Automotive Paints Market Analysis, Overview, Growth, Demand and Forecast 2022

Automotive paint market is expected to witness growth owing to increasing automotive production in countries including the U.S., China, India and Mexico among others. Growth can be attributed to factors such as economic development, new technological innovations such as waterborne and powder coatings, and lower cost of crude oil. These factors definitely make a lucrative aspect for the new players to enter into the market. But, due to association of high cost such as setup cost, holding cost and material cost with the product, sometimes the industry is perceived to have high barriers of entry. There are many drivers that drive the industry such as growing need of logistics catered by automotive vehicles, demand of passenger vehicles, and increase in awareness about quality, security and aesthetics. Because of which today the market has moved from an expected product to an augmented product, where people get more than what they expect. This has been achieved through continuous innovation, harnessing to reduce costs. These aforementioned factors have led to an increase in profit margins for manufacturers in turn augmenting the production and the supply.

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Some of the earlier paint technologies that used to drive the market were conventional low solids, solvent based formulations, latex paints, which were primarily used in architectural applications prior to automotive industry applications. But with time government regulations on air pollution has led the manufactures to focus on reducing emissions from Volatile organic compounds (VOC). Other factors that have become key drivers for the manufactures to continuously develop were the energy conservation and the increase in solvent costs. These aforementioned reasons become the key reasons for new technologies such as waterborne (thermosetting emulsion, colloidal dispersion, water soluble), two component systems, powder coatings, and radiation curable coatings to come into force. In the next seven years, air pollution regulation will become the key driving force for the adoption of new technologies resulting in the increase of demand of automotive paints. New technologies such as addition of nanoparticles to the paint formulation to modify specific properties (scratch, wear, and corrosion and UV resistance) would become the futuristic approach of the industry.

The United States, Japan and Western Europe are the mature markets and generally correlate with the health of the economy especially in housing, transportation and construction. Out of the three economies, Japan is expected to show relatively slower growth in the forecasted period for the paint and coating market especially in Automotive OEM and machinery market. Early maturity achieved by the market could be considered as one of the reasons. Whereas market such as Asia Pacific, Eastern Europe, and Latin America are expected to witness much faster growth. These are still young markets and would be showing growth of more than 8% per year in the forecasted period. Hence, in total overall global market is expected to show more than 6% of growth every year. Among growing markets of Asia Pacific, India and China will continue to cater growth of more than 10% per year.

Paint and Coating industry is primarily segmented into two functions decorative and protection. Primarily Protection function drives the automotive paints market to increase the life span of vehicles to make them desirable and marketable. Other than protection people have started using the decorative paints as vinyl coatings on exterior parts, colorful spray paints in the interior parts of the vehicles. Usage of decorative paints is majorly seen in the Europe region and North American region where people focus has moved towards vehicle customization for better performance and aesthetics.  The major players in the automotive paint market are Kansai Paint co. Ltd (Japan), Nippon Paint Holdings Co. Ltd (Japan), Axalta Coating Systems LLC (USA), Asian Paints (India), Axalta Coating LLC (US), BASF GE (Germany), Arkema SA (France). The profitability of these companies is majorly dependent on efficient production and technological expertise.

These producers would gain more presence in the developing world in the forecasted period as living standard and disposable are expected to increase. Automotive paint supplier such as Axalta Coating Systems is expected to offer IPO (Initial Public Offering) in the US to rise more than USD 1 billion. The company is planning to invest more on technological front so that future demand of quality paint products that could meet emission standards set by government can be achieved. Manufactures coherently have put much effort to give quality vehicles as well as they given the guidelines for the customers to check the quality of the same through following steps such as Looking at the hood of the car, Checking the car doors, Inspecting the paint finish on bumpers, and looking at the vehicle as a apple’s surface and not the orange peel type.

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