Coatings World - March 2015

Catherine Diamond, Associate Editor

Automotive and truck production is increasing, which is driving coatings use and growth rates. According to Phil Phillips, president and managing director of Chemark Consulting Group, experts like LMC Automotive have raised forecasts from 17.2 million units to 17. 4 million units. This is a three percent growth from the 2014 production level of 16. 9 million units.

“Investment in the region will increase overall capacity by
nearly 500,000 units, and, coupled with strong North American
vehicle demand, a more positive production outlook is expected,”
Phillips said. “Comparing 2012, 2013, 2014 and 2015, we see
almost a 13 percent average growth rate over this time period.”
Phillips noted that it is automotive and truck production
– not sales – that is the basis for forecasting coatings use and
growth rate. “Obviously, sales of these units are important to
track but coatings are used when a vehicle unit is produced, and
that’s what we must watch.”
The financials affecting automotive/truck demand fall along
the following 10 macro and consumer elements: disposable in-
come, unemployment, the housing market, the stock market,
fuel prices, credit availability, vehicle equity, vehicle price, incen-
tive actions, and product activity.

“We have others forecasting the same rate or better going
forward, indicating that North America’s automotive industry is
in good shape,” Phillips said. “The value chains of activity (coat-
ings, et al) supplying it have a very healthy segment to play in.”
Chemark estimates the North American OEM automo-
tive/truck coatings market to be valued at $2.4 billion USD.
“This figure is as the coating formulators sells its coatings
directly to the OEM plants for use in applying electro-coat
primers; sandable primers; base color coating and finally the
clear topcoat systems. It does not include the tier suppliers
who make and coat under hood and body parts ($0.390 bil-
lion) as well as the job shop custom coaters ($0.145 billion)
who receive parts from the tier part manufacturers and coat
to specification,” Phillips said.

A total North American value of $2.835 billion USD is consumed. The major formulators who supply over 80 percent of the North American OEM plants and key tier fabricators are: PPG, Axalta, AkzoNobel and BASF. Others who supply some OEM but mainly, tier manufacturers are: Sherwin-Williams, Wörwag, Red Spot, Nippon Paint and United Paint.