Leather Pipeline: implications for leather of Volkswagen crisis begin to emerge
06/10/2015
On the one hand, the report, (subscribers can read it in full here), says consumers who have taken a decision to buy a new car may well have been put off Volkswagen by the German company’s use of software devices to make it appear, falsely, that some of its cars were meeting emissions requirements. Consumers committed to buying Volkswagen vehicles may consider a different brand, but the report makes the point that this will not necessarily be bad news for car sales overall; in this scenario, Volkswagen’s loss will be other brands’ gain.
But on the other hand, the report points out that it is possible Volkswagen may spark something of a price-war in the market by adopting a policy of discounting as part of its strategy for exiting the current crisis. Should this occur, consumers may well hold back from buying new cars for a time to see how low the prices go.
Another possible short-term consequence for tanners is that those who supply leather to Volkswagen are likely to face requests from the automotive company to help it see out the difficult weeks and months ahead by keeping the price of finished leather as low as possible, with knock-on effects for all automotive leather manufacturers.
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