Global Automotive Coatings

Report Overview

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This study examines the global automotive coatings industry, which is divided into two major applications:

• OEM (original equipment manufacturer)
• automotive refinishing

Excluded from the scope of the study are products such as:

• paint thinners
• solvents
• plasters
• adhesives and sealants

Historical data (2009, 2014, and 2019) are reported in metric tons and current US dollars, with forecasts provided for 2024 and 2029. The term “demand” actually refers to “apparent consumption”, and is defined as production (also referred to variously as “shipments”, “output”, or “supply”) from a country’s domestic manufacturing facilities plus imports minus exports. It is used interchangeably with the terms “market”, “sales”, and “consumption”. In many cases, coatings production data were converted from gallons or liters based on estimates of the average weight.

Impact of COVID-19 Pandemic on Automotive Coatings Industry

The automotive market fared far worse than the global paint and coatings market as a whole, as demand is very reliant on motor vehicle production and sales, which plummeted due to manufacturing lockdowns and quarantines.

Among the major automotive coatings markets, OEMs saw severe demand declines, as plant closures and temporary shutdowns due to government orders occurred in many large markets, particularly in the US and Western Europe. Demand in the motor vehicle segment sharply declined due to these temporary closures – production virtually ceased in some parts of the world for several months to a year – and a reduction in travel, as people spent more time at home and in some cases telecommuted. This resulted in relatively stagnant demand for refinishing coatings in developed countries.

However, demand in the auto refinishing market actually increased during 2020, almost solely driven by increased repainting activity in China. The country’s motor vehicle ownership continued to rise at a rapid pace, as China reopened its economy earlier than other nations due to its management of the pandemic.

Demand for automotive coatings is expected to rebound in 2021, as manufacturing plants continue to reopen in some parts of the world and slowly increase their output.

The potential exists for automotive coatings to grow at a slower pace than the current forecast in 2021 due to a global semiconductor shortage. However, automakers such as Ford have decided to continue manufacturing vehicles, stockpiling these fully-coated cars and trucks while they await new quantities of semiconductors.

Demand by Region

Through 2024, demand for automotive coatings is forecast to rise 2.5% per year to 3.9 million metric tons.

The Asia/Pacific region is by far the largest outlet for automotive coatings, with China accounting for much of that demand, as it is the largest national market globally. Demand will grow at a rate above the global average through 2024, driven by expanding motor vehicle production and rising incomes, supporting larger rates of vehicle ownership.

The Africa/Mideast is expected to be the fastest growing, as the region’s automotive production base increases at a rapid pace due to rising domestic demand for motor vehicles and increasing investment by foreign automakers in manufacturing capabilities in order to serve domestic and nearby export markets.

Demand growth for automotive coatings in North America and Western Europe will be sluggish, due to market maturity and weak motor vehicle production and motor vehicle parc outlooks.

Demand by Application

OEM and automotive refinishing represent the two applications for automotive coatings:

• Motor vehicle production drives OEM demand, as coatings are applied to motor vehicles during their manufacture.
• Automotive refinishing demand is mostly driven by motor vehicle parc and annual distance driven:
  • Motor vehicle parc offers a base of vehicles in use that may need to be refinished during their lifespan.
  • Motor vehicles that are driven more frequently and for longer distances are potentially more likely to suffer some wear or be involved in an accident, which would require them to be refinished.

Through 2024, demand for automotive coatings is forecast to rise 2.5% per year to 3.9 million metric tons. Going forward, OEM applications will remain larger than refinishing in volume terms, despite weak manufacturing outlooks in the US, Canada, Japan and Western Europe. However, refinishing will account for a greater share of value demand, as the coatings used in refinishing applications often cost more than those employed in OEM applications.

Through 2024, global demand for automotive coatings is forecast to rise 2.5% per year to 3.9 million metric tons. Going forward, market advances will be supported by:

• an acceleration of motor vehicle manufacturing in the Asia/Pacific region, as output rises dramatically compared to historical levels
• the rising number of motor vehicles in use
• expanding insurance coverage, which facilitates more extensive repairs on damaged vehicles and thereby boosts demand for refinishing coatings
• global increases in annual distance traveled and high accident rates in developing countries where infrastructure is poor and the motor vehicles in use have with limited safety features

However, demand will be restricted by:

• weak motor vehicle production outlooks in North America, Western Europe, Japan, and South Korea
• increasing use of vehicles with enhanced safety features, which are lowering traffic accident rates in developed countries
• rising use of plastic components that do not require coatings

Asia/Pacific & Africa/Mideast Regions to Grow at Fastest Rate Through 2024

The Asia/Pacific region is by far the largest outlet for automotive coatings and will grow at a rate above the global average through 2024. Demand will be driven by expanding motor vehicle production and rising incomes, supporting larger rates of vehicle ownership. China will continue to dominate global motor vehicle production and be the main source of growth in the region, as ownership rates rise.

The Africa/Mideast region is expected to be the fastest growing region, as its automotive production base increases at a rapid pace due to rising domestic demand for motor vehicles and increasing investment by foreign automakers in regional manufacturing capabilities in order to serve domestic and nearby export markets.

North America & Western Europe Will Continue to Account for Large Share of Demand

Both North America and Western Europe will continue to account for sizable shares of automotive coatings demand going forward, as these regions feature significant motor vehicle parcs and some of the global leaders in automobile production. However, growth in North America and Western Europe will be weak due to:

• poor production outlooks, resulting in diminished demand for OEM coatings
• low accident rates – due in part to the inclusion of safety features such as auto braking and steering control on vehicles – and the high quality of OEM vehicle coatings used in these regions, which will restrain greater growth for refinishing demand.