Mitch Katz and his sister Leslie started a leather desk accessory business in Hawthorne, Calif., in 1983, which soon grew into a leather supplier for upholstery and trim shops, which soon grew into a source for leather seat covers for popular vehicles. So began Katzkin Leather Interiors Inc.
Katzkin Leather, now based in Montebello, Calif., has since grown to become a leading supplier to the restyling industry with its full line of not just leather seat upholstery, but complete aftermarket interiors. The company also has been a business pioneer, forging numerous strategic alliances throughout the automotive industry. In 2007, the company was acquired by ClearLight Partners, Newport Beach, Calif.
Miles Hubbard, the company’s director of marketing since 2003, has been involved with the restyling industry and been on the inside of automobile dealerships for the better part of two decades. Recently we asked Hubbard to give Restyling readers some insight from Katzkin’s perspective on the custom restyling market in 2010.
RESTYLING: How has business been for companies like Katzkin? After all, the past year has been tough for the auto industry.
Hubbard: We’re not where we want to be, but business has been good. Some of this can be attributed to our partnerships and dealer relationships with OEMs such as Chrysler, Ford and Volkswagen. We’re keeping an eye on our competitors. We never like to count them out.
RE: What do you think 2010 looks like for the leather interior business?
Hubbard: 2010 looks even better. We have a lot more programs in the works. We will be stretching our marketing arm to a larger demographic while still maintaining our core buyers.
Dodge trucks are big for us; Toyota is huge, as well as Ford trucks. We can provide interiors for everything else, but if you want to know where the bulk is, that’s where you see it.
Katzkin also owns the North American marketing and distribution division of DK-Schweizer, a Malaysian-based manufacturer of automotive interiors that has hundreds of patterns.
I think another part of the reason for our success is our commitment to the restylers that are our customers. We provide them with all the services they could use to help build their business.
We give them free customized marketing materials if they want. We also do custom brochures for restylers. All they have to do is call and ask, and we’ll produce marketing materials for them. We also provide them with other business tools, and they can log into our intranet site to track sales.
We have eight sales guys who cover the country, plus a field tech who is on call to go anywhere to help restylers with installations.
Most importantly, we are now the exclusive sales and marketing representative for Webasto aftermarket sunroofs.
RE: How is the relationship with Webasto going?
Hubbard: It’s going fantastic. They are a German company, with a U.S.-based aftermarket division, but our customer base was about 90% the same. It made sense to collaborate.
We launched a new joint package in February called PLUS, which stands for premium leather upholstery and sunroof. Consumer research shows that the two most sought-after options among car buyers are leather and a sunroof, so we put them together in one package. So they get to customize their interior. We have a lot of confidence in this one.
RE: What do you think makes people migrate to leather?
Hubbard: Leather feels better, it’s easy to clean and it has a higher resale value. Plus, it gives people the opportunity to customize. The world is going to customizing as a way to reflect “who you are.” We can customize a kit in an infinite number of ways with an average turnaround of less than 24 hours. So we fill a niche no one else does.
RE: Who do you think initiates the sale – is it usually the customer who’s looking for an interior look or change, or is the restyler or dealer salesperson who brings up the idea first?
Hubbard: It usually starts with a customer who just wants leather in their car. What we offer is a chance to get a leather interior in a way that you can’t get from the factory. The reason is that the factory bundles leather and sunroofs into a “luxury group” that often includes other options that people don’t want. Many of them say, “I just want leather in my car.” So that’s how we fill a niche. We provide an option for customers who just want leather but don’t want the whole luxury package. It’s far cheaper, plus they have the ability to customize it.
Car owners usually start the process; but some dealers will install a kit just to show their customers what they could get.
RE: What changes have you seen taken place in the auto interior business in the past two decades?
Hubbard: It’s just the availability of patterns for one thing. Twenty years ago, not many patterns were available. The leather was all cut and sewn by hand. We have a system here now where we’re developing three to five new patterns every week, each completely reverse-engineered so they perfectly fit every seat we put them on. A lot more options are available.
Another important change is “just-in-time” manufacturing that we employ here. We can customize interiors with less than a 24-hour turnaround time. In many cases dealers have a very small window to get a customer to buy a car. We’re able to do that for them.