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Leather Pipeline: frustration at Covid-19 and at automotive customers

The most recent edition of our exclusive Leather Pipeline market intelligence report went live on March 24 and is available here.

Naturally, the Covid-19 pandemic dominates the report. 

It makes the point that the landscape in the leather industry, in Europe at least, changed dramatically since the last Leather Pipeline two weeks ago.

It all started with the announcement that automotive brands were halting production in their European factories, starting in Italy and France, with original equipment manufacturers in other countries following suit.

In parallel luxury goods manufacturers in France and Italy took the same step. “Almost every factory is closed and will remain closed for a period of at least one month,” the report says.
This has affected tanners too, of course.

And while these closures come as no surprise, the report points out that just three weeks ago major automotive companies were asking for written confirmation from suppliers that their ability to maintain service would not be affected by the coronavirus. These customers wanted deliveries to be guaranteed.

Tanners had to budget for the raw material supply, their labour requirements, chemicals and so on. “The arrogance of the automotive industry, because of its sheer size and importance to many economies, will most likely be discussed and will need a different set-up after the crisis,” the report says.





Smit & Zoon Jan20

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