BASF India- A Brief Introduction
BASF India Limited has completed 77 years in the country. The company operates a total of eight production sites across the country. The Innovation Campus Mumbai and the Technical Support Center in Mangalore are both part of BASF’s global technology platform.
The Coatings division of BASF is a global expert in the development, production and marketing of innovative and sustainable automotive OEM and refinish coatings. This portfolio is supplemented by “Beyond Paint Solutions”, which enable new applications with innovative surfaces. The company creates advanced performance solutions and drive performance, design and new applications to meet its partners’ needs all over the world. In 2021, the Coatings division achieved global sales of about €3.44 billion.
Recently, BASF India Limited’s Automotive Coatings Division expanded its Automotive Coatings Application Center in Mangalore in the southern state of Karnataka. Coatings World speaks to Mr Brieux Boisdequin – VP, Automotive & Materials Cluster for BASF India and Mr Anmol Rao – Business Director, Automotive Coatings, BASF India Limited to know about the expansion and general state of automotive coatings industry in the country in this interview.
CW: Could you kindly elaborate about the recent expansion of your automotive coating application center in Mangalore? How would this expansion help your company to enhance your company’s market share in the Indian automotive coatings market?
Brieux: Being close to our customers has always been our strategy globally as it enables BASF to react in a timely fashion to evolving customer requirements, and to accommodate local market specifics. As one of the most diversified and high growth markets, India offers development opportunities with different kinds of solvent-borne coatings technologies and various automotive customers, both local and global OEMs. Each customer requires agility in R&D and in manufacturing from its paint suppliers. This was our motivation to invest in a state-of-the-art Application Center for the automotive coatings business in Mangalore, India. Through the new setup, we are offering strengthened innovation capabilities around R&D, testing, and customer support with the capability of simulating most if not all automotive OEM paint line conditions under all of India’s climatic conditions. BASF Automotive Coatings aims to be the most reliable partner for all OEMs in India and to support them in achieving the highest coatings performance standards.
CW: Can you share some of the technology aspects of your automotive coating application center?
Anmol: High standard coating performance to deliver top notch customer experience has been a key driver for this investment. The solutions deployed at the Center empower us with both the right infrastructure as well as digital enablement to find best solutions for Indian market, targeting passenger vehicles, two wheelers and e-mobility focused companies. The expansion of the existing Automotive Coatings Application Center with new state-of-the-art equipment such as high precision climate-controlled spray booth, electrostatic rotary bell applicators, and advanced quick connection system for electrostatic applications. The facility simulates all paint application procedures of all OEMs irrespective of the technologies and combination of robotics at OEMs. BASF will further strengthen our already solid partnership with OEMs by co-developing specifically tailored solutions to cater to the needs of the Indian market. This is a strong commitment from BASF that we are gearing up to participate in shaping the local customer needs and take our partnerships with OEMs to the next level.
CW: In simple words, how does BASF assist/serve Indian automotive paint industry?
Brieux: India has a highly diverse OEM landscape which underlines the huge growth potential. We see very strong growth with all OEMs active in the country, starting with the local champions as well as international OEMs. As a growing export hub, car manufacturers produce here a variety of models that are catered to both the domestic market and the international markets. Automotive OEMs thus rely on BASF’s innovative solutions to derive a cost-effective offering suited to all markets and combined with outstanding quality and field technical service. We are driven by our purpose of creating chemistry for a sustainable future and it is our ambition to become the sustainability leader in the automotive coatings industry. We continue to proactively offer sustainable solutions to shape the transformation to a greener industry – in India and globally. We develop and present innovative solutions for OEMs in all coating’s layers, be it Chemetall- pre-treatment of metal body, along with full suite of solutions for substrate treatment, external coatings and refinish solutions. Our solutions not only offer striking and long-lasting colors but also enhance the paint body life along with protection against the environment. Sustainability and cost efficiency is a key requirement for Automotive OEMs, thus our automotive coatings business actively explores new business models that align with our customers’ interests.
CW: White color has been the topmost choice for Indian automotive consumers. Can you shed some light on the usage of other colours in Indian automotive industry?
Anmol: The total number of vehicles built on the world’s assembly lines in 2020 and 2021 was significantly lower than the years before. That put a sharper point on the popularity of certain color spaces and Indian customers showed how the country is bucking one trend that its Asia Pacific neighbours are following. Data from the BASF Color Report 2021 for Automotive OEMs indicates that preference for Achromatic colours was down in India compared to 2020. While black was up 7% in 2021 compared to 2020, colors including whi¬te and silver are down 3%, and gray is down 2%, and the achromatic palette dropped by 1% overall. Interestingly, chromatic colors like Blue and Red are becoming increasingly popular in Indian customers. Blue passed red as the most popular chroma¬tic colour, in line with the rest of the globe. Along with the surge in blue, the family of green co¬lours increased about 2%. These aren’t just the usual greens. From teal to khaki to olive, va¬riations of green were more popular this year, especially in SUVs. That said, India is a land of colors and we are proud to have championed unique colours on the Indian roads with our customers. This expertise is highly valued by our OEM partners and further strengthens our partnership in making the Indian automotive industry more colourful! The report can be found here.
CW: India’s automotive sector has been under immense pressure for the last two years. Projections from the Society of Indian Automotive Manufacturers (SIAM) for the current year are not very encouraging. How big is this concern for your company’s automotive coating division?
Brieux: We see the market is now trying to rebound from both supply and demand issues that burdened the industry over the last years. Automotive sales were impacted by COVID-19 induced lockdowns, supply chain issues and lack of semi-conductor chips in 2020 & 2021. BASF continues to remain optimistic about the Indian Automotive market. In terms of global car production, India remains among the fastest growing markets globally. In terms of volume, India is the world’s largest 2-wheeler market and the world’s fourth largest automotive market. According to Automotive Color Report 2021, the trend indicates a growing preference for high quality vehicles and increasing adoption of more expensive or high-tech vehicles. Further, the focus of the government on bringing about e-mobility, sustainability and innovations in this flagship manufacturing industry is another strong signal of growth potential. These trends bring about multiple opportunities for BASF in the automotive coatings segment.
CW: Depressed demand in the Indian market and very high crude prices (on account of Russia- Ukraine conflict) during the last couple of years have been one of the most challenging times for the global and Indian paint industry. This is not the best of times to be in a paint maker’s shoes, how is your company planning to meet these challenges?
Brieux: Automotive Coatings is a challenging market which requires long term planning, hedged exposure to oil derivatives and navigating complicated supply chains. For us, India continues to be a strategic market which requires long term commitment. We are evolving our market outreach as per the market demand. In India, the market demand in the automotive coatings sector is dynamic, and we continue to remain agile with a long-term vision for growth.
We believe that India cannot continue to work on a short-term market strategy. Eg: vehicle demand collapsed in 2021 and only OEMs that kept on investing during the difficult times were able to cope with the resurging demand in 2022. Our investments and march with innovation as well as focus on sustainability will continue to drive the focus on Indian market.
CW: How big is the Indian automotive coatings sub-segments in value/ volume terms. Can you comment on your company’s contribution/ market share in it?
Anmol: India is the fourth largest automotive market and one that’s growing at an attractive pace. According to an external market study, India has roughly 40 cars per 1,000 inhabitants while it is over 570 cars per 1,000 inhabitants in Germany. Having said that, when we zoom into the faster growing segments and combine the evolving consumer buying preferences with key economic indicators – the market does look optimistic! Automotive coatings are an integral part of the automotive portfolio that play a key role to drive the demand of new launches. Over the years we have built valuable partnerships with the biggest OEMs in the market – both in India as well as globally that are driving this growth. Our solid Indian and global footprint enables us to become a partner of choice. We don’t comment on specific market share within India for the business, but what we can say the following: For BASF to continue being in the top three positions globally in Automotive Coatings segment– we stay fully committed to drive success in the Indian automotive market.
CW: What according to you are some of the biggest challenges facing the Indian automotive coating industry?
Brieux: Over the recent years, the India automotive market was characterised by high fluctuations which were driven by newly introduced emission standards and other regulations, followed by the Covid-19 outbreak and its related shortages and logistical challenges. We do expect those dynamics will continue in the short-term. However, this year we see a strong market performance so far which is manifested by the fact that India has now become the number four automotive market globally.
Sustainability, cost, dynamically evolving customer innovation requirements, the color preference in India are some of the biggest opportunities for companies like BASF. Catering to the dynamic design trends with a broad range of colors is a key area that keeps us active. With its broad range of climate and temperatures that vary across the nation, India presents ample opportunities for us to focus on innovation for heat resistant, weather resistant colors, self-healing (clear-coat paints) etc. We see that these trends continue to evolve with change in demand for end customers and is thus a challenge for OEMs in India as well as their partners like BASF. Combined with strong automotive exports from India, these are very promising indicators of a strong market development going forward.