North American Automotive OEM Coatings Adhesives and Sealants Markets

Research Overview

Suppliers Strive to Maintain Profitability in Price-Competitive Environment

The increasing need for original equipment manufacturer (OEM) customers to keep prices down has greatly challenged suppliers across the coatings, adhesives, and sealants markets. As suppliers contend with fluctuating oil prices and soaring raw materials prices, they find it extremely difficult to render cost-effective services while maintaining their profit margins. Further, as automotive tier companies continue to gain clout through consolidation, they wield higher bargaining power over their suppliers. The continuous price decline that suppliers have had to face has now resulted in a situation where further price reduction seems impossible. Added to this is the growing compulsion to comply with environment-friendly regulations. This necessitates extensive R&D investments, which further strains the profit margins of the suppliers.

This research from Frost & Sullivan evaluates the current and future prospects of the North American automotive OEM body surface and component coatings, adhesives, and sealants markets. It analyzes the potential market for upcoming technologies and examines the drivers and restraints influencing sales. It also offers comparative growth forecasts of each of the above market segments. This would enable the client to assess the growth opportunities in specific areas of different market segments. Additionally, it provides in-depth strategies for growing in mature and saturated markets.

Environmental Concerns Spur Technology Innovation

The rising demand for innovative, high-performance products has opened up a plethora of opportunities for suppliers. Recent environmental regulations have gone a long way in opening up the market for products with less solvent content. Compliance with these laws has also necessitated the discovery of products that offer advantages such as high design flexibility, adherence to a variety of substrates, improved acoustics, fuel efficiency, and greater aesthetic appeal.

"The number of pioneering products that have entered the market in the last few years is a clear indication of the enthusiasm with which suppliers have responded to the market needs," notes the analyst. The clearcoat segment alone has seen two revolutionary introductions in recent years. PPG Industries has introduced a nano-particle clearcoat that provides greater scratch resistance and improves overall gloss, while the introduction of "SuperSolids", a clearcoat based on ultra-low emissions technology by DuPont Automotive, aims at lowering volatile organic compound (VOC) emissions, and improving resistance to scratch and mar.

Suppliers with Cost-Efficient Solutions Likely to Expand the Market

Reducing overall production costs while maintaining high product efficiency has become a crucial issue among automakers. Increasingly, the cost-conscious automotive OEM market has been showing an inclination for products that eliminate the number of process steps in assembly plants. This is expected to lower the material, energy, labor, and equipment costs.

"Suppliers that develop cost-effective solutions can expect to rake in huge revenue," predicts the analyst. Products such as the one-component urethane adhesive, which reduces the number of application steps in multi-component adhesive systems, and the recently introduced roof-ditch sealants that negate the need for preformed moldings are not only aesthetically more pleasing, but are also likely to reduce overall costs.