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U.S. demand for automotive coatings, sealants and adhesives is forecast to rise 2.4 percent per year to 2.3 billion pounds in 2005, according to an automotive research group. Gains will slow from the expansionary pace set during the 1990s, primarily due to a deceleration in the production of larger-sized vehicles, according to a study by the Freedonia Group, a Cleveland-based research organization. However, larger vehicles will continue to account for a significant percentage of total motor vehicle production in comparison to a decade ago, thus ensuring gains in automotive coatings, sealants and adhesives demand, according to the study.

In addition, production of sedans and other smaller automobiles will rebound from declines during the 1990s when consumer demand favored SUVs, vans and trucks, the report said.

Automotive after-market growing-Although constituting a smaller segment, the aftermarket will benefit from the large number of vehicles put into service during the 1995- 2000 period, which will promote gains for coatings, sealants and adhesives used on automotive repair and various aftermarket parts. But gains will be restrained by the improved durability in automotive coatings, sealants and adhesives, as well as a reduction in the number of collisions, the study said. Among the collisions that do occur, more vehicles will be deemed as not worth the cost to repair, it added.

Nevertheless, all body parts and components have become more durable over the past decade or so, resulting in motor vehicles with longer useful life spans. Since older cars tend to require more repairs, this trend will promote aftermarket demand in the long run. Within the motor vehicle industry, coatings, sealants and adhesives are used for exterior, interior and under-the- hood applications.

Interior and exterior applications will continue to account for the majority of demand.

Although facing restrictive growth due to greater use of plastics, coatings will be a hot bed of product development as the product mix continues to switch from solvent-based to environmentally friendly technologies. For example, the commercialization of powder clearcoats in the U.S. (these products are already used in Europe), which is expected to occur within the next ten years, will have the greatest effect on this segment, according to Freedonia.

# posted by Medical Information : 3:32 AM