Market Trends of Coating Agents for Synthetic Leather Industry
This section covers the major market trends shaping the Coating Agents For Synthetic Leather Market according to our research experts:
Automotive Industry to Dominate the Market
- The use of coating agents in synthetic leather results in a lightweight and highly durable material while providing superior hydrolysis resistance, moisture heat resistance, and chemical resistance. It is used in various interior automotive applications, such as steering, wheels, and seats.
- The use of synthetic leather makes car seats more comfortable, and its highly abrasion-resistant property helps manufacturers meet the stringent volatile organic compound (VOC) standards for applications such as car seats and furniture.
- The BASF synthetic leather product portfolio includes Haptex, a polyurethane (PU) system solution for the production of synthetic leather.
- Suzhou Ruigao New Material Co. Ltd, a leading manufacturer of synthetic leather, adopted the product of BASF SE, Elastollan-grade B50A12CF made of thermoplastic polyurethane, in the production of synthetic leather in a Chinese automaker's latest model due to its cost-effective and environment-friendly thermoplastic process in comparison with conventional processing technologies such as coagulation.
- However, the recent decline in the automotive industry had a negative effect on the market. The automobile industry witnessed a rapid decline in 2019 after experiencing continuous growth for 10 years. According to the OICA, the automobile industry registered a negative growth of 5% in 2019, and the production declined from 95.63 million units produced in 2018 to only 91.78 million units in 2019.
- After a bleak 2019, where the global automotive sales decreased by 6%, the world automotive production faced a new and unprecedented challenge during 2020. In 2020, the COVID-19 pandemic impacted the automobile sector, with lockdowns implemented across all countries, which resulted in an automotive production halt.
- In 2020, the production of automotive saw a decline of 16%, reaching 77.62 million units compared to 91.79 million units in 2019. However, it is expected to take few quarters for the industry to reach at least the pre-COVID levels of automotive consumption. At the same time, the production follows with a delay, owing to accumulated inventories.
- The industry is also facing crash crunch issues. These factors are likely to have an adverse impact on the demand for the market studied in the early part of the forecast period. However, synthetic leather is expected to replace traditional leathers used in vehicle seats and other interior components of the vehicle over the coming years.
- Such a scenario will push the demand for coating agents from the studied market in the forecasted period.
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Asia-Pacific to Dominate the Market
- Asia-Pacific held the highest market share, accounting for more than 50% of the market. China is the largest synthetic leather market in Asia-Pacific, owing to robust growth in the automotive and footwear end-user industries in the country.
- China is the largest automotive market in the world. The automotive industry in China is mainly driven by domestic market demand. According to OICA, the country produced 25,225,242 vehicles in 2020, a decline of 2% compared to 2019. the production of automobiles is expected to increase owing to the rising demand for electric vehicles positively impact the demand for coating agents for synthetic leather for seat covers, steering, and other interior applications.
- The footwear industry in Japan witnessed revenue of USD 27.93 billion in 2020 and is expected to grow by 2.57% to reach USD 32.13 billion by the end of 2025 revenue, positively impacting the market demand.
- The athletic footwear end-user segment witnessed steady growth over the past five years, changing fashion trends, and shifting consumer preferences toward popular brands.
- According to Invest India, Ministry of Commerce and Industry, India, the textile industry in the country contributes 12% in the export earnings of the country, which was USD 14 billion in 2020, and it is expected to grow by 7.6% to reach USD 23.3 billion by 2027.
- Therefore, considering the aforementioned factors, the demand for coating agents in synthetic leather is expected to increase significantly in the region during the forecast period.
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