Supply chain issues and global effects on the Automotive Paint market

gun with paint in the hands of a man to paint a car.

While many industries have been affected by supply chain shortages throughout the Pandemic, which disrupted global trade and distribution of many commodities even into 2022, it has become more difficult to source the materials required to create many industrial paint components and enamels utilized in the automotive industry.  

Hurricane Ida in Louisiana in summer 2021 halted production of some of the key chemicals and resins needed to make paint, by shutting down the petroleum production, which is an ingredient in paint. 

The Texas Freeze in 2021 froze the resin, and frozen resin is useless so they disposed of those materials and tried to play catch up with backorders in over 1,150 plants throughout the south. This natural phenomenon also froze production of petroleum for that time period in the southern U.S. as well.

Also on March 3, 2021, a fire started at a polymer plant in Germany, and another paint factory fire in Columbus, Ohio, that year closed another major paint manufacturer. A third plant producing resin and paint components burned in the fall of 2022, also impacting the availability of raw materials and paint components for the automotive industry.  

COVID-19 lockdowns caused there to be less labor available at automotive plants, paint plants and trucking companies, which also affected production, meaning the public had access to few new cars during the height of the pandemic. The accompanied upswing in new car costs over the past few years have meant more people were repairing used cars. This increased demand for paint across the nation during COVID-19 only added to the supply shortage that occurred from lack of raw materials.

With higher gas prices, shipping and distribution costs have gone up for products that were made. To compensate for these higher logistical costs, many manufacturers have been forced to pass on those incurred price hikes to their consumer base in order to remain operational.

With rising production and operational costs, even for the plastic bins and storage materials to contain the products, paint manufacturers are paying a higher price to store their product as well. While a rise in plastic bins wouldn’t normally cause product prices to increase, the mountain of additional challenges which paint manufacturers now face has made this a surprisingly significant factor when determining product pricing.

A car’s paint job typically consists of four layers of paint, those layers include an e-coat, primer, base coat and clear coat. With even one of these products getting snagged on back orders means a repainting project can be held up until supplies come in. Backlogs on repair work and repainting are common with supply orders causing the hold up.

Few U.S. based automotive paint and coating manufacturers are in business to provide paint to the market from the mainland United States. Without supplies readily available, manufacturers have had to reduce their current product offerings, or seek out alternative additives to keep their product selection. In either scenario, Auto body and repair shops have seen a drastic increase to the cost of their industrial paint projects rise, as well as significant lead time for delivery of products through 2023.

Due to paint and resin supply shortages, there has been a boom in ceramic coatings for vehicles, as well as paint protective films that can mitigate any damage to paint. Want to know more?  Ask these advertisers about the latest trends in car repair, refinishing and care.

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