New Smithers report outlines global tire industry growth amid market and technology challenges

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Continuing global economic growth through 2024 is supporting vehicle production, the number of vehicles in use, and the number of tires supplied for these vehicles. A new report from Smithers, The Future of Global Tires to 2024, outlines the factors that are contributing to tire industry growth as well as the evolution taking place with products and services within the industry.

The global tire market is well positioned for further growth as it adapts to meet challenges across a complex matrix of tire type, end-use and regional markets. Estimated at over 2.36 billion units in 2019, topline volume tire growth is expected to continue at a 3.1% compound annual rate from 2019 through 2024, according to Smithers data.

In 2024, total global industry tire volume will reach 2.75 billion units. Value will grow somewhat faster due to a firmer raw material price outlook than in the recent past (and moderated by manufacturing efficiency gains). The 2019 market value of $239 billion will rise to $280 billion in 2024, for a 3.2% compound annual growth rate, Smithers research shows.

The drivers of growth in the global tire industry are best seen in tire types and end uses, grounded by the mature and traditionally technologically-advanced markets (such as the US, Western Europe and Japan), but increasingly dominated by volume and innovation in emerging markets in Asia  ̶  primarily China and India.

Raw materials

The global consumption of raw materials by tire manufacturers is showing continued growth from 2019’s estimated 49.1 billion tonnes. Growth is approximately 2.7% per year, to 55.95 billion tonnes in 2024. Growth of raw materials is slower than tire unit volume due in part to greater efficiency (waste reduction) and efforts to reduce tire weight.

The share composition of materials used is remaining fairly stable through 2024, with exceptions for some of the materials finding greatest use in energy (aka green) tires where low rolling resistance continues to gain in importance, and within categories such as elastomers, where greater sustainability is being pursued (e.g. through reduction in fossil fuel derived ingredients, and in favor of renewables, where possible). 

Growth in tire types

“General” tires account for the bulk of passenger (car, light truck, motorcycle) and goods (medium and heavy trucks, buses) transportation. These are relatively undifferentiated, non-speed-rated, lower-tier, mostly replacement tires for the over-the-road mass markets of light vehicles, truck and buses and motorcycles, particularly in large but still developing markets (especially China and India). They are still about four-fifths of the market by volume, but this share is steadily declining.

Growing much more rapidly are specialty tires, which include high-performance (aka speed-rated) and premium versions of tires for the major ground/over-road end uses, as well as more specialized types such as energy (aka green, or low rolling resistance, LRR) tires, run-flats, and winter tires.

Specialty tires by this definition are the area in which the leading mass market innovations are occurring, primarily in low rolling resistance tires, and higher-performance tires for larger, more powerful vehicles (such as SUVs, sports cars, electric vehicles). Volume growth is expected to average an impressive 6.6% per year from 2019 to 2024. The smaller segment (in volume, though more important in value terms) OTR (off-the-road) tires are also growing at an above-average rate. However, corresponding more exactly to specific end uses, we consider their prospects more in that context than by type.

Tire market by type, 2024, by volume (% share)

 

End-use markets

The segmentation of the global tire market by end use provides the most straightforward way of understanding the drivers of tire demand. Here, the high-performance, specialty type effect is submerged, but we can see the individual drivers at the application level. The passenger car and light truck share remains dominant, but the faster growth can be seen in motorcycle and OTR tires.

Declining to 68% of market volume in 2024, the passenger car and light truck segment is characterized by:

  • Strong pressures to meet OEM fuel economy regulations and consumer labeling
  • Further uptake of low rolling resistance tires
  • Continuing popularity of high-performance tires
  • Beginning of adaptation to electric (and to some degree, autonomous) vehicle requirements 

To learn more about The Future of Global Tires to 2024 market report from Smithers, download a brochure at:

https://www.smithers.com/services/market-reports/transportation/global-tire-markets-to-2024