On the face of it the outlook in Europe for OEM automobile coatings looks grim at the moment.
The region is estimated to have a 20 percent overcapacity in car manufacturing so that plant closures are seen to be sooner or later inevitable.
PSA Peugeot Citroen of France, which made an operating loss last year, and Opel-Vauxhall, the European business of General Motors, appeared in February to be on the brink of forging an alliance in the region, which analysts say could lead to at least two plants being shut down.
Fiat of Italy, which lost €500 million ($665 million) in 2011 is also under pressure to close uneconomical capacity.
Automobile sales in the European Union have still not recovered from the 2008 financial crisis. Last year’s car registrations in the EU were at the same level of 1997 and around 2.5 million below that of 2007.
However in the longer term prospects for automobile coatings in Europe are much healthier than they would appear to be from sales and overcapacity figures.
The current acute problems with the European car industry are mainly confined to its high volume, lower priced cars, which are the most susceptible to competition from outside Europe, particularly Asia, and are mostly being built in Western European plants.
In neighbouring Eastern Europe including Russia, which is classified as part of the world’s emerging economies, car production has been recovering quickly after a post-2008 downturn.
Most of the leading Western European car companies and several Asian automobile manufacturers have plants in the area to take advantage of its low costs. Kia of Korea, which has a large plant at Zilina, Slovakia, increased its European sales by 21 percent last year.
Premium brands, particularly the big German three of Mercedes-Benz, BMW and Volkswagen’s Audi, are doing well, especially in non-European export markets.
Germany’s sales of exported cars went up last year while those of the UK rose by six percent despite a slide in its domestic automobile sector. The UK has become the export base for non-European car manufacturers such as Nissan, Toyota and Honda of Japan and Tata Motors of India.
A thriving export market for European-made cars has enabled Europe to maintain its position as a developer of new automobile technologies, including coatings, which are ultimately rolled out across the world.
Europe is ahead of most regions in the world in implementing regulations curbing emissions from cars of CO2 and other global warming gases as well as of particulates. As a result the European car sector and its suppliers are pioneering new light-weight, energy-saving materials, such as plastic compounds requiring new types of coatings.
BASF, Europe’s main OEM coatings producer whose major competitors are PPG Industries and DuPont, has just celebrated the 25th anniversary of being the first paint manufacturer to introduce waterborne OEM basecoats, which it estimates were applied to 35 million vehicles worldwide last year.
The company is continuing to use Europe as an R&D platform for new coatings concepts aimed at the global market, such as mirror effect paints, primer and basecoat integration, cathodic e-coatings and scratch-resistant paints. New technologies helped BASF achieve increased automobile coatings sales last year in Europe.
“We are very satisfied with our [automobile coatings] business,” said Kurt Bock, BASF’s chairman, at the company’s annual press conference at Ludwigshafen, Germany, in February. “It is profitable and is well positioned all over the world.”
Its OEM coatings operation in Europe fits with the company’s strategy in the region of aligning itself with customer businesses, which are in the higher ends of their markets. “These are companies that are growing and exporting their products all over the world,” said Bock.
Bayer MaterialScience (BMS) announced in January that it is building a plant at Leverkusen, Germany, to make hexamethylene diisocyanate (HDI) and isophorone diisocyanate (IPDI), which are used mainly as raw materials for high-quality low-solvent polyurethane topcoats for automobiles.
“We must adjust our capacities accordingly if we are to meet the rising demand for coating and adhesive raw materials,” said Daniel Meyer, head of coatings, adhesives and coatings at BMS.
The rapid growth in Europe of an export-orientated luxury cars sector, based on some of the region’s leading historical brands, has been encouraging the development of new materials and design concepts in coatings, particularly for personalized versions of the vehicles.
At Bugatti, Molsheim, France, now owned by Volkswagen, porcelain coatings, developed by the well-known porcelain maker Koenigliche Porzellan-Manufaktur (KPM) of Berlin, have been put on the exterior of a version of the Bugatti Veyron Grand Sport model.
Ceramic coatings have been used on the engine exhaust systems of high performing sports cars and on motor racing vehicles. This appears to be the first time they have been applied to the outside of a car.
At Bentley Motors in the UK, another traditional luxury brand whose global sales rose by 37 percent last year with sales to China virtually doubling, innovative ideas on the design and application of coatings inside the vehicle are being tested. A design company headed by David Linley, a leading UK designer and nephew of the country’s Queen Elizabeth, has placed traditional wood inlays with different types of veneer on fascias, consoles and waist rails in the interior of Bentley models.
Rolls-Royce Motor Cars, now a BMW subsidiary whose global sales rose 31 percent last year, is intent on maintaining old traditions of paint craftsmanship at its plant at Goodwood, southern England.
“We are continuing the grand tradition started centuries ago by the coach-building industry with at least five layers of paint and clear lacquer coating being applied to each [vehicle],” said Nigel Wonnacott, Rolls-Royce’s product communications manager.” Between each layer technicians sand the body by hand. Following application of a final coat, the body is meticulously hand polished for five hours to achieve the glossy luster normally associated with a grand piano.”
As part of its program, coatings colors can be specified by customers through a Rolls-Royce iPad App, which enables the colors to be applied to a virtual car on the screen.
The revival of Europe’s luxury car sector is indicative of new opportunities in the region for coatings innovations in automobiles, whether based on novel technologies or traditional practices.