-year; Dow Chemical ranked 72nd, with a year-on-year decrease of 1. Last year, the sales of automobile accessories reached $2.8 billion, with a year-on-year increase of 7.7%. According to the data in the list, DuPont and Dow Chemical have similar strength in the field of auto parts, and their sales have increased year-on-year

but in specific areas, the business scope involved by the two companies is different. "DuPont's auto parts related business has not formed an independent auto business department, and the auto related business is scattered in other departments." DuPont China Enterprise Communication Affairs Department said to the introduction. At present, DuPont's business of auto parts is mainly polymer materials, composite materials, chemical materials and bio based fuels, involving parts of powertrain system, interior and exterior decoration of vehicles, chassis and electric vehicles. Unlike DuPont, Dow Chemical has set up a special automotive system business department, which mainly provides a variety of light materials, adhesives, foam materials, lubricants and other products for automotive enterprises, and has developed high-power battery technology since 2009 to provide energy supply for hybrid electric vehicles and electric vehicles. Dow automotive systems business department is not only a global leader in the field of automotive lightweight solutions, but also has a global market share of more than 50% in the automotive aftermarket. In addition, Dow focuses on various oil products such as chassis, post crash maintenance, bonding materials, paint, etc. It is worth mentioning that Dow also has corresponding rapid curing structural adhesive solutions for the after-sales market of aluminum

in its global market layout, the Asia Pacific region is undoubtedly the top priority in the next few years. "The goal of Dow automotive systems' Asia Pacific region is to make the Asia Pacific region the largest and most powerful region in the world in the next three to five years. The future strategy for the Chinese market can be summarized in eight words, that is' based on local cooperation and the world '." Said zhuchengyi, Asia Pacific Business Director of Dow Chemical automotive systems business department. In fact, it is true. As early as a few years ago, Dow Chemical has begun its localization of technical resources and personnel training. In 2009, the Dow center in Shanghai Zhangjiang High Tech Park was officially put into use. In 2016, for example, more than 500 scientists and more than 80 comprehensive laboratories worked together to carry out core research and application research and development. In addition, Dow Chemical automotive system business department also set up offices in Chengdu, Wuhan and other places to cultivate the overall ability of technology, service, sales personnel and customer service personnel

it can be seen that after the merger of DuPont and Dow Chemical, their auto parts related businesses are highly complementary, and their business scope will be further expanded. In the future, products can also be packaged, which greatly improves the company's competitive strength. Although it is uncertain whether the new company will establish an independent automotive systems division after its establishment, it is certain that DuPont and Dow Chemical have the same goals in many key areas of automotive parts to be developed, such as the development of automotive lightweight systems, hybrid and new energy vehicles. After the merger of the two companies, their R & D strength and capital investment in related businesses will be further improved

as for the merger and reorganization of DuPont and Dow Chemical, the head of sales of a material company in the industry said that the current period is a period of global economic slowdown, so there will be such a phenomenon of strong combination and group heating. Through the merger and reorganization, we will streamline the business with positive growth and focus on the development of advantageous projects. According to the financial report of the third quarter of 2015, the businesses of DuPont and Dow Chemical were not ideal. DuPont's sales decreased by about one fifth and Dow Chemical's sales decreased by about one sixth. From the global top 100 list of auto parts, we can see that the sales of the two companies in the auto supporting business have increased. Auto parts are the dominant business of the two companies. Under the combination of strong companies, the future development trend will be better

the advantages of mergers will first be reflected in the field of electric vehicles and lightweight

"the entire automotive industry is in an era of great change and cross-border cooperation, and automobiles are developing towards new energy, lightweight, intelligence and connectivity. Moreover, from a global perspective, the mergers and acquisitions and cross-border cooperation of large groups are unprecedentedly active, which is a general trend and new direction of development." Fu Yuwu, President of the China Society of automotive engineering, said, "at present, many vehicle manufacturers in China have carried out mergers and acquisitions, arranged electric vehicles and developed lightweight technologies."

for DuPont and Dow Chemical, in terms of existing businesses, lightweight materials and technology and new energy power systems have also been the key areas of development of the two companies

among them, Dow Chemical mainly includes composite materials, carbon fibers and composite structural adhesives in lightweight products, and provides products and technologies for many automotive enterprises. For example, BMW I3 uses Dow Chemical Structural bonding system. In addition, Dow Chemical also has carbon fiber research and development projects. In February this year, it signed a joint development agreement with Ford Motor Company to reduce the energy consumption required in carbon fiber production, reduce the cost of raw materials, and develop recycling production technology. DuPont mainly provides lightweight and renewable materials for automobile companies, so that the two sides jointly establish a Council to achieve the purpose of weight reduction, energy conservation and environmental protection. The products are used in many fields, such as engine hood, intake manifold, oil pan, turbocharger system, muffler and emission system. On the new energy vehicles, for the insulation system of electric vehicle drive motor, develop insulation materials and provide technical support

it is understood that the business of the new company after the merger of the two companies will be divided into three parts, and material science is one of the three main businesses

in this regard, Fu Yuwu said that the lightweight of vehicles is not only the development direction of traditional vehicles, but also the foundation of new energy vehicles. If there is no light weight as the foundation, there is no development of new energy vehicles, such as BMW I3 and Tesla. Their light weight technology uses carbon fiber and composite materials. Lightweight materials, especially composites and carbon fibers, are new technologies pursued and valued by various vehicle manufacturers and component factories, so these layouts and Technological Development Trends of foreign companies are also urgently needed by China's automotive industry

as for the impact on China's auto market after the merger of cross-border leaders, Fu Yuwu said: "China's auto market is a must for strategists. Eight years ago, China established an auto lightweight alliance and carried out cross-border cooperation, from metal to non-metal, to composite materials and carbon fiber dimension. But frankly, there is still a gap between our domestic level and the international leading level."

DuPont and Dow Chemical are companies with a history of 100 years. Their technical and economic strength give them great advantages and market competitiveness. After the merger, whether it is restructuring business or focusing on the development of profitable business, it will have an impact on the current domestic auto parts industry. Li Weicheng, chairman and CEO of Dow Chemical, said that the sales volume of Dow Chemical in Asia Pacific region increased by 7% this year, and the growth rate in Greater China region was the largest among the markets with leading demand growth, with an increase of 12%. In the future, we will continue to be optimistic about the development prospects of the Chinese market and expect to seize more business growth opportunities. "The merger of the two companies is the complementarity of capital, technology and market. This complementarity will produce new productivity and market opportunities. The perspective of the merger and reorganization of multinational groups is also global, and China's automobile market is also a part of the global automobile market. The new company will certainly have a significant impact in China, especially in China's new technology field." Fu Yu said to Wu

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