A number of factors such as the rising technological advancements and innovations and expanding automotive industry in the developing countries will drive the automotive original equipment manufacturer (OEM) coatings market at a CAGR of 4.2% during the forecast period (2019–2024). The market was valued at $10,997.4 million in 2018 and it is projected to reach $13,661.4 million revenue by 2024. In recent years, the surging preference for powder coatings over liquid coatings has become a prominent market trend, due to the lower content of volatile organic compounds (VOCs) in the former.
One of the key growth drivers of the automotive OEM coatings market is the increasing technological advancements being made in automotive OEM coatings in the Asia-Pacific (APAC) region. Coating manufacturing companies in APAC are largely focusing on developing novel products, processes, and technologies to meet the ever-changing demands of automakers. Automobile manufacturers are opting for coatings with greater functionality, low maintenance cost, and reduced emissions. The end users are looking out for advanced coatings to comply with the stringent government regulations.
Moreover, the flourishing automobile industry in countries such as Indonesia, India, and Thailand will also contribute to the market growth in the coming years. The mounting sales of four-wheeler and two-wheeler vehicles in these countries, primarily on account of the escalating purchasing power and improving road connectivity and infrastructure, are driving the demand for these coatings in these Southeast Asian nations. Additionally, the growing strategic alliances between automakers will also fuel the expansion of the market in the forecast years.
Currently, the players operating in the automotive OEM coatings market are taking strategic measures such as facility expansion, mergers and acquisitions, and product launches to gain a competitive edge. For instance, in March 2019, HMG Paints Ltd., introduced Acrythane 4G, a glossy commercial vehicle topcoat. This coating is developed to meet the stringent requirements of the commercial vehicle industry. Other companies following the same trend are PPG Industries Inc., Axalta Coating Systems Ltd., Kansai Paint Co. Ltd., Akzo Nobel N.V., BASF SE, and The Sherwin-Williams Company.
Globally, Asia-Pacific (APAC) will account for the largest share in the automotive OEM coatings market throughout the forecast period, while progressing at the highest rate. This can be primarily credited to the presence of leading automobile companies in the region, particularly in India, China, and Indonesia. Among APAC nations, China will generate the highest revenue in the market in the foreseeable future, due to the large-scale production of vehicles in the region. According to the International Trade Administration, the annual domestic automobile production in China will reach around 35 million units by 2025.
The layer segment of the automotive OEM coatings market is categorized into clearcoat, electrocoat, basecoat, and primer. Among these, the clearcoat category generated the highest revenue in 2018, and it is expected to maintain its dominance throughout the forecast period. This is because of the increasing adoption of clearcoats on vehicles, owing to their ability to provide protection from ultraviolet (UV) and sun rays. Whereas, the basecoat category is expected to demonstrate the fastest growth during the forecast period.
Thus, the increasing technological advancements being made in the APAC automotive industry and prospering automobile sector in developing countries will support the market growth in the immediate future.