Global automotive interior materials market to surpass $117.6 billion by 2025

car interiorThe global automotive interior materials market was valued at $61.69 billion in 2016, according to a report from Coherent Market Insights (Seattle, WA). It is expected to surpass $117.6 billion by 2025. The study covers the market by material (synthetic leather, pure leather, fabrics and thermoplastic polymers), vehicle type (heavy and light commercial vehicles) and component (steering covers, seat covers, interior roofing).

One of the key findings of the report, Global Automotive Interior Materials Market, is the wide use of synthetic or faux leather in vehicles. Synthetic/faux leather is made of polyurethane or polyvinyl chloride, materials similar in appearance to leather that are widely used because of the low cost compared with leather.

The rising sales of premium passenger cars is expected to have a significant impact on the automotive interior materials market, said Coherent’s study. 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 reporting healthy growth in 2016. In the United States, Mercedes Benz sold more than 340,000 vehicles, followed by Lexus and BMW at 331,000 and 313,000, respectively.

Asia Pacific is a lucrative market for automotive interior materials, primarily driven by strong performance of the industry in India with 2016 sales of 3 million, and China with sales of 28.03 million. North America and Europe also experienced strong vehicle sales in 2016, said Coherent’s report, with the United States positioned as the second-largest car market in the world (17.55 million in 2016). The North American automotive interior materials market was valued at $11.12 billion in 2016 and is forecast to achieve a compound annual growth rate of 7.39%.

The U.S. government’s decision to renegotiate the North American Free Trade Agreement (NAFTA) has threatened U.S. sales of cars made in Mexico. According to the Mexican Statistical Institute, the automotive industry accounted for 3.4% of Mexico’s GDP in 2015. That number is expected to fall in the forecast period if NAFTA renegotiation goes ahead, as planned. Conversely, it is expected to boost automotive manufacturing in the United States.

Thermoplastic polymers provide superior aesthetic characteristics at a low cost. The quality of the interior is not on a par with leather and, thus, is mostly used in commercial vehicles and non-premium passenger cars. Fabrics are typically used in economy passenger cars due to minimal cost of installation and procurement.

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