The global automotive interior materials market was valued at US$ 61.69 billion in 2016, according to the report, Global Automotive Interior Materials Market by Material (Synthetic Leather, Pure Leather, Fabrics, and Thermoplastic Polymers), by Vehicle Type (Heavy and Light Commercial Vehicles), and by Component (Steering Covers, Seat Covers, Interior Roofing, and Others), published by Coherent Market Insights. The automotive interior materials market is expected to exhibit a CAGR of 7.51% during the forecast period (2017—2025)
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Key Trends and Analysis of the Automotive Interior Materials Market:
Synthetic or faux leather is composed of polyurethane or poly vinyl chloride, which is similar in appearance to pure leather. It is majorly used due to its cost effective properties, which allow automobile manufacturers to provide pure leather-like interiors at low cost. Pure leather due to its high cost is mostly deployed in premium cars only. For instance, automakers such as BMW, Audi, Rolls Royce, and Mercedes utilize pure leather in high-end vehicles. Furthermore, these fabrics are majorly used in economy passenger cars due to minimal cost of installation and procurement. Thermoplastic polymers provide superior aesthetic characteristics at a low cost. Although, the quality of interior is not as good as leather due to which it is mostly deployed in commercial vehicles and non-premium passenger cars.
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Key Takeaways of the Market:
- The U.S. government’s decision to renegotiate North American Free Trade Agreement (NAFTA) has threatened the sales of cars made in Mexico in the U.S. According to the Mexican Statistical Institute, automotive industry accounted for 3.4% of Mexico’s GDP in 2015. The number is expected to fall in the forecast period if NAFTA renegotiation goes ahead as planned. Conversely, this is expected to boost automotive manufacturing in the U.S. The automotive interior materials market in North America was valued at US$ 11.12 billion in 2016.
- The use of lightweight interior materials results in increased fuel economy in heavy vehicles such as pickup trucks and SUVs. This along with low gas prices has resulted in high demand for such vehicles in countries such as the U.S and Canada. According to the U.S Department of Energy, using lightweight materials in just one quarter of the U.S. vehicle fleet will result in fuel savings up to 5 billion gallons by 2030. Also, a 10% reduction in weight of the vehicle can account for 6-8% fuel economy improvement. The U.S. federal government’s Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) developed the National Program for Greenhouse Gas Emissions and Fuel Economy Standards. The program aims to reduce gasoline use in the country by 2 million barrels per day by 2025, by achieving superior fuel efficiency in automobiles.
- The growth in automotive manufacturing industries of South Africa, Nigeria, Egypt, and Ethiopia are expected to propel the market growth. The newly formed African Association of Automotive Manufacturers (AAAM) will help local government bodies and manufacturers to achieve synergy and work toward the growth of automotive interior materials market in Africa.
- Global automotive interior materials market is extremely competitive and consolidated with the presence of large players accounting for major shares. Key players in the market include BASF S.E., Eagle Ottawa, Borgers A.G., Faurecia S.A, Adient Plc., Lear Corporation, Dow Chemical Company, and DK Leather Corporation Berhad, among others. Some of the major strategies adopted by these players to ensure long-term sustenance in the market include product and packaging innovations, tactical mergers and acquisitions, and joint ventures. In 2017, Adient Plc. Acquired the U.S.-based Futuris Group for US$ 360 million. The acquisition is expected to increase the company’s annual revenue by US$ 60 million.
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