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Passenger cars rule the automotive refinish coating market

Passenger cars rule the automotive refinish coating market



A $10.2bn market in the making

The automotive refinish coating market has considerably evolved in the developed regions such as North America, and Europe, whilst gaining popularity in the regions such as Asia-Pacific, Middle East & Africa, and South America

March 2018

The global automotive refinish coatings market is expected to reach $10.2 billion by 2021, growing at a compound annual growth rate (CAGR) of 5.3 per cent from 2017 and 2021, according to a report.

Rising disposable incomes, increasing number of vehicle collisions, growing demand for recreational vehicles, and an increase in the average age of vehicles, among others, are expected to drive the automotive refinish coatings market by 2021, said the report ‹Global Automotive Refinish Coatings Market- Analysis and Forecast (2017-2021)›, by BIS Research.

The market has considerably evolved in the developed regions such as North America, and Europe, whilst gaining popularity in the regions such as Asia-Pacific, Middle East & Africa (ME&A), and South America.

However, stringent regulations for volatile organic compound (VOC) emissions and lack of skilled professionals are some of the factors hampering the growth of the global automotive refinish coatings market. The development of environmentally friendly technologies are further expected to create opportunities for the growth of this market, noted the report.

 

Passenger Cars dominate

Automotive refinish coatings are used on passenger vehicles to provide similar mechanical, and optical properties as the factory applied coatings. The market is directly linked to the automotive market and has seen substantial growth in the last decade, primarily due to rapid growth in vehicle ownership in emerging economies with a resultant increase in the accident rate, said the report.

Rental car services are also increasing globally, especially in the emerging economies such as Latin America, India, China, Brazil, and others. For instance, in China, the total number of rental cars in 2015 was 430,000 as compared to the total number of rental cars in 2014 which was 400,000.

The increasing number of rental car Wservices drives the global automotive refinish coatings market as these vehicles are mainly used cars, which need proper maintenance at certain intervals.

In 2016, the passenger car segment accounted for the largest share of the overall automotive refinish coating market. In terms of value, cars segment is expected to register a CAGR of 5.2 per cent of the overall automotive refinish coating market between 2016 and 2021.

There is a battle for supremacy between compact and mid-sized passenger cars in the automotive refinish coating market with the latter inching ahead. An absolute dollar opportunity of more than $855 million exists in the mid-sized passenger car segment of automotive refinish coating market for the five-year period.

Mid-sized passenger cars are typically preferred in North America and Europe because these regions are well-developed and the customers there are less price-sensitive than their counterparts in emerging economies. If a company seeks to enter the high-volume compact passenger car segment though, they would do well to consider targeting APEJ as the continent should have the highest CAGR.

Heavy commercial and light commercial vehicles have a relatively similar market share in automotive refinish coating market by vehicle type. While both are estimated to lose market share points, the drop should be considerably steeper in the heavy commercial segment.

The heavy commercial segment is assessed to grow with a lower CAGR of roughly 5 per cent till 2022 and key stakeholders in automotive refinish coating market are advised to take this into account while devising their strategies, added the report.

 

Solvent-borne coatings

Based on layer, the clearcoat segment is expected to be the largest segment of the market, in terms of volume, during the forecast period. The clearcoat layer segment accounts for the largest share in terms of volume in the overall market. It is the final layer after basecoat and provides durability, scratch resistance, and chemical resistance to the overall coating and also protects against UV rays and provides a lustrous look to the vehicle.

According to Sonali Mazumdar, research analyst at BIS Research: “Clearcoats segment accounted for the largest share of 40 per cent in 2016 in the global automotive refinish coatings market, followed by basecoats. Several players such as Axalta Coatings, PPG Industries, and BASF, among others, offer clearcoat refinish coatings in the market. In the global automotive refinish coatings market, the solvent-borne technology-based coatings segment accounted for a share of 48 per cent in 2016. This growth can be attributed to the advantageous properties of using solvent-borne technology based automotive refinish coatings such as higher gloss retention, excellent block resistance, tolerance to adverse weather conditions, and good adhesion, among others.”

The primer segment has a revenue share of roughly a third of automotive refinish coating market by coating structure and is assessed to gain substantial share throughout the study period.

The North America primer market contributes a third of the primer market and is expected to have a value of over $1.3 billion in the year 2022.

Based on resin, the polyurethane segment has the maximum potential in automotive refinish coating market and is anticipated to gain share at the expense of other resin type segments in 2017. The polyurethane segment is predicted to be worth just under $4.7 billion at the end of 2022.

Polyurethane resins are widely used in clearcoat and basecoat, which helps formulate automotive coatings with higher gloss and excellent finish. The polyurethane resin based coating offers superior durability, thereby, lowering maintenance requirements significantly. The growth of polyurethane resin is also backed by its excellent resistance to UV rays, chemicals, and corrosion.

 

Regional strength

North America is the largest region in the polyurethane segment of automotive refinish coating market. Alkyd is the second largest in terms of resin type segments but is poised to lose market share in the medium term.

Along with North America, the Europe alkyd segment of automotive refinish coating market is predicted to cross a billion dollars at the end of the forecast period – the only other region to do so.

Based on technology, solventborne coating is projected to be the largest segment of the market during the forecast period. At present, solvent borne coating dominates the overall automotive refinish coating market. This technology offers higher gloss level and excellent adhesion when compared to other technologies, the report said. It is also less affected by environmental conditions such as temperature and humidity during the curing phase. However, due to stringent environmental regulations in North America and Europe, there is a shift from solvent borne to waterborne and powder coating.

The refinish paint market for automotive in APAC is projected to witness the highest growth during the forecast period. The growth can be majorly backed by the increasing demand for cars and rising income of middle-class population in emerging economies, such as China, India, and South Korea. Major players are focused on inorganic growth strategies such as mergers and acquisitions to enhance its footprint as well as cater the growing demand in this region.

Key players in the refinish paint market for automotive report are Axalta (US), PPG Industries (US), BASF (Germany), Sherwin-Williams (US), Kansai Paint (Japan), Nippon Paint (Japan), KCC Corporation (Korea), and AkzoNobel (Netherlands).

 




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