Lear Corporation is to acquire a 75% share of the automotive fabric business of New Trend Group. Financial terms of the agreement were not disclosed.
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“The acquisition of a majority stake in New Trend’s automotive fabric business is consistent with Lear’s strategy to selectively increase the level of vertical integration for its seating business,” Lear said in a statement.
It added the operations provide Lear an opportunity for low-cost fabric supply to its existing cut and sew capabilities as well as offering the potential for incremental sales growth as a fabric supplier to a broad range of automotive manufacturers.
“Other partnerships in the area of seat trim are presently being evaluated by Lear,” it said.
“Following our successful launch of the Aventino collection of premium leather last fall, Lear was looking for additional opportunities to further vertically integrate seat trim into our core product portfolio,” said Lou Salvatore, head of Lear seating operations.
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By GlobalData“The production of additional trim options such as flat-woven materials and knits provides Lear the opportunity to offer our customers a wider range of seat trim options and improve overall seating system value.”
New Trend is a leading supplier of trim to China and exports to Europe and the US through its two automotive textile manufacturing facilities in China. The company produces fabric used for seat covers, vehicle headliners and automotive door panels and carpet for GM, VW, Ford, China Brilliance, Toyota, Nissan, Hyundai, Chery and Geely vehicles, predominantly in China.
Although Lear’s investment gives it a majority ownership stake and management control in the New Trend automotive fabric business, the current management and employees will remain to ensure operational continuity, manufacturing expertise and existing design/development activities.
Lear will maintain the New Trend brand identity, and will refer to the business as New Trend automotive fabric by Lear.
Initially, New Trend will continue to produce fabrics in China for internal consumption. At the same time, Lear will evaluate opportunities to expand the facilities and use the low-cost source for export to markets outside of Asia.
Salvatore added: “Our consumer research shows European and Asian suppliers are trending toward more flat wovens, while North America has a high usage of knits. As a result, we see an opportunity to increase our market share in Asia, and further down the road, successfully launch our fabric portfolio with North American and European customers.”
