Automotive Interior leather Market is predicted to reach USD 44.1 Billion at a CAGR of 5.10% during the forecast period

Pune, India, Jan 2023, MRFR Press Release/Market Research Future has published a Cooked Research Report on the Global Automotive Interior leather Market.

Due to its high elasticity, breathability, and heat resistant property, automobile interior leather is seeing rising use in the automotive industry, which is fueling the market's expansion. They may be found in a wide variety of vehicles, including automobiles, buses, trucks, agricultural machinery, bicycles, and more, where they are utilized in a variety of places such the gear boot, infotainment box, seat covers, and door trims. During the projected period, the market should expand thanks to the rising use of bio-based materials in the production of automotive interior leather. Nonetheless, the global industry is expected to be slowed by the environmental impact of PU-based and PVC-based leather in the coming years.

Leather is commonly used in car interiors due to its long lifespan and high-class appearance. Transmission, consoles, chairs, information and entertainment systems, instrument panels, and interior trim all make use of it. Their high leather elasticity makes them not only highly durable and low-maintenance but also makes them resistant to alcohol, water, stains, and extreme heat and cold. The PVC vinyl fabric used for seat upholstery is one of the most widely used materials in the auto industry. The leather inside is standard in most modern cars. Customer demand for customisation and a more luxurious seat experience has led to a meteoric rise in the aftermarket industry's requirement for leather. In addition, the auto industry is growing rapidly.

Recent years have seen an explosive expansion in the upholstery subsector as a direct result of increased worldwide wealth and growing demand for high-end furnishings. High-end autos often have leather upholstery. This trend toward "affordable luxury" means that consumers now have easier access to superior goods at more reasonable prices. Many compact car models, especially those from luxury manufacturers, now come with leather upholstery. Growth in demand for vehicle interior leather is anticipated over the projected period as a result of the growing popularity of leather upholstery in high-end automobiles.

Market Synopsis

According to the MRFR analysis, the global Automotive Interior Lether market size is projected to reach USD 44.1 Billion by 2032 at a CAGR of 5.10%.

Increased demand for leather to cover the interior of cars, due to the material's long lifespan and high-end feel, is the primary reason propelling the market forward. Additionally, the aftermarket leather business has undergone meteoric expansion in response to rising consumer desire for customisation and luxury seat texture. Additionally, the market for automotive interior leather is expanding due to the rising popularity of leather in high-end vehicles. However, the global market would certainly be hampered by the environmental problems involved with leather production. Nonetheless, the makers are anticipating profitable chances due to the rising demand for bio-based leather.

Innovators in the leather goods industry have begun mass producing bio-based leather. Polyester polyol, the main component of the bio-based product, is made from renewable resources and is both softer and more scratch-resistant than PVC and PU. In order to create bio-based goods, several of the companies are researching and creating bio-based materials. Susterra propanediol, for instance, was developed by DuPont Tate & Lyle Bio Products as part of a joint venture between the two companies in 2004. It is a 100% bio-based, USDA-certified product that provides excellent performance in a wide range of uses, from polyurethanes and unsaturated polyester resins to heat-transfer fluids. An important Turkish leather competitor, Flokser A., has released a new brand, SERTEX, which is made up of 70% renewable materials. SERTEX is a polyester polyol composed of Susterra bio-based 1,3-propanediol by DuPont Tate & Lyle Bio Products and BioAmber's Bio-SA(TM) bio-based succinic acid. The annual output of SERTEX is 150,000 metric tons. As a result, the growing interest in bio-based leather among manufacturers promises to open up a lucrative market for leather producers.

COVID-19 Impact on Automotive Interior Leather Market

Cattle, sheep, goats, polyvinyl chloride (PVC), polyurethane (PU), and release paper are the primary raw materials used to make leather. Since the majority of the raw materials used in the outbreak are items with a petroleum base, it had a substantial impact on the raw material supply. The global COVID crisis, which affected the pricing margins of raw materials and end goods, was most detrimental to the petroleum industry. Additionally, PVC and polyurethane are employed in medical applications like artificial respiration, medical equipment, and instrumentation.

Thus, the crisis had a moderate impact on the production of PVC and PU. Sales of leather have decreased as a result of the pandemic. The leather market has been heavily damaged by the global textile industry's shutdown, which accounts for the largest portion of the market. Due to a decline in logistics, the producers are unable to deliver their products to the application industries. The manufacturers are providing products to local areas. With the ease of lockdowns across many regions, companies are developing more secure and hygienic ways to deliver products across various regions.

In terms of impact on end users, the automotive industry has been devastated by the pandemic with the reduction in production and sales. Lockdown has resulted in the piled-up inventories for the automotive supply chain that impacted the pricing strategies. The slump in consumer demands further impacted this. The decline in the production of cars and automobiles is attributed to the unavailability of hi-tech goods, polymers, and chemicals.

For instance, in March 2020, Fiat Chrysler Automobiles and Groupe PSA announced that they would be stopping car production facilities in Europe, while Volkswagen AG shut factories in Italy and Spain. Major auto producers such as Maruti Suzuki, Hero MotoCorp, and Bajaj Auto shut down operations in Gurgaon and Pune. Global carmakers such as Mercedes, local car and truck maker Tata Motors, and Hyundai and Honda also announced the suspension of operations. Furthermore, the unavailability of some of the essential raw materials caused manufacturing delays. However, the automobile industry has gained traction in the year 2021 owing to the reduction in restrictions. It will likely result in the recovery of automotive production, which will drive the demand for automotive interior leather.

Competitive Landscape

The high competition among the players have encouraged the players to produce mixers of Leather which could be unique in the market and have multiple applications. The various technologies and process used are different from different companies. In order to build new and innovative processes with more efficiency and performance, numerous companies benefit from mergers, acquisitions, and product development. To preserve their positions and broaden their geographic reach, the players in the worldwide automobile interior leather market are using a variety of strategies, including expansion, mergers and acquisitions, alliances, joint ventures, and expansion. To gain the largest possible market share, expansion was the growth strategy that was most frequently used by market participants.

There are numerous international, national, and regional players in the worldwide vehicle interior leather industry. There is a lot of competition in this sector, and everyone is trying to increase their portion of customers' wallets. When comparing prices and quality, as well as product availability across regions, different suppliers will use different metrics. In order to be competitive, suppliers must offer reasonably priced, high-quality leather for vehicle interiors. While tier-1 and tier-2 firms account for approximately 67% of the global market, the competitive landscape is fragmented amongst these and tier-3 firms. Market and economic conditions, government laws, and technological progress all affect how quickly and how large market actors can expand. As a result, businesses in this sector need to concentrate on increasing output and refining their offerings to keep up with consumer demand. These companies are investing heavily in creating new, high-end leather interior blends. Although worldwide companies account for the vast majority of sales, smaller regional and local firms are also present.

Segmentation

By Type of Cover

• Leather: Leather (or real leather) is a by-product of the meat industry. It is a natural, renewable material upcycled from the hides and skins, and has a characteristic smell. This means that the material comes from real animal or that there is some kind of leather in the material. While its quality comes nowhere near full-grain leather or top-grain leather, it is still from real animal skin.


• Synthetic Material: Synthetic materials, also known as artificial leather, is a material intended to substitute for leather and is used where a leather-like finish is desired, but the actual material is cost prohibitive or unsuitable. Synthetic materials are also called as synthetic, faux, imitation, vegan or PU leather, which holds the appearance of leather but is not made from animal skin or hide like genuine leather. The synthetic material consists of natural and/or synthetic fibres, coated with a plastic polymer or similar. Synthetic material is usually made from polyurethane (PU), polyvinylchloride (PVC) or textile-polymer composite microfibres.

By Application

• Headliners: A headliner is a combination of an outer layer of fabric, an inner rigid substrate and an inner foam backing which is adhered to the roof of an automobile. This composite product improves the interior appeal of the vehicle, as well as providing an element of insulation against heat and noise. These can also hide wiring and hardware for electrical components, antennas, and other accessories.


• Seats: Automotive interior leather are applied on seats, which offers soft covering on chairs that makes them more comfortable to sit on. Most car owners prefer such type of covers which are easy to clean and maintain. The material must be durable, and quality of seat fabric must stand out among other materials.


• Door Trims:Door trims or interior door casing of a car is the cover applied around the door. As such, there is a necessity for balancing gap between parts, as well as an overall sense of unity between the numerous parts. Door trim covers protect the surface of the door panels from nicks and scratches.


• Consoles: The automotive centre console is a storage compartment located between the driver seat and the front passenger seat within the centre portion of the automobile. Rising demand of automotive interior leather to protect the console from dust, scratches, and damage.


• Others: The other interior parts of a vehicle include dashboards, seatbelts, floor, & trunk carpets, air-bags, and several others.

By Distribution Channel

• Online: Online distribution channels include e-commerce platforms where the manufacturers distribute automotive interior leather & its products through various online shopping sites or websites, presenting a wide range of their products to the customers. Companies that cannot sell their products through offline distribution channels do so via e-commerce to expedite their product sales. Also, this model is easy for the vendors to create brand awareness.


• Offline: Offline distribution channel includes supermarket/hypermarket, stores, and others. This also offers authenticity and look & feel of the type of cover to a great extent, and also have a noticeable contribution to automotive interior leather distribution. Consumer preference for offline channels is high due to their ability to provide a one stop shopping experience.

By Region

• North America: In 2022, North America will hold a sizable market share for Automotive Interior Lether. The growing demand for the automotive interior leather from rising luxury automotive sales, especially in the US drives the North American market.


• Europe: Due to an increase in demand for electric vehicles in the major cities, the European market is anticipated to have a sizeable market share by the end of 2030. These vehicles use interior leather in seats, headliners and door trims amng others. Owing to this, demand for premium automotive interior leather is poised to grow at a rapid rate in the region.


• Asia-Pacific: A sizable automotive interior leather industry in the region is likely to make the Asia-Pacific region the largest expanding market for automotive interior leather globally. The market for automotive interior leather is also anticipated to grow throughout the forecast period because of rising automotive sales and shifting consumer preferences in countries like China and India.


• Latin America: The Latin America market is showing consistent growth during the forecast period. Finally, due to technological developments in these countries, it is anticipated that the Brazil and Mexico will experience considerable growth over the projection period.


• Middle East & Africa: The main reason fueling demand for electric vehicles in the Middle East and Africa is the region's growing need for products that use existing energy sources more efficiently. Moreover, the demand interior leather in various applications is expected to increase over the next several years due to the growing popularity of hybrid vehicles in advanced economies like South Africa, Saudi Arabia, Egypt, etc, and these vehicles inturn is poised to keep the market growing at a moderate CAGR during the forecast period.