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    Features

    Automotive OEM Coatings

    Despite slowdowns in 2020, the automotive coatings market is poised to grow, especially in Asia Pacific

    Automotive OEM Coatings
    AkzoNobel Automotive Specialty Coatings repair result
    Automotive OEM Coatings
    A vehicle being coated with PPG paint (Courtesy PPG)
    Automotive OEM Coatings
    Vehicle being coated with PPG paint (Courtesy PPG)
    Anthony Locicero, Associate Editor03.08.21
    The automotive coatings market is expected to be worth more than $35.82 billion by 2026, according to Polaris Market Research.

    After being valued at $25.53 billion in 2018, the market is expected to register a CAGR of 6.4 percent between 2019 and 2026, the Polaris Market Research report noted.

    Of course, the market was affected by the novel coronavirus pandemic in 2020.

    “Across the globe, 2020 was a very challenging year for everyone,” said Kevin O’Connor, director of Global Marketing and Product Management for Axalta’s Transportation
    Coatings business.

    “The automotive coatings market was significantly impacted by the fact that a lot of OEM manufacturing was on hold during many country lockdowns and due to prevention measures, such as quarantines, stay-at-home policies, and the reduction of trans-border transportation,” said Patrick Bourguignon, AkzoNobel director for Automotive and Specialty Coatings.

    Production was down about 20 percent below 2019 levels, according to Sean McKeon, BASF VP, global key account management.

    “COVID-19 and its effects on the economy caused rolling shutdowns of vehicle assembly plants as the virus spread across the Americas,” he said. “Our team worked very hard to get safety protocols in place fairly quickly, so we could restart production.” 

    “We experienced significant volatility in the second quarter,” O’Connor added. “Global lockdowns resulted in unprecedented business shutdowns for six weeks or more but impacts to the supply chain were remarkably contained.”

    PPG was especially affected, having an automotive coatings manufacturing facility in Wuhan, China – the epicenter of the COVID-19 pandemic.

    “At the onset of the pandemic, with almost all countries sheltering in place for an extended period, travel slowed and as a result dampened demand in several coatings end-use markets, including automotive OEMs,” said Rebecca Liebert, executive VP, PPG.

    It wasn’t all doom and gloom, however.

    “Despite the pandemic, demand for new vehicles was still very strong, so there was a solid restart for the industry in the late second and early third quarter,” McKeon said.

    “During the second half of the year, retail sales rebounded strongly, and we were encouraged to see better than anticipated recovery in the third quarter and into the fourth,” O’Connor said.

    Consumers were able to adapt and adjust to the “new normal,” according to Liebert.

    “[T]heir purchase behaviors reflect this. With more consumers spending more time at home, they continue to purchase new vehicles as the suburbs grow and downtown areas shrink,” she said. “The latest industry data bears this out: Whereas North American car dealers typically held 60 to 85 days of inventory in the past, most have fewer than 561 days of supply today. This is especially true in the light truck and SUV categories where demand has remained strong throughout the pandemic.”

    Regions for growth

    By 2026, Asia Pacific region is projected to be the largest market worldwide, according to Polaris Market Research.

    “We see that the overall market faces headwinds across the globe, but we still project growth beyond the global average predominantly in China, South East Asian countries and South America,” Bourguignon said. “When it comes to growth opportunities, we are focusing on providing additional tools and high-quality technical service to our customers to help them grow their business and drive the automotive coatings industry forward.”

    “Asia Pacific is the growth region for global chemical production with China as the major driver,” McKeon said. “OEMs are now making portfolio decisions in Asia, opting to play where they see a sustainable, profitable future.”

    By 2030, China’s share of global chemical production will increase to nearly 50 percent, according to McKeon.

    “We believe that China has significant short- and long-term growth potential for all segments that we serve,” O’Connor said. “For example, we see strong potential for growing our Transportation business in China – both Light and Commercial Vehicle end-markets. From 2020 to 2021, China increased the total amount of automotive builds by nearly 6 million, easily surpassing the increase of 3.4 million builds through the United States- Mexico-Canada Agreement (USMCA) in the same period.”

    “The Asia Pacific region continues to show strong performance driven by China, where the economic uptick is driven by a relaxation of credit, increased consumer confidence and new infrastructure investment,” Liebert said. “According to IHS Markit, vehicle sales in China increased by eight percent year over year with a focus on premium brands and electric vehicles. In China, electric vehicle demand and production are at historic highs as regulatory guidelines continue to accelerate.”

    The North American market is driven and dominated by the U.S. owing to the well-settled manufacturing of automobiles, according to Polaris Market Research. 

    However, with the growing production of vehicles in Canada and Mexico, the market is likely to have increasing demand for these products, the report noted.

    “April 2020 was an unprecedented month for the OEM industry, but with the help of its suppliers, the seasonally adjusted annualized rate (SAAR) of vehicle production over the last eight months in North America continues to be favorable,” Liebert said. “But make no mistake, the coronavirus has left an indelible mark.”

    Color and effects trends

    According to Polaris Market Research, the automotive coatings market is driven by growing applications as blockades to car paints from thrilling acid rains, heat, UV radiations, and dust accompanied by the feature of improving automobile appearance.

    Customer’s expectation for efficiency maximization, appealing appearance and compliance with environmental regulations is a demonstration of the modernistic machinery that is used in the production of products and upgraded processes, thereby creating long-lasting surfaces of vehicles, according to Polaris.

    AkzoNobel is very active in the segments of hang-on plastic parts for the exterior and interior of the vehicles, according to Bourguignon.

    “Overall, we see more attention to detail and to the overall atmosphere that can be created with specific materials and finishes,” he said. “In automotive interior, we continue to see a trend towards neutral colors and material combinations, with subtle hues and effects enhancing the finish.”

    Regarding color trends, AkzoNobel’s Color of the Year 2021, Brave Ground, is a good example, Bourguignon noted.

    “Brave Ground is a warm and grounding neutral shade that gives us the courage to embrace change,” he said. “The shade is all about balance, stability and potential. An empowering, but also a calm, reassuring color that grounds us and reconnects us to the simple things in life. The versatile finish brings elegance to your car interior through a variety of finish looks, from a fine metallic to polished high gloss, smooth soft-touch and subtly reflective terra-coat finish.”

    The company’s global design team collaborates with automotive OEMs using its ColorSurfaces trend collection as a starting point for new color development to digital tools to help designers create the perfect look for their project, Bourguignon pointed out.

    “Overall, there is a growing focus on sustainability, which also influences design choices that go hand in hand with functionality and efficiency. Examples include easy clean or anti-fingerprint coatings,” he added.

    Axalta frequently surveys the market to understand the needs and wishes of car buyers around the world, according to O’Connor.

    “Our expertise in identifying color trends and color popularity and combining that with the science of color demonstrates our color leadership in the market. We continue to be on the leading-edge of bringing to life innovative and functional automotive colors that align with consumer trends,” he said.

    According to Axalta’s 68th annual Global Automotive Color Popularity Report, neutral colors such as white, black, gray and silver dominate with 81% of vehicles painted in one of those four colors.

    White remained the most frequently purchased vehicle color globally for 10 consecutive years, and black continues to be the favorite in luxury vehicles, per the report.

    “We have started to see a growing interest in gray and less in silver. In 2020, gray increased two percent worldwide, while silver declined in nearly all regions by one percent,” O’Connor said.
    “Our customers are also showing interest in the role we play in mass customization.

    “Over the last few years, consumers are more frequently asking for automotive colors that are customized and personalized,” he continued. “We are experiencing increasing interest from our customers about black roofs, two-tone paint schemes, stripes, and logos.

    “Being able to choose an automotive color that isn’t one of the typical eight to 10 colors normally offered is appealing to many car buyers. Consumers are increasingly interested in customized finishes that accentuate the vehicle and the owner’s personality,” O’Connor added.

    “These personalized designs can be costly, which is why we’ve significantly invested in digital printing technologies, which is a cost-effective alternative to the traditional spray-painting process currently used for customization,” he concluded.

    The BASF Color Report 2020 for Automotive OEM Coatings shows the automotive color palette shifting in unconventional ways, unveiling a wider range of chromatic colors rolling off the world’s assembly lines, McKeon said.

    “Diverse shades like blue and yellow are making gains in some regions, while red and violet are slowly cutting the lead held by the achromatic colors in other parts of the world. The expanding color spaces made the overall spectrum broader than 2019 and added a flash of brilliance,” the report noted.

    “Despite the shift in colors, the achromatic colors – white, black, silver, and gray – followed a familiar pattern, coating the majority of the vehicles produced. As it has been for several years, white is still the most popular car color around the world. It has a classic, timeless beauty, and a connection to both the environment and high technology,” the report found. “Shades of blue are seen as more elegant, and buyers who may have chosen beige or brown in the past seem to be moving to blues or grays. BASF designers could see this coming. As early as 2016, BASF designers described blue as ‘a major color direction for the automotive industry that will gain market share in upcoming years.’ Automotive designers often look 3-4 model years ahead when developing colors, and the market has played out exactly as predicted.”

    “There’s a lot to get excited about with the bright colors we’re seeing,” said Paul Czornij, head of design, The Americas. “Just as we predicted three or four years ago, blue is having a moment in the sun, and we’re using some beautiful effects and pigments that advance the possibilities of hue and texture in this important design space.”

    PPG recently released its 2020 automotive color popularity report, which showed blue hues continuing to increase in popularity, climbing to nine percent of the global color share – a one percent increase from 2019.

    “The trend reinforces PPG’s 2019 automotive color forecast, which anticipated that sales of blue automobiles would increase over the next four years,” Liebert said. “PPG experts believe the rise and fall of the global COVID-19 pandemic through 2020 and 2021 is likely to further fuel global preference for the color.”

    While blue held steady in most regions, it increased by one percent in Asia-Pacific markets, accounting for virtually all the color’s overall global growth, the report noted.

    In North America, blues achieved 10 percent of the color share, matching 2019, but became more popular on minivans, compact cars and sports cars.

    Blue now commands 15 percent of the sports car segment in the region.

    “Consumer demand and the need to accommodate autonomous driving technologies helped white remain the world’s most popular automobile color,” Liebert said.

    While preference for white tones fell one percent from 2019, solid and metallic shades of the color claimed 34 percent of the cars purchased worldwide in 2020, according to PPG’s report.
    This was led by 41 percent of auto builds in the Asia-Pacific region, a boost of one percent from 2019, and 36.5 percent in South America, where demand fell by 2.5 percent.

    In North America, white metallic leaped substantially in the luxury car segment, from 21 percent last year to 38 percent in 2020, Liebert noted.

    Globally, a slight decrease in the popularity of silver was balanced by a corresponding increase in preferences for gray, according to the report.

    Silver tones dropped from 15 percent of auto builds in 2019 to 12 percent in 2020. Grays rose from 10 percent to 12 percent during the same period.

    “PPG forecasts that gray will remain a popular core color for automotive stylists moving forward, driven by the resurgence of concrete and stone materials and the on-going appeal of ceramic and metal tones,” Liebert said. “The gray palette will shift toward warmer hues with brown influences, while blue-inflected grays will retain their fashionability.

    “PPG forecasters say the influence from nature will be apparent in silver stylings moving forward as well. Warmer and more organic tones will further reflect current consumer tastes, while also aligning with the highly compatible nature of very light tones, including whites, with new radar and LiDAR technologies,” Liebert concluded.

    Sustainability

    Sustainability continues to be a hot industry topic.

    “Sustainability and sustainable paint systems are an important and still growing trend – raw materials, alternative eco-material and waste materials are factors that are undergoing a strong transition towards more sustainability,” Bourguignon said. “In relation to this, we see a growing demand for low-VOC coating systems.”

    The growing focus on sustainability also influences design choices “that go hand in hand with functionality and efficiency,” Bourguignon added. “Examples include easy clean or anti-
    fingerprint coatings.”

    For many automakers, according to McKeon, water has replaced organic solvents in coatings to permanently reduce emissions of volatile organic compounds. 

    “Sustainability is at the core of what we do. We source responsibly, produce safely for people and the environment, and drive sustainable solutions that add value for our customers, society, and the economy,” McKeon added “Following current trends, we want to be a thought leader in sustainability, taking a leading role in sustainable processes and business models. BASF will complete Product Carbon Footprint assessments by the end of 2021, and we want to achieve CO2-neutral growth until 2030. Our Verbund production activities save energy, reduce emissions and waste, and conserve resources.”

    According to O’Connor, Axalta is seeing an increased demand for eco-friendly coating solutions.

    “For our OEM customers, the focus has always been to reduce the total cost-to-coat in the body shops,” he said. “We are currently seeing an increased demand for coating solutions that are eco-friendly, reduce a body shop’s total environmental footprint, and deliver a beautiful final appearance.

    “More specifically, we are focused on developing coating solutions that enable OEMs to reduce the carbon dioxide emitted from the body shop, as well as the carbon dioxide emitted from the energy that powers its business,” O’Connor added.

    “The OEM industry continues to prioritize sustainable coatings solutions, including more water-based technologies and low-temperature cure products, enabling our end customers to reduce their energy consumption on the manufacturing line,” Liebert said.

    PPG offers ZircoBond pretreatment, which Liebert said provides a sustainable option to address OEM regulatory concerns, while offering cost-saving advantages over traditional zinc phosphate pretreatment technologies thanks to reduced waste generation, reduced energy usage, and reduced water consumption.

    “The end markets that Axalta serves are among the most demanding in the coatings industry, requiring high levels of product performance with increasing expectations for productivity and environmentally responsible products,” O’Connor said. “Our approach is dictated by customer preferences, existing and emerging regulatory controls on hazardous materials, and our own commitments to produce more environmentally responsible coatings and focuses on three components: The manufacturing process, the sustainability of our coating solutions, and creating more environmentally friendly processes.”

    AkzoNobel offers a portfolio of waterborne products, “which gives manufacturers a choice when selecting products that meet functional needs while considering environmental performance,”  Bourguignon said. “We’re constantly working on helping our customers comply with and stay ahead of VOC-related legislations; among the many ways we do this is by using high solids and waterborne paints and coatings.”

    AkzoNobel recently launched low-VOC brands in China, Bourguignon said.

    “Waterborne coatings represent a technology that has been in the market for many years already, particularly in mature markets,” he continued. “We see a tendency for developing markets, especially in Asia with China being a clear driver, to also start enforcing these technologies, as they help comply with legislations requiring lower VOC emissions.

    “Compliance to increasing governmental environmental regulations around the world will allow BASF to differentiate itself in the market and to contribute to our customers’ self-set sustainability targets,” said Jaime Manon-Macias, head of marketing, The Americas. 
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