Leather currently accounts for 13% of all materials used in vehicle interiors in China. This figure may increase, due to the growth in sales of premium vehicles. Automotive companies are encouraged by the results from the first quarter of 2017, which indicate that China's gross domestic product has grown by 6.9% year on year.
Current projections suggest that sales of premium cars in China will grow this year by 5%. Because of this, demand for leather is likely to keep increasing.
In addition to this stable growth, a number of recent developments are creating interesting new opportunities for automotive leather suppliers. From the success of upscale sport utility vehicles (SUVs) - which are currently outselling luxury sedans - to the proliferation of leather interiors in the fast-growing premium segment, the increased use of sustainable materials for interiors in China and the growing popularity of car-sharing business models, demands on the automotive leather supply chain continue to increase complexity for manufacturers.
New trends in vehicle interiors are confronting carmakers and suppliers with an increasing number of variants, as well as greater degrees of customisation and individualisation.
Although these present challenges, a new business relationship is clearly emerging for suppliers of leather components through a disruptive value proposition. With the rise of leather as an interior differentiator comes the need for OEMs to institute platform modularity. The autonomous vehicle and shared mobility trends are affecting this change in manufacturing modes, with partnerships enabled by standardisation and flexible manufacturing models.
Leather remains the material of choice for discerning consumers. Seating and interiors are becoming more connected and technologically advanced to meet consumer expectations in on-the-road services, design and well-being.
To reconcile these evolving customer expectations with changing OEM and supplier ecosystem needs, the drive towards automation and digitalisation is enabling many automotive leather players to rethink their approaches and transform their cutting rooms. The ecosystem comprising automakers, first-tier suppliers, leather cutters, and tanners still relies on the age-old practice of using roller presses and dies to cut leather.
These methods lag behind the automated processes that have long been implemented to streamline and expedite the production of other automobile components, including fabric and vinyl interiors and seating.
By making the switch to 3D design and prototyping, and digital cutting systems, a number of industry players have come to enjoy the benefits of end-to-end digital processes. A nearly unlimited number of virtual prototypes can be produced to develop a final product much faster, saving time, labour and materials.
Computer-aided design (CAD) enables exacting design to cost and design for manufacturing approaches that expedite requests for quotations (RFQ), improve the accuracy of data and reduce manufacturing lead times.
After evaluating 3D prototyping software and then implementing multiple workstations, a major international carmaker competing in a globalised and ultra-competitive automotive industry successfully overhauled its highly complex, multiprogramme processes for seat design review, trim feasibility studies and costing.
The prevalence of leather as a preferred material in the premium segment, combined with the need to optimise leather yield - and therefore cost structure - led the carmaker to invest in a digital leather cutting solution for a fully digital end-to-end process for producing leather seating and interiors.
For the world-famous carmaker, digitalisation enables control of the upholstery cost throughout the lifetime of a seating interior project, from analyses at the start of a programme to sourcing and costing.
Overall, lead time has been significantly reduced by enabling a greater number of variants to be tested and reviewed using 3D data, which also eliminates the need to produce costly physical prototypes. Calculations made possible in early phase development enable cost-based design choices that streamline the RFQ process and optimise yield once the designs enter production.
A tannery that supplies premium cut-leather parts to seating components manufacturers sought to optimise workflow and processes at one of its high-intensity, continuously running manufacturing plants. It required greater flexibility and agility to meet evolving consumer demands and become even more responsive to vehicle manufacturers.
Digitalising its leather-cutting value chain enabled the company to become more competitive during contract bidding for new projects. The high number of engineering changes associated with programme changeovers can now be handled quickly and seamlessly by developing patterns directly from 3D models, thereby also eliminating costly retooling, which can take up to 12 weeks.
By implementing digitalised cutting, the tannery's material optimisation has improved significantly, even for complex designs that include topstitching and notches.
Flexible automated cutting enables wider nesting strategies that optimise material use, while connectivity makes it possible to interface with the corporate IT platform to monitor KPIs. This, in turn, means the tannery can manage stock levels across multiple production sites.
Faced by increasingly demanding manufacturing requirements linked to growing consumer demand for personalisation, a multinational vehicle seating components supplier's China operations recently made the switch from die presses to a fully digitalised end-to-end process for the production of leather cut parts. The supplier can now handle customisation for smaller series that include more variants and configurations than previously possible with die presses.
Incompatible with short lead-time projects, die-press technology did not permit quick changeovers. By abandoning traditional cutting in favour of digitalised processes, the company succeeded in rapidly establishing data modelling and analytics to better manage its ecosystem of suppliers. The company's newfound ability to adapt quickly to customer requirements has largely offset its investment in new equipment and enabled further savings by monitoring costs and preventing waste.