Europe Coatings Market for Performance OEM: Introduction
The coatings market for performance OEM in Europe was valued at € 1 Bn in 2019 and is anticipated to expand at a CAGR of ~4% during the forecast period. The coatings market for performance OEM in Europe is driven by the increase in demand for coatings in the mining equipment industry in the region. Germany accounts for a major share of the coatings market for performance OEM in Europe, led by high demand for OEM coatings for rail locomotives, freight, and passenger cars segments in the region.
Key Drivers of Europe Coatings Market for Performance OEM
The growth in infrastructure of rail network, locomotives, freight, and passenger carriage is driving the coatings market for performance OEM. Rail transport is considered safer and more economical than other means of transportation. Alstom SA, Bombardier, CAF, Talgo, Siemens, and Skoda are major Europe-based rail manufacturers. In May 2020, Alstom SA, a France-based rail locomotive manufacturer, delivered the first of the 12,000-horsepower, Prima T8 electric locomotives for Indian Railways. In 2015, Alstom SA awarded a contract to supply 800 double electric locomotives to Indian Railways. Under the Paris Agreement, all countries are joining hands to reduce carbon emission and keep the increase in average Europe temperature to below 2°C. In line with this objective, Indian Railways plans to run on 100% electricity by 2024. This is expected to create new demand for electric locomotives, thus providing opportunities for Europe-based rail locomotives manufacturers such as Alstom SA, Bombardier, CAF, Talgo, Siemens, and Skoda.
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Rail locomotives and passenger wagons are more vulnerable to corrosion due to the moisture present in air. Many companies such as PPG, Akzonobel NV, and Nippon Paint Holdings Co., Ltd. manufacture epoxy and polyurethane coatings, especially for rail locomotives. Increase in demand for rail transport and rise in export of rail locomotives from Europe to other parts of the world are estimated to boost the demand for coating solutions in the rail industry.
Rise in Demand for Passenger and Commercial Vehicles to Offer Lucrative Opportunities
According to the data published by the European Automobile Manufacturers’ Association (ACEA), 91.5 million vehicles were produced in Europe in 2015. Europe accounted for the largest growth in terms of market share (3.8%) in 2015. Germany is the largest vehicle manufacturer in Europe, while the Czech Republic and Poland have high growth rates in the auto sector. As per the new passenger vehicle registration data released by the European Automobile Manufacturers’ Association (ACEA), total number of automotive vehicles rose by 1.2% from 15,624,948 units of cars sold in 2018 to 15,805,752 units of cars sold in 2019. The volume of vehicles sold by Europe-based companies is estimated to increase in the near future, owing to the rise in demand for electric vehicles in the region. Major companies such as Volkswagen, PSA Group, Renault Group, and BMW are shifting toward the production of electric vehicles. Increase in demand for automotive vehicles is expected to propel the sales of automotive coatings, as these coatings help safeguard metal body parts from corrosion. Majority of coatings used by OEM manufacturers are purchased from key players such as PPG, BASF SE, and DuPont.
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According to the information published by the Russian Federal Customs Service, Russia imports coatings for the automotive industry, primarily from Europe and Southeast Asia. Major importers are PPG, BASF SE, and DuPont. These companies jointly supply 90% of coatings used in the finished vehicle assembly plants in Russia and 80% of coatings used by repair workshops.
High Production Cost of Calcium Hydride to Hamper Europe Coatings Market for Performance OEM
Coatings are susceptible to environmental conditions such as temperature and humidity during the curing phase. This makes them impractical in certain climates. Changing from solvent-borne coatings to waterborne coatings requires significant amount of investment, as most of the industrial production lines are already set up for solvent-based coatings. This is another key challenge for the coatings market for performance OEM in Europe. Additionally, high standard of surface preparation has to be adopted while manufacturing waterborne coatings, as wetting issues arise if there is any oil contamination in the coating. Fluctuation in prices of raw materials of various waterborne coatings, additives, and resins is a major restraint of the coatings market for performance OEM in Europe. Varying cost of raw materials is anticipated to hamper the coatings market for performance OEM in Europe even though waterborne coatings contain less solvents.
Germany Dominates Europe Coatings Market for Performance OEM
Germany held 19.3% share of the coatings market for performance OEM in Europe in 2019. Its share is anticipated to reach 20.0% by the end of the forecast period. Together, Italy and France accounted for 27.3% share of the coatings market for performance OEM in Europe in 2019. Their cumulative share is anticipated to decline marginally to reach 27.2% by the end of the forecast period.
Consolidated Nature of Europe Coatings Market for Performance OEM
The coatings market for performance OEM in Europe is fragmented. Currently, the coatings market for performance OEM is expanding. Key players are focusing on research and development activities. Companies operating in the coatings market for performance OEM in Europe are investing to expand their product portfolios as well as distribution networks. They have adopted strategies such as mergers & acquisitions, development of new products, joint ventures, and expansions to meet the increasing demand for coatings from different countries in Europe. For instance, on June 1, 2017, Sherwin William Company acquired The Valspar Corporation. PPG Industries, Inc. was a major manufacturer of waterborne coatings, accounting for 20.40% of the market share in 2019. High share of the company can be primarily ascribed to its constant efforts toward technological innovations in order to achieve low processing costs and high-quality products.
Other companies operating in the coatings market for performance OEM in Europe are Akzonobel NV and Sherwin-Williams Company. Majority of the market is covered by small manufacturing companies whose lower price impacts the sales of multinational corporations such as Akzonobel NV, PPG Industries, and Nippon Paint.
Europe Coatings Market for Performance OEM: Segmentation
Europe Coatings Market for Performance OEM, by Type
- Others (including PTFE, PVDF, PVDC, Chlorinated Rubber, Inorganic Zinc, and Fluorinated Polymers)
Europe Coatings Market for Performance OEM, by Application
- Trucks & Trailers
- Trucks & Body Builders
- Agriculture Trailers
- Freight, Tanks Cars, and Intermodal
- Passenger Cars
- Port Equipment & Cranes
- Sea Port Equipment
- Airport Equipment
- Cranes (Stationary & Rolling)
- Mining Equipment
- Surface Mining
- Underground Mining
- Industrial Machines
- Power Generators
- Factory Machines
- Air Compressors
- Electrical Components
- Functional Products
- Waste Containers
- Pumps, Valves, and E-Drives
- Heat Exchangers & Process Vessels
- Castings & Drive Train Components
- Pre-fab Metal Building
- Construction Equipment Attachments
Europe Coatings Market for Performance OEM, by Country/Sub-region
- Rest of Europe
Companies in the Europe Coatings for Performance OEM market have increasingly shifted gears with wide application of digital technology across the continuum, from raw material sourcing to manufacturing to generation of final output, to warehousing to final distribution operations. Among the various affects, the market is witnessing new growth economics due to thinning of line between specialty and commodity businesses that are associated with the larger ecosystem. At the same time, new growth parameters are being vigorously being debated as industry stakeholders put greater emphasis on the circular economy processes.
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