Painting a picture
The refinish sector is a highly competitive environment for paint brands and one which is constantly evolving. Here, bodyshop magazine explores the dynamics of the market and finds out how the paint companies strive for that competitive edge.
The UK accident repair sector is very much based on an ‘approvals’, the work provider eg claims management companies, fleet managers, insurance companies and/or vehicle manufacturers mandate a paint brand for its approved network and, in order to secure that source of work, therefore bodyshops need to fulfil their contractual obligations by using the right paint, on the right job. It can mean, and is typical, for Bodyshops to end up with more than one paint system installed in order to satisfy multiple work approvals.
According to Steve Hawes, marketing manager BASF UK & Ireland, the influence of paint approvals in the UK differs by sector, for example whether it be fleet, insurer or vehicle manufacturer (OEM) directed workflow. However, according to Steve, the BASF focus is very much on the manufacturer market ‘which is 80% driven by approvals, whereas markets such as insurance is 100%.’
The benefits of approvals differ by which sector they represent although guaranteed quality of finish, durability of coatings and user support, in such a competitive market as paint, are a prerequisite. Steve said, ‘The benefits differ by market. In the case of OEM approvals the most important benefit is ‘repair compliance’ but also ‘a duty of care’ to support the ever growing demands of safety such as collision avoidance, warning systems and safety airbags. However, for insurance companies and work providers it is the guarantee of work provision.’
With the majority of the UK accident repair market being approval led, despite the odd grumble of the requirement to install ‘yet another paint system’, there are clearly many benefits to had for bodyshops. Steve explained, ‘Security of continued growth of their business is one key benefit, in a market where the number of larger bodyshop closures is still very evident without approvals. Also, the ability to repair to the complex standards demanded by manufacturers.’
Jon Amor, VR sales manager at AkzoNobel suggests that, within the UK, ‘approximately 70% of the market is approval related.’ And Jon is keen to point out that ‘the benefit of having approvals is clear, as it gives an increase in workflow to the industry. Otherwise, bodyshops are solely reliant on retail work.’
Despite the dominance of the approved market and the benefits it brings, it is a highly competitive arena and the changing landscape of consolidation is, inevitably, going to have a role to play in the paint supply marketshare dynamics. Much of what lies ahead within the market will evolve around strong business partnerships and creating mutually beneficial relationships. AkzoNobel’s Jon Amor is adamant that its partnership approach with businesses, combined with commitment to service, will remain at the heart of the company’s growth strategy. ‘Helping our customers to solve their challenges and increase the efficiency of their business for today and into the future is central to our approach,’ he said.
Interestingly, through all of this reshaping of the approved repairer status landscape, other segments of the market are coming to the fore as alternative markets for paint products.
Many individual sectors are emerging which are challenging the traditional supply chain model within the sector and the ‘free to choose’ market is one which is becoming increasing relevant, not only to bodyshops themselves but inevitably, with that, suppliers. Jon said, ‘Most certainly, the non-approved market is continuing to experience growth.’ With this in mind, it is little wonder AkzoNobel is investing efforts in promoting its Dynacoat range.
The Dynacoat value brand is now distributed exclusively by LKQ Coatings and is designed ‘with the pressures of today’s bodyshop in mind’. The system consists of all of the primers, basecoats, cleaners, fillers and clearcoats a bodyshop needs. Lee Berridge, head of technical and training, LKQ Coatings, said, ‘Having extensively used the complete Dynacoat range of products, I can confidently say it is one of the easiest systems to use and the end results were beyond my expectation for a value range.’
What is more, in many instances, with these free to choose market brands, they come complete with the necessary back-up and support the end user would expect, and often more. For example, Dynacoat benefits from the ability to retrieve colour shades and formulations to mix a colour direct from a Smartphone in seconds, via AkzoNobel’s iMatch Color App (available in Google Play and Apple Store).
Of course, not everyone sees the same potential in alternative markets and despite numerous anecdotal evidence suggesting otherwise, BASF’s Steve points to industry statistics which he claims ‘show that the B brands that target on price for the non-approved sector has only grown to circa 10% of the UK market in the last 10 years.’
If that truly is the case, with the growing popularity of mobile repair offerings and fast track, retail based concepts springing up within the sector, will the same still be true within 10 years’ time? Unfortunately, we don’t possess a crystal ball but it would be our suggestion that the paint market itself will very much become a segmented entity with specific brands targeting specific market sectors, much as it has been for some time – only now there is likely to be more sectors to satisfy, more choice to be had and, a good thing for all, increased competition.