IBIS Partner Interview – Axalta

Back onboard as an IBIS Global Summit partner for 2018, Axalta Coating Systems is a giant within the highly competitive world of automotive coatings. Here we catch up with Joseph McDougall, executive vice president and president, global refinish and EMEA, Axalta Coating Systems, to find out more.

 

Please provide a brief overview on the current refinish paint market globally

All indications are that growth will remain at two to three per cent over the coming years. While there are factors like accident avoidance technology that should slow growth, off-setting factors like distracted driving, car parc growth, and miles driven mute any contraction in the market.  Growth rates vary by region and segment, but we remain very positive on the overall market.

What is Axalta Coating Systems’ position within the market?

Axalta is fortunate to be the refinish market leader globally. We work hard every day to bring great products to the market and pair them with world class service for our customers. Our company has a heritage that spans more than 150 years and brands like Spies Hecker and Standox have been a big part of the refinish industry from the very beginning.

How is the refinish business structured globally?

We run our business with an overarching set of global strategies that guide the work of our regions where execution takes place. We have a salesforce organized regionally to look after customer needs in a given geography while functions like technology take a much more global view. This matrix works for us and gives us and our customers the best of both worlds.

What challenges and opportunities do you see globally within the refinish sector?

Consolidation in the industry is both an opportunity and a challenge. As our customers grow, so do their needs. Whether those needs are more productive coatings or the ability to convert new shops quickly, we need to respond. That takes an agile workforce and a relentless focus on understanding our customers’ business needs.

The collision repair industry varies greatly from region-to-region – can you give examples from the refinish paint perspective on just how diverse the market is?

Probably the best example in paint is the diversity of distribution globally. In some regions you have a very traditional distribution network that is consolidating rapidly. In other regions, you must manage four or five different models. We need to be effective at all of them. For a paint manufacturer, a distribution partner is a key part of your business and your brand.

What is/are the key strategic focus for the refinish business moving ahead?

Simply stated, the Customer remains our prime focus. We must continue to drive technology that helps our customers achieve their business goals. As the market dynamics continue to evolve through consolidation, we work hard every day to identify the appropriate service model to address customer needs and deliver value.

How does Axalta Coating Systems ‘add value’ to the collision repair industry?

It’s all about service to the customer. We believe we have the best technology in the world, and our competitors would say the same about their products. We differentiate ourselves by providing strong technical service at the shop level. Helping shops solve their problems move you from a paint supplier to a business partner.

Digitalisation, innovation and technology are major influences within all walks of life today – how far can this influence the realm of refinish paint?

Camera technology will continue to improve and not just in spectrophotometers. I would expect we see a day in the near future where an iPhone can be used just as effectively to match paint.  Technology innovation in terms of coatings will continue to evolve and probably more rapidly than ever before. Not only are the OEMs, insurers and shops demanding it, so are consumers.  We’ve enjoyed a pretty traditional industry for a long time, however, we all need to pay attention to innovation and potential disruption around us.

There has been lots of ‘noise’ in recent months regarding possible acquisitions/mergers amongst the global paint giants. What is causing this? And what are the likely outcomes?

It certainly seems that consolidation will continue in our industry as we’ve seen with some recently closed deals and those proposed. Global expansion is certainly a big driver as companies want to expand beyond their traditional geographies. However, bigger is not always better so each deal must stand on its own when it comes to making sense for shareholders and providing a better company in the end for customers.  It is hard to predict where it ends. Usually the market decides when these events occur across an industry.

Lastly, you’re back onboard as an IBIS Global Summit partner – why is IBIS important to you as a business?

IBIS brings together the most influential and thoughtful leaders in our industry. The quality of the programming and the value to attendees in terms of knowledge, networking, and learning is top notch. We are proud to be a sponsor and look forward to Munich.