AkzoNobel’s new StickerFix repair system uses a coating that is
applied to a very thin foil.
Coatings World: What are your thoughts on the effect the
recession has had and continues to have on the market? When
will the market improve in your opinion and what are you
doing to prepare for the turn around?
Schueler: The recession has hurt everybody and we’ve certainly seen a painful slowdown in sales in the first half of 2009.
It does look as if the general economy is now slowly beginning
to improve, but it really is difficult to predict how that will
affect the vehicle refinishes business. If people are still affected, they might put off a discretionary repair. Our strategy all
along has been to be cautious with our resources, to be attentive to our customers and to look for opportunities that would
position us to be stronger once the market turns around.
Outcalt: It has been a tough market for our collision repair
business customers over the past year or so. Recessionary pressures have caused a significant decline in refinish repair opportunities, especially those smaller repairs that many consumers
have chosen to forgo until the economy improves or their situation changes. The economy has also had the affect of accelerating further consolidation in the business, with the total body
shop population shrinking significantly over the prior year.
In addition, insurance companies, which account for approximately 80% of all auto refinish repair work, are becoming
more selective in determining which collision shops can participate in their direct repair programs. Bottom line is there are
fewer shops out there competing for a shrinking number of
repair opportunities.
We foresee the market beginning to recover later in 2010 as
people return to work and consumer confidence rebuilds. In the
meantime, PPG Automotive Refinish is focusing on enhancing
our product line and bolstering our programs that help our collision shop customers improve their competitiveness and
improve speed and quality of their repair process.
Eilenberger: The recession has clearly affected our industry
particularly in the area of low consumer confidence and fears
of possible unemployment. When the consumer is worried
about where their next paycheck will come from, they will not
spend money on nonessentials. In the case of our industry, if a
consumer’s car is damaged but drivable, there is a good chance
that they will not repair it because, at the time, it is viewed as
nonessential.
Coatings World: What are the current trends and issues in
the market? What challenges does the market face moving forward in the years to come?
Schueler: The demand for sustainable products is a trend
that is almost certainly going to stay with us. As repair professionals discover that they can get the same performance
from waterborne products and products with much lower
VOCs, we’re convinced they will switch to them.
Our customers are also looking to improve the efficiency in
their shops. That’s something that AkzoNobel has always tried
to help with, in terms of training and consulting. Our Sikkens
Process Centered Environment program shows bodyshop
operators how they can streamline their operations to improve
productivity.
Managing costs is always a challenge in our industry. Right
now we are benefiting from a decline in energy costs, but we
anticipate that the long-term trend line will be higher energy
costs, so we simply need to be prepared to meet that challenge
by improving our efficiency, and possibly by cutting transportation costs by manufacturing closer to our markets.
Outcalt: Compliance with new VOC emission regulations continues to be the major trend influencing the refinish market in
Western Europe and North America. The best solution for
meeting these stiffer VOC requirements is the use of waterborne technology. We anticipated this need years ago which led
to our new generation of waterborne technology for refinish
use. In Europe the transition is nearly complete as the majority of shops have completed the conversion away from solventborne basecoat to waterborne. In Canada where rules dictate
that the move to waterborne basecoat be completed by June 18,
2010, we have been very successful in converting collision
shops to the new, more environmentally-friendly technology.
Just recently we reached the milestone of having the 1,000th
Canadian shop make the conversion to PPG waterborne. In
North America, California is leading the move to waterborne to
