Trade Resources Industry Trends Industrial and Construction Growth in Argentina Fueled The Paints and Coatings Market

Industrial and Construction Growth in Argentina Fueled The Paints and Coatings Market

Industrial and construction growth in Argentina during the past five years fueled the paints and coatings market and is expected to continue its fast pace.In the paints and coatings industry,like most Latin American countries,the architecture segment is at the forefront and accounts for 75 percent of the market,while in the industrial segment,automotive paints and coatings is the sub-segment leader with almost eight percent of the market.

During the 2007-2011 period,automotive manufacturing in Argentina grew at a 12.1 percent CAGR,driving other sectors such as auto parts,adhesives and sealants,and the paints and coatings market,which accounted for an 8.6 percent CAGR.Although the Argentine economy is expected to enter a cooling stage and for industrial growth to drop,according to IMF(International Monetary Fund)the Argentine GDP is expected to grow at a 3.6 percent rate until 2017.

There is an intrinsic relationship between GDP growth and vehicles and coatings sales and,due to high inflation rates and Argentine Peso devaluation,Argentina's middle and high classes are buying cars to maintain their purchasing power.As a result,the automotive paints and coatings market is expected to grow at a faster rate than the GDP.The total automotive paints and coatings market in Argentina is expected to grow to almost 30 million liters in volume by 2017 and more than triple in terms of revenues.

According to Frost&Sullivan,automotive manufacturing in Argentina is forecasted to grow steadily and reach more than 900,000 units of vehicles produced by 2017,while the domestic car fleet is expected to grow at a 3.3 percent CAGR.The refinish segment in Argentina will grow at a higher rate than the OEM segment,mainly due to car fleet continuous growth,increasing used car sales,high car insurance penetration,and Argentine car owners who take care of their cars more than in other regional countries.

BASF,DuPont,PPG,Sherwin Williams and Akzo Nobel are the biggest market participants,and for the forecasted period,these companies will have to address big challenges.Increasing raw material prices,domestic import restrictions and governmental pressure toward a self-sustaining automotive and chemical industry are expected to be the top challenges in the market.In this sense,companies will be obliged to manufacture their products locally and export in order to level their trade balances.On the other hand,the national government,through the Ministry of Industry,designed the National Industrial Plan 2020 that will support the chemical and petrochemical industry and plans to increase automotive manufacturing up to 1.9 million units by 2020 and registrations up to 1.6 million units.

A bright future for the automotive paints and coatings market in Argentina is thus expected during the next five years.

Source: http://www.coatingsworld.com/issues/2012-10/view_market-research/automotive-industry-boom-in-argentina-boosts-the-paints-and-coatings-market/
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Automotive Industry Boom in Argentina Boosts The Paints and Coatings Market
Topics: Construction