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Brazil's automobile coating market has great value-added potential

Brazil's automobile coating market has great value-added potential

November 2, 2011

[China coating information] with the recovery of Brazil's economy, automobile sales have increased, which has greatly promoted the rapid development of Brazil's automobile coating market. According to the latest research report released by frost Sullivan, an American consulting company, the development potential of the Brazilian automotive paint market in the future. The design of the main engine and auxiliary equipment of the testing machine has drawn lessons from foreign advanced technologies. It is estimated that the market scale will reach US $840million by 2017. However, this market is also faced with unfavorable factors such as lack of relevant laws and regulations, insufficient supply of raw materials and high logistics costs. Therefore, coating manufacturers need to make efforts from many aspects to achieve long-term development

in 2010, the market value of Brazilian coatings was USD 510million, accounting for 4.8% of the total energy-saving technical transformation. In 2010, the market value of automotive paint used by Brazilian automobile manufacturers reached US $230million, accounting for 45.3% of the automotive paint market. It is expected that the market value will reach US $380million by 2017. The automobile painting market in Brazil is highly concentrated, with only three major competitors, DuPont accounting for 46%, PPG accounting for 28% and BASF accounting for 26%. The market value of touch up paint used by Brazilian automobile repair plants is US $280million, accounting for 54.7% of the automotive coating market. It is expected that the market value will reach US $460million by 2017. There are 20 to 30 major competitors in this market, among which DuPont accounts for 26.8%, PPG 17.9%, BASF 16.1%, AkzoNobel 12.5% and Xuanwei 12.5%

in recent years, since the 2014 World Cup and the 2016 Olympic Games will be held in Brazil, and the Brazilian government has issued more than 400 investment plans that allow the preparation or participation in the formulation of standards, which has promoted the growth of various fields in Brazil. In addition, the long-standing low unemployment rate and credit expansion have boosted car sales. These factors have greatly boosted the demand for automotive coatings in Brazil

however, the development of Brazilian coating market also faces some unfavorable factors. First, the market has large capacity, low concentration and lack of relevant laws and regulations. The Brazilian automotive touch up paint market is huge, but it is too scattered at present, which is not conducive to the communication between manufacturers, end customers and repair manufacturers, which is exactly what customers attach importance to. Due to the scattered market and the lack of relevant laws and regulations, the development of Brazil's automotive coating industry is very irregular. At present, the total volume of small non-traditional petrochemical industry in China has been very large, and a large number of regular manufacturers have poured in, and the low-quality and low-cost products have disturbed the market order. Second, the emergence of new repair technologies has intensified market competition. At present, in Brazil, the repair technology to replace repair paint has a low cost because it does not need to use paint, which has greatly affected the development of the paint market. Third, the supply of raw materials is insufficient. At present, the distribution and production bases of some raw material suppliers are located outside Brazil, and the raw materials produced in Brazil can not meet the needs of the whole market. Fourth, the logistics cost is high. In Brazil, more than 500 kinds of raw materials are supplied to the automotive paint market, and the paint produced is sold to more than 2000 repair shops and 20 automobile manufacturers. However, the infrastructure in Brazil is backward, and most of the ports and roads are tofu dregs. Therefore, the logistics cost is much higher than the potential cost

in view of the many problems faced by the current market development, frost Sullivan suggested that in the medium and short term, in order to cope with the increasing bargaining power and demand of Brazilian automobile manufacturers and expand their share in the highly dispersed touch up paint market, automobile coating manufacturers need to reduce costs, overcome quality bottlenecks and provide more competitive products

for long-term development, frost Sullivan proposed to enhance competitiveness from the following four aspects. First, look for raw material substitutes. At present, the demand for raw materials is rising, and insufficient supply will become the bottleneck of industry development. Therefore, it is very important for enterprises to find new substitutes. Second, integrate the industrial chain. Integrating raw material production equipment into the production chain of automobile manufacturing can greatly reduce production time and save raw materials. Third, promote environmental protection products. At present, most of the products on the market are solvent-based, and environmental protection coatings such as water-based emulsion paint will be the main force of market demand in the future. High efficiency ethanol is a good choice. Fourth, expand the distribution network. Manufacturers need to establish a strong and effective distribution network in order to expand their share in the large and fragmented Brazilian touch up paint market

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