Volume 14, Issue 2- March/April 2010


Setting the Pace
Overcoming Low Penetration in the Paint Protection Film Industry
By Tim Hartt

The automotive paint protection film industry has evolved and changed dramatically over the last decade. And unfortunately, while paint protection films (PPF) and patterns generally have gotten much better, market penetration remains relatively low. Unlike industries where suppliers enter into the business as demand trends quickly upwards, in this industry, the supply side of the equation has completely outpaced the demand. Today, there are a disproportionate number of film manufacturers and pattern developers in the market competing for a relatively small number of quality installers. Perhaps this is due to the perception of a grand end-game scenario where at least half of all car-buying consumers will have paint protection installed on their cars. Current estimates, though, have that number at close to 1 percent, and it has not changed much over the last ten years.

So, how could some metropolitan areas achieve greater than 50 percent penetration, while the majority of others languish below the single digit mark? The answer has turned out to be two-fold: price and quality.

Basic Economics
In successful markets, such as Denver, the average amount of film installed per car began much smaller than that of the rest of the country. Smaller coverage means lower film cost and lower installation time. Lower film and labor costs lead to a lower price. Lower price means more people can afford it. Basic economics, right?

Most installers in Denver started out only covering the leading 12 inches of the vehicleís hood, making the product affordable for almost anyone. But many other regions began by selling 24-inch hoods, fenders, mirrors and full bumpers. This bumped the retail price upwards by more than 75 percent, and priced most first-time consumers out of the market.

On the other hand, installing nothing but minimal coverage on the hood, which leaves the entire painted front bumper exposed to road salt, rocks and other debris, doesnít make much sense either. However, it does allow the consumer to step into the realm of paint protection and experience firsthand what it can do for the surface it protects. At some point down the line, when these customers buy their next cars, they will realize that, while it worked well, it wasnít installed in nearly enough places. This is the time when the coverage and average ticket price can grow organically.

In Denver today, the average size of hood coverage has grown and complete bumper coverage is commonly installed as well. The difference for them is that the penetration rate is deep into the double digits, even with all the extra coverage. Perhaps the reason this market developed so naturally is that installers there were some of the earliest adopters of the product. As early as 1991 or 1992, installers in Denver were working with paint protection where the only film available had a maximum width of 12 inches.

Later on, as the product spread into other areas, industrious companies lead by automobile enthusiasts began dutifully increasing coverage and adding options to protect all of the other chip-prone areas. That alone may have seemed like the right thing to do, but the price tag associated with the change served only to stunt industry growth.

To encourage mass participation, we must allow some of our customers to tiptoe into this product and realize for themselves that they need more coverage. The problem is that most installers donít want to invest the three or four years it will likely take to start seeing a return on this strategy. This brings me to the point of quality.

Job Well Done
Larger coverage generally leads to a more difficult installation. And, unless the installer is experienced and thoroughly proficient in the trade, a difficult installation usually leads to poor quality. We have also seen a huge number of new, inexperienced installers entering the paint protection market. New installers, difficult installations, high prices Ö you get the idea.

Just as the laws of economics teach us, the higher the price of a good or service, the fewer people who are willing and able to pay for it. When examining the products being installed today, this is certainly true of the paint protection industry.

Nationwide, the average retail price for a frontal protection package consisting of 24-inch hood coverage, matching fenders, mirrors and full bumper is about $799. Full frontal coverage, which consists of the entire hood, complete fenders, the mirrors and full bumper retails for about $2,295. Entire vehicle coverage pushes the retail price to $5,000 and beyond. Though there are added benefits with each additional amount of coverage, the percentages of sales for full frontal and complete vehicle coverage are 0.98 percent and 0.004 percent respectively.

There is a market for this type of coverage. And many manufacturers support it by offering wide format films and designs, but the numbers reveal that itís a niche market. Most installers will never sell one, while others may sell one per month. Itís even more rare to find a shop that uses full coverage as the core of its business.

From the Ground Up
What has been missing for the last decade, at least in most markets, is the entry-level protection that would entice consumers to try the product for the first time. Paint protection is a good product. It works, and when it is installed properly, it is barely noticeable by anyone. For these reasons, I am confident that consumers will buy it again, and most likely ask for more of it the next time around. The industry has simply outpaced demand, and has left the market in a somewhat dysfunctional state.

Many PPF suppliers, including our company, have taken necessary steps to minimize the installationís level of difficulty and thereby increase the quality. From highly conformable film and specialized installation fluids to installation aides and patterns designed by career professionals, companies have researched solutions to many different installation issues. While these steps have certainly had a measured effect, I believe it is nothing compared to the flood of new business that could be realized by getting back to the basics and remembering the fundamental laws of economics.

Tim Hartt is chief operating officer of XPEL Technologies Corp. based in San Antonio and has been involved in the paint protection Industry for more than ten years.

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