SOUTHFIELD, Mich. — Lear Corp. has entered into agreements to acquire a 75 percent share of the automotive fabric business of New Trend Group Co., Ltd., a privately held company founded in 1986 that produces automotive interior fabric and commercial plastic goods. Financial terms of the agreement were not disclosed.
The acquisition is consistent with Lear’s current strategy to selectively increase the level of vertical integration for its seating business. New Trend’s seat trim fabric operations will 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. The company is currently evaluating other possible seat trim partnerships as well.
"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, Lear senior vice president and president of global seating operations. "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 the China automotive market as well as an exporter to Europe and the U.S. 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 in place 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.
In the initial phase following acquisition, New Trend will continue to focus on its core competencies and produce fabrics in China for internal consumption. At the same time, Lear said it will evaluate opportunities to expand New Trend’s facilities and leverage this low-cost source for export to markets outside of Asia.
"We anticipate growing New Trend’s fabric sales multifold over the next couple years," Salvatore continued. "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."
For more information about Lear, go to: http://www.lear.com.
