Can you give us a breakdown of the different
players in the Chinese automobile coatings
market and the role of foreign and domestic
producers?
Johnson: For the Chinese automobile coatings market, foreign
firms represent about 70 percent of revenues, and a little less
by total output. Specifically, for OEM coatings, the figure is
about 83 percent by revenues and 78 percent by output, and
for repair coatings, in which we include the low-end market,
foreign companies account for only about one-third of the
total output. For repair coatings, foreign firms really only sell
high-end products; they sold between 50,000 and 60,000 tons
of repair coatings in the China market last year.
Based on your forecasts, what is the direction of
growth for automobile coatings in China?
Johnson: Well, OEM coatings tend to follow very closely with
car sales, and recently, there was a major drop in car sales in
China. Between 2009 and 2010, the industry was booming, and
passenger cars grew over 30 percent in 2009, about 25 percent
in 2010, and sales in busses and trucks were also robust. But in
2011, automobile sales plummeted, and OEM coatings were af-
fected by this.
What are some inhibitors, which caused some
of the lower sales growth of automobiles in
2011?
Johnson: For automobile sales, you can partly attribute this drop
to a number of government policies that were discontinued in
2010. Some of those included subsidies for purchases in rural
areas, subsidies with engines smaller than 1.6 liters, old car replacement policies changed, purchasing restrictions in major
cities—Beijing for instance—certainly felt this effect.
52 | Coatings World www.coatingsworld.com October 2012
There are only about 60 vehicles per 1,000 people in China, so the market has a long way to grow before it is “mature.” When China reaches
300 cars per 1,000 people that would mean about 400 million cars on the road. If drivers buy a car about every 10 years or so that’s about 40
million vehicles sold every year.
