Transportation

The Transportation end-user segment is particularly important for our Performance Coatings Business Area. We supply a comprehensive range of advanced coatings and color technologies for virtually every type of transport, including cars, commercial vehicles, ships, yachts and airplanes. We also produce specialty chemicals used in the production of automotive systems and components, with particular emphasis on automotive plastics. In addition, we supply surfactants for automotive fuels and lubricants.

Trends

The outlook for the Automotive OEM parts and assembly sub-segment remains reasonably strong globally, although our benefit from this is limited as we do not compete in the mainstream automotive OEM coatings business. Growth rate expectations are particularly high in China, which is now the largest region for automotive production. Expectations for growth are more modest in Europe, where some recovery is required in order to reach pre-recession production levels. North America is an exception to the positive growth outlook, with production having returned to pre-recession levels. Growth going forward is therefore expected to be lower than overall North American GDP growth. The trend towards smaller, lighter weight cars is supporting the continued conversion to plastics, so the outlook for automotive plastics is disproportionately strong, which is important for AkzoNobel, as we are a leader in automotive plastic coatings.

Growth expectations in the Automotive repair sub-segment are less robust, although the market is more stable and less cyclical than in the other automotive sub-segment. Key drivers for growth are the number of vehicles on the road, the insurance rate and the repair rate. Higher growth is therefore expected in countries such as Brazil, Russia, India and China, where growth rates in these key drivers are expected to be higher.

In the Marine and air transport end-user segment, we see some evidence that the bottom of the cycle has been reached in marine new build, as production is now very modestly increasing. However, we are not expecting a sustained recovery because new contracts are declining and the order book is falling as a result. Furthermore, the marine maintenance market is continuing to grow slowly as freight rates have still not recovered significantly, dampening demand for maintenance activities. Aerospace is a much smaller market than marine for AkzoNobel, but we do expect continued robust demand growth.

Future sustainability developments

Based on the WBCSD Vision 2050, by 2050 there will be an 80 percent reduction in energy use by light duty vehicles. In addition, the WBCSD is expecting a 50 percent drop in energy use in freight transportation.

Implications for strategy and actions

As products with sustainability and/or cost benefits in production and in use continue to grow disproportionately, we will continue to innovate and provide products that lead to reduced carbon use and lower costs. Aesthetics will also remain important and we will therefore continue to innovate in terms of products and services that support differentiated color and finish. In addition, we will ensure that we are well-positioned geographically as the vehicle car park continues to increase outside of.

Transportation – Fields of application (illustration)Transportation – Fields of application (illustration)
Mature markets

Mature markets are comprised of Western Europe, the US, Canada, Japan and Oceania.