Automotive Refinish Market

By Kerry Pianoforte | August 10, 2005

Automotive refinishers continue to expand their businesses globally as well as develop easier-to-use, fast, environmentally-compliant products to meet the needs of growing and emerging markets.

Savvy business professionals know that being in the right place at the right time is essential to success in any business endeavor. Manufacturers of automotive refinish products have been working overtime through expansions, acquisitions and partnerships to get their products and services to reach markets around the world that offer the greatest potential, such as Eastern Europe.

After the collapse of communism more than a decade ago, a number of former Soviet Republics in Eastern Europe have embraced capitalism. With Estonia, Latvia and Lithuania slated to join NATO and the European Union, suppliers to the automotive refinishing market�such as BASF, Akzo Nobel and Sherwin Williams�have noted there is considerable demand potential in these still-burgeoning markets.

AP Trading, the Estonian importer for BASF's Glasurit automotive refinishes, opened the country's first training center for automotive refinishes in Tallinn, Estonia. The center is the result of a cooperation between AP Trading and the State College of Mechanics at Tallinn. Glasurit GmbH will also use this new facility for local and international training. Future plans are in the works for coaters from neighboring countries of Latvia, Lithuania, Russia and Finland to use the training facility as well.

In conjunction with Glasurit's own training center in Moscow, opened in 2002, the company plans to make further inroads into the Russian market for automotive refinish while at the same time expanding the international presence of its training locations in Eastern Europe.

Following the addition of the latest two centers, Glasurit now has 16 training centers. In addition to Moscow and Tallinn, centers are located in Germany, France, England, Italy, Spain, The Netherlands, Belgium, Germany, Poland, Bulgaria, Austria, Croatia, Czech Republic and Turkey.

According to BASF, as the refinish market continues to be impacted by new techniques, products, guidelines and directives, there is a necessity for these worldwide training centers. The same standards are presented throughout all the centers, resulting in what BASF refers to as it's "one-voice policy."

Akzo Nobel has a broad range of training courses for body shops, regardless of the size of shop. "We offer basic product training and spot repair training, but also more advanced application courses," said Aart Mateboer, global product manager, Akzo Nobel Car Refinishes. "We have 63 dedicated training centers all over the world and we have a global training center in Sassenheim, The Netherlands, where customers from countries such as Nigeria and other regions where we don't have our own branches can be trained."

These training centers not only provide training for the application of the coating, but also offer instruction in financial and communications matters.

"Beside the training we provide to the paint shop, we have a broad range of training for the entire body shop," said Mr. Mateboer. "We provide training to the body shop manager on how to run his business more efficiently and make him more profitable. Sikken's vision� 'People best at enabling body shop profitability'�illustrates why we believe this is important. Through our experience in the collision repair market, we are able to help our partners in business to enhance their performance and increase their profitability. We even have training for the body shop on human resources, communication and efficient administration processes."

There are a number of DuPont Refinish Training Centers (DRTCs) throughout Europe as well. "As the European markets vary and products can be introduced at different times, it is important to have facilities in different countries," said Olaf Adamek, European marketing communications manager, DuPont Refinish. "This enables DuPont Refinish to maintain a high level of training in line with the needs of each individual marketplace." According to Mr. Adamek, each center offers a wide range of courses and support programs suited to refinishers, distributors and DuPont Refinish sales and technical staff. DuPont carries out more than 1,000 courses in Europe, with more than 10,000 students completing them, he said.

Strategic Alliances Play a Key Role
Many of the key suppliers to the automotive refinish market have embarked on a series of acquisitions and alliances to expand their presence in new markets, in some cases purchasing its distributor or importer in an effort to achieve higher returns or greater offerings.

Sherwin-Williams Automotive Finishes Corp. (SWAFC) recently acquired ScottWarren France, based in Perpignan, France. The newly-formed company, Sherwin-Williams France will operate as a subsidiary of Sherwin-Williams Automotive Europe. ScottWarren France, one of France's fastest growing automotive refinish companies, has distributed Sherwin-Williams Automotive Finishes' products since 1996 from its headquarters in the south of France. Sherwin-Williams will utilize the existing 50,000 sq.-ft. facility, which features a color lab, customer service center, training facility, applications laboratory and warehouse. According to Sherwin-Williams, the acquisition follows the company's strategy to grow its presence in the European market, which was implemented in 2000.

In addition, SWAFC has formed a strategic alliance with Chemical Specialties, Inc., the largest privately-owned paint manufacturer in South Africa. The partnership enables Chemical Specialties to distribute the Sherwin-Williams brand automotive refinish basecoat/clearcoat system throughout South Africa.

Akzo Nobel Car Refinishes recently acquired Educorte SA, its Portuguese importer of Sikkens and Lesonal refinish paint. Nine employees will transfer to Akzo Nobel's Portuguese service center, Akzo Nobel Tintas Para Automotives Lda., which is located in Lisbon. In addition, Akzo Nobel Car Refinishes has set up its own business in Pinetown near Durba, South Africa, following its strategy to build strong distribution networks, supported by its own organization in key markets, according to the company.

There is also significant activity on the North American refinish front. Sherwin-Williams Automotive Finishes has opened two new branches in Albany, NY and Florence, KY. Along with other locations opened earlier this year in Mobile, AL and Chattanooga, TN, S-W has now opened four new branches in less than 10 months, bringing its total number of U.S. branches to 132. And S-W isn't done yet. Four additional locations are scheduled to open throughout the remainder of 2003, according to the company, featuring direct distribution of SWAFC automotive paint and associated products, mixing and delivery services, and SWAFC sales and technical representation and training, including product and management courses.

Education Sets Standard
As automotive coatings companies expand their presence, they expand their personnel rosters making it imperative to train coaters to be on par with company requirements. Among the biggest training issues is helping coaters to become well versed in the latest environmental legislation. Legislation in the U.S. and Europe is setting new standards in reducing VOCs, and has consequently forced the automotive refinish industry to transition from solventborne to waterborne coatings. Many times this means teaching workers about new waterborne technologies and training them on new equipment.

"Especially in Europe, where in contrast to North America, the VOC legislation can only be met by using waterborne basecoats, paint shops had to go through a number of changes, both in equipment as well as in working procedures," said Mr. Mateboer of Akzo Nobel Car Refinishes. "In The Netherlands and the UK, where the legislation is the strictest, the majority of paint shops are now working with fully compliant systems, in the rest of Europe we are preparing and switching our customers to VOC compliant systems in order for them to be ready before the EU legislation comes in force by 2007," he added.

In response to the pending EU legislation, DuPont Refinish has developed the waterborne Cromax range offering reduced VOC emissions and significant environmental benefits. "It combines superior quality with faster curing times and is an efficient solution for body shops that want the best clears for all repairs with less than 420g/l VOC," said Mr. Adamek of DuPont.

While the obvious benefit of the waterborne Cromax range is the compliance with VOC regulations, there's a bonus for body shops, according to Mr. Adamek. "Body shops are switching to Cromax not only because of compliance but also for its benefits in increased productivity. Refinishers can expect color accuracy, coupled with excellent coverage and ease of use. Wet-on-wet application and no flash-off times between coats mean repairs can be carried out faster and most colors can be repaired with only two coats."

Sixty-one Cromax mixing tints are available so repairers can accurately match solid, metallic and pearlescent colors by combining the tints with waterborne binders, according to DuPont. Mr. Adamek also noted that Cromax comes ready-to-use, "so there are no time-consuming viscosity checks or costly reducers to add."

BASF's Glasurit 90 Line waterborne basecoats can be used to repair metallics, special-effect and solid-color finishes. These coatings are widely used in the UK, The Netherlands and Austria, where VOC legislation is currently the strictest. Glasurit 90 Line paint systems can be applied in conventional spray booths.

Akzo Nobel has introduced two new innovative clearcoats, Sikkens Autoclear WB and Autoclear III to the car refinish market. Autoclear WB is a waterborne refinish clearcoat that dries in 35 minutes and appears white on the panel when first sprayed to make it easier for the painter to control coverage.

"Due to its white appearance during spraying, it offers maximum control during the application," said Mr. Mateboer. "Although it is a low VOC product, 3.5 lb/gl, the product is very easy to apply without the risk for sagging or popping."

Autoclear III is a solventborne clearcoat that consists of one package clearcoat, hardener and activators with 10/20/30 minutes drying time.

What's Next?
Besides, environmental compliance, automotive refinish suppliers must focus on providing products that are fast and easy to use. In order to keep up with these demands, paint companies must always be working on "the next big thing."

"We are continuously working on new technologies, with the aim to upgrade our assortment by improving speed, coverage and also looking at ways to minimize the impact on the environment," said Mr. Mateboer of Akzo Nobel. This month the company will introduce Autoclear Vision HS, a clearcoat that cures in five minutes at 60�C, to the North American market.

Akzo Nobel has also been busy developing new marketing concepts. In June it launched a new company called Nobilas. "Nobilas provides accident and claim management and herewith connects several parties in the market, like insurance companies, lease companies and body shops," said Mr. Mateboer. "Nobilas makes the entire chain more efficient, from the moment a car is dented until the moment a driver picks his car up at the body shop."

As automotive refinish companies continue to make major changes�improving and streamlining their products and processes�they will certainly continue to reach out into new markets.

Variety of Courses Offered for Automotive Refinish Market
Manufacturers of coatings for the automotive refinish market are offering a variety of classes to help body shops maximize their performance and profitability, as well as classes to help insurers understand current technology.

BASF now offers a new interactive workshop designed to help body shops increase profit and improve customer satisfaction through more efficient repair process management.

Advanced Production Management, the latest offering in BASF's VisionPLUS University program, is an intensive one-day program for key body shop employees involved in the production process, including estimators, customer service representatives, business and production managers and lead technicians.

The workshop focuses on systemization, "pre-managing" repair jobs, organizing the production department and increasing "throughput." The workshop is taught by Bernie Blickenstaff, president Collision Management Services, Inc.

BASF's VisionPLUS University is a package of interactive workshops and business seminars developed to help distributors and body shops improve their performance and profitability. For more information call (800) 825-3000 or go to www.basfrefinish.com/vision.html.

PPG Automotive Refinish has introduced its Cycle Time Management course. This course teaches a host of techniques for speeding up the cycle time of a shop's repair process from the time the order is placed to final delivery.

The class is designed for shop owners, mangers and key personnel, with overall aim of improving throughput, leading to increased profitability and customer satisfaction. Special focus is devoted to how to best implement a "quick repair" process by modifying existing administrative and production processes.

The one-day course covers streamlining administrative time, scheduling to maximize repair capacity, segmenting jobs by type and size of repair and organization of vehicle disassembly. The course also covers how to blueprint jobs for error-free repairs and how to develop work teams to speed repair time.

The class is available at PPG's 187 training centers across North America and is taught by industry experts in the MVP program from PPG. For more information call (800) 970-2283.

DuPont Performance Coatings (DPC) is offering a course for insurers designed to enhance their awareness and understanding of today's technology.

The one-day course, Refinishing Today, covers paint and materials, paint procedures, color matching, equipment and facilities, regulatory compliance, tri-coat finishes, plastics, paint defect analysis and industry issues. Classes are conducted in-shop, with live demos. According to the company, several hundred field appraisers, adjusters and claims management personnel from national insurers have already taken the class.

DPC-trained instructors are facilitating Refinishing Today on an as requested basis throughout the U.S. Those interested in the course should contact their local DPC representative for further information.

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