OEMs are concerned about the rising energy consumption at their paint shops and the resultant increase in carbon emissions. These environmental issues and OEMs’ desire to accelerate production cycle times have prompted OEM coating suppliers to develop integrated coating processes such as those that do away with primer coatings. This drop in primer requirement will be offset by the amplified need for basecoat to achieve superior performance and aesthetics.
Another important feature of environment-friendly vehicles is lightweighting, achieved through the greater use of plastic parts in automobile production. This translates to a new market for coating technologies that can seamlessly paint over plastic and metal substrates. However, the gradual replacement of metal parts with plastics and composite materials will dampen the demand for OEM coatings on metal substrates.
New analysis from Frost & Sullivan, Analysis of the North American and European Automotive OEM Coatings Market (http://frost.ly/pd), finds that the market earned revenues of $2.81 billion in 2015 and estimates this to reach $3.37 billion in 2022. During this period, the market is expected to register a compound annual growth rate of 3.3 percent and 2 percent in North America and Europe, respectively.
“There is also a fast-emerging market for safe and sustainable products due to the cap on the use of volatile organic compounds (VOCs) in coatings by the European Renewable Energy Directive and California Air Resources Board (CARB),” said Frost & Sullivan Visionary Science Research Analyst Vinay Venkatesan. “In response, coating OEMs are likely to develop non-polluting and high-performing waterborne, high-solids and powder-based coatings.”
While the VOC regulations are implemented strictly in Europe, there is considerable variance in their enforcement across the East and West coast regions of the U.S. As a result, North American OEMs are reluctant to invest in new equipment that supports sustainable technologies and continues to be heavily reliant on solvent-borne technologies.
In both Europe and North America, automotive production is on the upswing. Coating OEMs are developing superior basecoat products to make the most of this opportunity and the rising consumer demand for dynamic colors and sophisticated coating finishes.
“The continuous evolution of automotive quality standards has had a knock-on effect on coating systems, resulting in improvements such as extreme stone chip resistance, etch and mar resistance, and high corrosion protection,” said Venkatesan.
The OEM coatings market is highly consolidated; leading participants such as PPG, BASF and Axalta Coating Systems contribute to the majority of market shares in both Europe and America, according to Frost & Sullivan. As there are only a handful of global companies supplying to a largely fragmented OEM market, customers have been very demanding in terms of cost efficiency and performance. Therefore, coating companies are working on diversifying their product portfolio to offer a wide array of products and services across all layers. This strategy will go a long way in enhancing market penetration in both regions, says Frost & Sullivan.
