Change

AkzoNobel Car Refinishes


“Because we maintained our focus on our key capabilities – service, availability, quality and innovation – we were a port in a storm for our customers.”

Overview

It proved to be a good year in difficult times. We were clearly impacted by the economic downturn, primarily as a result of lower demand in all of our market segments. But through various business improvement projects and cost-cutting we weathered the storm and were able to pick up on some uplift in the market towards the end of the year.

Analysis

The downturn had the most significant affect on our Commercial Vehicles and Automotive Plastic Coatings businesses, which are closely related to the automotive OEM (original equipment manufacturers) segment. Our vehicle refinishes activities also suffered, but to a lesser extent, because they are more connected to the aftermarket. So we did experience lower demand, which resulted in lower revenue, the hardest hit regions being North America and Western Europe. But due to our strength in brands and distribution, focus on customers and operational excellence, we negotiated the hostile climate.

Downturn

Because we maintained our focus on our key capabilities – service, availability, quality and innovation – we were a port in a storm for our customers; a safe place for them to come in difficult times. We therefore not only ended the year with a higher customer retention rate than ever, but also attracted a number of strategic new customers. We devoted more resources to the training and development of our employees than in previous years, despite the downturn. This helped to continue their career development and enhance their ability to serve customer requirements.

Actions

Various operational issues were addressed to bring costs more in line with the current volumes. This included restructuring the business, which resulted in a reduction in headcount. The organization is now leaner and more efficient. We also made significant strides, even in a downturn, in terms of lowering our working capital and were able to redeploy resources into key growth markets. This helped us to take advantage of the bounce back in regions such as China, India, Brazil and Turkey. But even in light of restructuring to align costs and increase synergies, we did not let up on quality or availability and innovation was as robust this year as any other.

Developments

Early in the year we announced that we had become the official supplier of paint solutions to the McLaren Mercedes Formula 1 team through our Sikkens brand. We signed a deal to coat 1,000 electric buses in China, while further contracts were signed with various manufacturers, including Toyota, Kia, GM, Honda and Mazda. In terms of products, our UV LED gun proved to be a success in the markets where it was launched, and there was very high market acceptance – both in the aftermarket and the OEM markets – for our StickerFix adhesive do-it-yourself repair and protection system. This year also saw the launch of our first self-repairing clearcoat, Autoclear Exclusive. Another important development was the fact that we made significant strides in increasing the strength of our distribution footprint in vehicle refinishes across the globe. Major progress was also made in the area of safety and we recorded a significant reduction in incidents.

Revenue
in € millions
Car Refinishes – Revenue in € millions (bar chart)
Jim Rees: Managing Director – Car Refinishes (photo)
Jim Rees
Managing Director
Key brands
Car Refinishes – Key brands (logos)

Main products

  • Primers, basecoats, topcoats and clearcoats for vehicle refinishes
  • Automotive plastic coatings
  • Customer service technology

Key markets

  • Collision repairers and commercial vehicle refinishers
  • Bus, truck, specialty vehicle OEMs
  • Automobile insurer networks
  • Fleet owners and operators
  • Automotive OEMs aftermarkets
Geo-mix revenue by destination
in %
Car Refinishes – Geo-mix revenue by destination in % (pie chart)
Keyword Search
Copyright © 2010 Akzo Nobel N.V.