In 2023, China’s automobile production and sales recorded a historically significant double-digit high growths, exceeding 30.16 million and 30.09 million vehicles, grew by 11.6% and 12.0% year-on-year. With the robust growing of China's automobile industry, automakers are continuously introducing new technologies to enhance the comfort of car rides.

Traditionally, automotive leather interiors have been made from genuine leather, PVC leather and textiles. As the requirements for durability, flame retardance, stain resistance, eco-friendliness and other performance attributes in automotive interiors continue to rise, synthetic polyurethane (PU) leather and its composites have been more widely applied, serving as a viable alternative. This trend indicates a broad market space for PU leather in automotive interiors.

PVC Leather

PVC leather has occupied a large share in automotive interior field due to its cost advantage. However, due to its significant environmental pollution during production, lower comfort and strong odor, it has been classified as a restricted item in Industrial Structure Adjustment Guidance Catalogue (2024).

PU Leather

PU leather, as a new type of organic polymer material, has superior properties compared to PVC leather, such as high durability, good texture, better softness and longer lifespan. The manufacturing process involves coating textile surfaces with PU resin, making the production low-carbon and eco-friendly. It aligns better with the sustainability trend, thereby making it more favored.

Anhui Anli Material Technology Co., Ltd is a Chinese leading PU leather manufacturer. His main products - ecological functional PU leather and PU composites - are globally leading. It possesses 40 dry and wet production lines, with an annual production capacity of 88.5 million meters of ecological synthetic leather, and 70,000 tonnes of PU resin. The company plans to achieve an annual capacity of around 100 million meters for ecological functional PU leather and composites during the 14th Five-Year Plan period.

The automotive interiors sector is a key emerging segment that Anli Material Technology is actively developing. The company’s products are gradually being utilized by an increasing number of automakers such as BYD, Toyota, XPENG Motors, Great Wall Motor, JiYue and ZEEKR, among others. They are in a phase of active expansion and momentum building. Since 2023 H2, progress has been noticeable, with rapid revenue growth seen in 2024 Q1 for this product category.

Ultra-fiber Leather

Ultra-fiber leather is a high-end synthetic leather made from PU resin or TPU. Thanks to its lightweight texture, superior abrasion resistance, tear resistance, breathability, and ease of cleaning, it has been increasingly applied in the automotive interior sector. Ultra-fiber leather is made from eco-friendly materials instead of animal leather, making it a more sustainable solution in the industry. As consumers turn to prioritize comfort and environmental performance, the application of ultra-fiber leather in automotive interiors is projected to expand further. Synthetic leather manufacturers are also ramping up production. In September 2023, the 12 million-meter high-end automotive interior leather technology transformation project of Nantong Zhongao New Material Co., Ltd. was set to be launched. Once completed, the facility is expected to add 6 million meters of high-end automotive PVC leather and 6 million meters of TPU/TPO high-end synthetic leather annually.

Overall, as the economy advances and consumer requirements for comfort and environmental friendliness in auto interiors increase, innovative materials like PU leather and ultra-fiber leather are poised to play important roles in the automobile industry.