Bringing Color to the Aftermarket SectorBy Antonio Gozain | Wed, 05/25/2022 - 08:45
Q: What added value do Sherwin-Williams’ products offer clients and the end consumer?
A: We have a very complete portfolio, including water-based technology and traditional paint for cargo vehicles. The market has three main segments: the high-end segment; the medium segment, which are the shops that aspire to have higher productivity but still have not reached those volumes; and the low-end segment with lower productivity. We have grown through our two local factory acquisitions, one in 1996 and the other in 2007. Both have a strong presence in the low-end segment. Our main focus in the last few years has been to move more into the high-end segment.
Our added value is in the technology we offer, such as our HPC 15 clearcoat that cures in 15 minutes without forced drying. Another important element is our approach to working together with our customers to meet their demands, but also the training we provide to their people. That is our main differentiator: our people. At the end of the day, our people are the ones who make it all work. The technology and processes may be similar but the team makes all the difference.
Q: Painting is a complex process that requires specific conditions, such as spray booths and equipment. How do you support your customers in this regard?
A: The nature of the collision industry is complex because the customer usually comes to us after their vehicle has been damaged. There is a myriad of variables that can affect the final color and being able to match hues and shades and provide customer satisfaction requires careful craftsmanship. It is almost artisanal work. We sell the bases and the color matching process is up to the paint lab or bodyshop staff. They must consider all the variables when elaborating and applying the color mix to provide the closest match. For example, a color will look different on aluminum than on plastic or if one part of the vehicle has been fixed, the opposite side must be retouched to provided symmetry.
Our business model is mainly centered on providing the most attractive cost and appropriate cost-control measures to maintain productivity.
Q: The aftermarket segment is expected to feel the impact of the slump in vehicle sales in recent years. How will paints and coatings fare under these circumstances?
A: With the drop in new car sales, agencies do not have enough vehicles. What we are doing is promoting a process called Express Repair. In general, an automotive dealership already has a captive market and a paint service but sometimes customers believe that painting a car at the dealership is expensive and time consuming. Through Express Repair, the dealership offers to repair minor damage when regular maintenance is being done.
Although the pandemic has reduced mobility, and accidents and the work necessary to repair them, this service helps to make up for those losses. The service was previously underutilized, but it is cost-effective for both parties and gives the user an advantage in that it minimizes repair times. This service may represent 15-20 percent of their sales. An important issue is how the service is sold. It is key to train assessors and paint personnel to deliver workable repairs in this limited time. Our technological advantage is that our system allows the process to be completed in about 90 minutes, from application to complete finish.
We are also creating synergies between service providers, body shops and customers to create virtuous circles in which the body shops, dealerships, distributors, and customer, all win. Another important service we offer is consulting to help body shops improve their processes.
Q: How do you strengthen dealerships to sell Sherwin-Williams products?
A: Like many other businesses, 20 percent of our customers make up 80 percent of the business. With this in mind, the point is how to retain them and how to expand to those with whom we do not have exclusivity. Our value proposition is strong, having 1,500 points of sale that provide nationwide coverage. We do not have our own distribution network but we have established agreements with certain distributors, have important contracts with insurance companies and formed alliances with body shops. These strategies allow our products to reach more people.
Q: Considering that the sector is price-oriented, how do Sherwin-Williams’ products improve performance and durability for the end customer?
A: All paints have a specific purpose and are good for what they are designed to do. What varies the most is the durability and the warranty you want to offer. The durability of a premium paint with a lifetime warranty is not the same as a conventional paint. We have a wide range of paints for all needs, and all are quality products. We also have a wide range of matte and custom colors that provide the customer with a wider range of options.
Q: How is Sherwin-Williams addressing the need for more environmentally-friendly materials in both the original and the aftermarket sectors?
A: Paint generally has four elements: resin, which determines the paint’s quality; pigments that provides the color; additives that imbue special characteristics; and solvents, which provide viscosity during application and then evaporate. This last component is the biggest pollutant, hence the benefits of water-based technology, which requires a much smaller number of solvents. Approximately 80 percent of new vehicles are painted with water-based technology. But matching becomes difficult between solvent-based and water-based technologies. As more vehicles are painted with water-based technology, it becomes easier to include this technology in the collision market.
Our fast-drying components also help us to save energy and gas. The usual drying process involves spray booths with temperatures of 60-70°C that ultimately require resources to maintain these high temperatures.
Q: What are your priorities for the Mexican market in the short term? Which regions will be a priority?
A: We have had set agreements with OEMs and insurance companies, that will bring more body shops to use our brand. Our priority is to protect our business base in the low-end sector.
In Latin American, Brazil is our biggest market. In Mexico, we are market leaders, selling the biggest volume. We also have the most advanced solution in water-based technology. This is important in terms of cost-effectiveness, improving productivity with a minimal extra investment. We have an automotive plant in Texcoco and other plants for industrial and decorative purposes in Mexico.
In the premium sector, we are the number two player, having a lot of room to grow. We want to position ourselves at the top and we are focused to achieve that.
Sherwin-Williams Automotive Finishes is the automotive division of Sherwin-Williams, a leading US company focused on painting, coatings and related supplies.