Despite steady demand from the automotive sector, German leather production fell by approximately 5% to 16 million sq m last year. The downward trend continued through the first half of 2004, with weaknesses in the domestic market and increased competition in export markets being attributed to the strength of the euro. 65% of finished leathers went to the automotive and furniture industries, 25% to the footwear industry and the remaining 10% to the leathergoods and garment sectors.

The 45 German leather companies, which employ a total of 3,000 people, saw overall turnover decrease by 9% to e600 million in 2003. Export sales decreased by 13% to e270 million and domestic sales were down by 5% to e330 million. The first half of 2004 saw further company closures. Major export markets by value are Poland (€131 million, +6.5%), Hungary (€117 million, +3.5%), Austria (€113 million, +77.7%), Portugal (€47 million, -9.7%), France (€37 million, +29.2%), USA (€35million, -11.6%), Belgium/

Luxembourg (€32 million, +44.4%), Romania (€24 million, +22.6%), Czech Republic (€24 million, -16.7%), Hong Kong (€23 million, -11.7%) and Italy (€22 million, -34.7%). In volume terms, Poland and Hong Kong are the major destinations with 7.8 and 6.4 tonnes respectively in 2003, the majority being wet-blue.

Major sources of leather imports are Italy (e266 million, -7.4%, representing 43% of total imports), Poland, (e58 million, +19.5%), Austria (e49 million, -5.4%), Uruguay (e28 million, +752.3%), India (e26 million, -16.9%), Slovak Republic (e19 million, -0.4%), Netherlands (e16 million, -24.4%), Pakistan (e15 million, -26.1%), Spain (e14 million, -30.9%), and Brazil (e12 million, – 40.5%).

Some years ago, Germany moved away from bulk leather production for mass markets and began to specialise in high-quality leathers for upper market segments such as luxury goods and automotive interiors.