Automotive coatings: Getting Back on solid ground?
The automotive industry has recently been as heavily affected as the automotive coatings producers.
The global sales of new cars had already reached its peak in 2017 with more than 97 million units – passenger cars and commercial vehicles. Since then, the declining momentum in the emerging markets, especially the BRIC countries, has led to a drop-in passenger car sales. The spread of Covid-19 caused a dramatic decline in 2020, with the number of new registrations decreasing by around 15 % worldwide. However, a large part of the decline occurred in the first half of 2020. A recovery started already in the second half of the year, albeit to varying degrees depending on the country.
Pandemic huge factor
Calling 2021 a “crisis year” seems trivial at first glance. The ongoing Corona pandemic continues to affect people and many sectors of the economy face immense problems. With regard to the car industry, however, the situation cannot be summarised so simply: While the Corona crisis and the ongoing semiconductor shortage pose immense challenges to the industry as a whole, the ongoing problems are increasingly dividing the auto industry into winners and losers.
While numerous suppliers have to fight for their survival, carmakers are generating unprecedented profits as a result of their focus on high-margin models.
According to an EY study, the world’s 16 largest manufacturers were able to increase their operating profits in the third quarter of 2021 by 11.4 % to a new record high, even though sales figures fell by 16 %. The auto industry has not been broken by the crises of 2021, but it has nonetheless fallen into disarray, the consequences of which will manifest themselves not only in the coming year, but probably far beyond. According to the International Organization of Motor Vehicle Manufacturers (OICA) vehicle production in 2021 was at about 80 million units – in 2019 the output of the industry was more than 90 million units before it dropped to 77 million units in 2019. If one only takes a look at passenger cars the production dropped from some 67 million units (2019) to 55 million units (2020). OICA listed 57 million produced cars in their current production statistics for 2021.
Slight recovery of the market after sharp drop in 2020
The markets grew in 2021 but are still well below the 2019 levels for both automotive OEM and refinish coatings. The consulting firm Kusumgar, Nerlfi & Growney (KNG) estimates vehicle production is down -13 % in 2021 from 2019. The experts, therefore, assess coatings consumption are likely down about the same range between 10-15 %. KNG expects the volume for refinish coatings in 2021 is probably only off a little from 2019. The estimated number of cars on the roads globally is estimated at 1.5 billion units.
According to the market research company ChemQuest, automotive coatings, OEM and refinish, hold a share of 6 % (volume) and 12 % (value) of the complete market with paints and coatings.
The figures from IRL’s market researchers give the following order of magnitude in volume: 2020 saw a global of 1.42 million tonnes for automotive OEM coatings and 0.75 million tonnes for refinish. In 2021, volumes grew slightly. For OEM coatings, IRL puts the volume at 1.54 million tonnes and for refinish it is 0.81 million tonnes.
Broken down by region, Asia-Pacific leads the way with 0.84 million tonnes for OEM coatings. America, as a whole continent, follows with about 0.35. Europe is in third place with 0.32 million tonnes. The Middle East and Africa account for just over 40,000 tonnes.
The complete article can be found in the April issue of the European Coatings Journal.
