28 Jul 2022
It is clear from our new edition of the Leatherbiz Market Intelligence newsletter that the automotive sector, once more, offers the best source of hope and solace for leather manufacturers.
Supply chain and logistics set-backs in the first half of 2022 have not dimmed optimism among car companies that they can still meet their production targets for the year. If they are to achieve this, it will need to be on the back of substantial increases in output in the second half.
Unfortunately, the report speculates that, in some markets, leather manufacturers will already have the necessary raw material and possibly the semi-finished or finished leather in stock to meet the increase in demand, but this does not apply to China.
Earlier in the year, with the global car industry facing severe shortages of components, factories in China were closed for a different reason: the government’s strict covid-control measures. This affected tanneries too and now, with demand increasing, especially among makers of electric vehicles, leather manufacturers will need to source hides and set their drums rolling again.
An extra fillip is that demand in China is particularly strong for “new energy” vehicles and, according to Leatherbiz Market Intelligence, these cars are much more likely to offer leather upholstery to consumers in the Chinese market than to buyers elsewhere.