Consumption of automotive paints is directly related to the production of vehicles, especially passenger cars and two-wheelers, in the country. Increased vehicle interior applications and growing demand for Automated Manual Transmission are giving a boost to the specialty coatings market in India. At the same time, rising sales of premium passenger cars in the country is expected to drive the demand for eco-friendly coatings in near future, says Amey Amanaji.
Automotive paints are the exterior coatings that not only provide an aesthetic appearance to the vehicle body but also protect them from external factors, such as rain, dust, and chemicals. Alternatively, automotive specialty coatings are the coatings applied to various vehicle components or systems (such as engine, exhaust, suspension system, steering system, brake system, and wheel rims, among others) to protect them from corrosion and to provide high efficiency in high temperature and friction. Table 1 shows types of coatings and their area of application in an automotive.
The demand for automotive paints and coatings is directly dependent on growing vehicle production, increasing application of coatings, and the increasing adoption rate of AMT (Automated Manual Transmission) are projected to drive the automotive specialty coatings industry. Alternatively, owing to VOC emission regulations and emissions during actual painting process, paint manufacturers are devising new ways to reduce the cycle time. For instance, BASF’s process named “integrated coating” reduces the primer surface layer as the functionality of two coats is integrated into one functional layer. The process eliminates the need for a primer bake oven, normally used between the primer and colour-coating layers, thereby reducing the paint shop footprint. PPG launched its B1:B2 (wet-on-wet) compact process that eliminates the intermediate requirement of a baking or a heated dehydration process, which will help OEMs save production costs. The B1 layer provides the functionalities of primer, filling, chip, and durability, whereas the B2 layer provides colour and additional durability.
The global automotive paints market is valued at $ 8.74 billion in 2018, whereas the global automotive specialty coatings market is valued at $ 3.02 billion in 2018. Being world’s largest vehicle production base, the Asia-Oceania region is estimated as the leading market for automotive paints as well as special coatings. With growing focus towards environment friendly paints, the demand for waterborne paints and powder coating is projected to showcase a significant demand in near future.
According to a publication by Berger Paints, the India paint industry is dominated by 4 players – Asian Paints, Kansai, AkzoNobel and Berger Paints, which together contribute to approximately 53 per cnt of paints market. Table 2 shows overall performance of three paint companies in India. According to the same publication, the automotive paints segment has a contribution of approximately 12.5 per cent in the total India paints market. India being a cost-sensitive market, price proposition is one of the key factors in the country and Kansai is one of the leading automotive paints suppliers in the country.
According to MarketsandMarkets Analysis, the Indian automotive paints market is projected to grow from $ 484.8 million in 2018 to $ 602.7 million by 2025, at a CAGR of 3.16 per cent over the forecast period. Of this, the basecoat and electrocoat are projected to showcase the largest contribution to Indian automotive paint industry. Even after the implementation of GST (which is 28 per cent for paints as compared with previous tax of 24-27 per cent under VAT), the industrial as well as automotive paint market is projected to have a significant growth in the Indian market.
The India automotive specialty coatings market is estimated to grow from $ 134.2 million in 2018 to $ 188.6 million by 2025, at a CAGR of 4.98 per cent, during the same period. Increased vehicle interior applications and growing demand for Automated Manual Transmission are the key factors driving the demand for specialty coatings in India. Automotive interiors and wheel rims are estimated to showcase the largest contribution towards the Indian specialty coatings industry over the forecast period.
For better adhesion of coatings in metal or plastic surfaces, pre-treatment activities are carried out in the metal or plastic. Conventionally, chromate and phosphate conversion coatings (CC) are preferred for metal or plastic pre-treatment activities. However, conversion coatings emit high VOCs and owing to new non-VOC regulations they are getting replaced with low or non-VOC metal pre-treatments. For example, in the US, the federal rules governing the use of VOCs fall under the umbrella of the Environmental Protection Agency’s National Emission Standards for Hazardous Air Pollutants (NESHAP) guidelines. Due to such regulations, coating manufacturers are moving toward the lesser VOC emitting technologies, such as waterborne and powder coating technologies.
Developing countries such as China and India offer huge growth opportunities for premium and luxury cars. In addition, electric and hybrid vehicles are gaining popularity across the globe. These vehicles are considered under premium and ultra-premium vehicles. China, Germany, and the US, which have a significant share of electric and hybrid vehicles, are estimated to be the largest markets for powder coating.
With the increase in demand for premium and luxury cars, powder coating is expected to gain market share in the automotive paints market. Advanced, pleasant, and environmental hazard proof exterior paint is one of the key highlights of the E & F segment vehicles. Powder coatings are more durable and efficient than solvent-borne and waterborne technology. However, due to its high set up cost, it is limited to premium and ultra-premium cars. The growing demand for premium and ultra-premium cars has thus created an opportunity for automotive paint manufacturers.
Additionally, with growing sales of premium vehicles, the demand for automotive specialty coatings is expected to grow as the application of specialty coatings is higher in premium vehicles than the mid- or low-segment vehicles, owing to additional interior features and high-performance engines in premium vehicles. Moreover, premium and luxury vehicles are equipped with bigger engines, which ultimately increase the amount of coatings required. Apart from this, the suspension system of a premium vehicle is also different and are usually equipped with air suspension systems, which increases the coating amount required as compared to other suspension types, such as MacPherson strut, owing to an increase in the number of components, such as electric pump, onboard compressor, and airbags, among others.
Owing to the aforementioned factors, the automotive paints and coatings industry would majorly be focusing on eco-friendly paints and coatings as well as on the innovative paint processes which not only reduces paint process time, but also saves on materials, emissions & energy, leading to cost-effectiveness.
Table 1: Automotive coatings for specific areas
Table 2: Indian paint companies: Overall performance