Proliferating Colours Providing Challenges

There are few, if any, “easy” aftermarket categories for jobbers to sell, and paint and refinish products are no exception. Thankfully, there is help.

For a seemingly straightforward product and technology, paint and coatings materials and their associated technologies are actually one of the most complex OEM vehicle components. Consequently for the jobber, selling aftermarket paints and coatings can require as much knowledge as the most complex engine technology.

Add cost to complexity and you have a product group where a simple mistake in application can result in both unhappy customers and a big financial hit. One study indicates that painting can account for 20% of the OEM build-cost of a vehicle. The report also says that the painting area of an OEM can constitute up to one-half of the costs of the assembly plant. And in the aftermarket bodyshop, paint and primer can represent 75% of the shop’s materials costs.

But that investment is worth it. Paint is one of the biggest drivers in consumer sales. The variables of colour, paint composition, quality, and technological advancements all influence the consumer, and, as is the case with most automotive products and services, aftermarket personnel need to have more knowledge when talking with customers than do car dealership salespeople.

Whatever paint and coatings advancements are made at the OEM level, by the time these applied formulations reach the aftermarket, the OEM technology is complicated by the additional problems presented as vehicles and their paint finishes age.

As with other aftermarket products, paint and finishing retrofitting aimed at achieving OEM original quality is always more difficult and cost-intensive than the original OEM application and installation. A painting troubleshooting chart for one of the major automotive finishes suppliers, for example, listed 31 descriptions and solutions for major problems that could arise in the painting process. Fortunately, for jobbers and their body shop customers, assistance such as troubleshooting advice, painting and refinishing business systems assistance, and product knowledge education are offered in depth by automotive paint manufacturers and suppliers.

Here’s how the research firm Frost & Sullivan describes the workings of this complex market: “Probably one of the most exciting OEM markets for coatings these days is in the transportation sector. While designers are struggling for a different look in sports cars and SUVs, coating firms are working closely with automobile manufacturers to assure that several things work in harmony. These include keeping costs low while improving protection against the elements, providing new and exciting colour schemes, assuring longer warranty protection offered by the dealers, following environmental guidelines, and coordinating OEM coatings with the needs of the automotive replacement market.”

Paint and refinish products comprise an ever-expanding frontier involving colour trends, paint types, technologies, and consumer preferences. And all of this is taking place within today’s singular business requirement: environmental standards compliance.

The biggest overall automotive market driver today, at both the OEM and aftermarket levels, is customers’ desire for personalization and individualization in their vehicles. And within this desire, paint and its role in appearance is king. Brilliant styling, outstanding mechanical performance, and exceptional vehicle longevity are all trumped by appearance.

Appearance, and the consumer’s enjoyment in a nice-looking vehicle, are not only important to the vehicle owner for aesthetic reasons. Appearance is also a key factor in determining residual value, and consumers know this. Maintaining a quality appearance becomes even more important as vehicles are tending to be kept increasingly longer by the original purchaser. Even minor flaws in the finish of a vehicle can lower resale value. Mintel International Group comments that the number-one reason consumers make aftermarket modifications to their vehicles is “to protect the investment in the car.”

All these factors create a strong market for aftermarket appearance products and detailing services, the most important of which are paint and paint-related products. In addition to the primary multi-product refinish market, paint can also drive jobber sales for a wide variety of paint maintenance and protection products, as well as refinishing preparation products ranging from sandpaper and primer to body filler. In spite of what some new car salespeople may say about OEM paint finishes now being virtually indestructible, they are not, and they require maintenance.

Colour and its close cousin, paint type, are the key factors in the appearance mix. The staggering array of colours now available to the new vehicle purchaser will eventually end up having to be replaced with refinish products and services in the aftermarket, and every year this is getting more complicated. One major automotive supplier involved in colour offered more than 100 new colours for the 2004 model year. Black was once black, but now there are many variations of colours so dark that they are virtually black–and they are not easy to match. Trying to keep track of all the colours is difficult, and that is why paint and coatings suppliers such as PPG conduct colour popularity surveys, of which the 2004 survey is reviewed as a sidebar to this article.

Adding more variance, in contrast to a time when the choice was “metallic” or “enamel”, some new formulations of paint change colours when viewed from different angles or under different light conditions. Paint and coatings companies are constantly striving to come up with dramatic colours and formulations to complement the advanced vehicle designs being introduced every year. Some paints now include microscopic metal flakes that reflect light differently from changing angles, so that the colour of a vehicle changes as the observer walks around it. “Optically enhanced” paints based on holography and nanotechnology are also emerging into the vehicle coatings mainstream.

With today’s finishes, you can park your dark red car at work in full sunlight at 8:00 in the morning and then when you return to it after work under less direct sunlight, it may be purple. More and more original paint is becoming like the “custom” colours we used to see only on show vehicles at car enthusiast gatherings. We now not only have concept cars, we have concept paints. And like many concept cars, new paint formulations are hitting the OEM assembly plant sooner and sooner after they are unveiled. But whereas the OEMs are faced with only one group of colour and paint type changes each year, the aftermarket is looking at five, 10 or 15-year multiples of these new finishes–just one more reason that the life of the automotive jobber becomes more challenging daily.

As is the case with many other automotive aftermarket products, there are also environmental factors in play. In the case of paint and refinish products, the key area being monitored by government agencies is volatile organic compounds, or VOCs. This is not entirely new, but additional compliance requirements continue to mount. VOCs are a concern because they are a key solvent ingredient in paint and coatings products.

According to the Canadian Paint and Coatings Association / Auto Refinish Manufacturers’ Council, solvent use will represent 32% of all VOCs by 2010. And within the solvent-use sector, paints and coatings constitute 45% of VOC emissions. In turn, automotive painting and refinishing represent a significant use of paints and coatings, and thereby VOC involvement.

With the regulatory eyes of all levels of government on the aftermarket paint and coatings segment, jobbers need to be sure that the products they are recommending, selling and/or using are compliant. You can check out the VOC regulations at the website of the Canadian Paint and Coatings Association, www.cdnpaint.org.

It’s important to note that VOC levels have been established for the painting process stage when the paint is in the spray gun cup, not when the paint or coating is in its container. From a marketing perspective, new VOC-compliant products may add to the jobber’s SKU mix, and some familiar products may become obsolete because of lack of compliance.

Looking at the overall paint and refinishing aftermarket, jobbers and refinishers will have to work hard to keep up with change. But this is no different from other aftermarket categories in our world of rapidly evolving automotive technology. However, there is plenty of excellent assistance available from the supply side to help with product knowledge education and business mentoring. Also on the upside for jobbers is the fact that appearance, and in particular colour and paint type, are for the consumer two of the most important variables in personalized branding. And being “different” is what’s driving today’s automotive market.

Research for this article includes material sourced from the following companies and organizations: PPG Industries; DuPont; Frost & Sullivan; Canadian Paint and Coatings Association / Auto Refinish Manufacturers’ Council; Sherwin-Williams Automotive Finishes Corp.; Mintel International Group; BASF; and Norton Abrasives.

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All That Glitters Is Not Gold

At first glance, colour popularity factors might seem to be a light element in the paint and coatings knowledge mix, but it’s actually very important. Current year colour popularity is an excellent guide to what the aftermarket can expect in terms of future demand. And with some pigments costing much more than others, colour popularity knowledge is important for more than just aesthetic reasons.

PPG Industries recently revealed the results of its 2004 Global Colour Popularity Survey. The new survey says that for the fourth consecutive year, silver ranked as the most popular vehicle colour in North America at 27%. This represents a popularity increase of almost 25% from 2003. Silver’s popularity was highest in the sport/compact category.

Red and white, tied at 14%, were the next most popular colours. Black finished third at 13% followed by blue at 12%.

The “naturals” colour family, which includes gold, copper, champagne and the lighter shades of brown and yellow, came in at 11%, while green achieved 5%. Other niche and specialty colours were featured on 4% of vehicles.