A VIEW FROM AUTOMOTIVE TEXTILES

PRESENTED BY: Bob Eller President Robert Eller Associates,Inc Ph: 001 330 670 9566 bobeller @prodigy.net www.robertellerassoc.com

PRESENTED AT: EATP EXPANDING THE LIMITS OF POLYOLEFIN TEXTILES Budapest, Hungary May 25, 2004
B/mydocs/papers/budapestex
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 AUTO TEXTILES A COMPREHENSIVE VIEW TEXTILE SUBSTITUTION DRIVING FORCES/TARGET MODULES EUROPE/N.AMERICA AUTO TEXTILE DIFFERENCES VALUE ADD STRATEGIES/VALUE CHAIN SHIFTS TEXTILE ROLE IN PROCESS COST SAVINGS THE FOAM/TEXTILE INTERFACE FLOOR/ACOUSTIC MODULES NEW ENTRANTS VIA LIGHT WEIGHT FIBER MATS HEADLINER COMPETITION PATHS-TO-MARKET SHIFT/ROLE FOR PO TEXTILES BASED ON : -SOFT TRIM MULTICLIENT (REA) -AUTO NONWOVENS MULTICLIENT (REA/J.R.STARR) 2

PRESENTATION HIGHLIGHTS

EC O NO M

TE CH NI

M AR KE T

AN ALY S IS

M anagem ent

A utom otive Interior Soft Trim :

S kins, Foam s, C oated Fabrics, Textiles, and Acoustic B arriers
C O AT ED FAB R IC S

CA L

IC

D EC ISIO N S

SK IN S M O D U LE FAB R IC AT IO N AN D IN T EG R AT IO N T EC H N O L O G IES

T EXT IL ES (W O VEN , N O N -W O VEN )

FO AM S

C AR PET

SU B ST R AT ES

AC O U ST IC B AR R IER S

R EQ U IR EM EN T S O C C U PAN T SAFE T Y AC O U ST IC R EQ U IR EM EN T S W EIG H T ELV L EG ISL AT IO N EST H ET IC S T ELEM AT IC S IN T EG R AT IO N SEN SO R Y SM E LL

IN T ER IO R M O D U LES - C O C K PIT - H EAD LIN ER - DOOR - FL O O R /AC O U ST IC S - T R U N K LIN ER - SEAT IN G - PIL LAR C O VER S

C O N ST R AIN T S M AN U FAC T U R IN G EC O N O M IC S Q U AL IT Y C R AFT SM AN SH IP PR O D U C T PO SIT IO N IN G SU PPLY C H AIN M AN AG EM EN T

R obert E ller A ssociates, Inc.

slide-covautointsofttrim701 02.vsd

Opportunities for Advanced Technology Nonwoven Fabrics for Automotive Interior Surface and Construction Applications in NAFTA and Europe
COATED FABRICS LEATHER BATTING (SHODDY, FELT)

ARTIFICIAL LEATHER

AUTO INTERIOR FIBERS AND TEXTILES MARKETS

NONWOVEN FACINGS

WOVEN/KNIT TEXTILES NEW LIGHTWEIGHT ACOUSTIC FIBERS

FOAMS (COMPETITION/ COMPLEMENT) March 2004

AUTO TEXTILES..A COMPREHENSIVE VIEW

BATTING(INCUMBENTS VS NEW LT. WT. FIBERS) FACE FABRICS( NWs VS KNITS AND WEAVES) CONSTRUCTION FABRICS BARRIER/ADHESIVE FABRICS SEMI-STRUCTURAL COMPOSITES (LIGHTWEIGHT FIBER REINFORCED THERMOPLASTICS) NONWOVENS(PET,POLYOLEFIN,BICOMPONENT) ARTIFICIAL LEATHERS ROLE FOR PROTEIN BASED FIBERS? NEW GENERATION COATED FABRICS? 5 SMART FABRICS

AUTOTEXTILE SUBSTITUTION DRIVERS

TEXTILE PROFIT SQUEEZE VALUE SEARCH MODULE COST SAVINGS REQUIREMENTS AFFORDABLE LUXURY FABRICS GLASS FIBER ELIMINATION (TOYOTA, HONDA) V.O.C. REDUCTION MONOMATERIALS MODULES SURFACE ESTHETICS (PRINT, 3D, TOUCH) SUBSTRATE/FOAM SHIFT TO POLYOLEFINS NEW SEMI-STRUCTURAL MODULES ACOUSTICS/ENERGY ABSORPTION (COMBINED?) ON-BOARD FUNCTIONS/POPULATED PANELS WEIGHT REDUCTION INCENTIVES
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AUTO TEXTILE GROWTH TARGETS

AIRBAGS: GLOBAL 330 MM SQ.METERS IN 05 HEADLINERS: PROCESS SHIFTS, ACOUSTICS, EA FLOOR/ACOUSTICS TRUNK MODULE: RAPID GROWTH, EA INTEGRATION, SEMI-STRUCTURAL COMPOSITES HOOD LINERS: SHIFT FROM FIBERGLASS? DOOR TRIM: MEDALLIONS, FOAMS, ACOUSTICS SUNVISORS: SHIFT TO EPP FOAM SUBSTRATE PILLAR TRIM: GROWTH OF BACK INJECTION CRAFTSMANSHIP: ALL MODULES
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EUROPE/NAFTA AUTOTEXTILE DIFFERENCES

TARGET MODULE/ KEY PARAMETER
TRUNK/FLOOR MODULE -DEVELOPMENT TARGET IN BOTH REGIONS -EUROPEAN BEER CRATE LEGISLATION -TALL CARS INCREASING FASTER IN NAFTA -EUROPEAN SPARE TIRE COVER DESIGNS MORE ADVANCED (SEE REA PHOTOS) -HIGHER IN EUROPE -FAVORS PO MONO-MATERIAL CONSTRUCTIONS -HIGHER IN EUROPE -WILL ACCELERATE IN NAFTA DUE TO: -FUEL PRICE INCREASES -REVISED CAFE REGULATIONS? -PROFITABILITY PRESSURES ON LIGHT TRUCKS -HIGHLY PENETRATED BY NWs IN EUROPE -HIGHER NW PENETRATION IN EUROPE -DIFFERENT FREQUENCIES, SIMILAR PERF. REQTS -MORE SEVERE IN NAFTA
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AUTO TEXTILE CHARACTERISTICS

RECYCLING PRESSURES WEIGHT SAVE PRESSURES

HEADLINER FACE FABRIC CARPET FACE FIBERS ACOUSTIC PERF. REQTS COST PRESSURES

C O M P A R IS O N O F R E G IO N A L T R E N D S IN A U T O M O T IV E C A R P E T (2 0 0 2 )
120

TUFTED NEEDLE
100

80

PERCENT

60

40

20

EUROPE

JAPAN

NAFTA
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SOURCE: ROBERT ELLER ASSOCIATES, INC. /JOHN R. STARR, INC. AUTOMOTIVE NONWOVENS MULTICLIENT STUDY

CURRENT/POTENTIAL AUTO TEXTILE PROPERTIES

IMPROVED ACOUSTIC CONSTRUCTIONS ELASTIC (NONWOVENS, KNITS) UV RESISTANCE (POLYOLEFIN NWs) CRAFTSMANSHIP (VIA PROCESS PARTNERING) DRAPE/TOUCH NEW FABRIC COATINGS (POs, SILICONES) NEW LUXURY FEEL FABRICS MICRODENIER (NONWOVENS TO NANOSCALE?) SMART PERFORMANCE INTEGRATION OF ENERGY ABSORPTION
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VALUE ADD STRATEGIES

IMPROVED TEXTILE PERFORMANCE VALUE CHAIN POSITION SHIFT MATLS COST SAVINGS (ROLE FOR PO NWs) MODULE FABRICATION COST REDUCTION IMPROVED FUNCTIONAL CAPABILITIES: -MICRODENIER (ACOUSTICS, DRAPE) -ELASTIC PROPERTIES (VIA NEW PO RESINS*) -ENERGY ABSORPTION -SEMI STRUCTURAL CAPABILITIES -SMART TEXTILES
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* E..G FROM DOW, EXXONMOBIL, MITSUI, SUMITOMO

SUPPLY CHAIN SHIFT STRATEGIES FOR AUTO TEXTILE SUPPLIERS

STRATEGY
FORWARD/BACKWARD INTEGRATION OUTSOURCING NEW TEXTILE TECHNOLOGIES

EXAMPLE
-CUT/SEW, LAMINATION -TEXTILE SUPPLIER/MOLDER PARTNERING FOR PROCESS DEVELOPMENT -FOAMING SEAT PADS, HEADRESTS -FOAM/TEXTILE LAMINATION SHIFT -ELASTIC PO NWs (RECENT RESIN DEVELOPMENTS-DOW/EXXON, MITSUI, SUMITOMO) -POLYOLEFIN FOAM LAMINATION -BACK-MOLDING OF KNITS AND NWs FOR PILLAR TRIM -FLAME LAMINATION ALTERNATIVES -ON-BOARD ACOUSTICS -MICRO-DENIER INTEGRATION INTO NW CONSTRUCTIONS -BACK INJECTION -IN-MOLD AIRBAG DOOR SCORING -IN-MOLD TRIM AND ASSEMBLY

SANDWICH LAYER CONSOLIDATION REDUCE SECONDARY OPERATIONS

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CURRENT MODULE FABRICATION (INEFFICIENT)

RESINS

MOLD/TRIM TEXTILE BACKFOAM

MOLD SUBSTRATE

HIGH SCRAP

PU FOAM

MOLDED PLASTIC PRE-MODULE

ADD-ON PARTS

ASSEMBLED MODULE 4-STEP OPERATION

SOURCE: ROBERT ELLER ASSOCIATES, INC., 2004

slide-mod fab 03.vsd

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FUTURE MODULE FABRICATION (IDEAL)

-ADD-ON PARTS -ON-BOARD ACOU. -FOAM LAMINATES -ELASTIC NONWOVENS

VALUEADDED TEXTILE LOW SCRAP

MODULE FABRICATION IN-MOLD ASSEMBLY

DIRECT COMP'DG.

SUBSTRATE RESIN

ADD-ON PARTS?

ASSEMBLED MODULE

(IDEAL) 1-STEP OPERATION

SOURCE: ROBERT ELLER ASSOCIATES, INC., 2004

slide-one step 03.vsd

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AUTO TEXTILES AND PROCESS COST SAVINGS

STRATEGY
IN-LINE FORMING/ IN MOLD FORMING

EXAMPLE/APPLICATION
-EPP FOAM/TEXTILE COMBOs -DOOR TRIM MEDALLIONS -HEADLINERS -FLOOR MODULES -WIDELY USED IN EUROPE -STARTING IN US -FAVORS POLYOLEFIN TEXTILES -ROLE FOR INTERMEDIATE LAYER -FLOOR ACOUSTICS/TRUNK MODULE -DOOR TRIM INTEGRATED ACOUSTICS -SMART TEXTILES -HEADLINER/ENERGY ABSORBER
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BACK MOLDING OF TEXTILES

SANDWICH CONSOLIDATION

ADDING VALUE VIA IMPROVED TEXTILE PERFORMANCE CHARACTERISTICS

STRATEGY
IN-MOLD FABRICATION LIGHTWEIGHT FIBERS SURFACE ESTHETICS

EXAMPLE
-TEXTILES -FLOOR/ACOUSTICS,HEADLINER -MICRO-DENIER NONWOVENS -NEGATIVE FORMING -ELASTIC FIBERS -BETTER ACOUSTICS -IMPROVED DRAPE -REDUCED WRINKLING -JCI CRAFTECH PROCESS -VIA NEW POLYOLEFIN RESINS -DOW, EXXONMOBIL, MITSUI, SUMITOMO HEADLINER
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MICRO-DENIER NONWOVENS

CRAFTSMANSHIP ELASTIC POLYOLEFIN NONWOVENS INTEGRATED ENERGY ABSORPTION

PATHS TO MARKET FOR AUTOMOTIVE NONWOVENS

RESIN PRODUCER RESINS (E.G., PO, PET)

SPUN BOUND NONWOVENS PRODUCER (E.G., FREUDENBERG) NONWOVEN

NEEDLEPUNCH NONWOVEN PRODUCER NEEDLEPUNCHED FABRIC

TO SEAT, HEADLINER, DOOR TRIM PU FOAM FORMULATION LTWT. FIBERS(B) RECYCLED COTTON FIBERS NEEDLEPUNCH NEEDLEPUNCH MAT (SHODDY)

TUFTING

FOAMING OR LAMINATION WITH FIBER MAT

LAMINATE OR BACK-INJECT (HINTERSPRITZEN)

LAMINATE OR BACK-INJECT (HINTERSPRITZEN)(D)

TRIM, DIE CUT, WATERJET(A), OR LASER

TRIM

TRIM

TRIM

DASH MAT

NOTES: OMITS HYDROENTANGLED (ABOUT 6% MKT. SHARE) (A) DOMINANT METHOD (B) E.G., AcT TM (C+A), ULTRALIGHT TM (RIETER), SonoTec AT (LEAR), DUAL IMPEDANCE FIBER (PELZER) (C) HIGH END VEHICLES ONLY (D) EPP FOAMS MAY BE USED FOR HINTERSPRITZEN

FLOOR ACOUSTIC MODULE

TRUNK FLOOR MAT(C)

TRUNK FLOOR MAT

PACKAGE TRAY

DOOR TRIM PANEL

nonwov ptm 03.vsd

SOURCE: ROBERT ELLER ASSOCIATES, INC./ JOHN R. STARR, INC. 17 AUTOMOTIVE NONWOVENS MULTICLIENT STUDY

NONWOVEN PATH-TO-MARKET OPPORTUNITY FOR ADDING VALUE RESIN

NONWOVEN PRODUCTION

NONWOVEN

PREFORM

FOAM LAMINATION NW/FOAM LAMINATE

PU RESIN? SKIVED PU SHEET PO FOAM SHEET?

PU FOAM RESIN

MODULE ASSEMBLY

PREFORMED SUBSTRATE

MODULE ASSEMBLY

MODULE ASSEMBLY

SUBSTRATE RESIN

ASSEMBLED MODULE OEM NOTE: = VALUE ADD OPPORTUNITIES FOR NONWOVENS

nw op val ad 03.vsd

SOURCE: ROBERT ELLER ASSOCIATES, INC/ JOHN R. STARR,INC. AUTOMOTIVE NONWOVENS MULTICLIENT STUDY

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NONWOVENS TARGET TREE (BY CONSTRUCTION TYPE)

MATS

TEXTILES/SKINS

CARPET

SEMI-STRUCTURAL

INCUMBENT -SHODDY -PU FOAM

CHALLENGER -MD NW -N-PUNCH -SPUNBOND -MELT SPUN -LIGHTWEIGHT FIBER MAT(B)

INCUMBENT -KNIT -WOVEN -SKINS -COATED FABRIC -LEATHER

CHALLENGER -NWs -NON-SKIN TECH -LUXURY COATED FABRIC

INCUMBENT -TUFTED -NONWOVEN

CHALLENGER -NW

INCUMBENT -FOAM LAM. -BLOW MOLD -INJECTION

CHALLENGER -LFTPs(A)

NOTES: (A) AZDEL SUPERLITE, SYMALITE (B) FROM RIETER, C+A, LEAR, PELZER

SOURCE: ROBERT ELLER ASSOCIATES, INC., 2004

lg/myfiles/visio/NW Target Tree 04.vsd

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FOAM/TEXTILE INTERFACE
FOAMS COMPETE AND COMPLEMENT FIBERS PO SHEET FOAM/TEXTILE LAMINATES STARTING (EUROPE/JAPAN) PO SUBSTRATES AND FOAMS DRIVING PO NONWOVENS INTO MARKET NEW PO FOAM/TEXTILE INTERFACES: -HEADLINER (ENERGY ABSORBER INTEGRATION) -HEADRESTS -SEATING (STARTING AS INSERTS) -SUNVISORS (WIDELY USED IN EUROPE) -DOOR TRIM MEDALLIONS (RENAULT LAGUNA II) -VW TARGET
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AUTOMOTIVE FOAM/TEXTILE INTERFACES

HOOD ACOUSTIC INSULATOR

INSTRUMENT PANEL

HEADLINER, ENERGY ABSORBER

PILLAR TRIM

PACKAGE TRAY

KNEE BOLSTER

SEAT BACK

DASH MAT

FLOOR SYSTEMS (ACOUSTIC & LOAD FLOOR)

DOOR ENERGY ABSORBER, DOOR TRIM, DOOR MEDALLION

REAR SEAT

TRUNK FLOOR/ LOAD FLOOR

SOURCE: ROBERT ELLER ASSOCIATES, INC., 2004

slide-auto fm tex intfc 21 03 d

DRIVING FACTORS FOR PO FOAM SUBSTITUTION

IN-MOLD TEXTILE/EPP FOAM COMBINATION PROCESSES MICROCELLULAR PO SHEET FOAMS PROLIFERATION OF RADIATION CROSSLINKING PO FOAM TECHNOLOGY LOW COST, NON-CROSSLINKED AND CHEMICALLY CROSSLINKED PO SHEET FOAMS PO FOAM/TEXTILE LAMINATE POTENTIAL MARKET PENETRATION FOR THICK 22 SHEET FOAMS (E.G. FROM DOW)

EPP SEMI-STRUCTURE/TEXTILE COVERING CONCEPT

SOURCE: TARACELL

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TARACELL IP EPP SEMI-STRUCTURE/TEXTILE COVERING CONCEPT

SOURCE: TARACELL
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BMW 6-SERIES DOOR MEDALLION

SKIN VS TEXTILE EXAMPLE SIDE AIRBAG REQUIREMENT

EXAMPLE ENTRY POINT FOR POLYOLEFIN TEXTILE/FOAM LAMINATES

SOURCE: REA PHOTOS

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TEXTILE/PO FOAM LAMINATES

TEXTILE/PO FOAM LAMINATES SHOW POTENTIAL FOR PENETRATION INTO INTERIOR SOFT TRIM MODULES BASED ON:
IMPROVED THERMOFORMABILITY VS. TEXTILE/PU FOAM LAMINATES IMPROVED RECYCLABILITY MATERIAL AND PROCESS COST SAVINGS

TEXTILE/PO FOAM LAMINATES PENETRATION OF PO NWs UV RESISTANCE, ABRASION RESISTANCE ELASTIC PROPERTIES AND MICRODENIER TECHNOLOGY WILL FACILITATE PO NONWOVENS PENETRATION
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COMPARISON OF PU AND PO FOAM LAMINATION

LAMINATION METHOD LAM SPEED M/M TEX/ PUF 30-60 TEX/PO FOAM 10 --SLOWER FOR PO --ESTER-TYPE PUF REQUIRES FLAME RETARDANT NOTE

FLAME

DIRECT CALENDERING HOT MELT FILMS HOT MELT SPRAY SCATTERING

12

12

20 30-60 12

20 20 12
27

PU ADHESIVES PRIMARILY

SOURCE: REA/J.R.STARR AUTO NONWOVENS MULTICLIENT

TEXTILE/FOAM COMPETITION IN FLOOR /ACOUSTIC MODULE

CURRENT MULTIMATL CONSTRUCTION:
HEAVY LAYER (FILLED EVA, SEBS) FOAM OR LIGHTWEIGHT FIBER LAYER CARPET

MAJOR ACOUSTIC TIER 1s DEVELOPING LIGHTWEIGHT FIBER CONSTRUCTIONS REDUCE OR ELIMINATE HEAVY LAYER CONSOLIDATED TRUNK MODULE GROWTH INTEGRATED FLOORS EVOLVING FOAM VS FIBER COMPETITION 28

2004 BMW X3 2.5i-NON HINGED SPARE TIRE COVER

29

2005 FORD FREESTYLE LTD SPARE TIRE COVER

30

EXAMPLE OF CURRENT DASH MAT LAYER CONSTRUCTION

HEAVY LAYER

ACOUSTIC BATTING

CARPET

SOURCE: COLLINS & AIKMAN

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EXAMPLE OF ACOUSTICALLY TUNEABLE FIBER

SOURCE: COLLINS AND AIKMAN

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LIGHTWEIGHT FIBER REINFORCED THERMOPLASTICS (LFRTPs)

LFRTP SUPPLIER QUADRANT AZDEL TOYOTA BOSHOKU OTHER NAME SYMALITE AZDEL SUPERLITE PROCESS TYPE DRY LAID NW PAPER BASED NW? NW NOTE NEEDLED BASED ON ARJOWIGGINS TOYOTA HEADLINERS COMMERCIAL IN 2004

SOURCE: ROBERT ELLER ASSOCIATES,INC

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PET/PO FIBER BATTLE IN HEADLINERS

KEY MODULE FOR NW/KNITTED COMPN. IN FACE FABRIC USAGE DIFFERS BETWEEN REGIONS REQUIREMENT FOR ENERGY ABSORPTION COUNTERMEASURES, NEW LIGHTING APPROACHES & IMPROVED WORKPLACE SAFETY WITH AN EMPHASIS ON: INTEGRATING ENERGY ABSORPTION USE OF LIGHTER WEIGHT ACOUSTIC LAYERS SUBSTRATE BATTLE: LIGHTWEIGHT NONWOVENS (BI-COMPONENT) GR-Pos (QUADRANT, AZDEL, TOYOTA BOSHOKU) EPP BEAD FOAMS? -INTEGRATION OF EA COUNTERMEASURES INTO NWs PO SUBSTRATE APPROACHES FAVOR PO NWs AS FACE 34 FABRIC

NONWOVEN HEADLINER SHARES

100% 90% 80% MARKET SHARE 70% 60% 50% 40% 30% 20% 10% 0% EUROPE NAFTA KOREA JAPAN OTHER NONWOVEN TRICOT

SOURCE: FREUDENBERG VITECH

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POLYOLEFIN AUTOMOTIVE TEXTILE PROPERTY IMPROVEMENT TARGETS

WEAR RESISTANCE-Seating, door medallion UV RESISTANCE-Horizontal exposed surfaces COLORABILITY-Carpet PRINTABILITY-Backmolded pillar trim HEAT RESISTANCE-Hood liner STIFFNESS RETENTION- Headliner/airbags FORMABILITY-Trunk module

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AUTOMOTIVE POLYOLEFIN TEXTILE GROWTH PATHS

PET/PA TEXTILES PET NWs PO NWs PET/PU FOAM LAMINATES PET/PO FOAM LAMINATES PO NW FOAM LAMINATES GLASS/PP BATTING PET BATTING BASED COMPOSITES ALL PO-

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SUMMARY
POLYOLEFIN TEXTILES WILL GROW IN AUTOMOTIVE VIA: -NONWOVENS SHARE GAIN -MICRODENIER NONWOVENS -ELASTIC NONWOVENS -COATED FABRICS -POLYOLEFIN FOAM SUBSTITUTION IN TEXTILE LAMINATE -GLASS FIBER SUBSTITUTES -GROWTH OF SEMI-STRUCTURAL COMPOSITES -GROWTH OF BACK-MOLDING (IN N.A. MARKET) -EUROPE/US TEXTILE/MODULE TECH. CONVERGENCE TEXTILE SUPPLIERS HAVE VALUE ADD OPPORTUNITIES VIA: -TEXTILE PROPERTIES -VALUE CHAIN POSITIONING -MODULE FABRICATION TECHNOLOGY FURTHER PROPERTY IMPROVEMENTS REQUIRED
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ADDITIONAL AUTO TEXTILE RESOURCES

AUTO INTERIOR SOFT TRIM MULTICLIENT (PROSPECTUS): bobeller@prodigy.net ADVANCED AUTOMOTIVE NONWOVENS MULTICLIENT (PROSPECTUS) bobeller@prodigy.net jstarr@ johnrstarr.com INTERIORS AT THE 2004 DETROIT AUTO SHOW (A DOWNLOADABLE PHOTO DATABASE AND COMMENTARY) www.robertellerassoc.com bobeller@prodigy.net
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