The global automotive conformal coatings market is projected to reach USD 2.7 billion by 2025 from USD 1.8 billion in 2020, at a CAGR of 8.7%. However, halt in vehicle production across the globe have impacted the automotive conformal coatings market. Despite this, owing to increase installation of automotive electronics and increasing demand for comfort features in vehicles the market is expected to recover in the last quarter of 2020. The automotive conformal coatings market is estimated to observe a decline post-COVID-19 due to the impact on vehicle production. The global automotive conformal coatings market is projected to reach USD 2666.9 million by 2025 from USD 1761.1 million in 2020, at a CAGR of 8.7%. The growth of this market is primarily driven by the increasing automotive electronics in vehicles and growing adoption of electric vehicles.
The increasing demand for safety, comfort, and convenience is reflected in the overall price of vehicles. While the key criteria for buying a car previously were power, speed, and design, buyers now demand energy efficiency, safety, and comfort. The demand for automotive safety and comfort features is growing in countries such as China, India, and Japan, among others in Asia Pacific. As a result, carmakers are now required to incorporate basic safety features, such as anti-lock braking systems (ABS) and airbag systems, in their entry-level models. For such features, electronics installation is expected to increase, which is expected to drive the Asia Pacific automotive conformal coatings market. On the contrary, these features already have strong presence in the North America and Europe region due to stringent safety regulations.
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Asia Pacific is the largest market for automotive conformal coatings market and accounted for ~56% of the market in 2020. The adoption of electronics has increased in the last few years because of the installation of various safety and comfort features in modern vehicles, especially passenger cars. Vital components like ECUs, PCBs, sensors, and LEDs need to be safeguarded against challenging operational environment so they can operate at optimum efficiency. Moreover, in countries such as China, India, and Japan, safety and fuel efficiency and emission regulations have pushed OEMs to install sophisticated electronics to improve vehicle performance.
The passenger car segment is estimated to be the largest market in the automotive conformal coatings market. The demand and production of passenger cars, combined with recent regulations related to mandatory installation of airbags and stringent emission norms in countries like China and India is expected to drive market growth. Moreover, standard features, such as reverse parking assist and airbags, are expected to increase the installation of PCBs, ECUs, and sensors in passenger cars. Moreover, growing installation rate of LEDs in compact SUVs is also expected to drive market growth. Hence, increase in electronics components is expected to drive the passenger car conformal coatings market.
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Leading market players have adopted strategies of new product development and expansion to increase their share in the automotive conformal coatings market. In September 2018, Henkel laid the cornerstone for the new global innovation center of its Adhesive Technologies business at the company’s headquarters in Düsseldorf. The company invested more than EUR 130 million to erect a state-of-the-art building. Once completed, the facility will allow more than 350 Henkel experts to develop new technologies and applications for a variety of industries. The building will also serve as a global customer center, where Henkel will present new solutions for adhesives, sealants, and functional coatings. The opening of the innovation center is planned for the end of 2020.
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