CLEVELAND - A new study from the Freedonia Group reports that U.S. demand for automotive coatings, adhesives and sealants is expected to increase 2.6 percent annually to $5.3 billion in 2012, with volume reaching 1.6 billion pounds. Coatings will continue to dominate the market, accounting for nearly 80 percent of market value. Slow gains in this segment will offset the more rapid advances seen in the smaller-volume adhesive and sealant markets. An improving outlook for motor vehicle production will support volume gains, as will the increasing importance of structural adhesives in vehicle assembly.

Through 2012, motor vehicle production is expected to rebound from the poor performance experienced during the 2002-2007 period, spurring demand in the OEM market.

Aftermarket demand will benefit from continued growth in the motor vehicle market, as well as the popularity of light trucks, vans and sport utility vehicles over the past decade. Despite below-average gains in the production of these larger light vehicles due to high fuel prices and market saturation, these vehicles, which consume higher volumes of coatings, adhesives and sealants in their repair than do smaller, light vehicles, will maintain a significant share of the motor vehicle market.

Demand for coatings will be limited to some extent, as competing alternatives such as paint film and in-molded color can offer cost advantages, reduced production time and improved wear-resistance.