The outlook for automotive leather is looking bright. Demand is soaring worldwide as automakers seek to make the interiors of vehicles from subcompacts to pickup trucks more luxurious. Plus, the availability of hides is improving because fewer shoes are being made of leather due to a global consumer shift to more casual footwear.
According to WardsAuto installation-rate data, 35.7% of ’15 model-year cars and 44.8% of ’15 trucks sold in the U.S. were equipped with leather seats, up substantially from just two years ago when 35.1% of cars and 39.4% of trucks were so equipped. WardsAuto analysts say these numbers reflect the surging popularity of luxury CUVs.
But even though the market for automotive leather is growing, supplying automakers is becoming more challenging. Vehicle product development times are shrinking while the number of interior color and trim combinations is expanding. That puts increasing pressure on the supply chain to move faster and be more flexible and efficient.