Auto Service World
Feature   October 1, 2002   by Andrew Ross

Cover Story: Hot Performance, Cool Colours – Technology and Opportunity in the Refinish Market

The world of refinish is resplendent with colours that could only have been dreamed of just a few years ago. It is an ever-changing dreamworld for the colour-loving public. For the jobber without inventory and training, it is a technicolour nightmare.

Vehicles come off the assembly line today dressed in infinite shades of fire red, caution yellow, deep green, and other colours with names that had to be invented because no words fit. The Mustang Mach I that appears here is Azure, but it’s also available in Zinc and Dark Shadow–blue, yellow, and grey respectively–and a GT model can be had in Sonic, which is blue.

Dealing with thousands of new colours, and the special challenges of the aftermarket to repair them, is on the mind of every bodyshop owner in the market.

In the replacement parts segment of the aftermarket, a jobber’s anxiety is driven by exploding SKU counts. For those in the refinish business, it is mostly about the evolving chemistry of the products they sell. Currently, that evolution is occurring on many fronts.

“There are so many changes. Products evolve throughout, from cleaners right down to the clearcoat,” says John Beauregard, technical instructor for PPG and Nexa Autocolor. He works out of the Montreal Business Development Centre, which handles the MVP business programs and other business programs as well as technical training for the company. As a result, he gets to be up close and personal with all issues at the bodyshop and jobber level.

“What we’re seeing now in the next level of product is UV curing technology. We’ve just launched the UV-cured primers and the biggest challenge has been to bring that type of evolution to the field.”

The challenge to create the chemistry behind such products is one thing. Getting it accepted in the field is quite another.

“It’s been some work for us, obviously, because the technology is so new and using it involves new equipment and new techniques.”

Beyond the newest entries into the market, one of the greatest changes over the last few years is the result of pressure to reduce volatile organic compounds (VOC). This has caused changes in the products used in the refinish process and the tools they use to apply them.

At one point it was thought that waterborne technology would have led the charge to lower VOC paints, as they do at the OE level, but changes in the schedule of acceptable products changed the playing field. When government agencies in the U.S. led the way for Canadian rules by excluding certain high-VOC solvents from the equation used to determine acceptability, solvent-based paint systems remained acceptable.

What it has caused, though, is a proliferation of products with much lower solvent content and, consequently, much higher solid content. Think of it as fresh-squeezed versus concentrate.

“It’s had a great effect,” says Beauregard. “Obviously we’re not selling the amounts of paint we were in the ’80s and ’90s. That’s also having an impact on the jobbers and their customers. It’s dramatic. When you were spraying acrylic enamel, you’d need a gallon and a quarter. Today, you’ll probably use a quart of colour and a quart and a half of clear.”

The rub, as it were, comes in the fact that the aforementioned quart of colour can cost significantly more than that gallon of yesteryear. Efficiency may be up dramatically, but the sticker shock that goes along with it is a real issue in ground level discussions between a jobber and his customer.

“The product outperforms anything that has been done in the past. A customer that was using a significant amount of paint on a job is using less than half. Plus they’re by far more productive. This all benefits the end user, but obviously it affects the jobber. It’s often very difficult to size up everything correctly. It’s hard to get the information to the end-user. They don’t realize what they’re getting out of it. To get that understanding through the jobbers to them is tough.”

The rising costs of consumables and the increase in pressure from insurance companies–the biggest customer for most bodyshops–to lower costs has forced repairers to look at ways to become more efficient. Speed is the goal for most bodyshops, but as we all know, speed is dangerous.

“In the last year to year and a half, companies are pushing for faster drying systems. That’s the new thing: getting the whole job done in a day without baking,” says Vince Goldman, technical director, Transtar Autobody Technologies, which produces virtually every consumable for bodyshops except colour. “That covers all sorts of primers from metal to plastic, fillers, clearcoats of all shapes and sizes, as well as adhesives, polishes, etc.,” says Goldman.

The company’s focus has meant that it has borne the brunt of changes in the speed expected, especially when it comes to clearcoats, and is fully aware of the impact of any change on the market. The increase in speed has been dramatic and has caught some in the market unawares.

“Especially in the summer, people are hesitant. They’ve always been told not to over-accelerate. Now people are telling them that these systems are okay to use.” Put simply, there is a reluctance to believe the claims. Hot, humid summers may be great for some segments of the aftermarket, but the refinish industry has learned that these conditions play havoc with the refinish process.

“Hot, humid weather is the worst for painting. Most of the coatings are urethane-based. They react with water so you don’t want the water reaction, but you can’t avoid it when it’s that humid,” says Goldman. In extreme cases, over-accelerating a coating can cause it to actually dry as it comes out of the gun. Still, he says, it’s worth the effort to convince customers that the new technologies are for their own benefit.

“There are going to be issues, but overall that’s what the customer wants. The industry is teething itself.

“There is always a risk. In the industry in general you have some not very educated users. A lot of guys don’t even know how to use a mixing cup and mixing stick which is even more critical with these faster systems. Then there is a huge variation in climate.

“It makes for a lot of challenges.”

Challenges abound in the refinish market, not the least of which is the “sticker shock” that some bodyshop owners must contend with when faced with new colours and new pigments.

“If there is a big impact, it is probably having him understand what he is getting out of the product,” says Beauregard. “It’s all a question of education and making them understand that production is everything. The initial cost of the product should have less impact than it does.”

The issue of cost bleeds over into the issue of colour too. Some colours cost more than others, and for jobbers and bodyshops alike, the popularity of red has its price.

“Red is probably one of the most expensive pigments and yellow is next. Many of the components that we used to use for these are no longer compliant. That in turn brings up the price. This is all a question of education and making people understand that we can’t manufacture paint with the products we did in the past. But the customers are getting more out of it.”

A litre of paint goes further than it used to, plus paint performance has improved. Yellows, he says, used to be very poor at hiding, but the new yellows hide well. Keeping pace with the changing colour popularities can have its own challenges. Yellows may have improved as well as have other colours, but the rapid rise in the popularity of hard-to-match silvers, according to the Du Pont’s annual colour popularity survey–it has gone from mid-pack popularity to the top of the charts in the last three to four years–is bound to have an impact on bodyshops in terms of training needs and technical assistance. It becomes an imperative, not an option. It is not as if the bodyshop or the jobber can opt out of an entire colour family.

“A bodyshop can’t say, ‘Well I’m not going to do any red.’ There are just so many out there,” says Beauregard.

For the jobber, then, there are issues both technical and business-oriented. Getting inventories in line with demand is a constant battle, but virtually every paint manufacturer can provide a great deal of assistance here.

On the plus side, a trusted jobber’s relationship with his bodyshop custome
rs can smooth the transition to new paint technologies and techniques.

“There are millions of products out there and for the most part they work,” says Goldman. “If you can have a jobber store that can offer training, work with the bodyshop, visit them frequently, and answer questions, that is how you’re going to get business.”

Dynamic Opportunities Exist in Aerosol Paint Market

While the refinish market is often dominated by the professional bodyshop segment of the market, aerosol paint products can offer jobbers myriad opportunities.

The Canadian touch-up market alone is estimated at $17 million annually, yet it seldom commands the attention of many in the aftermarket.

I’ve found that with spray paint, it’s not really high on anyone’s list,” says Gus Amodeo, general manager of Plasti-Kote Canada. “We just constantly need to be in the face of our customers in order to get attention.”

Recently, special coatings for industrial and heavy-duty truck applications have been packaged in the aerosol format that many end-user customers are more comfortable with. The same holds true for automotive-related products, which can be sold alongside the more familiar touch-up paints.

“Take products like etching primer. It hasn’t really been a big mover in spray, but we’ve been quite successful with it as an aerosol. Another one is the aerosol bedliner. What a terrific idea. You can do a full size truck bed for under $100.”

Bill Cooper, director of sales, Diversified Brands, a division of Sherwin-Williams, agrees that trucks have been a focus of the touch-up business, with the company selling larger “truck-size” cans as a result. Also, the overall market appears to be ahead of projections, fully 15% up from last year.

Cooper suspects that this means aerosol products are being used for more than touching up; customers may be colouring accessories, using it to highlight areas on vehicles, or other uses that remain a mystery. It’s a case of letting the consumer decide.

“The jobber with a nice-looking showroom can make it more consumer-friendly,” says Cooper. “You’ll get the walk-in trade and they will buy the touch-up. We have a small rack with 40 colours that cover 70% of the market. Why not sell it?

“Sometimes jobbers forget that the professional walk-in is a consumer. They have cars and the need for some of these products, too.”

Cooper says to be on the lookout for new products being introduced shortly, though he can’t say what they are.

“It’ll make it easier for the consumer to do the job. That’s about all I can say.”

Bridging the gap between professional refinish and aerosol, both Plasti-Kote and Sherwin-Williams have aerosol filling stations available for the customer who wants that custom colour in an aerosol format.

“They’ll take their product and our can and they will fill up the spray can,” says Amodeo. “You could take leftover paint and put it in a couple of spray cans and have your own touch-up down the road. It is really cool.

“There’s no doubt about it. The aerosol market is anything but stagnant.”

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