Yes you can dye leather. Depending on the product you may need to use ammonia to strip the old dye off and clean the hyde, then an oiling product is used and finally a water based dye. I re-did an entire Jaguar interior in black and the product I used was called Leatherique. It was some years ago, may want to call Eastwood direct and see if they have a water based dye and try that.
You might be better off just having an upholstery shop re-do the wheel. It will cost alittle more but in the end, it will probably come out a lot nicer. Its a small piece, so the cost of the leather should be low, but most of the cost will be labor.
I would at least get some estimates before you do it yourself with the dye. It couldnt hurt...
I've instaled around 20 leather steering covers, from wheelskins, with great customer satisfaction records. (I've made some $ for the Camaro doing so) You can make the instalation over the existing cover, or removing the actual. You just need to take measurements and order a custom built one. There're two lacing techniques, using one string or two strings, depending on the lacing style you choose. Two string style is more elaborate. This is just an alternative. My 2¢
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