Leather Pipeline: Shoe Tanners Shifting to Automotive will Give Carmakers Power in Price Wars

The first Leather Pipeline report of the new year says confidence took an early knock with the slump of China’s stock market, which led to many delaying buying decisions until they see how business will be affected.

Following an extended Christmas break, there does not seem to be much indication of increasing leather orders, as retailers and brands see little incentive to sell leather shoes when consumers seem content with plastic-derived lookalikes.

Looking ahead into 2016, the author suggests we might see more tanneries shifting production from the footwear to the automotive sector. While sector is still showing positive signs, growth rates might slow and increased competition will give carmakers the edge when negotiating prices.

He says, “A number of well-informed pundits are pointing out that car manufacturers will put a lot of price pressure on suppliers. We have to expect that car manufacturers will play the price card soon.”

The full report is available to Leatherbiz subscribers on the Market Info page, where you can also read Market Intelligence from German and US Perspectives.

Source: http://leatherbiz.com/fullitem.aspx?id=140479