Coatings Market Grows in India Demand for Refinished Automotive Coating Strengthens
Due to increased purchasing power, India's domestic automotive consumption will continue to grow at a CAGR of 10 per cent till 2017. This will further aid the growth of the automotive coatings market.
The Indian automotive coatings market has witnessed growth over the past two to three years due to increased development of the automotive industry. Significant research and development (R&D) investments made by coating manufacturers to enhance the performance of coating products will further boost the market. A new analysis from Frost & Sullivan, Strategic Analysis of the Indian Automotive Coatings Market, finds that the total automotive coatings production stood at 76.1 kilotons (KT) in 2012, and estimates this to reach 134.7 KT in 2017.
Although the original equipment manufacturer coatings segment accounts for 75 per cent of the total market share in terms of volume, the refinish coatings sector is likely to witness a considerably higher growth rate.
Rising Oil Prices Push Costs for Key Materials
According to Frost & Sullivan, 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.
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 costeffective, environment-friendly products, including water-borne and ultraviolet-curable coatings, is the need of the hour.
Consolidation to Come?
Furthermore, the research company expects that the scope for consolidation in the refinished coating sector will broaden the prospects of automotive coating manufacturers in India. Establishing channel partners in tier II and III cities will help quicken the market penetration, especially in the refinished coatings segment.