Key Indicators of the Film Industry’s Wellbeing
By Nick St Denis
Overall consumer sentiment in the U.S. is lukewarm. Economists are uncertain whether a recession is looming—nor is there any consensus as to the severity of a recession if one is to materialize.
Putting aside the ambiguity in the economy as a whole, what is the outlook for the automotive and architectural films market in particular?
Here are three key indicators that give us an idea of the state of the market, and whether or not the industry can enter 2024 with optimism.
Growth of Leading Manufacturers
Eastman Performance Films and XPEL are leading suppliers of paint protection film and window film in North America and encompass a significant portion of the market. Given this, their financial results are a sensible way to gauge the health of the industry as a whole.
The total combined revenues of Eastman Performance Films and XPEL have doubled over the past five years (from 2017 to 2022), with significant double-digit percentage year-over-year growth in most recent years. In 2021, they saw a combined growth rate of 30% followed by a 12% increase in 2022.
Dealer and Installer Activity
While growth has been undeniable from the supplier perspective, dealers of automotive and architectural film have demonstrated similar results.
According to research KMR conducted in collaboration with its trade publications PPFMag and Window Film Magazine, the average growth in sales from 2021 to 2022 among the top 50 film dealers and installation businesses in the U.S. was 32%. It is to be determined how 2023 and 2024 ultimately shake out, but we suspect double-digit percentage growth through this year and likely next year, even with the expected economic slowdown ahead.
Dealers have put an emphasis on diversifying their products and services. On the automotive side, in addition to PPF and window film, installation businesses are implementing ceramic coatings, color change wraps, detailing and paint correction into their offerings.
New Vehicles
Vehicle production in North America was up 10% in 2022 from the previous year, International Organization of Motor Vehicle Manufacturers data show.
According to automotive industry data provider MarkLines, new vehicle sales in the U.S. increased 13% year-to-date through August 2023 compared to the same period in 2022.
Paint protection film strongly relies on volume from high-end and luxury vehicles. The most recent new vehicle sales data demonstrate strength in this area, as Marklines reports Tesla sales were up 34% in August from the same month a year ago, while Jaguar Land Rover and BMW sales increased 39% and 15%, respectively.
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