London - The European automotive paint additives market is being driven mainly by new technology and innovation, boosted by sizeable R&D investments aimed at developing competitively priced, high-performance additives that meet legislative requirements, according to new research by Frost & Sullivan.
The report 'Strategic Analysis of the European Automotive Paint Additives Market,' finds that the market earned revenues of Euro 104.2 million ($1.3 billion) in 2011 and estimates this to reach Euro 159.8 million in 2017.
Limits on volatile organic chemicals (VOC) content and REACH regulations have provided opportunities for innovation and ushered new technology trends in the additives industry, Frost & Sullivan said. This has led to the development of novel products like zero-VOC additives, multifunctional additives and self-healing additives.
"The implementation of laws and regulations on VOC limits has triggered the shift from solvent-based to water-based coatings, promoting market prospects," noted Elamuhil Pari, Frost & Sullivan research analyst. "Although water-based coatings are generally low in VOC, they require a greater quantity of additives to achieve the properties of good quality paint, thereby boosting the demand for additives."
However, the report notes that pricing pressures remain an area of concern. Paints account for only 2-3 per cent of the total investments in automotive manufacture, and therefore car makers are willing to pay only a very low price for automotive paints.
Pari also noted that paint additive manufacturers "have to innovate and adapt quickly to changing technologies like nano-technology and smart-coating formulations to stay ahead of the competition."
UTI has not seen this report and cannot comment of the accuracy of its analysis