The automotive paints market is projected to grow from USD 8.4 billion in 2023 to USD 9.9 billion by 2028, at a CAGR of 3.2%. The key factors driving the automotive paints is increase in production of passenger cars, EVS and increase in sales of SUVs is driving. Also, there is increase in adoption for powder coating and water-borne coating technologies in automotive sector to reduce the environmental impact. Hence these factors is driving the automotive paints market.
The shift in consumer preference to SUVs from sedan and hatchback, also there is increase in adoption for powder coating and water-borne coating technologies in automotive sector to reduce the environmental impact. Hence these factors is driving the automotive paints market.
Polyurethane resin is projected to have the highest demand in automotive paints market
Polyurethane-based coatings are popular in automotive OEM and refinish painting because they offer a unique combination of properties, this includes good elastic property at very low temperatures, solvent and water resistance, abrasion resistance, machine washability and dry cleanability. In addition to these benefits, polyurethane-based coatings do not increase paint thickness or change styling factors, such as drape. Also, with an increase in need of automotive paints by OEMs, the paint manufacturers have started investing in expanding their plant capacity for polyurethane resins. For instance, BASF SE has announced a single-digit million-euro investment in the capacity expansion of water-based polyurethane dispersions (PUDs) at its Castellbisbal site in Spain to increase the production capacity. Hence, polyurethane-based paints have the largest market in automotive paints market, by resin type.
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Passenger car is the second fastest growing segment in vehicle type for automotive paints market
Compact and mid-sized SUVs are among the most popular vehicle segments, and their demand is continuously growing. This has led to increased production of these vehicles, boosting the demand for automotive paints. These vehicles typically have a larger surface area than smaller cars, requiring more paint per vehicle. This has increased the consumption of automotive paints for these vehicle segments. Additionally, two-tone paints are becoming increasingly prevalent in compact and mid-sized SUVs, adding a more distinctive and customized look to these vehicles.
According to MarketsandMarkets Analysis, the global premium car segment under passenger car market is dominated by premium SUVs, which accounted for about 53% of total production in 2021 and grew to 62% in 2022 Developed countries such as the US, Canada, Japan, and South Korea hold the majority of the market, representing over 90% of global premium SUV production. For example, in 2021, the US produced luxury SUVs that comprised around 75% of its total luxury car production. Conversely, developing countries such as China, Brazil, and India have exhibited remarkable growth in SUV demand over the past few years. China and India’s SUV markets have grown by 36% and 10%, respectively, between 2018 and 2021. This growth in sales for SUVs is driving the market for passenger cars in the automotive paints market.
Asia Pacific holds the largest share in the automotive paints market.
The rapid adoption of electric vehicles (EVs) in the Asia Pacific region is driving demand for specialized automotive paints that can withstand the unique challenges of EV batteries and lightweight materials. Governments across the region are incentivizing EV adoption through subsidies and tax breaks, further fueling the demand for EV-specific paints. For instance, China, the world's largest EV market, offers generous subsidies to EV manufacturers and consumers. This has led to an explosion in EV sales, with China accounting for over 60% of global EV sales in 2022 according to The International Council on Clean Transport (ICCT). Similarly, India is also implementing policies to promote EV adoption. The Indian government has set ambitious targets for EV sales, aiming to have 30% of all new car sales be EVs by 2030.
Key Market Players
Major manufacturers in the Automotive paints market include PPG Industries LLC. (US), Axalta Coating Systems LLC, (US), Akzo Nobel N.V. (Netherlands), BASF SE (Germany), The Sherwin Williams Company (US), Valspar (US), DOW Chemical (US), 3M (US), and KCC (South Korea).
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