Market Trends of ASEAN Automotive OEM Coatings Industry
This section covers the major market trends shaping the ASEAN Automotive OEM Coatings Market according to our research experts:
Indonesia to Dominate the Market
- The automobile industry in Indonesia has a considerable impact on the country's economic progress.
- Indonesia is one of the largest passenger car manufacturing nations in Southeast Asia. However, for the establishment of onshore car manufacturing facilities, Indonesia is primarily reliant on foreign direct investment, particularly from Japan. Attracted by low per capita-car ownership, low labor costs, and a rapidly expanding middle class, various global passenger carmakers have decided to expand car production capacity in Indonesia.
- Passenger car production in the country has declined by more than 47% in 2020. However, post-COVID-19 the production of passenger cars in the country reached 8,89,756 units in 2021, which shows a recovery of 61% compared to 2020.
- Furthermore, A growing number of automotive manufacturers, including Toyota, Nissan, and General Motors have decided to expand car production capacity in Indonesia.
- For Example, Passenger car production in the country has declined by more than 47% in 2020. However, post-COVID-19 the production of passenger cars in the country reached 8,89,756 units in 2021, which shows a recovery of 61% compared to 2020.
- Additionally, Light commercial vehicle production in the country increased after 2020 as a result of modifications and regulations enacted by the Indonesian government to attract market investment. While in 2020, light commercial vehicle production in Indonesia declined by 34.9%. The industry production has recovered by large extent in the country and reached 1,57,890 units in 2021, which shows a massive recovery of 66% compared to 2020. This is expected to increase the consumption of Auto OEM coatings from the country's LCV market.
- Also In July 2022, Mitsubishi annouced the plans to build a new plant in Indonesia to manufacture hybrid and electric vehicles.
- All the aforementioned factors are expected to act as driving factors for the Automotive OEM coatings market during the forecast period.
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Water-borne Coating Dominate the Market
- Although solvent-borne technology accounts for most of the market, it is predicted to grow slowly over the forecast period.
- Regulations governing VOC emissions from hazardous air pollutants contained in solvent-borne automotive OEM coatings such as toluene, xylene, ethylbenzene, and methyl ethyl ketone are one of the major factors limiting the expansion of solvent-borne automotive OEM coatings.
- Water-based automotive OEM coatings are becoming increasingly popular due to the continuously changing environmental regulations. Water-based coatings are constantly developing to provide the same performance as solvent-based coatings. For example, mild co-solvent reducers and additives are being developed to improve water-based coatings' performance and drying times.
- The increasing adoption of waterborne automotive coatings is due to their physical and chemical qualities, such as high chemical resistance, low processing temperature, and solvent-free formulations.
- Owing to above mentioned factor, waterborne technology is expected to grow significantly during the forecast period.
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