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April 29, 2005

EXCLUSIVE RESEARCH UPDATE: Solutia sees booming market for laminated vehicle side glass

Thanks to a cocktail of rising crime and consumer demands for greater in-car safety and drive comfort, the US applied chemicals giant Solutia Inc reports a booming market for laminated vehicle side glass. In April 2005, Matthew Beecham talked with Michel van Russelt, Solutia’s sales and marketing manager based in Brussels and Jay Pyper, North American automotive market development director for Solutia Automotive.

Thanks to a cocktail of rising crime and consumer demands for greater in-car safety and drive comfort, the US applied chemicals giant Solutia Inc reports a booming market for laminated vehicle side glass. In April 2005, Matthew Beecham talked with Michel van Russelt, Solutia’s sales and marketing manager based in Brussels and Jay Pyper, North American automotive market development director for Solutia Automotive.

Headquartered in St Louis, Solutia is the world’s largest producer of the PVB (polyvinyl butyral) plastic interlayer that is used to manufacture laminated windscreen, side and rear glazing.

Laminated glass reduces noise intrusion by about six decibels versus tempered glass.  It has solar and acoustic benefits and helps protect against rollover and side impact injury while weighing less than standard glass of a similar thickness.

At this year’s Detroit motor show, some 40 vehicles on display featured laminated side, rear, roof and advanced windscreens.  They included the Mercedes-Benz Maybach, S400 and S430, Ford GT, Lincoln Navigator and Aviator, Volvo XC90 V8, Chevrolet Corvette C6, Z06 and TrailBlazer, Buick Rainier, LaCrosse, Cadillac STS and STS-V, Pontiac Grand Prix GXP, Rolls Royce Phantom, Maserati Quatroporte, Lexus LS430, Bentley Continental GT, Lamborghini Murcielago Roadster, Jeep Grand Cherokee, Dodge Durango, Audi A8L-W12, Porsche Cayenne and Carrera GT, BMW M5 and 545i, Volkswagen Phaeton and Isuzu Ascender.  “Laminated glass is becoming mainstream, and this show provides validation of that movement,” said Jay Pyper, North American automotive market development director for Solutia Automotive.  “As automakers continue to refine vehicles in search of that competitive advantage, they look to solutions like laminated glass as adding value for their customers.”

Over the past few years, Solutia has offered a number of new interlayer products under its Vanceva brand name, which compliments its Saflex brand of interlayers for laminated glass.  In addition, Solutia has developed interlayers for emerging markets, such as hurricane- and blast-resistant architectural glazing.

According to Solutia, the number of vehicles equipped with laminated glass has risen four and a half times in Europe since 2000. Only eight models were available with laminated glazing in 2000, whereas 42 models are offered with the feature today, equivalent to 550,000 units per year.

In April 2005, Matthew Beecham talked with Michel van Russelt, Solutia’s sales and marketing manager based in Brussels and Jay Pyper, North American automotive market development director for Solutia Automotive.

just-auto.com: How is your business shaping-up in Europe?

Michel van Russelt: In Europe, we are on 42 models equipped with laminated side glazing.  This market has evolved rapidly.  The response from carmakers is far more positive these days.  They are now seeing a lot of advantages to the product.  On the downside, most carmakers offer laminated side glass as an option only. The interesting point is that we have seen the adoption permeating down the car segments. The latest adoption is the Citroen C4, marking a first in the C segment. 

Another point is that there are some variations being offered in addition to plain laminated glass.  For example, we are seeing more and more carmakers offering the option of coloured tail windows.  That market is developing quite fast.  We are already on a number of different models, including the Volvo XC70 and Peugeot 407 SW wagon. We’re on around ten models in total and there are some more coming in that I can’t disclose right now.  We are working on three or four different models which could appear later this year.

j-a.com: And the North American market?

Jay Pyper: It has developed well over the past few years.  We have 18 or 19 vehicles in production today with laminated side glass.  One of the interesting things is that if you look to the third quarter of this year, North American laminated side glass will be at a volume in excess of 4 million side windows annually.  So it has grown from not much at all two years ago to a pretty significant rate of production.  We see at least another 5 – 7 major vehicle platform adoptions over the next 12 – 18 months with laminated side glass.

j-a.com: How many vehicles are equipped with laminated side glass as standard in North America?

JP: We have 13 vehicles in North America which come equipped with laminated side glass as standard, at least in the front two doors.  The rest are optional fitment.

j-a.com: Where it is an option, what sort of take-up rates are you seeing?

JP: What is interesting is that where it is an option on 3 or 4 different vehicles, the take rate is pretty low.  It ranges from an extreme low of less than 5% to a comfortable 15%.  But we are actively working with the OEMs to try to improve that take rate.  Now, some vehicles such as Volvo are getting a different take rate.  But I think Volvo has had years of experience promoting that in Europe and North America as a security as well as comfort option. 

j-a.com: It must depend on how it is promoted in the showroom?

MvR:  It is really a question of promotion from the OEM because we see some big variation in the option take rates here in Europe as well.  It really depends as some carmakers have it on the cars but they hardly promote it at all.  So you end up with a single digit take rate.  In some other cases, they actively promote it or make it standard on one kind of trim level, such as the Peugeot 407 which results in a 70% take rate.  It depends on the promotion levels that the car make wants to put into that specific feature

j-a.com: What sort of optional cost is laminated side glass?

JP: JD Power & Associates recently published an emerging technology study with a price sensitivity.  The study included laminated side glass.  When offered for $300, 80% of those interviewed said would ‘likely’ or ‘most likely’ buy it. 

j-a.com: And yet we’re seeing single digit take rates …

JP: Exactly, but I think that it comes back to this whole awareness.

j-a.com: In North America, of those 18 – 19 models that you are currently supplying with laminated side glass, are they all SUVs or are you seeing it migrate downwards?

JP:   We’ve had great success with fitting laminated side glass on the SUVs, including the Lincoln Navigator, Aviator, and Chrysler Dodge.  But one of the interesting trends we are currently seeing – on cars like the Buick Lucerne, Cadillac DTS, Ford Crown Victoria and Grand Marquee – is that these will have four doors laminated as standard.  So the North American OEMs are starting to pick-up on the security advantages of laminated side glazing, driven by Europe.  So we are seeing a trend to adopt four door laminated side glass in the US for the noise benefit as well as the security benefit.   In fact, Chrysler is promoting optional fitment of laminated side glass in North America as Secure Shield. 

j-a.com: What inroads are you making into the Japanese market?

MvR:  It is more moderate compared to the European and American market although some manufacturers such as Lexus have put the laminated side glass on the LX430 which is then exported to Europe.  But the Japanese market is still relatively small. It is below ten different models.  The benefits they are looking for is completely different from Europe.  The Japanese OEMs are more interested in the UV benefit.

j-a.com: What is the state of play with emergency vehicles and the take up of laminated side glass?

MvR: In France, we are getting a lot of interest from the emergency services.  They are concerned about suburban vandalism.  Young people are throwing stones and bricks at their vehicles as they answer a call.  The French police are already using laminated side glass.  The fire brigade have told me that not only are they getting attacked by young people while on a call but some are trying to steal some of their equipment.  The point is that in most cases, they [police] are using standard types of vehicles which currently do not offer laminated side glass as an option.  So we have developed a retrofit item.   That is a growth industry.  It means we can develop very specific solutions depending on their requirements.

JP:  In North America, we are selling into the biggest police force vehicle in America, the Ford Crown Victoria.  Ford offers laminated side glass on all four windows as optional. The take rate is not as high as we would like but if you look at it on a national scale, it is not insignificant. It is down below 10% take rate at this point in time, but it has been only out about 18 months.

j-a.com: So are your initial market predictions playing out?

MvR:  Yes. In the US, the growth rates have been tremendous.   And in Europe, we are making progress with a number of adoptions but the take rate is still relatively small.  However, we are now seeing new applications for laminated glass for panoramic roofs.  Some OEMs in Europe have already decided from day one that they will only fit laminated glass for panoramic sunroofs. Some others that started with tempered glass have made a decision to switch to laminated glass in the future due to safety reasons.  And I think we shall see more OEMs go in that direction, especially for fixed glazing.

Note: The third edition of just-auto research report Vehicle glazing systems: trends, companies, and market forecasts is due to be published in May 2005. Here is a link to the second edition’s page of contents: https://www.just-auto.com/store/products_detail.asp?art=24229&lk=ss

 

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