Recoating the Future: Automotive Paints Market Readies for Low-Carbon, Flexible Production

Automotive Paints Market — OEM modernization and auto-segment volume gains are shaping demand for advanced, low-emission coatings.

A wave of factory investments and improving auto volumes are reshaping the demand profile for automotive paints. The global Automotive Paints Market size is predicted to reach USD 11.49 Billion by 2030 with a CAGR of 5.4% from 2024-2030.

Recent 2024–2025 developments show OEMs upgrading paintshops to cut VOC and CO₂ emissions while paint suppliers see clearer revenue drivers from autos — developments that matter to procurement, sustainability leads and supplier strategists. 

Latest developments (2024–2025)

• Škoda Auto has begun construction of a next-generation paint shop at Mladá Boleslav that is planned to open in 2029; the facility is designed to support both electric and internal-combustion models and to raise the site’s daily painting capacity by up to 1,600 bodies for the new shop (combined throughput 2,600 with the existing 2019 shop). The company says the new plant will reduce CO₂ emissions by 28% versus the unit it replaces.

• The Škoda paintshop design emphasizes automation (robotic sealant application, automated plugging of body openings), incorporates hybrid energy supplies (electricity + biogas) and advanced automation systems such as robotic sealant application and automated plugging of body openings. The plant targets significant VOC and CO₂ emission reductions versus the current facility, including a 28% cut in CO₂ emissions.

• On the supplier side, paint major Kansai Nerolac is reporting encouraging signs tied to automotive volume gains: among listed paint companies, Kansai Nerolac has the highest exposure to the auto segment, with roughly 30% of sales coming from that vertical, and the company outperformed peers in recent share movement (stock up over 5.2% in the prior month, per the Business Standard report). Analysts cited improving auto volumes — potentially supported by recent tax actions — as a medium-term revenue trigger.

Applications Across Industries

• Automotive OEMs (primary): Vehicle surface protection and visual finish remain the core application — from cataphoretic anti-corrosion coats through base coats and clear coats — with new paintshops enabling two-tone and matte finishes that help OEMs differentiate battery-electric vehicles.

• Industrial coatings / adjacent manufacturing: Kansai Nerolac’s broader industrial coatings capabilities, underscoring that paintmakers serving automotive also supply industrial end-markets — a diversification relevant when auto volumes fluctuate.

Regional Outlook — Dominating and Fastest-growing Regions

Europe — Key Modernization Hub (example country: Czech Republic)

• Škoda’s large, next-generation paintshop is sited in the Czech Republic (Mladá Boleslav) and highlights Europe’s push for low-carbon, flexible paint production. The project’s 28% CO₂ reduction target positions Europe as a leader in sustainable paintshop investments. 

Asia-Pacific — Rapidly Growing Region (example country: India)

• Paintmakers in India such as Kansai Nerolac report meaningful revenue exposure to the auto segment (30% of sales) and are sensitive to local auto volume swings. Increases in auto production directly boost domestic paint demand. This makes India a fast-growth market for automotive coatings, especially when local vehicle production rebounds.

North America — Active in Modernization and Digital Paintshop Investments (example country: United States)

• Automotive Manufacturing Solutions observes OEMs across North America are rethinking paintshop design and production playbooks; the AMS coverage and associated events (e.g., Automotive Manufacturing North America in Detroit) indicate a concentrated focus on paintshop modernization in the U.S. market.

Why these countries lead: 

Investments in next-generation paintshops (Czech Republic), high vendor exposure to local vehicle production (India), and concentrated OEM modernization programs, along with major industry events in the United States, are the verified growth drivers.

However, OEMs and paint suppliers face challenges including high capital costs of paintshop upgrades, long commissioning lead times, and evolving VOC regulations that require ongoing formulation changes.

Key Players and Recent Strategies 

• Škoda Auto (OEM / paint-shop investor) — 

  • Strategy: build a flexible, low-emission paint shop to support both EV and ICE production, add finishes (two-tone, matte), and reduce VOC/CO₂ via process changes and hybrid energy.

• Kansai Nerolac (paint manufacturer) — 

  • Market position: highest listed exposure to automotive sector, with ~30% auto segment share of sales; the company is cited as benefiting from auto volume gains. 

  • Strategy implications: concentrate on industrial and automotive coatings to capture rebound.

• Other notable players include PPG Industries, Axalta Coating Systems, BASF SE, Akzo Nobel N.V., Sherwin-Williams Company, Nippon Paints Holding Co., Ltd, and more.

Future Prospects and Practical Examples – NMSC Viewpoint

• Procurement and supplier strategy: Buyers should expect tender requirements to increasingly include environmental KPIs such as CO₂ reduction targets and low-VOC formulations. Škoda’s 28% CO₂ reduction goal provides a concrete benchmark for sustainability in future tenders.

• Product innovation: Process changes that allow decorative base coats to be applied directly onto cataphoretic layers (bypassing primer bake) illustrate productivity and energy gains that coating formulators and applicators must support through compatible chemistries and application systems.

• Example use case for suppliers: A paint manufacturer that can demonstrate low-VOC, bake-stage-reducing chemistries plus support for matte and two-tone finishes will be better placed in RFPs for next-generation paintshops. Kansai Nerolac’s exposure to automotive demand illustrates the direct P&L sensitivity to such auto volume swings.

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