Automotive Interior Materials Market – Insights
The global automotive interior materials market was valued at US$ 61.69 billion in 2016, and is slated to reach US$ 117.59 billion by 2025. The market is expected to exhibit a CAGR of 7.51% over the forecast period.
Increase in demand for premium automotive interiors worldwide has augmented the growth of automotive interior materials market. Consumers demand premium grade interiors with superior aesthetic appeal and tactile experience, even for non-premium cars. To meet this increasing demand, counterfeit products, usually of low-quality, made from plastic, are introduced in the market by certain local players. Volvo owns an R&D center in Shanghai, China, which is involved in developing new designs that exhibit a technological edge over its competitors.
The rising sales of premium passenger cars is expected to have a significant impact on the automotive interior materials market. In China, despite a 10% austerity tax on premium vehicles, automotive sales have been strong with premium automobile manufacturers such as Porsche, Ferrari, McLaren, and Maserati—all reported healthy growth in 2016. In the U.S., Mercedes Benz alone sold over 340,000 vehicles, followed by Lexus and BMW at 331,000 and 313,000, respectively. This has augmented the market growth of automotive interior materials market in the aforementioned countries.
Asia Pacific is a lucrative market for automotive interior materials, primarily driven by strong performance of the automobile industry in India and China. The growth of transportation sector coupled with rise in need for transit of consumer goods, people, and raw materials has boosted the automotive interior materials market growth. According to China Association of Automobile Manufacturers (CAAM) and Society of Indian Automobile Manufacturers (SIAM), sales of cars in China stood at 28.03 million in 2016 and 3.00 million in India. The CAAM also projected automobile sales in China to grow by 5% to reach 29.4 million units in 2017. The boom in sales can be attributed to the favorable sales tax, which was cut from 10% to 5% in 2015. The Asia Pacific market was valued at US$ 24.96 billion in 2016 and is expected to exhibit a CAGR of 8.28%.
North America and Europe also experienced strong vehicle sales, with the U.S. positioned as the second-largest cars market in the world. In the U.S., the automotive sales in 2016 stood at 17.55 million. High dealer incentives, low interest rates on automotive loans, and low gasoline prices have resulted in the growth of automobile industry in the country. Pickup trucks and crossover SUVs witnessed maximum growth in sales. Automakers such as Ford, G.M, and Chrysler are among the largest customers of automotive interior materials. The North America automotive interior materials market was valued at US$ 11.12 billion in 2016 and is forecasted to exhibit a CAGR of 7.39%.
Also, as automotive companies aim to reduce the weight of vehicles to increase fuel economy, leather may be replaced with lighter synthetic fabrics such as wool, silk, carbon fiber, and faux suede. For instance, Toyota, BMW, Mercedes, and Volkswagen use faux leathers, which are similar to leather in both touch and feel. Leather usage is expected to decline in North America and Europe, owing to the strict emission and waste generation regulations prevailing in these regions.
Figure 1. Global Automotive Interior Materials Market Share (2016), By Region
Asia Pacific dominated the global automotive interior materials market in 2016 and is expected to retain its dominance throughout the forecast period.
Major Players in the Global Automotive Interior Materials Market
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.
Automotive interior materials aim at offering comfort to the driver and enhancing the aesthetic appeal of the vehicle. Automotive interiors of superior quality minimize engine vibrations and act as effective cabin insulators, thereby enhancing riding experience. The growing consumer demand for premium automotive interior materials and the desire to enhance aesthetic appeal of interiors are projected to propel the global automotive interior materials market growth over the forecast period.
Asia Pacific is the largest market for automotive interior materials, buoyed by high sales of passenger vehicles in the region. China is the world’s largest automaker and is a host to numerous domestic and international automotive interior materials companies. The rapid growth in middle-class population, as well as first-time buyers in countries such as India and China that demand mid-size vehicles set terms for the automakers to provide lucrative pricing strategies and improve credit evaluation. In order to do so and keep up to the technological advancements, players in Asia Pacific extensively use aesthetically appealing automotive interiors that are of low prices that help them serve high performance and economically viable cars and other automobiles to a huge price-sensitive customer base. North America and Europe are also highly lucrative regions for automotive interior materials. High purchasing power of the consumers coupled with demand for premium interiors has boosted the market growth in these regions.
The Automotive Interior Materials market is segmented on the basis of material, vehicle type, and component. Passenger cars segment is expected to project a rapid growth during the forecast period on account of rising demand for personal transportation in emerging economies such as India, China, and ASEAN. Synthetic leather in material segment is expected to gain major traction, as the use of leather declines due to environmental concerns arising from its manufacturing process and consumer sentiment regarding animal cruelty in Europe and North America. Although, leather is a dominant material segment in premium passenger cars.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.
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