Automotive Interior Material Market Trends

Key Emerging Trends in the Automotive Interior Material Market

In recent times, the upholstery sub-sector has experienced significant growth due to a rise in global wealth and a growing preference for luxurious living. This surge is particularly notable in the demand for high-quality leather, especially in premium automobile brands. More and more people are seeking "affordable luxury," leading to an increased availability of top-notch leather upholstery even in smaller vehicle models, especially those from renowned brands like Pagani, Maserati, Spyker, Rolls-Royce, BMW, Audi, and Range Rover.

These premium car brands are known for providing opulent and comfortable interiors adorned with leather. For instance, Pagani is celebrated for its impeccably stitched leather seats, while Bentley Mulsanne boasts a handcrafted leather interior. The Audi Q7 features three rows of leather seats, and the Rolls-Royce Phantom and Dawn showcase luxurious leather interiors. Additionally, a variety of other manufacturers, including Subaru, Jeep, Chevrolet, Ford, Lexus, BMW, Volvo, Porsche, Land Rover, and Audi, offer vehicles with leather seats. Some brands, such as Mercedes-Benz and BMW, have also developed their own synthetic leathers that closely resemble genuine leather.

The demand for luxury cars has witnessed substantial growth, reaching USD 580 billion in 2021 from USD 258 billion in 2010. This expansion is attributed in part to the increasing purchasing power in emerging markets like China. Notably, the luxury car market in the United States generated over USD 5 billion in revenue in 2021, making it the largest in the world. BMW led the luxury car market in the US in 2021, closely followed by Tesla. Mercedes-Benz alone delivered over 2 million vehicles in 2021, solidifying its position among the top luxury car brands.

Despite a dip in global sales in 2020, German luxury carmakers and premium brands gained market share in major markets, particularly in China. The Chinese new car market played a pivotal role in the success of German luxury car brands, with at least a third of their global sales coming from China in 2020. Electric vehicles are gaining popularity, but their significant adoption is expected to occur in 2021, especially in the US.

China stood out as the only mainstream automotive market that grew in the previous year, with luxury brands experiencing an increase in sales. Approximately 2.53 million luxury vehicles were sold in China in the last year, constituting 13% of total passenger vehicle sales. This marked the third consecutive year of growth for luxury brands in China, showcasing the resilience of this segment despite challenges in the overall automotive market. Key players like BMW, Mercedes-Benz, and Audi set new sales records in 2020, contributing to the growth of the luxury vehicle market.

The rising use of leather in luxury car interiors is expected to fuel the demand for automotive interior leather in the coming years, reflecting the ongoing trend toward premium and comfortable driving experiences.