Automotive Interior Leather Market

What is the Future Outlook for Automotive Interior Leather Market in Comparison to Historic Sales?

Interior design and comfort are key factors influencing a buyer’s decision when getting a new car.  These components have always been primary concerns of people interested in investing in a vehicle. Faux leather or artificial leather or synthetic leather, is being more commonly used these days in car upholsteries due to its affordability and positive attributes such as easy to clean and visually appealing look.

The market is likely to gain significantly from the growing replacement and aftermarket installation of interior leather. This provides opportunities for new comers as well as established players to gain traction. Consequently this will result in advent of better custom requirement solutions for vehicle owners.

Some of the leading players in automotive interior leather market are investing in research and development (R&D) activities to facilitate the provision of a variety of leather produced in various colors and materials for diverse uses. Through this, manufacturers intend at keeping pace with dynamic environment.

Leather has been consistently used in vehicles due to rising demand for light weight, high quality and durable leather interior, especially for seats, which improves not only the foundation of the car but also ensures comfort to the driver and passengers. Owing to the ongoing crisis caused by COVID-19 pandemic, automotive production and related supply chain activities have been disrupted. While this could inhibit growth of the market, sales are expected to recover with the containment of the pandemic.

A key factor to consider here is that, COVID-19 outbreak disrupted sales across some of the most lucrative pockets. With a number of producers affected in regions such as South Asia and Pacific and the Middle East and Africa, restricted supply and shortage in demand are expected to result in temporary period of lull. Nonetheless, FMI has forecast the global automotive interior leather market to grow at 4.1% CAGR through 2031.

What is the Commercial Potential of Automotive Interior Leather?

Automotive interior leather is designed to provide comfort and to improve the visual appeal of the interior of any vehicle. It also leaves the vehicle with a remarkable appearance and feel. It is used widely for automotive interiors across the globe, especially in midrange and premium passenger vehicles.

Growing spending capacity and rapid developments in automobile manufacturing are giving tailwinds to the market growth. The interior of a vehicle that adds to its aesthetic appeal has remained a primary factor determining purchase decision of a potential vehicle owners. With customers willing to spend a little more on style and comfort, the demand for automotive interior leather is poised to surge considerably in the coming years.

What is the impact of regulatory framework?

Automotive interior leather and textile manufacturers operate within the purview of government regulations. Most of these regulations target some of the important factors such as product safety standards, manufacturing parameters, and disposal methods. For instance, in India registration, construction, and maintenance of motor vehicles and others are governed by Central Motor Vehicles Rules (CMVR), 1989 and Motor Vehicles Act (MVA), 1988.

Besides this, the formation of International Automotive Task Force (ITAF), intended at providing improved quality automotive products worldwide has considerable influence on the market. Some of the leading automakers such as BMW Group, Ford Motor Company, and General Motors among others are members of this organization. 

Rising focus on providing better quality and experience has been encouraging carmakers to be a member of similar international organizations. This is expected to drive the market in the coming years.

Country-wise Insights

Which Vehicle Category is Exhibiting High Demand in the U.S. Market?

FMI has forecast the U.S. market for automotive interior leather to grow at a healthy rate over the forecast period. The rising demand for light vehicles will boost sales in America. However, demand in the U.S. is driven primarily by the commercial vehicle market, accounting for nearly a two-thirds share of the market.

According to Trading Economics, total vehicle sales in the U.S. reached 16.60 million in January 2021 from 16.30 million in December 2020. Despite crippling effect of the pandemic on U.S. car sales, steady demand for aftermarket will ascertain steady sales of automotive interior leather in the country.

What is The Impact of Aftermarket Sector in the U.K.?

The auto industry in the U.K. averted what could potentially hamper growth when the U.K. and European Union agreed upon post Brexit trade accord. It remains to be seen how the domestic U.K. auto industry will respond in the coming years as the road will continue to be rocky for the foreseeable future.

However, the aftermarket customization and replacement still remains positive hope for the automotive interior leather in UK. Increasing customer’s attention on latest features in car interior and their preferences are decisive factors, which are driving the market for automotive interior leather. With growing recreational activities, the demand from luxury and sports vehicles’ aftermarket customization remains certain.

How Improving Auto Sales in China Impacting Automotive Interior Leather Market?

China presents lucrative opportunities for the expansion of the automotive interior leather market on account of the customers’ willingness towards spending on premium vehicles and their interiors.

In addition, surging demand for artificial/synthetic leather in cheaper motor vehicle variants will create lucrative prospects for growth during the forecast period. Also, the automotive sector in China is expanding at a fast pace, providing attractive opportunities for manufacturers of automotive interior leather.

How are Japan based Manufacturers Positioned in the Market?

The demand for customized interior in vehicles is rising in Japan which is boosting the growth of the market. Popularity for lightweight automotive materials for vehicle interiors is driven by the increasing sales of lightweight vehicles as both manufacturers and buyers aim for maximum fuel efficiency.

Japan also has become a key supplier of materials used for providing a luxurious feel in car interiors. More specifically, Japanese firms are in the driver’s position for high-end synthetic suede and leather used to cover car seats and other interior components in vehicles. Manufacturers within Japan have combined Japanese manufacturing excellence, a willingness to spend money on R&D, and the ability to forge close relationships with Japanese carmakers to come up with top-end seat materials.

How Surging Auto Production Will Benefit Automotive Interior Leather Sales in India?

India is a major passenger vehicle manufacturing hub in Asia, which makes it a lucrative market for automotive interior leather sales. According to data released by the Society of Indian Automobile Manufacturers (SIAM), passenger vehicle whole sales in India increased by 11.4% in January 2020, despite supply chain challenges.

FMI too has identified India as one of the highly lucrative markets in South Asia. Despite temporary downturn registered amid COVID-19, the demand for automotive interior leather is expected to rise in the country in response to the recovering auto sales.

Category wise Insights:

How will Synthetic Leather Segment Outpace Its Counterparts?

Due to increasing demand for cruelty-free products among customers and hindrance towards the use of leather made of cattle hides, increasing number of premium car makers are exhibiting inclination towards the synthetic leather.  They consider it a better alternative than real/genuine leather. Fake/synthetic leather trim was introduced as a cheap substitute for real leather. It is now being keenly pursued by various customers, especially by customers who prefer environmental-friendly vehicles.

How is Market Gaining from Passenger Vehicles Sales?

Passenger cars such as sports utility vehicles (SUVs) and sedans continue to be high in demand. This has helped the passenger cars segment to emerge as the largest end-user in the market. Expansion of the automobile industry and increasing sale of passenger vehicle are making the interior leather market more attractive.

Various interior features that were previously available in premium and luxury cars are now being introduced in mid-size and compact cars by manufacturers in order to stand apart from competitors. There also is immense focus on strengthening their product portfolio. Increasing consumer preference for passenger cars and attention towards automotive interior components such as upholstery, seat, seat-belts, trunk & floor carpets and leather-covered dashboards is fuelling the demand for automotive interior leather.

What Makes OEMs Preferred Sales Channel?

Under the sales channel segment, original equipment manufacturer (OEM) channel is expected to record the faster growth than the aftermarket segment. However, due to rising demand for customization, the aftermarket sales are expected to increase in the near future. Consumers’ inclination for retrofitting of automobiles interior is also supporting expansion through the aftermarket channel.

Why Upholstery Remains the Most Lucrative Application Segment?

Currently, customers consider the automotive upholstery as one of the most important prerequisites while purchasing a car. Also, rising demand for lightweight automotive materials and increasing demand for advanced automotive interiors are some of the key aspects that are likely to propel the automotive interior leather market growth over the forecast period.

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Competitive Landscape

The global automotive interior leather market is highly fragmented. Some of the players are focusing to carve a niche for specific regions or vehicle types.  Companies operating in the market are focusing on strategic collaborations. There is also focus on introducing sustainable materials to keep pace with changing consumer preference. However, expansion strategies are expected to remain highly popular among leading players.

For instance:

• GST AutoLeather Inc. inaugurated a new leather finishing facility in Jiaxing, in April 2019
• Faurecia S.A. also inaugurated a production line in Huejotzingo, Puebla, Mexico in June 2017

Some of the leading companies operating in the market are:

• Lear Corporation
• Seiren Co., Ltd
• GST AutoLeather Inc
• BOXMARK Leather GmbH & Co KG
• Bader GmbH & Co. KG
• Katzkin Leather,Inc. 
• Leather Resource of America
• WOLLSDORF LEDER SCHMIDT & Co. Ges.m.b.H.
• DK Leather Corporation
• Scottish Leather Group Limited

*The list is not exhaustive, and only for representational purposes. Full competitive intelligence with SWOT analysis available in the report.

Scope of the Report

Key Questions Answered in the Report

• Which is the most lucrative market for Automotive Interior Leather?

  China currently leads the global market for automotive interior leather. Sales in China will be over one fifth of total demand throughout the forecast period.

• Which are the top-selling Automotive Interior Leather material type?

  Synthetic leather is highly sought-after in vehicle production. The demand for PU leather is expected to remain high in the near future, especially due to its increasing use across passenger vehicles.

• Which Vehicle Type is Exhibiting high demand for Automotive Interior Leather?

  Automotive interior leather is widely used in passenger cars. Its usage in compact and luxury cars is anticipated to remain key factor impacting the overall market growth.

• Which are some of the leading companies providing Automotive Interior Leather?

  Some of the leading companies manufacturing automotive interior leather are Lear Corporation, Seiren Co Ltd, GST Auto Leather, BOXMARK Leather GmbH & Co KG etc.

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Is this research conducted by Future Market Insights?

Yes, the research has been conducted by expert analysts of Future Market Insights through a combination of primary research and secondary research. To know more about how the research was conducted, you can speak to research analyst

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Global Automotive Interior Leather Market by Category

Material Type

• Genuine Leather
• Synthetic Leather
  • PU Leather
  • PVC

Vehicle Type

• Passenger Cars
  • Compact
  • Mid-Sized
  • Sedan
  • Luxury
  • Van
• Light Commercial Vehicles
• Heavy Commercial Vehicles

Application

• Upholstery
• Dashboard
• Seat belts
• Air-bags
• Floor & trunk carpets
• Headliners
• Others

Sales Channel

• OEM
• Aftermarket

Region

• North America
• Latin America
• Europe
• East Asia
• South Asia & Pacific
• Middle East and Africa (MEA)