99% 98%
91%
79%77%
72%69% 69%
65% 64%
0%
20%
40%
60%
80%
100%
Air conditioning
($1,100)
Power windows
(down & up)
($200)
Genuine leather
seats ($1,000)
Heated and
cooled front seats
($750)
Premium brand
audio ($750)
8-Way power
front seats ($600)
Navigation
system ($1,500)
Genuine leather
steering wheel
($200)
Bluetooth ($150) Sunroof ($900)
91% of participants made clear that they
desire genuine leather seats in their next
vehicle
Ranked 3rd out of 30 choices
(Leather Seating Study 2010, The Planning Edge Inc.)
Opportunities: Does the consumer want
leather?
80% recognize Vinyl and Polyurethane as synthetics
Imagery
– Vinyl = Inexpensive, practical, plain, simple
– Leather = High quality, attractive, comfortable, soft
91% of luxury vehicle owners with leather seats are
satisfied with seat materials compared to 62% of non-
luxury car owners
(Leather Seating Study 2010, The Planning Edge Inc.)
Opportunities: Preference for leather
The Chinese luxury market
A growing consumer market fragmented in 4 categories
Core luxury buyers
Luxury role models
Fashion fanatics
Middle-class aspirants
The Chinese luxury consumer
Significantly younger than its counterpart in other luxury markets
Trends away from ostentation towards understatement and subtlety
Desired product attributes
– Authenticity gives meaning to the purchase
– Well-known brand
– High quality
– Heritage
– Craftsmanship
– Innovative design
(McKinsey & Company, 2010)
80%
30%
19%
0% 20% 40% 60% 80% 100%
China
US
Japan
% of Luxury buyers under 45
Opportunities: What do end users value ?
Most important seat material factors when purchasing a vehicle
– 96% responded: “Durability”
– 91% responded: “Stain resistance”
– 91% responded: “Clean-ability”
– These factors also considered most “unmet” needs
Resale value: 72% noted that knowing leather seating increased
resale value would impact their decision to purchase leather
(Leather Seating Study 2010, The Planning Edge Inc.)
Labeling: 62% said labeling of the seats as
“Genuine leather seat” would influence their
purchasing decision
69% considered leather the most environmentally friendly seat
cover material
(Leather Seating Study 2010, The Planning Edge Inc.)
Opportunities: What do end users value ?
Challenges: Leather with high durability
Improved appearance in use over
lifetime, particularly important for light
colors
Typical failures pictured, flex cracking
and abrasion
Investment in R&D and finishing
technology
Benefits
Stays clean longer
– Up to 65 % more stain-resistant to denim transfer
Easy-to-clean
– Up to 75 % more cleanable against denim dye transfer
– Up to 85 % more cleanable against carbon-based soiling
Anti-Soiling leather
6
10.8
12.2
16.1
17.8
1.7
3
5.1 5.8 5.9
0
2
4
6
8
10
12
14
16
18
20
X1 X2 X3 X4 X5
Anti-soil leather Denim Soiled
Lower is Better
Soiling cycles
Anti soil leather Traditional leather
Traditional leather
Delta E Value
Preserving the luxury image – keeping leather
affordable for entry level vehicles whilst a
voiding the commodity trap
Product safety – cabin air quality –
low VOC emissions, low odor, low fogging,
low allergy, etc.
Green processes – resource neutral
industrial ecology
Opportunistic view of natural markings to
avoid unneeded loss of material
Challenges for leather supply chain
Leather is positioned as a luxury feature in the interior
With growing affluence in Asia, brand oriented luxury consumers will
demand quality
Suggesting brands should focus on high quality leather
Leather manufacturers globally will continue to focus on innovations
in processing, machinery and chemistry to reduce consumption of
precious resources
In summary
Durability of leather throughout the life cycle is a foundation
Low VOC is a given
There is scope for improved functional performance such as anti soiling
While maintaining functional performance, more design features are
needed to differentiate quality of leather and seating in automotive
interiors
In summary