Carbon fiber for the aerospace industry. Materials used in regenerative medicine. Highly purified chemicals for making the most advanced computer chips. Japanese chemical manufacturers nowadays are known as key suppliers of advanced materials and devices.
More surprising, but relevant during this summer driving season, Japan has also become a key supplier of materials used to create that luxury feeling in car interiors. More specifically, Japanese firms are in the driver’s position for high-end synthetic suede and leather used to cover car seats and other interior components in vehicles sporting a Porsche, Lexus, or Mercedes-Benz logo.
Business is booming. Fueled by trends like car sharing and increasing affluence worldwide, consumer appetite for luxurious interiors is surging. This is excellent news for leading textile makers—especially Toray Industries, Asahi Kasei, and Seiren—that have tried to make their businesses less dependent on the cutthroat apparel fiber market in recent years.
They have combined Japanese manufacturing excellence, a willingness to spend money on R&D, and the ability to forge close relationships with Japanese carmakers to come up with top-end seat materials. Managers at these companies feel they have built such a lead that it will be very hard for competitors to dislodge them.
Toray sits at the top end of the market. It owns a majority stake in the Italian firm Alcantara, which Toray cofounded and that markets a high-end artificial suede of the same name. In Japan, Toray also produces a nearly identical line of synthetic suedes branded as Ultrasuede.
Yasuhiro Takagi, general manager of Toray’s advanced fiber material division—who has spent 35 years promoting the two materials with postings in Japan, the U.S., and Italy—says Alcantara and Ultrasuede have virtually no competition at the top.
“We position our materials as being in a category of their own, not a synthetic suede or an alternative to real leather,” Takagi says. Over the years, he notes, while based on the same basic technology, Alcantara and Ultrasuede have pursued different brand identities from their separate bases in Italy and Japan.
Toray pretty much invented high-end artificial suede in the early 1970s when one of its scientists, Miyoshi Okamoto, developed a manufacturing process for the material, which is two-thirds polyester and one-third polyurethane. Soon after, Takagi recalls, Toray licensed its technology and took a 49% stake in Alcantara, which it formed with the Italian oil company Eni. Alcantara is today owned 70% by Toray and 30% by Mitsui & Co. after a change in business strategy at Eni.
Alcantara started production in Italy in 1975. The synthetic suede initially enjoyed much success in the apparel sector, with many clothing items incorporating the novel material. “It was unprecedented,” Takagi says. “It felt like real leather, and yet it’s much lighter.”
But fashion is fickle, Takagi observes, and the apparel market for Alcantara and Ultrasuede peaked in the early 1980s. Toray and its Italian subsidiary tried to make inroads in the furniture industry. It eventually dawned on managers that Alcantara’s characteristics, such as weather and stain resistance, made it ideal for car seats. This proved to be a stroke of genius, and by the 1990s, mentions of Alcantara became ubiquitous in marketing literature for luxury cars.
While demand for Alcantara and Ultrasuede has grown steadily in the past 20 years, more recently it has shifted into high gear. This is primarily because the market for luxury cars is growing at triple the rate of the overall car market worldwide, Toray says. But that is not the only reason.
With the rise of car sharing, high-end driving services, and, slowly, self-driving cars, people who used to have their eyes on the road and their hands on the wheel have more freedom to let their eyes wander and their fingers touch the interior of the vehicle they are sitting in. And in ride-hail cars that are used many hours per day, odor control—which high-end car seat materials can provide—becomes an important feature.
Another trend benefiting Japanese car seat material suppliers is the increasing number of electric vehicles being sold. One of the focuses in electric cars is keeping them light in order to increase vehicular range per battery charge. Alcantara, which weighs significantly less than either polyvinyl chloride (PVC) or leather, is mandated by several manufacturers of electric vehicles, Takagi says.
To satisfy the expected rise in demand, Alcantara initiated an investment program in Italy last year that will see the firm spend $350 million over five years to expand its facility. In Japan, meanwhile, Toray is increasing production of Ultrasuede by 60%. In October, Ultrasuede got an important boost when Toyota announced that it would start using it in several Lexus models.
Other Japanese manufacturers of high-end fabrics are also cashing in on the growth of the luxury car market. Asahi Kasei is currently raising capacity by 50% in Japan for its Lamous brand of synthetic suede, also sold by the Italian firm Miko and its U.S. parent Sage Automotive Interiors, under the name Dinamica.
Perhaps the closest competitor to Alcantara, Lamous is likewise a blend of polyester and polyurethane. “Lamous is basically a microfiber nonwoven impregnated with polyurethane,” says Yasuyoshi Nakajima, senior manager of Asahi’s nonwoven fabrics division. “Asahi Kasei and Toray are the only two companies that can make this in a way that is suitable for car interiors.”
Both Lamous and Alcantara, Nakajima says, are pleasant to the touch owing to the extremely fine microfibers they’re made from. While their physical properties are slightly different because of variations in manufacturing, the materials made by both companies, he adds, are versatile ones with a wide range of colors and properties that can be adjusted depending on customer needs. Asahi, for example, can adjust the stretchiness of Lamous or add a fire retardant to it, he notes.
About 100 luxury car models already use Lamous worldwide, Nakajima says. The U.S. could grow in importance for Asahi in the near future. The Japanese firm just agreed to pay $1 billion to acquire South Carolina-based Sage, the world’s largest supplier of car seat fabric.
Europe is currently the key market, Nakajima says, noting that he himself lived in Germany for several years. “We sell more Lamous in Europe than we do in Japan,” he says, largely because of the close partnership with Miko. As Sage does in the U.S., Miko performs the final dyeing and finishing steps in the Lamous process.
“European carmakers tend to buy from European suppliers,” says Kazunori Yamada, product development manager at the textile producer Seiren. In 2006, the company launched a new type of synthetic leather, branded Quole, made from polyurethane and polyester fabric. The product, which feels like normal leather—not suede—has been a runaway success, but only in Japan so far. Quole is currently used in 50 car models, Yamada says. From a small portion of Seiren’s sales 10 years ago, the car interior business now accounts for nearly 60% of Seiren’s total annual turnover of $1 billion.
In North America, Seiren is approved as a supplier by General Motors, Ford Motor, and Fiat Chrysler Automobiles but has yet to secure an actual supply contract. “It’s not easy to qualify as a supplier,” Yamada says. The main issue, he contends, is that U.S. carmakers have had bad experiences with polyurethane. “In U.S. car seats, polyvinyl chloride and leather are more mainstream,” he says.
But the difficulty of gaining the confidence of a major carmaker also limits competition from newcomers, Yamada says. “A new supplier could approach a car company with a sample of a material that they hope to supply, but it would need to show that it has the production capacity, the quality-control systems, and a track record,” he says.
Developing the ability to supply high-end seat materials requires considerable investment in product development and manufacturing facilities, Toray’s Takagi adds. And the rewards may ultimately not be that great. “The total market is not actually that large,” he says. Although a fast-growing segment, high-end artificial suede represents only about 1% of the overall market for car seat cover materials, he estimates.
A willingness to invest in R&D has been critical to the Japanese firms that have succeeded, Seiren’s Yamada notes. Textile manufacturers aren’t known for investing much in research, but Seiren operates an R&D center in Sakai, Japan, near Osaka, staffed with 600 people.
A major challenge Seiren scientists overcame in developing Quole was to make it using dry-process polyurethane, Yamada says. Whereas wet-process polyurethane is porous and therefore not suitable for car seats, product made with the dry process is too rough to the touch. Quole is both soft and nonporous, Yamada claims. And also very light. Quole is only 500 g/m2, compared with 800 g/m2 for PVC and 1,000 g/m2 for leather.
Developing the manufacturing know-how to make Lamous was similarly challenging, Asahi’s Nakajima says. “The manufacturing process is complex.” Somewhat similar to Alcantara, it involves making polyester microfibers, impregnating them with polyurethane with the help of needles of pressurized water, dyeing, and finishing.
“It’s very hard for a single manufacturer to combine all those technologies and produce a material that meets the requirements of carmakers,” he says.
Japanese firms, as approved suppliers, are already in a good position to help their customers design the car seats of the future. Seiren’s Yamada notes that the trend is toward less stitching and sewing in car seats to simplify manufacturing. “In the future, we’re likely to start manufacturing large pieces of materials already in seat shapes,” he says.
Few would expect that Japanese textile firms, struggling against China and other low-cost competitors only a few decades ago, would succeed at producing car seat materials—and make good money from it. And few would consider upholstery to be as high tech as carbon fiber, medical materials, or microchips. But there is more to car seats than meets the eye.