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Automotive Interior Soft Trim:

Skins, Foams, Coated Fabrics, Textiles, and Acoustic Barriers

COATED FABRICS

SKINS TEXTILES (WOVEN, NON-WOVEN)

MODULE
FABRICATION
FOAMS AND CARPET
INTEGRATION
TECHNOLOGIES

SUBSTRATES ACOUSTIC BARRIERS

REQUIREMENTS INTERIOR MODULES CONSTRAINTS

- COCKPIT
OCCUPANT SAFETY MANUFACTURING ECONOMICS
- HEADLINER
ACOUSTIC REQUIREMENTS
WEIGHT - DOOR QUALITY
ELV LEGISLATION - FLOOR/ACOUSTICS
ESTHETICS CRAFTSMANSHIP
- TRUNK LINER
TELEMATICS INTEGRATION
SENSORY - SEATING PRODUCT POSITIONING
SMELL - PILLAR COVERS SUPPLY CHAIN MANAGEMENT

Prospectus for a Global Multiclient Industry Analysis Oct., 2002

Robert Eller Associates, Inc.
CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES

4000 Embassy Pkwy., Ste. 230, Akron, OH 44333-8328 USA Phone 330-670-9566/Fax 330-670-9844
Internet Home Page: http://www.robertellerassoc.com E-mail: [email protected]

USA EUROPE JAPAN MEXICO LATIN AMERICA

 EXAMPLES OF MULTICLIENT EXHIBITS

GROWTH OF PVC AND TPU SLUSH IN EUROPEAN IP SKINS FLEET

4000
PVC POWDER
3500
TPU POWDER
3000
VEHICLES X 100

2500
2000
1500
1000

500
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

SOURCE: ROBERT ELLER ASSOCIATES, INC.

EUROMODEL PHOTO/SUPPLIER DATABASE, 2001 prosp601.vsd

INTERIOR SKIN AND COATED FABRIC SUPPLIERS (EXAMPLES ONLY)

SHEET SECTOR NOTE
SUPPLIER IP DT SEAT FLOOR
CGT X X X
DELPHI X X FIRST NA COMMERCIAL TPO SKIN
HAARTZ X X X EXTRUDED ONLY
BENECKE X X X ALSO SLUSH, HIGH EUROPEAN MKT. SHARE
POLYONE X X FORMERLY O'SULLIVAN, ALSO SLUSH
SANDUSKY(A) X X X PARTIAL OWNERSHIP BY BENECKE/KYOWA
PENNEL X X X X
RECTICEL X X PU SPRAY
(A)
INCLUDES ATHOL

EPP BEAD FOAM PRODUCER INDUSTRY STRUCTURE (EXAMPLES ONLY)

EPP BEAD BEAD MFR. SELL AREA NOTE
SUPPLIER SUPPLY PARTS PARTS US EUR JPN LA
BASF X X X X X NEW PLANT IN BRAZIL
(A)
KANEKA X (A) X X X X USE IN-HOUSE AND
CONTRACT MOLDERS
JSPI X X X X X X PLANT IN FRANCE
FAGERDALA X X X X X
BASELL X X

______________________________________________________________________________
Robert Eller Associates, Inc.
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Automotive Interior Soft Trim:

Skins, Foams, Coated Fabrics, Textiles, and Acoustic Barriers

Robert Eller Associates, Inc. (REA) is pleased to present, for your consideration,
this prospectus for an analysis of automotive soft trim and its role in interior module
technology, economics, and markets.

BACKGROUND

Soft trim materials present the interior module to the automotive customer. They play a key role in
determining the choice of module manufacturing technology and associated costs. The range of
potential soft trim candidates has broadened in response to new driving forces including acoustic
performance, occupant protection (energy absorption), PVC substitution mandates, ELV legislation,
telematics integration, and shifting esthetic requirements as illustrated by our prospectus cover logo.

Intense cost pressure has driven down materials costs, while quality, efficient interior packaging, and
craftsmanship constraints have increased. The remaining cost reductions will be made on the module
manufacturing floor with technologies capable of integrating soft trim materials, foams, and the
acoustic function into a simplified process flow and mono-materials construction (where feasible).

New raw materials are emerging to challenge the dominant incumbent soft trim choices. These
include, for example:

• Coated fabrics with non-PVC alternatives (styrenic, olefinic)

• Acoustic constructions based on polyurethanes and polyolefins capable of meeting new tuning and
cost requirements
• New slush molded and thermoformed skin candidates (TPU, TPO)
• New foams with energy absorbing, acoustic, and fabrication process benefits
• Microfiber non-wovens technology.

At the same time as these materials and fabrication process technology changes are occurring, the
automotive interior module supplier industry is undergoing rapid structural change, globalization, and
intense consolidation which will affect supplier/customer relationships, paths to market, and material
selection criteria.

_____________________________________________________________________________
Robert Eller Associates, Inc.
 STUDY OBJECTIVES

The overall objectives of the proposed multiclient study are to characterize and quantify the global
automotive interior soft trim and module sector with respect to:
• Intermaterials competition and demand evolution
• Driving forces for material and process substitution
• Impact of new textile and plastics materials and process technology
• Fabrication processes and intermaterials competition for underlying substrates as they affect soft
trim material selection parameters
• Manufacturing economics for components and finished modules
• Effects of structural changes in interior module supplier industry.

The study updates and extends REA's widely subscribed 1997 Automotive Interior Skins and Foams
multiclient study.

SCOPE

Regional Coverage: Europe, North America, and Japan.

Market Definition: REA will develop demand forecasts for the interior soft trim materials and the
processes used to fabricate modules in the three target regions. Fleet share and demand estimates by
material type, material and module supplier, and fabrication process will be developed. Constructions
will be compared for key models in each fleet.
Interior Components: The interior modules to be evaluated include:
• Door Trim
• Cockpit
• Sunvisors
• Pillar Trim
• Consoles
• Headliners
• Seating
• Floor/Acoustic Systems

Soft Trim Types: The soft trim materials to be evaluated include:

• Skins (slush molded, vacuum formed, RIM, sprayed)
• Coated Fabrics
• Textiles (woven, non-woven)
• Foams (sheet, bead, poured)
• Acoustic Barriers and Constructions

Industry Structure: Supplier shares of the soft trim materials markets and their key customer
relationships will be identified and quantified. Profiles of major suppliers, their product lines, new
materials, and processes will be developed.
______________________________________________________________________________
Robert Eller Associates, Inc.
Constructions: Current and potential soft trim structures and their associated foam layers (integral,
laminated, back foamed) will be included and diagrammed. Esthetic design considerations and their
effects on material selection will also be analyzed.
Module Fabrication Processes: Changes in fabrication processes (e.g., low pressure molding,
S-RIM) or substrates (e.g., bead foams, natural fiber composites) for the modules on which soft
trim materials are used.
Driving Forces for Material Substitution: A broadened range of forces is driving material
substitution and creating opportunities for new materials and processes. The requirements illustrated
by the design on the cover of this prospectus will be examined for their impact on materials selection,
manufacturing process evolution, module construction, and economics.
Skins: The materials and process technology options for producing skins have evolved since the
pioneering 1997 REA multiclient analysis. The new technologies (TPU/TPO slush, vacuum formed
TPO, Spray, RIM) will be documented. Commercial status, suppliers, constructions, and the
implications for module economics and technology will be quantified.
Textiles: Textiles represent a major automotive materials market. Changes in performance
requirements (acoustic performance, recyclability, monomaterials construction) and the need to offer
cost effective module constructions are driving these changes. The textile industry is responding with
new non-woven technology (e.g., microfibers) and new laminate constructions.
Coated Fabrics: PVC is the dominant incumbent in coated fabrics used in seat and other interior
modules. Anticipation of inclusion in future PVC substitution mandates by GM, Honda, Toyota, and
others has stimulated the development of PVC alternatives (ESI, specialty TPOs) which are starting to
penetrate this sizable auto interior materials segment.
Foams: All types (poured, sheet, and bead foams) as they participate in passenger safety, structures,
textile support, and esthetics will be included. The intermaterials competition, role in module
manufacturing costs, implications for soft trim material selection, and integration into module
construction will be examined.
Acoustics: Acoustic performance will be a driver for soft trim material selection. Acoustic
solutions were previously an afterthought designed to "fix" problems. Acoustic materials will be
incorporated
into design and process selection to fabricate cost-effective modules with on-board acoustics.
Economics of Intermaterial and Interprocess Competition: System economics will ultimately
determine material and process selection. REA will develop manufacturing cost cases to quantify
systems manufacturing costs for key modules. These cost cases will be suitable for the analysis of
strategy and product positioning.
Time Horizon: Forecasts and analyses will be developed from the base year of 2001 through 2006.
New Soft Trim Technology: Driven in part by PVC substitution pressures, materials and process
technologies for skins, foams, coated fabrics, textiles, and acoustic materials are changing. The new
technologies will be identified and their implications for module construction, process technology,
and manufacturing economics will be quantified.

______________________________________________________________________________
Robert Eller Associates, Inc.
 REA QUALIFICATIONS

REA is a strategic, technology, and market consulting resource specializing in providing decision-
quality analysis in support of management decisionmaking in the global autoplastics sector from
offices in the U.S. and Europe.
REA has carried out pioneering technical, economic, and market multiclient and single client studies
of all major autoplastic components including instrument panels, headliners, door trim panels, interior
trim, seating, skins, electrical components, acoustic barriers, structural components, weather stripping,
bumper fascia, and exterior trim. Recent strategy, market, technology, and
acquisition studies have included:
• European instrument panels/cockpits photo/supplier database (multiclient study 2000, 2001)
• TPEs in automotive applications (multiclient study -- 2000)
• Automotive polypropylene resins and compounds in the U.S. and Europe
• Supplier industry structure and globalization implications on autoplastics
• Several acquisition analyses in the skins, coated fabrics, and Tier 1 sectors in the U.S. and Europe.
The study will be directed by Robert Eller working in close coordination with REA associates in the
U.S., France, and Japan. In addition to directing the plastic consulting activities of REA, Mr. Eller
currently serves as Consulting Editor (Plastics) for Automotive and Transportation Interiors
magazine, where he writes a periodic column and feature articles analyzing the technology,
economics, and structure of auto interior plastics. Prior to establishing REA, he directed plastics
consulting studies at Arthur D. Little, Inc. in the U.S. and Europe.

WHO SHOULD SUBSCRIBE

As with all REA studies, this report provides analysis in support of management decisionmaking. It
is designed to provide a planning resource for:

• Automotive interior module suppliers

• Skins and coated fabric suppliers
• Textile suppliers (woven, non-woven)
• Sheet and bead foam producers
• Coating (soft touch and protective) and adhesive suppliers
• Raw materials suppliers (skin, foam, substrate, acoustic barriers, textiles)
• Automotive manufacturers (OEMs)
• Compounders
• Interior designers

TIMING AND HOW TO SUBSCRIBE

This study will be initiated in the third quarter of 2001. The target completion date is the second
quarter of 2002. An order form outlining costs, terms, and conditions is enclosed with this
prospectus. To order, fill out and return the enclosed form with payment or billing instructions.

______________________________________________________________________________
Robert Eller Associates, Inc.
TABLE OF CONTENTS
1. Executive Summary 11. Door Trim Panels
A. Door Trim Industry Structure
2. Demand Forecasts
B. Door Trim Materials
A. Summary
C. Door Trim Processes
B. Fleet Demand Forecast Model by Module
D. Door Trim Manufacturing Cost Models
C. North America
E. Door Trim Supply/Demand Models (Eur., N.A.)
D. Europe
3. Driving Forces 12. Headliners
A. Automotive A. Headliner Industry Structure
B. Environmental/Regulatory/Legislative B. Headliner Materials
C. Headliner Fabrication Processes
4. Soft Trim Materials
D. Headliner Manufacturing Cost Models
A. Candidates
E. Headliner Supply/Demand Models (Eur., N.A.)
B. Skins
C. Property Comparison 13. Seating
A. Seating Industry Structure
5. Textiles (Woven, Non-woven)
B. Seating Materials
A. Automotive Textile Industry Structure
C. Seating Fabrication Processes
B. New Automotive Textile Technologies
D. Seating Manufacturing Cost Models
C. Role in Acoustics
E. Seating Supply/Demand Models (Eur., N.A.)
D. Japanese Textile Industry
14. Acoustic Modules
6. Foams and Their Techno-Economic Role in Modules
(Flooring, Dash Mat, Trunk Floor)
A. Foam Industry Structure
A. Automotive Acoustics Industry Structure
B. Foam Technology Advances/Trends
B. Acoustic Module Materials
C. Sheet Foams
C. Acoustic Module Processes
D. Bead Foams
D. Acoustic Module Manufacturing Cost Models
7. Acoustic Principles E. Acoustic Module Supply/Demand Models
A. Acoustic Technology Review (Europe, N.A.)
B. Acoustic Material/Performance in Soft Trim
15. Industry Structure
Modules
A. Summary
C. Acoustic Value Assessment
B. Skins Suppliers
8. Secondary Operations C. Supplier Profiles
A. Summary (Skins, Foams, Textiles, Coated Fabric, Acoustics)
B. New Technologies D. Global Effects
C. Auxiliary Processes E. Forward Integration Effects by Tier 1 and
D. Role of Painting in Automotive Interiors Tier 2 Suppliers
E. Module Effects F. Shift to Central and Eastern Europe
9. Interior Modules and Fabrication Processes
A. Summary APPENDICES
B. New Technologies
C. Module Effects Appendix A - Abbreviations
Appendix B - Fleet Production Trends
10. Cockpit/Instrument Panel Appendix B-1 - N. American Fleet and Area Models
A. Industry Structure Appendix B-2 - European Fleet and Area Models
B. Materials Appendix C - Photos
C. Instrument Panel Skin Processes Appendix D - Module Diagrams
D. Instrument Panel Manufacturing Cost Models Appendix E - General Mfg. Cost Assumptions
E. Instrument Panel Supply/Demand Models
(Europe, N. America)
skins2-new TOC prospectus outline 92702.doc

Robert Eller Associates, Inc.

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Robert Eller Associates, Inc.

CONSULTANTS TO THE PLASTICS AND RUBBER INDUSTRIES
____________________________________________________________________________

4000 Embassy Parkway, Suite 230 • Akron, OH 44333-8328 USA • Phone: 330-670-9566 / Fax: 330-670-9844
Internet Home Page: http://www.robertellerassoc.com E-mail: [email protected]

USA • EUROPE • JAPAN • MEXICO • LATIN AMERICA

PURCHASE ORDER FORM AND SUBSCRIPTION AGREEMENT

Automotive Interior Soft Trim:

Skins, Foams, Coated Fabrics, Textiles, and Acoustic Barriers

Mail/Fax To: Robert Eller Associates, Inc. Phone: (330) 670-9566

4000 Embassy Pkwy., Suite 230 Fax: (330) 670-9844
Akron, OH 44333 E-mail: [email protected]
USA Home Page: www.robertellerassoc.com

This signed order form constitutes an agreement to subscribe to this multiclient study. Mail, fax, or
e-mail the completed order form, and enclose your payment or billing instructions. The order form may
be downloaded from the REA Home Page. Please contact REA for more information on study
contents, scope, and approach.

The price of the study for subscribers is US$15,000. The subscription includes three (3) copies of the
final report. Additional copies of the report are available to subscribers for US$400 each. The study
will be available on compact disc at a slight additional charge to cover CD preparation costs.

Please fill out the column below if the report

is to be mailed to an address other than that
indicated to the left:

_____________________________________
Signature/Date
_____________________________________ __________________________________
Name/Title Name/Title
_____________________________________ ______________________________
Company/Division Company/Division
_____________________________________ __________________________________
Street Address Street Address
_____________________________________ __________________________________
City, State, Zip City, State, Zip
_____________________________________ __________________________________
Telephone Telephone

TERMS AND CONDITIONS:

1. The subscriber represents and agrees that it will hold in confidence the information and services furnished
hereunder, and that it will use the information and services for its own proper use and will not make such
information and services available to any other person, firm, or corporation. A subscriber may transmit
information furnished under this agreement to a wholly-owned subsidiary.

2. REA reserves the right to cancel this multiclient study and refund prepayments if sufficient support is not
received. The same information could be made available to the subscriber under negotiable terms as a
single client study.

June, 2003

Robert Eller Associates, Inc.