Automotive coatings production to reach 134.7 KT in 2017 in India: Frost & Sullivan

The total automotive coatings production in India is expected to touch 134.7 kilo tonne (KT) in 2017 from 76.1 KT in 2012, according Frost & Sullivan’s new report, ‘Strategic analysis of the Indian automotive coatings market’. The Indian automotive coatings market has witnessed growth over the past two to three years due to growth of the automotive industry, both in the new and used car segments. Increased purchasing power will continue to fuel domestic automotive consumption at a compound annual growth rate of 10 percent till 2017, in turn, aiding the growth of automotive coatings market. Significant R&D investments made by coating manufacturers to enhance the performance of coating products will further boost the market.
 
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Although the original equipment manufacturer coatings segment accounts for 75 percent of the total market share in terms of volume, the refinish coatings sector is likely to witness a considerably higher growth rate. “The emergence of new technologies, such as the compact coating process that involves fewer coating layers, waterborne coating systems, and an effective spray process, is driving demand for coatings used in large auto surface areas and components with complex shapes, thus widening market scope,” said Frost & Sullivan’s Chemicals, Materials & Foods Research Analyst.
 
However, escalating crude oil costs are pushing up the prices of key raw materials such as resins and titanium dioxide, eating into the profits of coatings manufacturers. Moreover, the increasing use of automotive plastics as interior and exterior components in vehicles will decrease the amount of automotive coating needed per vehicle. Concerns over the environmental impact of volatile organic compounds, along with pricing pressures from auto manufacturers add to the challenge. Therefore, the development of plastic coatings and the diversification of product lines with an emphasis on cost-effective, environmentally-friendly products, including water-borne and ultraviolet-curable coatings is the need of the hour.
 
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“Increased organisation in the used vehicle segment and scope for consolidation in the refinish coating sector will broaden the prospects of automotive coatings manufacturers in India. Establishing channel partners in tier II and III cities will help quicken the market penetration, especially in the refinish coatings segment,” observed the analyst.