How Do Road Accidents Drive Demand for Automotive Refinish Coatings?
Londoners were involved in 25,341 road accidents, as per Transport for London, the government agency responsible for the transport system in the English capital. Moreover, India saw 467,171 road traffic crashes, says the National Crime Records Bureau. Not all accidents lead to deaths, but most of them result in a significant damage to vehicles. The damage can range from a minor scratch to a completely smashed-in automobile.
Therefore, due to the high rate of such incidents, P&S Intelligence expects the
automotive refinish coatings market value to witness a significant growth in the coming years. Since people highly prize their vehicles, they take great care of their appearance. Therefore, one of the first things to do after an accident is to fill in the scratches and dents or get the vehicle repainted entirely, depending on the damage. The repainting is done outside the factory, at company and private garages and repair shops.
Even more significant than accidents in this regard is the rising number of vehicles in operation, because it is itself a major reason behind the high number of accidents. With the increasing disposable income of people, vehicle sales are increasing around the world. After a brief slump owing to the COVID-19 pandemic, auto sales have started increasing again, already reaching 35,603,479 units, as per Organisation Internationale des Constructeurs d'Automobiles (OICA).
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Since vehicles, especially cars and motorcycles, have become a style statement and an expression of people’s personalities, they are often customized with a new paint job and accessories. Therefore, a key driver for the automotive refinish coatings market is people’s rising disposable income, which is not only allowing them to purchase vehicles but also spend a little extra to have them customized. Another related factor here is the increasing average age of automobiles, which is enabled, in part, by having them repainted for functional purposes.
Hence, the consumption of solvent-borne, water-borne, and ultraviolet (UV)-cured refinish coatings is surging. Till now, solvent-borne variants have accounted for the highest usage because they have been around the longest and are cheaper than others. But, they contain significant amounts of volatile organic compounds (VOCs), which can cause a number of health issues, including cancer! Therefore, with the rising awareness on the harms of these products and government norms to limit VOC emissions, the demand for water-borne coatings has begun to surge rapidly.
The largest automotive refinish coatings market has been Asia-Pacific (APAC) till now, and the situation will likely be unchanged for many years to come. India, China, Japan, and South Korea are among the biggest manufacturers of automobiles in the world and also their largest users. This has been making the road congestion and accident problems worse, which is resulting in a large number of automobiles in need of repair and repainting.
For instance, as per the government,there were around 9.7 million automobiles in operation in Delhi, and the number has kept on rising continuously. Moreover, as per the World Health Organization (WHO), most of the 1.3 million annual road crash fatalities are recorded in developing countries, which gives an idea of the severity of the crashes. Since APAC is home to a large number of emerging economies, its accident rate is rather high, which is propelling the consumption of paints and coatings for automotive refinishing.
Hence, with the increasing number of vehicles in operation, rising vehicle age, and surging number of road accidents, the demand for refinish coatings will boom.
SOURCE: P&S Intelligence
