Market Trends of Automotive Appearance Chemicals Industry
Increase in the Production of Electric Vehicles
- The automotive appearance chemical market is growing due to the demand for electric vehicles (EVs).
- The EV market witnessed significant growth due to environmental awareness and the need to address future energy requirements. The need to attain sustainable transportation plays a significant role in driving the demand for EVs.
- Furthermore, the rising production of electric vehicles will likely enhance the market demand for the studied market. For instance, according to CleanTechnica, international plug-in vehicle registrations increased by 61% in July 2022 compared to July 2021, reaching 778,000 units.
- As per the International Energy Agency (IEA), in 2022, electric vehicles accounted for around 14% of worldwide passenger car sales, a 5.3% point increase year on year.
- As per the World Economic Forum (WEF), nearly 4.3 million new battery-powered EVs (BEVs) and plug-in hybrid electric vehicles (PHEVs) were sold globally in the first half of 2022. Additionally, BEV sales grew by around 75% yearly and PHEVs by 37%. Moreover, global electric car sales crossed the 5.7 million units mark in the first eight months of 2022, and the market share of plug-in electric cars increased to nearly 15%.
- The governments of various countries adopted favorable policies toward adopting electric vehicles and expanding the manufacturing infrastructure of electric vehicles. Rising energy costs and competition among emerging energy efficiency technologies are also expected to fuel market growth.
- In recent years, automotive manufacturers announced many plans and timelines for bringing more EVs. Toyota plans to generate half of its sales from electrified vehicles by 2025. The company partnered with Chinese battery manufacturer BYD in 2021 to manufacture electric cars. 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.
- Currently, much attention is being given to passenger vehicles for electrification, but this trend is expected to change soon and spread to other classes of vehicles.
- All the factors above are expected to enhance the demand for automotive appearance chemicals during the forecast period.
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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.
- The Asia-Pacific region is home to some of the world's most valuable vehicle manufacturers. Developing countries such as China, India, Japan, and South Korea are working hard to strengthen the manufacturing base and develop efficient supply chains for greater profitability.
- According to the China Association of Automobile Manufacturers (CAAM), China includes the largest automotive production base in the world, with a total vehicle production of 27 million units in 2022, registering an increase of 3.4 % compared to 26 million units produced last year.
- According to SIAM India, in the financial year 2022, the total production volume of vehicles in India was around 22.9 million units, an increase from the previous year.
- Additionally, according to the Indian Brand Equity Foundation (IBEF), the electric vehicle (EV) market is estimated to reach INR 50,000 crore (USD 7.09 billion) in India by 2025.
- In 2022, according to METI (Japan); JAMA, approximately 6.57 million passenger cars were produced in Japan, down from about 6.62 million units in the previous year. The total domestic production volume reached approximately 7.84 million units, which includes buses and trucks next to passenger cars.
- Therefore, the above factors will likely impact the market in the forecasted period.
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