The global market for automotive appearance chemicals is expected to register a CAGR of about 3% during the forecast period. Major factors driving the market studied are increase in the production of electric vehicles and rising consumer awareness toward vehicle maintenance. Furthermore, slow down in the global automotive production and unfavorable conditions arising due to the COVID-19 outbreak are hindering the growth of the market.
- Automotive appearance chemicals help in improving the gloss and durability of vehicles, enhancing the life of the vehicle.
- The Asia-Pacific region represents the largest market, and it is also expected to be the fastest-growing market over the forecast period, owing to the increasing consumption in countries, such as China, India, and Japan.
Key Market Trends
Increase in the Production of Electric Vehicles
- The global electric vehicle (EV) market is expected to register a CAGR of over 20% over the forecast period.
- The EV market witnessed significant growth due to environmental awareness and the need for addressing future energy requirements. The need to attain sustainable transportation plays a significant role in driving the demand for EV.
- Global EV sales totaled at about 1.1 million during the first half of 2019, an increase of 46%, as compared to the total sold in the first half of 2018. During the first half of 2019, EV sales increased by 22% in the United States, 66% in China, and 35% in Europe, as compared to the first half of 2018. Global EV sales totaled at about 2.1 million in 2018, an increase of 64%, as compared to the total sold in 2017.
- The governments of various countries have adopted favourable policies towards the adoption of electric vehicles and expanding the manufacturing infrastructure pertaining to electric vehicles. Rising energy cost and competition among emerging energy efficiency technologies is also expected to fuel market growth.
- In recent years, automotive manufacturers announced many plans and timelines for bringing more EVs to the market. Toyota announced plans to generate half of its sales from electrified vehicles by 2025. The company will also partner with Chinese battery manufacturers. Volkswagen said it will spend more than USD 30 billion developing EVs by 2023. The manufacturer also aims for EVs to make up 40% of its global fleet by 2030.
- As of now, much attention is being given to passenger vehicles for electrification, but this trend is expected to change soon and spread to other class of vehicles also.
The Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region is expected to account for the largest market for automotive appearance chemicals, during the forecast period.
- Vehicle sales in the region declined during 2019, and they are expected to continue to decline in 2020. However, China will maintain its position as the world’s largest automotive market, along with Japan and India among the top 10 countries.
- While market saturation, rising fuel prices, trade tensions with the USA, and the COVID-19 impact will continue to impact development, the consensus remains that the rising middle-class populations and increased disposable incomes of China, India and Southeast Asia (SEA) are going to continue driving auto industry growth for years to come.
- The Chinese electric vehicle (EV) market segment witnessed a huge growth in 2019, with the market share increasing from 4.5% to 4.7%.
- According to Autocarpro, the total electric vehicle sales in India in FY 2019 have been more than 480,000 units. This includes electric 2-wheelers, electric 3-wheelers, and electric passenger vehicles. This growth is majorly a result of the government's announcement in April 2019, about the FAME II (Faster Adoption and Manufacturing of Electric Vehicles) scheme.
The global automotive appearance market is fragmented. The major companies of the market studied include 3M, LIQUI MOLY GmbH, ITW Global Brands, Valvoline Inc., and Tetrosyl Ltd, among others.
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