Automotive OEM Interior Coatings Market Size, Share & Trends Analysis Report By Resin (Epoxy, Polyurethane, Acrylic), By Layer (Primer, Base Coat, Clear Coat), By Vehicle Type (Passenger Cars, Light Commercial Vehicles, Heavy Commercial Vehicles) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global automotive OEM interior coating market size was valued at USD 2,508.75 million in 2022. It is expected to reach USD 2,963.97 million by 2031, growing at a CAGR of 1.87% during the forecast period (2023–2031).

Automotive OEM coatings are one of the critical components of the automotive production sector. Protection against the harsh environment is one of its functions. The best quality and most durable coatings are used in automobiles. Automobile coatings also offer excellent mechanical protection against chemical exposure and abrasion. Interior automobile coatings enhance the surface's appearance and provide functional characteristics that convey comfort and luxury. Various measures are used to prevent rusting of the metal when applying these coatings. Additionally, they can endure UV radiation. The coating procedure includes the base coat, primer stages, and clearcoat. The clear coat provides a translucent, glossy covering. The automobile industry uses automotive coating extensively to improve the aesthetic and functionality of the car.

Market Dynamics

Global Automotive OEM Interior Coatings Market Drivers:

Preference for Mobility in Personal Transport

Consumer preference for personal transportation has increased in recent years due to improved road and infrastructure construction, start-up innovations in the car rental sector, and affordable cars for middle-class individuals. The availability of online platforms, the simplicity of the booking, the widespread use of smartphones, and the growth in international tourism have contributed to the car rental industry's increased popularity over the past few years.

Additionally, the number of online tourist vehicle bookings is rising globally due to the growing popularity of smartphones and the rise in users between the ages of 25 and 34 who prefer to make car rental reservations online. Over the past few years, renting a personal vehicle for a brief period through an online booking has become the most popular option for customers due to the growing trend in technology. In the upcoming years, these expanding trends are likely to increase demand for personal transportation, which will, in turn, increase the need to produce new cars, interior materials, and interior OEM coatings.

Rising Demand for Better Vehicle Interiors

One of the main factors influencing the demand for interior OEM coatings from the components used in the interior of cars, such as dashboards, steering wheels, cover seats, and other plastic finishing in the interior of the car, is the growing demand for high-performance cars and new aesthetic looks in automobiles in recent years. Additionally, it is anticipated that demand for interior OEM coating will increase in the upcoming years due to the growing demand for customized cars from the luxury car segment. Customization typically entails changing the engine, paint job, or adding aftermarket accessories to make a car look different from the factory version. Additionally, in recent years, the availability of simple customization at affordable prices with updated technology has increased demand for interior OEM coatings among car enthusiasts. Therefore, it is anticipated that during the anticipated period, demand for automotive OEM interior coatings will be driven by rising per capita income and manufacturers' ease of access to customization.

Global Automotive OEM Interior Coatings Market Restraints:

Decline in Automotive Industry

The automotive sector experienced a sharp decline in 2019 after years of uninterrupted growth. The production of automobiles decreased from 95.63 million units produced in 2018 to only 91.78 million units in 2019, according to the OICA, which reported a negative growth of 5% for the sector in 2019. In the past year, car sales have decreased due to the convenience of ride-sharing services like Uber and Ola and demand shocks in nations like India. As a result, production has decreased because the automotive industry employs a lean production strategy (production follows the sales demand for automobiles with a slight lag).

The automotive industry experienced encouraging growth over the previous ten years, but the pace of growth has slowed recently. New car sales and production are declining in many regions of the world, including Europe, Asia-Pacific, and the United States. This impacted most of the countries' previously rising automotive production. Markets, business models, and the competitive environment are all evolving.

Global Automotive OEM Interior Coatings Market Opportunities:

Increased Domestic Demand

The industry is likely to grow to satisfy domestic demand. This indicates the potential to boost manufacturing in Sub-Saharan Africa as numerous foreign automakers are setting up factories in Ghana, Ethiopia, Angola, Nigeria, Rwanda, Namibia, South Africa, Kenya, and other countries (SSA). Mureza and the Iranian SAIPA Group may collaborate to create an automobile in South Africa that will retail for USD 12,434. The vehicle constructed from SKD and CKD kits is reportedly expected to be produced in Zimbabwe and Botswana at former Mazda and Hyundai factories. Additionally, the nation has recently prohibited the importation of used cars from strengthening domestic manufacturing. Over the ensuing years, this will likely present a significant opportunity for the nation's OEM interior coating. Therefore, during the forecast period, such upcoming investments and changing government policies to support the manufacturing sector in the region are likely to present opportunities for the OEM interior coatings market.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global automotive OEM interior coatings market is segmented by regions: North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 2.22% during the forecast period. The tier 1 and tier 2 suppliers of automotive OEM parts primarily use interior coatings for automobiles. However, most of the nation's auto interior components are typically used in domestic auto production. The country's auto manufacturing and sales impact the demand for automotive interior coatings. The automotive industry's use of lean production techniques to minimize inventory overhead costs is primarily to blame. The largest automotive manufacturing sector in the world is found in China. In 2018, the industry experienced a slowdown, with production and sales falling. Similar trends persisted, with production declining by 7.5% in 2019. The economic changes and China's trade conflict with the United States impacted the automotive industry's performance.

Europe is expected to grow at a CAGR of 1.29% during the forecast period. With 41 assembly and engine production facilities, which account for one-third of all European auto production, Germany is the region's market leader in the automotive sector. Manufacturers from various segments, including equipment producers, suppliers of materials and components, engine manufacturers, and integrators of complete systems, are in Germany, one of the top manufacturing hubs for the automotive industry. The nation's expanding electric vehicle industry is anticipated to impact the country's interior coatings market positively. Germany ranks among the continent's significant nations as a producer and consumer of electric vehicles. Electric vehicle registrations have increased significantly over the past few years, even though overall car sales in the nation have decreased. The government's push for 100% electric vehicles by 2040 contributes to this growth. Additionally, the country's production of electric vehicles is receiving significant funding from German automakers.

The United States is the world's largest and most potent economy. After China, the United States is the second-largest automotive manufacturer, with 11.31 million vehicles produced in 2018. The nation has experienced rapid growth in automobile production over the last five years. Due to an excess inventory and low demand for passenger cars, the growth slowed down for the following two years after reaching a 3.8% increase in 2015. Additionally, after China, the United States is the second-largest market for electric vehicles. The rising demand for electric vehicles, particularly from its leading player, Tesla, is predicted to increase the demand for OEM coatings.

Brazil's economy has grown slowly over the previous five years. In 2019, the country's GDP growth rate dropped from 1.1% in 2018 to 0.9%, according to the International Monetary Fund. Brazil's economy has been growing since its downfall due to the current political climate and government policies. Sales, as well as production in the nation's automotive industry, have been rising. Despite a slowdown in the rest of the world, domestic demand was strong in 2019 and helped the automotive industry grow by 2.2%. The trend in the nation will likely continue, increasing demand for the market that the automotive industry has been studying.

The Iranian economy entered a recession as a result of the United States government reimposing sanctions and the drop in oil prices.As a result, GDP shrank by 7.6% in 2019 due to a decline in consumption, oil exports, and construction activity. The U.S. government's reimposition of sanctions and the decline in oil prices plunged the Iranian economy into recession. As a result, GDP shrank by 7.6% in 2019 due to a decline in consumption, oil exports, and construction activity. The government is working to make things right. In June 2020, Iran's National Development Fund (NDF) will release USD 1 billion from its national reserves to support its automakers amid a protracted economic crisis. As production increases, this is expected to increase demand for automotive interior OEM coatings. However, the nuclear agreement with the west, particularly the United States, will h impact the country's automotive industry growth in the long run, affecting demand for the market under study.

Segmental Analysis

The global automotive OEM interior coatings market is segmented by resin, layer, and vehicle type.

Based on resin, the global automotive OEM interior coatings market is bifurcated into epoxy, polyurethane, and acrylic.

The polyurethane segment is the highest contributor to the market and is expected to grow at a CAGR of 1.98% during the forecast period. Highly elastic polyurethanes (PUR) can be customized for coating applications. They are glossy, transparent, hard, flexible, and chemically resistant. Building blocks are diisocyanates and polyols. In contrast to aromatic isocyanates, which become yellow in the sunshine, aliphatic isocyanates give high-performance urethane coatings outstanding light stability and weathering resistance. Polyester or polyether is frequently used in elastomeric polyurethane. The oxidative stability, heat, and abrasion resistance of polyester-based urethane coatings are greater, but the hydrolytic stability and low-temperature flexibility are less. One- or two-part resins can be used to cure PUR coatings. Urethanes can fix via heat, water, solvent evaporation, air drying, or one of four other ways. While heat-curing urethanes are utilized for more demanding applications, moisture-curing urethanes are frequently employed in interior and wood coatings.

Reinforced polymer composites made of epoxy resins are derived from petroleum. They are the result of an epoxide unit-based reactive process. To increase the longevity of coatings on metals, these resins are applied as binders in coating applications. Using epoxy compounds as coatings are one of the most well-liked epoxy coating applications. Epoxy coatings are standard because they offer metals and other materials a quick-drying, durable, and protective coating. Epoxy coatings are quick and straightforward to apply, unlike conventional heat-cured powder coatings, making them perfect for various applications.

Based on the layer, the global automotive OEM interior coatings market is bifurcated into the primer, base coat, and clear coat.

The primer segment owns the highest market and is expected to grow at a CAGR of 2.01% during the forecast period. After electro-coating has been applied to a vehicle during production, a priming layer is used on the vehicle’s body. Its thickness typically falls between 30 and 35 millimeters. Primer materials are used for car interior parts, even though they are typically used during vehicle assembly. They are additionally categorized as primers are electro coats. Epoxy, polyesters modified with polyurethane, and acrylic resins are the most frequently used in producing automotive interior primers. Primers help to even out the surface and protect it from sudden impacts. They also achieve a flawless finish by filling in uneven surfaces before painting. The primer, which serves as a transitional coat between the e-coat and topcoats, is the second functional layer. Additionally, it offers the e-coat film excellent protection against UV rays and stone chips.

The base coat, the third coating layer applied to a car, is the last layer that determines the car’s color. Its average thickness ranges from 10 to 20 micrometers. The final color of the vehicle is determined by how the base coat is applied to the surface. Polyurethane and polyacrylate resins are often used for base coatings on autos. This is mainly because polyurethanes increase brilliance, flexibility, and resistance to stone chipping.

Based on the vehicle type, the global automotive OEM interior coatings market is bifurcated into passenger cars, light commercial vehicles, and heavy commercial vehicles.

The passenger cars segment is the highest contributor to the market and is expected to grow at a CAGR of 1.93% during the forecast period. The market under investigation has the highest demand for the passenger car segment. Different kinds of single- and multi-component, solvent-borne, and waterborne coatings are used to coat other substrates, like ABS and polycarbonate materials, in the interiors of passenger cars. These uses also include etchable laser coatings. They coat various interior components, including steering wheels, door trim, handles, instrument panels, speaker grills, armrests, armrest bezels, center clusters, meter clusters, and instrument panels. High gloss and smooth finish are two of these coatings' key features.

The segment of light commercial vehicles consists of vehicles like vans, small buses, caravans, and delivery trucks. Light commercial vehicles are those that weigh less than ten metric tons in general. After passenger cars, the light vehicle segment is the second-largest segment in the automotive OEM interior coatings market.

Recent Developments

• August 2022- Axalta introduced new basecoat technology for Latin American automotive refinish market.
• October 2022- BASF opened a surface treatment innovation and technology center in China for Chemetall.