Slow down for automotive coatings

The global market for automotive coatings is affected by the struggling of many international car manufacturers. Especially OEM and plastic parts coatings are currently showing decreasing figures. The outlook for refinish coatings is somewhat better.

automotive coatings road
The automitive coatings market is under pressure -

The market value for the global automotive coatings market was estimated at around EUR 22.6 billion in 2018, with automotive OEM coatings accounting for the largest share of the value followed by automotive refinish coatings. The total volume of the market was at 3.06 million metric tonnes.

The global automotive OEM and plastic parts coatings market was estimated by IRL at almost 2.25 million metric tonnes in 2018, a slight decline compared to 2017. Sales also went down from EUR 13.74 to EUR 13.59 billion. The analysts of IRL believe sales have declined as a result of slowdown or decline in vehicle production in major markets.  

This decline is expected to continue as the early signs in 2019 suggested and is estimated to pick up from 2020 once the vehicle sales demand in major markets stabilises. Thereafter, the market should continue to grow and reach almost 2.5 million metric tonnes by 2023.

Struggling automotive market

However, the automotive market is currently struggling. Robert Bosch, an automotive supplier, for instance recently revised its forecast for global automotive production, expecting a 5 % decline this year, bigger than an earlier estimate of a 3 % decline. The BBC is also reporting about the falling demand. After years of strong growth, global car sales were broadly flat in 2018, largely because of a slump in demand in the world’s biggest market, China. The Chinese slump comes as demand in two other giant car markets, Western Europe and the US, has also slowed amid waning consumer confidence.

Automotive coatings market 2018

The global automotive coatings market by volume in 2017 and 2018.

In Europe, emission issues are also causing headaches for car manufacturers. Air quality concerns and taxation changes have led to a big drop-off in diesel sales, contributing to a fall in new car registrations in several European countries in 2018. More challenging, perhaps, is the introduction of tough new CO2 emission standards, designed to tackle global warming, that make it much more expensive to build cars. From 2021, manufacturers will face big fines in the EU if their fleets break agreed emissions limits, and these targets will get progressively tougher.

More electric vehicles

To get their emissions levels down, carmakers will need to sell a lot more electric vehicles, but there are big obstacles in the way. A lot of carmakers are not ready to deliver electric vehicles at the right quantities. They need to change their operations and gear the cars much more to a mass market, but that requires investment.

Other worries are weighing on carmakers’ minds, too – one being the emergence of new technologies that could radically change our relationship to car ownership. If driverless cars go mainstream over the next 15 years then many people might opt to share or rent rather than own our own vehicles. That could slash the cost of travel per mile, making ownership seem much less appealing.

Refinish Market shows continuous growth

The global automotive refinish coatings market continued to grow in 2018 to reach almost 0.81 million metric tonnes and a value of EUR 8.98 billion. Contrary to automotive OEM and plastic parts coatings market, the refinish market is projected to steady growth. According to IRL, the volumes should exceed 0.9 million tonnes in 2022 and reach 0.93 million tonnes in 2023. Asia-Pacific accounts for the largest share of sales followed by Americas region.

Water-based systems dominate OEM

In terms of application systems, water-based coatings already account for the majority of sales of automotive OEM coatings, mainly due to the European and North American legislation in place for these markets. In 2018, water-based coatings accounted for 0.93 million tonnes in the OEM segment, followed by 0.84 million tonnes of solvent-based systems and 0.04 million tonnes of powder coatings.

In the refinishes and plastic parts markets solvent-based coatings are still dominant. Some 76 % of the applied systems in the refinish segment are solvent-based. With 79 % is the share of solvent-based systems in the segment plastic parts even higher.

Pure acrylic are the most used resins

Regarding the main resins used, pure acrylic accounts for the largest share in all the three coating types market. These resins are used in some 40 % of the coatings or in 1.2 million tonnes of the total
3.06 million tonnes.

Pure acrylic-based resins account for some 33 % in automotive OEM coatings. The second largest share of the automotive OEM coatings market hold epoxy-based coatings (30 %) followed by polyurethanes (20 %).

Damir Gagro

More information:

A longer and more detailed of this report was published in the European Coatings Journal 10/2019. A digital version is available for subscribers at European Coatings 360°.

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