Axalta refinish net sales fell 2% from a year earlier to $504 million in the third quarter of 2026, as a drop in European volumes outweighed acquisitions and favorable price mix, according to the company’s Oct. 29 earnings release. The company said on its earnings call the same day that it has added about 2,600 net new body shops through September.
The decline followed a 6% increase to $545 million in the second quarter and a 3% decrease to $498 million in the first. Chief Financial Officer Carl Anderson said on the call that year-to-date refinish net sales are modestly ahead of 2025.
Villavarayan said North American refinish is starting to stabilize
Axalta refinish volumes in North America were down slightly in the quarter, CEO and President Chris Villavarayan said on the call. “We’re starting to see stabilization in the marketplace,” he said, adding that insurance premiums have begun to ease and that miles driven are rising slightly.
Anderson said year-over-year declines in insurance claims are shrinking and that collision rates are about where the company expected. PPG Chairman and CEO Tim Knavish said on his company’s earnings call that U.S. collision claims fell 4% in the third quarter, compared with a 6% drop in the second.
Villavarayan said Axalta expects to end 2026 with about $2.1 billion in refinish revenue, level with three years ago, after more than $200 million in market effects.
Axalta reached its usual annual body shop win total in nine months
Villavarayan said the 2,600 net new body shops equal what Axalta typically adds in a full year. He also pointed to two top 10 customers, with North America accounting for most of the volume, and to 830 body shops tied to multi-shop operator (MSO) wins that Axalta announced in July.
Villavarayan said the rollouts are speeding up, with many beginning in the fourth quarter and most taking place in the first half of 2027. Axalta plans to spend almost $8 million on the effort in the fourth quarter, he said, and Anderson said faster conversions will squeeze margins in the short term.
European distributors paused inventory orders late in the quarter
Axalta said on the call that its refinish business in Europe, the Middle East, and Africa was down by a double-digit percentage, while total refinish volumes fell by a mid-single-digit percentage.
Villavarayan said the third quarter missed the company’s expectations mainly because of European refinish, which had set sales records for five straight quarters. Axalta reaches that market through about 50 company-owned retail shops, its own distributors, and distributors it partners with. He said those partner distributors chose in late August and September to hold off on stocking up for the fourth quarter, based on economic and political conditions, and he described the slowdown as a matter of inventory timing.
Axalta refinish sales in Europe are up 5% for the year, Villavarayan said. Axalta said it expects those sales to be about flat in the fourth quarter, and Anderson said the same for refinish sales overall.
AkzoNobel CEO Greg Poux-Guillaume said on his company’s earnings call that European refinish improved in the third quarter and that the North American refinish market is still at its low point.
Refinish pricing has run at 4.8% as freight and raw material costs rise
Villavarayan put refinish pure price, which separates price from product mix, at 4.8%.
Freight costs rose more than 15% from a year earlier on higher diesel prices, Anderson said. He said raw material inflation is on pace for a mid-single-digit percentage increase in 2026 and is running at a high-single-digit rate in the fourth quarter. Axalta plans more pricing actions, and many of its businesses are working on diesel surcharges, he said.
Axalta says AkzoNobel merger remains on track for early 2027
Regulators had cleared Axalta’s merger with AkzoNobel in two-thirds of the jurisdictions where approval is needed, Anderson said on the call. He said the sale of AkzoNobel’s European refinish business is underway.
The European Commission granted the merger conditional approval Nov. 6 after the companies agreed to sell AkzoNobel’s European vehicle refinish business, according to their joint release. The release said the sale answers the Commission’s initial concerns about competition by eliminating where the two companies overlap in the European Economic Area, the U.K., and Switzerland, and that the Commission raised no competition issues in other markets. The companies said they expect to close in early 2027, pending the remaining regulatory approvals.
The Commission said the sale responds to concerns that the combined company’s market power could raise prices for repair shops and consumers, Reuters reported. EU antitrust chief Teresa Ribera said in a statement that the commitments ensure companies in that market “do not extract high margins from car repairs by increasing prices or lowering quality.”
The buyer must be a current coatings supplier or an industrial company in a related field, and the merger cannot close before that buyer wins approval, Agence Europe reported. The report said the top four suppliers account for as much as 80% to 90% of sales in the European Economic Area, with Axalta first and AkzoNobel fourth.
Shareholders of both companies approved the merger Aug. 5. The combined company will be named Axanzo, and the companies have said customers will see no change in the teams and brands they work with before the deal closes.
Lisa McArdle