Market Trends of Brazil Automotive OEM Coatings Industry
Acrylic Resin Segment to Dominate The Market
- Acrylic resins are polymeric materials containing acrylic monomers in the form of dispersion, solids, and solution. These monomers are usually esters of methacrylic acids, acrylics, and other derivatives.
- Acrylic resins are used for stoving enamels for industrial appliances (machines and equipment) and primarily for automotive OEM finishes, mainly topcoats, base coats, and clear coats. They have major performance advantages regarding gloss, exterior durability, corrosion resistance, chemical resistance, solvent resistance, and hardness.
- Acrylic resins develop properties such as transparency, high color ability, and UV resistance in coating solutions. They are often used in water-borne systems, which results in low VOC emissions.
- In Brazil, the demand for water-borne acrylic resins is increasing since they are environmentally friendly products that can reduce odors and solvents used in paint. Similarly, solvent-borne acrylic resins have a homogeneous film with excellent workability and fast-drying properties. Therefore, they are used for automotive OEM applications.
- The demand for acrylic-based water-borne coatings is increasing in the electric vehicle sector due to their sustainable properties.
- According to the Brazilian Association of Electric Vehicles (ABVE), in 2022, the sales of light electric vehicles (EVs) were registered at 49,200 units, at a growth rate of 41% compared to the previous year. Thus, the increase in the sales of electric vehicles is expected to drive the automotive OEM coatings market in the country.
- As per OICA, the production of automobiles in the country amounted to 23,69,769 units in 2022, registering a growth of around 5% compared to the previous year. As per OICA, the total sales of vehicles in the country amounted to 18,30,992 units in Brazil in 2022, as compared to 18,66,073 units in 2021, registering a decline of around 1.9%.
- Thus, the acrylic resin segment is expected to dominate the market during the forecast period.
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Passenger Vehicles Applications Segment to Dominate The Market
- The demand for automotive OEM coatings is higher in passenger vehicles. In passenger cars, solvent-borne and water-borne coatings are used to coat polystyrene and ABS materials used in car interiors.
- The OEM coatings are used to coat various interiors, such as center clusters, meter clusters, instrument panels, speaker grills, armrests and armrest bezels, steering wheels, door trims, and handles. The important characteristics of these coatings are high gloss and a smooth finish.
- The passenger vehicles segment occupies the majority of the share of the automotive market in the country. In Brazil, around 77% of the vehicles produced are passenger vehicles. According to the International Organization of Motor Vehicle Manufacturers (OICA), the production volume of automotive vehicles reached 1.82 million passenger vehicles in 2022, as compared to 1.71 million units manufactured in the previous year.
- Similarly, the production volume of electric vehicles is increasing in Brazil with the implementation of various initiatives. In 2023, the electric vehicle sector in the country received an investment of USD 8 billion. The investment will help kick off the production of new EV models and their components on Brazilian soil in 2024.
- Furthermore, global automotive brands such as Audi, BMW, Chevrolet (Bolt), Fiat (500e Abarth), Mercedes Benz, and Renault announced their plans to start the manufacturing of electric vehicles in Brazil in 2024. Thus, the increasing production of electric vehicles is expected to drive the market for automotive OEM coatings.
- Moreover, the Brazilian Government has approved a law that states that electric, hybrid, and hydrogen fuel cell cars registered in the city can get back 50% of the Motor Vehicle Ownership Tax (IPVA) paid. These factors are further expected to drive the country's market for OEM coatings.
- Thus, the passenger vehicle application segment is expected to dominate the market during the forecast period.
