Demand for automotive coatings is rising as vehicle manufacturing continues to revive
Los Angeles, CA (PRWEB) May 25, 2012
The Automotive Coatings Manufacturing industry's performance has been streaky during the past five years. Industry revenue is expected to fall 0.7% annually on average over the five years to 2012, but it is expected to grow 3.5% in 2012 to $1.3 billion. The recession has had lingering effects on the industry, with consumers holding off nonessential vehicle alterations and new vehicle purchases, hurting demand for automotive coatings, says IBISWorld industry analyst Nima Samadi. At the onset of the economic turmoil in 2008, automakers had already been enduring crashing consumer demand for new vehicles. Things took a turn for the worse in 2009, though, as US vehicle sales fell to historic lows and motor vehicle manufacturing revenue plummeted. The severe decline in demand for new automobiles reduced the auto sector's demand for automotive coatings. However, motor vehicle manufacturing revenue has rebounded aggressively from 2009 to 2012. The success of the past few years has helped reinvigorate demand for automotive coatings from motor vehicle manufacturers.
The recession has also had lingering effects on the Car Body Shops industry (IBISWorld report 81112), which is a major market for automotive coatings manufacturers. Because consumers held off on essential repairs and pulled back on discretionary services like automotive coatings, this market segment reduced their purchases of automotive coatings during the recession, continues Samadi. Car body shops also derive revenue from customized coatings and finishes. Customized coatings are a discretionary luxury since paint and coatings are an aesthetic non-operational feature of a vehicle; as such, industry demand and revenue was hurt by drops in consumer and discretionary spending levels. However, industry demand has been encouraged by several new styles of automobile coatings, including coatings with ultraviolet light-cured finishes and coatings that incorporate nanotechnology.
Water-based coatings are the future of automotive coating technology and are expected to boost demand for coating customization, given their ease of use and lower potential cost once the technology is widely adopted. All of these factors will bode well for the Automotive Coatings Manufacturing industry. Industry firms will experience growing demand for their products over the next five years, prompted by an expanding economy. Revenue is expected to grow in the five years to 2017.
The Automotive Coatings Manufacturing industry carries a high level of market share concentration. In general, the industry is dominated by large corporations that compete on a global scale. However, the industry's two largest companies, PPG and DuPont, are both based in the United States and generate a majority of their revenue domestically. Additionally, many of these companies are general chemical suppliers that produce numerous products across various segments and for multiple industries. Over the past decade, these companies have leveraged their favorable economies of scale to acquire smaller coatings companies to incorporate into and expand their operations. Over the next five years, IBISWorld expects concentration to continue to grow as the market becomes increasingly more saturated and as larger firms continue to expand their domestic operations. For more information, visit IBISWorld’s Automotive Coatings Manufacturing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
This industry manufactures various coating products to decorate and protect automobile surfaces against wear, weather and corrosion. After production, firms sell the final products to automotive manufacturers, wholesalers, retailers and auto shops.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.