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Automotive Paints Market – New Revenue Pockets
The automotive paints industry is directly influenced by the automotive industry’s production figures. Any fluctuation in the vehicle production rates would directly affect the dynamics of the automotive coating industry. Owing to the increasing demand for vehicles, it is estimated that the automotive coating market would also show promising growth in the coming years. Because of the environmental concerns, the government regulatory authorities and other environment organization have issued regulations and guidelines to control/minimize the application of VOCs in automotive coatings. These regulations are encouraging the market share of eco-friendly coatings and it is expected that these green-coatings would show a promising growth for the next five years.
Solvent-borne coatings are estimated to lead the coatings market with the largest market volume by technology in 2013. However, as a result of their high VOC content, the growth of solvent-borne coatings is expected to slow down. The associated environmental benefits with low switching costs have popularized waterborne coatings within a short period of time. Still, waterborne coatings contain a small percentage of solvent (VOCs) and hence, they are known as ‘low VOC’ coatings. Reasons, such as increasing environmental constraints, transfer efficiency, minimizing the paint shop wastage, maximum overspray recovery, and emissions have raised the demand for powder coatings. They do not contain any carrier medium such as solvents, or water, therefore they are categorized as completely eco-friendly or green-coatings. As solvent-borne coatings lose their market share to the eco-friendly coatings, owing to the above mentioned reasons, the waterborne coatings market is projected to rise at a faster rate and is anticipated to provide a new opportunistic market for the players. The eco-friendly coatings would be the best segment to invest in as its revenue share in the global automotive coating market is increasing at a rapid pace.
Innovative processes launched by key automotive coating giants have introduced new basecoats which excludes the requirement of primers and solve the purpose of both primer and basecoats. Such innovations are designed in order to reduce the overall cost and the time required per vehicle unit with controlled paint shop emissions. If these trends are assumed to continue, the demand for basecoats would increase in the near future. Therefore, automotive coatings companies should primarily focus on minimizing the thickness of the coat as well as reducing the steps involved in the paint process to increase the rate of production, as these are the main demands by the vehicle manufacturers. Hence, investing in R&D for such innovative products would be beneficial for the automotive coating players to sustain in the market.
Asia-Oceania is the largest market for automotive coatings with China having accounted for a majority share in 2013. Large scale production of vehicles has benefitted the Chinese automotive coating industry. In North America, U.S. is the biggest vehicle manufacturer, accounting for about 65.4% of the total vehicle production in North America. Due to increased production rates in the U.S., after the economic slowdown, the automotive coating industry is also benefitting from this high vehicle demand and it is estimated that it would grow with a significant growth rate. The trend for investments is unlikely to change, as Asia-Oceania will be the favorite destination for the automotive coating industry due to the fact that the majority of the global vehicle production is carried out in the Asia-Oceania region. The U.S., Mexico, Brazil, Argentina, and Russia would also be the countries to watch for, as the automotive industry is very prominent in these countries growing with significant rates.
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