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A number of speakers at the ILM Automotive Leather Supply Chain conference in Shanghai on September 2 said that their businesses expect the automotive leather interior segment to continue to grow over the next four years and beyond based on increased demand for passenger cars. According to a recent report global automotive leather use is anticipated to grow around 10.5% by 2018.
Speakers at the conference included Bentley Motors, Faurecia, GST Seton Autoleather, BASF and Lectra who all provided data and predictions that demand for car leather will increase as OEM's look to use more leather in their interiors."The seating systems represent up to 10% of a cars cost. Leather represents around 50-70% of the material cost of the seating and this represents the second largest cost for auto makers", said Christophe Gaysse, Global Strategic Account Manager, Lectra. "Despite this the use of leather in interiors is expected to grow over the next four years along with global production of light vehicles."
By 2020, China is expected to be the largest purchaser of cars, buying approximately 3 million units per annum (the figure was 1.3 million in 2012). However, Chinese consumers specify around 50% of all new cars sold with leather interiors compared with a figure around 19% in Europe. Demand is also expected to increase for cars for the US market from 1.7 million units in 2012 to 2.3 million by 2020.
"Globally the entire cut & sew market is expected to rise 5.9% in the next few years including growth of 18.7% in China", said Valerio Garcia, Leather Team Leader, Faurecia Interior Systems addressing the conference. "We anticipate that the overall use of leather will increase", he added.
Greater demand from the automotive sector combined with declining raw material availability is anticipated to greater pressure on the leather supply chain which may see raw material and leather prices continue on an upward path witnessed over past few years.
The ILM Automotive Leather Supply Chain conference took place at the Jumeriah Himalayas hotel in Shanghai on September 2 and included 95 international delegates covering the whole automotive supply chain. The event was sponsored by National Beef Packing Company, Lectra, Trumpler and was supported by BASF and APLF Ltd.