European technical textile fibre manufacturers have had to cut prices and operate with reduced margins to remain competitive, according to a new report from Frost and Sullivan.
The study, which focusses on the European market for technical textiles used in airbags, seat belts, carpets, seat upholstery and tyres, forecasts a compound annual growth rate of 1.6% from 2001 – 2008 and predicts that the market will be worth $1.18 billion by 2008.
Emma Smith, Research Analyst with Frost & Sullivan explains: ‘All segments of the technical textiles market are under increasing price pressure, which is exacerbated by over-capacity in the fibre production industry and the threat of Asian imports. Combined with this, we have the ever increasing pressures on manufacturers to reduce the weight of textiles – currently around 11kg per motor car, to aid fuel efficiency, to make fibres recyclable and to improve their safety. It seems that they will need to make considerable investments in the research and development of new fibres at a time when there is no margin left in the industry.’
Companies have responded by enforcing divestments, mergers, acquisitions and joint ventures in order to focus on key business areas and by cutting jobs.
However, it is not all bad news for the manufacturers. The report reveals that automotive component manufacturers are unlikely to move to using imported products owing to their perceived lower quality, delivery speed concerns and partnerships with existing suppliers on R&D issues.