NEWS DIGEST Part I
In order to get you posted what happened during the holidays, TextileFuture presents you a news round-up in three parts, and grouped according to topics. The first one entails Associations, Automotives, China, Italy and Company News
OEKO-TEX® Awards New Certification for tested Leather Goods on harmful substances
From 2017 onwards, producers and suppliers of leather goods can also have their products certified to be tested for harmful substances by the International OEKO-TEX® Association. The basis for the certification is the new LEATHER STANDARD by OEKO-TEX®, which was launched during the annual meeting of the General Managers of the OEKO-TEX® institutes in Ostend, Belgium at the start of November.
Formed in 1992 and celebrating its 25th anniversary in 2017, the OEKO-TEX® Association, in response to the latest developments in the textile, leather goods and footwear market, is adding the leather sector to its extensive testing and certification system that has focused so far on textile products and accessory materials.
In the future, the International Association for Research and Testing in the Field of Textile and Leather Ecology (OEKO-TEX®) will use the new LEATHER STANDARD product label to distinguish products that meet the strict requirements of the LEATHER STANDARD by OEKO-TEX® criteria catalogue. The test criteria and limit values in many cases go far beyond applicable national and international standards. The LEATHER STANDARD by OEKO-TEX® therefore contributes to a high and effective level of product safety and reliability from the consumer’s perspective and lets manufacturers of leather goods in all stages of production distinguish their products to show that they have been tested for harmful substances, providing a reliable decision-making tool for consumers who purchase leather products.
The OEKO-TEX® Association is delighted to have obtained the Research Institute of Leather and Plastic Sheeting (Forschungsinstitut für Leder und Kunststoffbahnen – FILK) in Freiberg, Germany and the Test and Research Institute Pirmasens (Prüf- und Forschungsinstitut Pirmasens e.V. – PFI), who are highly acclaimed in their specialist areas in the leather industry, as additional partners for leather goods testing. Together with six other OEKO-TEX® institutes that have been established for many years now, the two new establishments FILK and PFI will also carry out testing and certification according to the LEATHER STANDARD by OEKO-TEX® from next year onwards.
“We are delighted to see our network of meanwhile 18 OEKO-TEX® institutes growing steadily and that we managed to obtain such experience and renowned expertise in the field of leather goods production with our two new members. Ultimately, our greatest concern is ensuring consumer protection and environmentally friendly production throughout every area of textile and leather processing”, says Georg Dieners, General Secretary and CEO at OEKO-TEX®.
How to buy American, when the clothing label does not say “Made in the USA”
Holiday spending in 2016 is expected to reach its highest point since the Great Recession, increasing 10 percent compared to last year. So, what can consumers do if they want to buy American-made clothing and home furnishings when they do not see a “Made in USA” label on the product?
“Consumers have been taught since as far back as the Wool Products Act of 1939 to look at the tag to see what it’s made of and where it was made,” said NCTO National Council of Textile Organizations (NCTO) President and CEO Auggie Tantillo. “Nowadays, it is not that simple. People who want to buy American need to understand that not all imports are created equal.”
Tantillo says there is a very good chance that imported clothing items such as shirts and pants contain American content like cotton, polyester, yarn, and fabric if the tag indicates the garment was made in a country in the Western Hemisphere.
“The American textile supply chain exports more than USD 10 billion in yarns and fabrics to Mexico and other Latin American countries. When consumers buy clothing items from there, they are more likely to be supporting American manufacturing jobs,” Tantillo continued. “On the other hand, if a garment is labelled ‘Made in China,’ it is almost certain that none of the yarns and fabrics used to make it come from the United States.”
To illustrate the U.S. contribution to the “Farm to Fashion” journey taken by a pair of pants, consider the following example. Jeans or khakis with a label that says “Made in Mexico” likely were made with cotton grown on an American farm that then was spun into yarn and woven into fabric in American textile factories. “In this case, only the assembly – the last part of the apparel production process – was done outside the United States,” Tantillo said, emphasizing that pants imported from Mexico and other Western Hemisphere countries often contain a high level of U.S. content and sweat equity.
Industry analysis of pricing data suggests that when U.S.-made yarns and fabrics are used in making pants and shirts in Latin America, U.S. components typically comprise 50 to 70 percent of the value of the finished good.
“This is an important lesson for American consumers. Simply by checking the tag and understanding the partnership between U.S. textile manufacturers and Western Hemisphere countries, shoppers can buy American even though the tag may not say so,” Tantillo concluded.
Below is a list of the U.S. trade partners under the North American Free Trade Agreement (NAFTA) and the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) who help turn American fabric and yarn into apparel and home furnishings, and then ship it back to domestic retailers to sell to consumers:
– Costa Rica
– El Salvador
– Dominican Republic
The National Council of Textile Organizations (NCTO) is a Washington, DC-based trade association that represents domestic textile manufacturing.
Foreign buyers now want ‘One-Stop Print and Printing Solution
Foreign buyers now expect to have all types of print and printing solution from the same place within a short span of time, said a top apparel sector leader.
“Foreign buyers will avail themselves of one-stop printing solution from DCC. As a result, their reliance and popularity for Bangladeshi manufactured fabrics will increase,” said Faruque Hassan, senior vice president of BDMEA, the Bangladesh Garment Manufacturers and Exporters Association. He made the remark while visiting DCC Print Vision LLP Textile studio in the city.
During his visit at DCC Print Vision LLP Textile, situated at capital’s Banani, he inspected printing machine, printing technology along with different one-stop printing solution. Faruk Hassan said organisations like DCC Print Vision LLP Textile can make a significant contribution towards fulfilling the dream of manufacturing fabrics in readymade garment sector of Bangladesh by 2021.
DCC Country Manager HN Ashikur Rahman said there are immense possibilities in Textile Printing industry of Bangladesh but it lacks in one-stop solution. “DCC decides to start its operation in Bangladesh after a continuous request of customers of Bangladeshi Textile industry. DCC is moving towards establishing a world-class printing studio,” he said.
To reinforce the textile printing industry in Bangladesh, DCC has recently established a world-class printing studio for the first time in Bangladesh. DCC will organise constant workshops to create skilled manpower, and one-stop solution is unparalleled in terms of making the textile printing industry digital and taking it to the leading position. The country’s revenue from textile industry will get a boots simultaneously.
Road Gets Rougher in World’s Largest Auto Market
Selling cars in China appears easy these days given double-digit sales growth. But making money from all those cars is about to get a lot harder.
Two developments loom large. China’s Ministry of Finance said Thursday it would trim a temporary purchase-tax cut on small-engine cars next year, raising the rate from 5% to 7.5%, still below the normal 10 % level. Second, Beijing is clamping down again on foreign car makers’ business practices. State-backed media reported this week that investigators were looking into an unnamed U.S. car maker’s price setting behaviour. General Motors and Ford both have profitable China operations.
Across China, sales volumes have been on a tear, yet average selling prices have been edging lower, down almost 2 % between June and October, according to data from the National Development and Reform Commission’s Price Monitoring Center. It was only a matter of time before the world’s largest car market was inundated with too many cars. Excess capacity accounted for 54 % of production in 2015.
So far, margins have largely held up. That looks set to change. Car makers should see higher marketing and selling expenses as they lure customers and offset the phasing out of the tax cut. Higher steel prices and stringent fuel efficiency requirements should hit the cost side.
Both Ford and GM have warned that pricing pressure is increasing. GM has kept net income margins at its China joint ventures relatively stable over the past few years, averaging 9.6 % since 2013. In the third quarter, even as GM’s sales rose 9 %, margins fell to 8.7 %.
The investigation into pricing policies represents another weight. It could result in fines, as a probe into parts price fixing did for many makers in 2014. More important, it could be a signal of a time-honoured tradition in China where companies, especially foreign ones, get a brushback when profits get too large.
The math is only going to get tougher in China’s car market.
Autoneum opens additional plant in China in 2017
Autoneum is expanding its presence in the Chinese growth market and will open its seventh plant for the production of lightweight acoustic and thermal management components in the Eastern Chinese city of Yantai. Multifunctional inner dashes and carpet systems will be produced in series for vehicle manufacturers in China at the manufacturing location measuring 6600 square metres from the summer of 2017
In order to meet the persistently strong demand by international and local vehicle manufacturers for lightweight noise and heat protection components and simultaneously minimize the logistics costs for customers, Autoneum expands its production capacities in China with a seventh plant. Starting summer 2017, the market leader in acoustic and thermal management will ensure the just-in-time delivery to vehicle manufacturers at their nearby production facilities out of the 6600 square metres plant in the Eastern Chinese city of Yantai in the Province of Shandong.
Following the start of serial production, carpet systems and inner dashes will be manufactured for around 250000 vehicles per year, with an increase in production easily possible. As part of the implementation of sustainable production processes at all Autoneum locations, production waste in the form of polyester or mixed fibre fleece is to be recycled and re-used in the manufacture of components at the new facility in Yantai.
“With over 26 million light vehicles produced this year, China is the world’s largest automobile market. The investment in a further plant in this growth market will enable our customers to receive innovative lightweight components just-in-time and with significantly lower logistics costs. At the same time, the expansion of our Chinese production capacities is in line with our strategy and will contribute to the targeted market share increase in China”, underlined Martin Hirzel, CEO of
Autoneum, on the occasion of a visit to the plant premises.
With an expected production increase to over 29 million light vehicles in the year 2020, China is one of the key growth markets for the automobile industry. In addition to the three fully owned plants in Chongqing (since 2006), Taicang (2010) and Shenyang (2011), Autoneum jointly operates Chinese production locations with Japanese automotive supplier Nittoku in Guangzhou (2003), Tianjin (2004) and Wuhan (2013).
2016 Total U.S. new vehicle sales poised to set record with slight increase over 2015
With a strong close to the year, total new light-vehicle sales in 2016 are expected to reach a record 17.5 million vehicles, surpassing the previous high set in 2015 by 5000 units, according to a forecast developed jointly by J.D. Power and LMC Automotive.
Retail sales in 2016 are forecast to close at 14.1 million units, a 1.2 % decline from 14.2 million units in 2015, but still will be the sixth-highest retail sales year in history.
New-vehicle retail sales in December are projected to reach 1332800 units, a 0.8 % increase on a selling-day adjusted basis compared with December 2015, while total light-vehicle sales are expected to reach 1604500 units, a 1.4 % increase.
Deirdre Borrego, senior vice president and general manager of automotive data and analytics at J.D. Power, said: “This year will be remembered for strong retail sales and record transaction prices. However, elevated inventories, a slow model-year transition and record incentive levels point to the challenges the industry will face in 2017. Going forward, automakers must maintain production and pricing discipline to achieve profitability, which is easier said than done.”
Incentive spending in November eclipsed USD 4000 per unit for the first time on record. December, which typically delivers the highest incentive spending level of the year, is expected to exceed the November record as manufacturers clear out old model-year vehicles and reduce inventory.
• The seasonally adjusted annualized rate (SAAR) for retail sales in December 2016 is projected to reach 14.6 million units, down 70 thousand units from December 2015. The SAAR for total sales is projected at 17.5 million units in December 2016, consistent with the level a year ago.
• Fleet sales are expected to total 271,700 units in December, up 4.8 % on a selling-day adjusted basis from December 2015. Fleet volume is expected to account for 16.9 % of total light-vehicle sales, up slightly from 16.4 % in December 2015.
• The average new-vehicle retail transaction price thus far in December is USD 32000, a record for the month, and surpassing the previous high of USD 31849 set in December 2015.
• With high absolute retail sales volumes and record transaction prices for the month, consumers are on pace to spend USD 42.6 billion on new vehicles in December, slightly behind the record high of USD 43.7 billion for the month of December set in 2015. Additionally, 2016 annual retail sales expenditures will set a record at USD 438 billion, surpassing the previous record of USD 436 billion set in 2015.
Jeff Schuster, senior vice president of forecasting at LMC Automotive, said: “We project 2016 to be another record for light-vehicle sales, but it will come down to a photo finish. Given the high level of incentives and an increase in fleet volume this year, we expect to see some payback in 2017. However, it may not be evident as the sales volume is expected to be at the same level, with variables that could tip the volume risk slightly in either direction. Positive drivers include a stronger economy with fiscal stimulus and deregulation, Volkswagen’s buyback program and a high number of lease maturities. Negative drivers include a steeper interest rate increase, potential protectionism, a potential pullback in incentive levels and used-car substitution.”
LMC is forecasting total light-vehicle sales in 2017 to be in the 17.4-17.5 million unit range, down slightly from 2016 levels by approximately 25000 units. Retail light-vehicle sales are expected to fall 0.3 % to 14.0 million units in 2017.
Visteon Silicon Valley Technical Center to lead development of Artificial Intelligence for Autonomous Vehicles
Visteon Corporation’s new technical centre in Silicon Valley will lead the company’s development of artificial intelligence for autonomous vehicles. Visteon’s breakthrough autonomous vehicle program will apply machine learning technology for accurately detecting and classifying objects in a vehicle’s path and planning the vehicle’s movements, resulting in fully trained driving control systems
The recently opened facility in Santa Clara, California, will work closely with global Visteon tech centres to develop excellence in artificial intelligence software, advanced driver awareness systems (ADAS) and deep machine learning. These efforts will support Visteon’s approach to autonomous driving, which encompasses three key elements:
• Creating fail-safe, centralized domain controller hardware leveraging Visteon’s industry-first cockpit domain controller, Smartcore™.
• Unlocking the innovation potential of algorithm developers through an easy-to-access open framework and test/simulation environment.
• Applying artificial intelligence for object detection, classification, perception and decision-making in future autonomous vehicles.
“Most current advanced driver assistance systems based on radar and cameras are not capable of accurately detecting and classifying objects – such as cars, pedestrians or bicycles – at a level required for autonomous driving,” said Sachin Lawande, president and CEO of Visteon, a leading global cockpit electronics supplier. “We need to achieve virtually 100 percent accuracy for autonomous driving, which will require innovative solutions based on deep machine learning technology. Our Silicon Valley team, with its focus on machine learning software development, will be a critical part of our autonomous driving technology initiative.”
Visteon’s recently opened facility in the heart of Silicon Valley will house a team of engineers specializing in artificial intelligence and machine learning. The center is located close to the West Coast offices of various automakers and tech companies, as well as Stanford University and the University of California, Berkeley – two of the leading universities for artificial intelligence and deep learning in the U.S.
In addition to leading Visteon’s artificial intelligence efforts, the Silicon Valley office will play a key role in delivering control systems, localization and vision processing – interpreting live camera data and converting it to information required for autonomous driving. Visteon is targeting launching its first autonomous driving domain controller platform in 2018.
Leading Visteon’s artificial intelligence effort based in Silicon Valley is Vijay Nadkarni, who joined Visteon earlier this year from Chalkzen, Inc., where he developed and launched a revolutionary SaaS (software as a service) and connected car services platform.
Visteon has been continually expanding its resources to support development of next-generation ADAS development and autonomous driving. On April 1, Markus Schupfner joined the company as chief technology officer, bringing more than 20 years of experience leading software development for global automotive suppliers. Visteon recently announced that Matthias Schulze will join the company in January 2017 from Daimler AG; he will lead Visteon’s ADAS development, including overseeing the Silicon Valley facility.
Visteon is a global company that designs, engineers and manufactures innovative cockpit electronics products and connected car solutions for most of the world’s major vehicle manufacturers. Visteon is a leading provider of instrument clusters, head-up displays, information displays, infotainment, audio systems, telematics solutions and SmartCore™ cockpit domain controllers. Visteon also supplies embedded multimedia and smartphone connectivity software solutions to the global automotive industry. Headquartered in Van Buren Township, Michigan, Visteon has approximately 10,000 employees at more than 40 facilities in 18 countries. Visteon had sales of UAS 3.25 billion in 2015. www.visteon.com
PSA Peugeot Citroën decided to relaunch the iconic Méhari as E-Car
When PSA Peugeot Citroën decided to relaunch the Méhari, its classic all-terrain vehicle (ATV), into an all-electric vehicle that is a fashion statement for a new generation, the automaker partnered with Bluecar and Oerlikon Graziano became supplier of the electric transmission technology. The bold, colourful E-Méhari is making waves in the automobile world, both because it’s a striking reboot of the beloved classic car and because it’s making a statement about the performance capabilities of electric vehicles
Back in the late 1960s, there was possibly no more coveted car than Citroën’s Méhari. The four-seat all-terrain vehicle (ATV) had a soft top and ABS plastic body, with off-road capabilities that made it a beach-lover’s fantasy and a cult favourite, with pop culture appearances ranging from the 1971 blockbuster movie, The Omega Man, starring Charlton Heston, to a Méhari-based car in the video game Grand Theft Auto V.
Now, the legendary car has been reintroduced with a slick makeover for a new generation. French automaker PSA Peugeot Citroën unveiled the all-electric E-Méhari in December 2015, making a splash on the auto scene with a funky, chunky reboot of the classic automobile.
Making a Sustainable Statement
In a nod to the vehicle’s sustainable power source, the E-Méhari was unveiled in conjunction with COP21, the 2015 United Nations Conference on Climate Change, held in Paris. As government and consumer demand for mobility solutions with minimal environmental impact continue to increase, a February 2016 study by Bloomberg New Energy Finance in London, predicts that such preferences, plus future reductions in battery prices will pave the way for electric cars to make up 35% of global new car sales by 2025.
But the Bluecar and Citroën teams knew that consumers are more likely to pass by vehicles that skimp on style or function, so they worked to ensure the E-Méhari delivered on all fronts. Reaching a top speed of 110 kmh/68 mph, the convertible has a 124-mile/200-kilometer range on a single charge, making it a vehicle best suited for dashing around town and for enjoyable driving in the leisure time. Like the original, its colorful thermoformed plastic body doesn’t rust or corrode and eliminates worries about minor dings or chipping paint. Rear folding seats allow more cargo space and a removable soft top lets drivers soak in the sun. A raised chassis preserves the all-terrain vehicle’s beach-cruising legacy, and the vehicle’s interior is completely waterproof.
The E-Méhari’s new design is reminiscent of the Cactus M concept car Citroën revealed at the 2015 Frankfurt Motor Show. Underneath the fun exterior, the car’s platform, drivetrain and technology that are evolutions of the transmission systems developed by Oerlikon Graziano for Bluecar, the vehicle used in Paris-based Autolib’s successful car-sharing program in cities around the world. Autolib is owned by French investment and industrial holding group Bolloré.
Since the vehicles do not typically travel long distances or at a high rate of speed, they are actually ideal candidates for the electric gearbox and transverse electric motor. However, designing an electric transmission for an ATV required some adjustments. “The transmission doesn’t look any different externally, but inside it is upgraded to be stronger and more silent,” says Michele Schiavoni, senior area manager of Oerlikon Graziano’s Drive Systems Segment.
To make the electric car’s performance match expectations, the team worked on increasing the power and torque, moving the transfer case further from the original applications, and adding a stronger differential. “The result is better acceleration and enhanced driving experience for the consumer,” says Paolo Mantelli, vice president and head of global automotive sales and business development in Oerlikon’s Drive Systems Segment.
The E-Méhari’s head-to-tailpipe makeover makes it as much a fashion statement as an automobile choice. It has had an enthusiastic reception by both automotive and technology press as a bold and innovative new option in the electric car market. While the car is sure to be a favorite among sustainably minded Millennials, it also appeals to more mature market segments who fondly remember the hip vehicle from its heyday.
Soaring wage prompt Chinese apparel makers turn to Vietnam
China exports about USD169 billion worth of clothing annually. It used to be the unrivalled textile king of Asia. But with wages in China having doubled in the last five years and apparel makers there under heavy pressure from clients to cut costs, companies are increasingly moving production of low value-added goods out of the country.
Chinese apparel makers are prompted to shift their production to neighbouring Vietnam, where labour costs are nearly 60 % lower. Although such moves does involve a certain amount of risk due to the nations’ territorial dispute in the South China, among other factors.
Nameson Holdings, maker of sweaters and other knitwear to order based in Huizhou, Guangdong Province plans to increase production in Vietnam. The company began turning out products in the Southeast Asian country in 2015 at a factory in the suburbs of Ho Chi Minh City. It expects to complete the second phase of construction at the plant in April next year.
Nameson mainly supplies garments to Japan’s Fast Retailing, operator of the Uniqlo chain of casual clothing stores. Over half of the Chinese company’s revenue comes from sales to the Japanese retailer.
Nameson’s production shift is partly due to a 2009 economic partnership deal that has in principle eliminated tariffs on Vietnamese textile exports to Japan. Nameson is trying to expand its customer base in Japan.
China’s Bosideng International Holdings, a major manufacturer and retailer of down jackets, is also boosting output in Vietnam. It currently produces garments on a trial basis at a Vietnamese textile factory affiliated with Japanese trading company Itochu, with which it has a capital partnership. Bosideng will closely monitor the situation at its Vietnam plant and base its expansion moves on developments there.
Bosideng Chief Financial Officer Mak Yun Kuen said that their clients are increasingly looking for a cross-border supply network, and that’s partly why Bosideng is missing out on potential orders in original equipment manufacturing(OEM). The shift to Vietnam is intended to cut production costs.
But with the U.S. President-elect Donald Trump announcing his intention to pull the U.S. out of the Trans-Pacific Partnership, a free trade accord encompassing 12 countries, including Vietnam and Japan. The shift of textile production by Chinese businesses to Vietnam wanting to take advantage of lower tariff may slow down.
Also setting up operations on foreign shores carries risks. In the spring of 2014, Vietnamese protesters gathered for a huge demonstration against China’s oil exploration in the South China Sea. Chinese and Taiwanese companies were targeted by violent protesters, leading to supply chain disruptions.
Italy’s textile-fashion exports on a roller-coaster ride as markets and habits change
Forced to follow the rollercoaster of the markets, the Italian textile-fashion industry is looking for a strategy to contain the damage and continue growing, albeit in small steps.
Comparison of figures from 2016 and 2015 prepared by the Sistema Moda Italia (SMI) show how sudden and frequent the changes in terms of markets and consumer purchasing behavior can be.
In the first seven months of the year, the textile and fashion exports to Europe have picked up the pace (+2.2 % in EU-28 to EUR 9.7 billion), reaching 56 % of the total: the driving forces were Germany (+2.7 %), France (+2.2 %), the United Kingdom (+3 %) and Spain (+4.4 %), that is, the main European sales markets for the sector.
But non-EU markets triggered alarm bells (exports fell 1.6 % for January-July to EUR 7.7 billion) and especially for the United States (-6.2 %). Whereas in 2015, when the US market — the sector’s third-largest and the leading non-EU market–posted double-digit growth.
In the first seven months, there was also a drop for Hong Kong (-2.1 %) and China (-1.4 %), while Russia’s decline slowed (-1.4 %) and, as SMI notes, is slowly recovering ground.
Overall, the sales abroad for January-July as recorded by SMI were up 0.5 % (compared to a gain of 2 % in the first half of the year) due to the slowdown registered in the month of July. The textile industry (+1 %) for once did