Demand for automotive leather is growing in Mexico, but demand for footwear leather is shrinking (drastically). According to Vicente Laud Martínez, president of the Guanajuato Chamber of the Tanning Industry (CICUR), the decline in demand from the footwear industry outpaces the growth in automotive. The situation negative consequences for the local tanning industry.
Footwear suffers
Current demand for leather for footwear production in the state of Guanajuato has decreased by up to -50% compared to 2018. Tanneries have responded by shifting production toward the automotive sector, but that marketplace is not a large enough one to accommodate everyone. “We still have the same amount of hides on the market”, Laud Martínez explained to Milenio.com, ”but now the low demand has caused the price to drop. According to the same executive, a hide that was globally worth $100 just 10 years ago, is now worth $30. Laud Martínez called on the Ministry of Economy, headed by Marcelo Ebrard, to take effective action to safeguard businesses in the sector.
Growing demand for automotive leather
An example of the however-better trend experiencing the four-wheel supply chain in Mexico, is German Bader, which has allocated $6 million to build a new 14,000-square-foot facility in Lagos de Moreno, in the state of Jalisco. With this expansion, the company expects to increase weekly production to 11,000 vehicles outfitted with leather interiors, or about 500,000 vehicles a year. And to generate 400 new jobs. Bader has had a presence in Jalisco since 2014. Roberto Arechederra, Jalisco’s Secretary of Economic Development, told Mexico Now, “This expansion of Bader reaffirms the confidence of international companies in the state’s talent and competitiveness”.
Read also:
