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    Features

    The Automotive OEM Coatings Market

    Globally auto builds are increasing, which bodes well for automotive OEM coatings manufacturers.

    Kerry Pianoforte, Editor 03.24.14
    Automotive OEM coatings manufacturers Coatings World interviewed expressed optimism for 2014, citing increased auto production in emerging markets such as Asia Pacific and economic recovery in the mature regions of North America and Europe.

    “We have seen recovery at the OEM level, although understandably the pace has varied by region,” said Steve Markevich, senior vice president, Axalta Coating Systems and president, OEM. “The demand for automotive OEM coatings is directly proportional to the number of vehicles produced. Since the economic downturn in the mature markets, there has been a recovery led by North America. Today the outlook for Europe is improving, the Asian markets continue to grow and the South American markets will reflect political and economic conditions.  Our overall confidence in all three regions is reflected in our recent investment commitments.  In the past ten months, Axalta has announced substantial investments in the construction of additional capacity to manufacture waterborne products in Germany, China and Brazil.”

    “Vehicle production will grow in 2014 in North America but not as much as we saw in 2013,” predicted Joe Schmondiuk, vice president – global accounts, BASF Coatings North America. “This increase in production naturally helps OEM paint producers. Europe is still having some struggles with their economy but will see a slight increase in automotive production while Asia is in a growth mode, particularly in China.”

    “Global auto builds are up 18 percent since 2010, and North America has recovered quickly over the last two to three years with production up 36 percent since 2010,” said Mike Millar, PPG manager of strategic marketing, automotive OEM coatings. “The U.S. is expected to sell 15 million units in 2014. Also in 2014, PPG expects vehicle production growth of four percent in North America and two percent in South America, continued growth to remain sluggish. Overall, we expect steady global growth in the three to four percent range.”

    Markevich said he expects that 2014 will see growth globally in automotive production in the three to four percent range based on economic forecasts, and expects to be able to gain new business accordingly.
    “We are watching the market in South America closely due to economic and political volatility in a number of countries including the large market of Brazil and some of the smaller yet important markets of Argentina and Venezuela,” Markevich added. “But long-term prospects in South America are good and our optimism is reflected by our recent announcement that we are moving forward with the third phase of our $32 million waterborne capacity expansion in Brazil.”

    Markevich also said there are signs of optimism as well for the mature European market, which has previously not yet seen the recovery enjoyed by North America.
    “While it may be slower, this market may be on the way to a recovery and we are confident that we are prepared to meet any increases in demand,” he explained. “North America ended 2013 strongly.  Going into 2014, the severe weather has impacted both production and demand. However, the market seems back on track to pre-recession trends. Overall, we expect 2014 to be another strong year for OEM coatings in North America.”
    China continues to lead the growth in Asia and Axalta expects 2014 will be another record year for demand. “We just broke ground to expand Axalta’s waterborne production capacity in Jiading – in the Shanghai area – to supply new OEM manufacturing plants in China’s southern and western regions,” Markevich said.

    Geographically, Axalta has been growing in emerging South American, Asian markets and China in particular. Not only are these markets growing, but Axalta is also supplying modern coatings,which provide industry leading performance and lowest environmental impact.

    BASF also noted that it sees growth opportunities in the BRIC countries, particularly in China.  “This growth in China is fueled by investments in integrated processes – and BASF is a pioneer in integrated processes,” said Alex Shimazaki, vice president - global accounts, BASF Coatings North America.

    In order to support its global automotive OEM customers, PPG has invested in multiple emerging regions in recent years. “We added a new waterborne-coatings manufacturing cell and a resin manufacturing operation in China; expanded the production capacity of our joint venture plant with Asian Paints in India; added an automotive-focused manufacturing cell in Bangplee, Thailand; and are building a coatings plant to expand our presence in Russia,” said Millar.  “We also recently began investing to add a new resin reactor in Sumaré, Brazil. These actions support global OEMs that are moving into these rapidly growing regions.”
    In addition to making these capital investments, PPG also has invested in expanding the capabilities of its regional organizations. “We are committed to ensuring that our organization is fully capable of providing the world-class products, service and support that our global customers expect, no matter where in the world they build vehicles,” said Millar.
    Sustainability
    Reducing environmental footprints and developing environmental responsible products are two key issues for auto OEM coatings manufacturers.

    “The trend towards lightweighting will continue, providing a challenge to coatings manufacturers around performance over new substrates,” said Schmondiuk. “Automakers are also continuing to look for improved efficiency in the coatings process so products that allow them to lower energy costs or shrink the footprint of the paint shop are most important.  That is why we are seeing the proliferation of coatings that eliminate an oven or a part of the spray process.  This trend will continue.”

    “Global OEMs are seeking sustainable solutions from their coatings suppliers. These solutions will help them reduce waste along with their overall environmental footprint
    “Sustainable coating products enable OEMs to improve both the efficiency of their operation and the quality of their vehicles,” said Millar. “The OEMs are under pressure to meet ever more stringent requirements for emissions and fuel efficiency, and both vehicles and production facilities need to meet stricter environmental regulations.”

    “Coatings suppliers have stepped up to these challenges by offering advanced coatings systems that reduce material usage, improve throughput and reduce environmental footprint,” he continued. “Some of these coatings technologies include hyperthrow electrocoat primers and compact-process decorative paints. These technologies allow OEMs to improve their sustainability through footprint and energy-usage reductions, and to increase their vehicle quality and performance, while lowering overall production costs.”

    The OEM paint shop has a significant impact in terms of capital, labor, utilities and the environmental footprint of the overall vehicle manufacturing process. Axalta is  supporting wet- on- wet coating systems and coating layers that can provide multiple attributes in one step that shorten the painting process for both new and refurbished plants. 

    To meet regulations on auto fuel economy and CO2 footprint, automakers are increasingly using lighter weight materials such as aluminum and composites.  “We’re developing coating systems that can protect and decorate these new materials to produce a finished vehicle that meets customer, performance and efficiency expectations,” said Marcevich. “Coatings systems need to meet changing environmental trends such as REACH and TSCA ingredient regulation, and reduction of green house gas emissions from the painting line.”

    Axalta’s waterborne production process utilizes a  global waterborne technology system to produce “Lean and Green Automotive Coatings” that  automobile OEMs manufacturers can use to significantly reduce volatile organic compounds (VOCs), energy consumption  and investment. 

    The “Lean and Green Automotive Coating” process  includes primer-less coatings and 3-wet coatings which can achieve full layer performance  without having to flash and bake  between coats.  According to Axalta, the increased productivity results in  a better bottom line for customers while still producing an unparalleled finish on vehicles.  In addition, Axalta’s waterborne products are environmentally friendly and meet global environmental requirements, such as the EU’s VOC Regulation 2004/42/EC which Axalta adheres to in China, and which can help reduce the overall environmental footprint of China’s auto industry.

    “Axalta’s consolidated process product segment has been growing as we gain share with our 3-Wet High Solids, 3-Wet Water and primerless waterborne ECO systems,” said Marcevich. “Our high efficiency Electroshield 27 corrosion protective technology has been growing in share and volume. This technology has a reduced environmental impact as a result of its enhanced capability to coat and protect deep recesses and provide a smooth exterior that prepares the surface for final finishing.”

    Axalta’s high performance clearcoats have been gaining share as well. “These include SuperMar 2K and Generation V 1k providing outstanding gloss and overall appearance with improved resistance to scratches and marks,” added Marcevich. Axalta recently launched a new high performance Monocoat line for utility vehicles that provides excellent long-term durability once only achievable with a second application of a clear coat following the color coat.”
    The market for auto OEM coatings continues to evolve, and Axalta says it is well positioned to meet these new trends with its latest technologies. “Consumers continue to expect the finish to provide long lasting beauty and protection,” Marcevich said. “Consumers also are always looking for fresh ways to express themselves through the exterior finish selection and that will continue to drive color technology which, in turn, will bring new value from coatings.” 

    Customers Seek Consistent, Reliable Coatings
    Automotive OEMs not only require sustainable environmetnally responsible products, but they need these products to meet the highest performance standards. Coatings for auto OEMs must deliver consistent, durable products on a global scale.

    “PPG’s global reach enables us to provide consistent quality in all regions and across technologies,” said Millar. “To provide customers with the same world-class technology wherever they operate in the world, it is important for automotive suppliers to be disciplined and high-performing in all aspects of their business – from safety to flawless launches to consistent quality – and to take a consistent approach that is based on best practices. In addition, customers expect continuous improvement in coatings systems that reduces their manufacturing costs, simplifies the manufacturing process and improves vehicle appearance and performance.”
    Because these auto coatings must withstand harsh environmental factors, durability is key,

    “Customers expect a coating to last 10 years,” said Jane Harrington, PPG manager of color styling, automotive OEM coatings. “They expect mar and scratch to be minimal.”
    “Auto OEM customers demand a good, uniform initial appearance with high throughput in the painting line,” said Marcevich. “They expect consistency in coatings materials and in the process, continuous improvement and a prompt response to any issues. They also expect the different painted parts of the vehicle to have a consistent color match. OEMs want finished paint that will perform well in the field with high durability requirements on stone chip and gloss retention, with no significant delaminating or corrosion.”

    Customers continue to look for innovative ways to lower costs and shrink their footprint without giving up quality.  “BASF has a strong portfolio of solutions that can help.  Our iGloss, ColorFuse and Integrated Process Technologies, specifically the 3 Wet waterborne process,” said Shimazaki. “The 3 Wet waterborne process is used by one of our key customers. Nissan uses this eco-friendly water-based process for the production of its Infiniti “J” series and Nissan Pathfinder SUVs at its Smyna, Tennessee assembly plant. The process eliminates the need for a primer bake oven, normally used between the primer and color-coating layers. The Smyrna manufacturing plant allows three layers of paint to be applied one after another while still wet before a single trip though the oven. Previous processes required the vehicle to bake in between the primer application and the topcoat layers. Implementation of this new technology reduces energy consumption, cost and emissions while increasing production efficiency.”

    Another new high performance process from BASF is its ColorFuse technology.  “This is an advanced coating technology that provides a highly efficient, integrated painting process via the integration or “fusion,” of the traditional basecoat and clearcoat into a single coating layer,” said Shimazaki. “ It reduces the baking steps required from three to two.  This technology reduces material usage and lowers VOC emissions while still providing excellent appearance, physical properties and outdoor durability.  This process is going to launch commercially in North America later this year with a major OEM.”

    Lastly, BASF offers its iGloss, which is a clearcoat that combines the advantages of inorganic “hard” materials with those of organic “soft” materials.

    BASF reports that the hybrid material delivers improved scratch resistance without increasing brittleness. The technology does not require any significant changes in the application process.  “The clearcoat offers better protection against microscratches, which you might get at the car wash for example,” said Shimazaki . “With iGloss you can enjoy that new car effect for a much longer period of time.”

    Color Trends
    Of course, performance is the most important aspect of automotive OEM coatings, but to the consumer color is key. Coatings companies are tasked with developing durable coatings that feature eye-catching special effects and the most popular colors. While white continues to rank as the most popular color, more vibrant colors are gaining in popularity (see “Automotive OEM Coatings Manufacturers Issue Color Forecasts on page 66). 
    PPG Industries sees an increased use in reds, blues and oranges for automotive coatings.

    “There is an increased use of high-chroma colors using tinted clears, new micas or pigment-coated aluminums noticeable in reds, blues and oranges,” said Harrington. “This has created a custom-car look in production vehicles. White continues to be the most popular color globally. It is not just a solid white, but also white pearls, some with slight color shifts of silver, blue or gold and white metallic shades. There is an increase in blues and reds in North America.”
    According to experts from BASF, three areas influence color moods and preferences.

    “Considering technology, we see a continuation of the speed of discovery and launch of new gadgets, and this is now accepted only with partial optimism – although we continue to be excited by these, there is also an increase in pushing back against this technology, as it creeps in too much perhaps into our private lives, said Paul Czornig, technical manager, BASF Coatings North America. “The individual, then, looks for balance. Balance in work and leisure, in the way we design our cities, homes, and offices. And in society, we see a demand for more responsibility in our governments and businesses. All these factors move the color trend to express these feelings. We see a balance of highly saturated color spaces in reds, blues, and greens that reflect this optimism. Offsetting this, we also have seen a shift towards colors that look more natural, from copper-browns to grayed off blues. Rounding out the palette, blacks, whites, and silvers reflect softer transitions in highlights or grayed off deep angles.”

    Axalta sees growing interest in new soft hues with opaque characteristics, vivid colors with colored sparkle effects, warm and complex hues with an urban appeal and modern interpretations of neutral spaces.
    “These are what we’ve been showcasing in our color trend show Say It With Color!  There is interest in warmer colors, too; light beiges and medium to dark browns, which go well with some of the trending interiors,” Marcevich said/ We see interest in soft light pastels keeping color simple and luxurious. At the same time, there is a trend for high impact chromatic colors for small and sport vehicles.”
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