Market Challenge - Increasing competition from aftermarket refinish products and services

The global automotive refinish market is facing significant challenge from increasing competition arising from aftermarket refinish products and services. Many independent repair shops and general automotive parts suppliers have started offering refinish coatings and painting services to vehicle owners at competitive prices. This has intensified the competition for established automotive OEMs and refinish brands. Increased availability of low-cost refinish products through e-commerce channels and expanding distribution networks of aftermarket players have given more choice to customers. Aftermarket refinish options are generally cheaper compared to OEM recommended refinish solutions, posing pricing pressure. Vehicle owners are also willing to try alternative options for minor repairs and touching up scratches to save costs.

Opportunity: Increasing adoption of waterborne and powder coatings due to their environmental benefits

The stringent environmental regulations being introduced by various governments regarding emission of volatile organic compounds (VOCs) from paints and coatings present a major opportunity for waterborne and powder coating technology providers in the automotive refinish market. Waterborne coatings produce 60-80% lesser VOC emissions compared to solvent-borne coatings. Similarly, powder coatings are 100% free from VOCs. Both these technologies are gaining acceptance from automotive OEMs and refinish brand owners as they help comply with strict environmental norms. The rising ‘green’ or sustainability aspirations of consumers are further driving higher demand for environment-friendly refinish options. More vehicle repair shops and refinish centers are installing booths and equipment compatible with low-VOC technologies. This growing shift towards waterborne and powder coatings will significantly boost their adoption in the coming years.