U.S. demand for automotive coatings, adhesives and sealants is expected to increase 2.6% annually to $5.3 billion in 2012, with volume reaching 1.6 billion pounds, according to “Automotive Coatings, Adhesives & Sealants,” a new study from The Freedonia Group, Inc., a Cleveland-based industry research firm. Coatings will continue to dominate the market, accounting for nearly 80% of market value. Slow gains in this segment will offset the more rapid advances seen in the smaller volume adhesive and sealant markets. An improving outlook for motor vehicle production will support volume gains, as will the increasing importance of structural adhesives in vehicle assembly.
The OEM market for coatings, adhesives and sealants is heavily dependent on motor vehicle production patterns. Through 2012, motor vehicle production is expected to rebound from the poor performance experienced during the 2002-2007 period, spurring demand in the OEM market.
Aftermarket demand will benefit from continued growth in the motor vehicle park, as well as the popularity of light trucks, vans and sport utility vehicles over the past decade. Despite below average gains in the production of these larger light vehicles due to high fuel prices and market saturation, these vehicles—which consume higher volumes of coatings, adhesives and sealants in their repair than do smaller light vehicles—will maintain a significant share of the motor vehicle park. Providing further aftermarket support will be above average increases in the number of medium and heavy vehicles in use.
Demand for coatings will be limited to some extent, as competing alternatives such as paint film and in-molded color, which are used with plastic substrates, can offer cost advantages, reduced production time and improved wear-resistance. Adhesives, on the other hand, will benefit from the shift toward plastics, as they are lower in cost and better-suited for use with plastics than mechanical fasteners.