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

New tire testing equipment installed at Smithers Ohio facility

New equipment to measure a tire’s footprint, load deflection, and inflation pressure loss rate has been installed at the Smithers Rapra Tire and Wheel Test Center in Ravenna, Ohio, USA.

Custom made, the footprint and load deflection machine is designed to shorten testing lead times and support clients’ evolving data requirements.

Read the source article at Tire Technology International

Smithers Promotes New Project Engineer for Dynamic Mechanical Analysis

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Smithers has announced the promotion of Mike Kelly and the hiring of Jeff Wible to its rubber physical testing laboratory in Akron, Ohio.

Mike Kelly has joined the physical testing team as a project engineer, specializing in dynamic mechanical analysis (DMA) testing and new DMA method development.

Read the source article at Tire Review

Smithers sets webinar on silica in tire compounding for Dec. 4

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AKRON — Smithers Group is planning a one-hour webinar for Dec. 4 on the use of silica in tire compounding featuring Bruce Lambillotte, vice president of technical consulting for Smithers and an industry veteran with more than 40 years of experience.

Read the source article at Tire Business

Smithers issues report on all-season, winter tires

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LEATHERHEAD, England—Smithers Market Reports has released its “All-Season vs. Winter Tires to 2024: A State of the Art Report,” which looks at the expected evolution of the all-season and winter tire markets for both OE and replacement tires.

Read the source article at Rubber and Plastics News

OTR tire market growth supported by increased activity in emerging markets

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OTR tire market growth supported by increased activity in emerging markets

Growing mechanization and infrastructure development in emerging markets is increasing demand for agriculture, construction and mining equipment as well as off-the-road tires.

According to a report from Smithers, The Future of Off-the-Road Tires to 2024, the global market for off-the-road (OTR) tires is estimated to be more than 4 million metric tons in 2019, corresponding to a value of $27.5 billion. A five-year compound annual growth rate (CAGR) of 3.8% to 2024 in volume and 4.8% per year in value is expected.

Construction and industrial activity have been leading market supports and drivers in the recent past, but going forward, growth will be more balanced among end-use sectors. For example, improving commodity prices are supporting the mining industry, while economic and population growth are supporting the construction, agriculture, manufacturing and shipping sectors. From an equipment perspective, development of new machines for these industries is driving OTR tire innovation. Products that can handle increased load demands and communicate their condition are now the focus.

 

Volume from mining and construction sectors

The mining and construction segments will continue to represent more than half of the market by volume. Mining and construction growth over the last several years has been restrained by the effects of soft energy and metals prices, but the aggregate mining segment (aggregate used in construction) has helped the overall market grow. Meanwhile, construction, as well as agriculture and industrial, are performing in line with overall economic growth.

Increased demand for agriculture tractors, and construction and mining equipment is being seen in developing countries. The construction and industrial segments have continued their steady market-leading performances from the prior period, 2014-19. As before, only the growth of the smallest end-use segment, the industrial market, will outpace the market as a whole. The increase in manufacturing in developing economies is projected to drive the market for industrial equipment tires. Increased industrial automation is also projected to influence the OTR tires.

 

Regional development

As global economies recover, stabilize and resume growth, all regional markets are expected to grow through 2024. As with many other tire markets, the relatively strong economic performance of developing economies greatly influences the distribution of growth opportunities. With large mining, construction, agricultural and industrial bases in place, the Asia Pacific market is already by far the largest; nearly as large as the more mature North American (including Mexican) and European (including Russian) markets combined. Further growth in Asia Pacific is supported by increasing population, higher levels of agricultural mechanization, recovery in mining, and ongoing construction activity.

 

Changing end-user requirements

Across end-use segments, load requirements are increasing, and tire product and services are a critical element in avoiding downtime. Equipment automation and the use of Big Data and predictive analytics are transforming the OTR tire business into a closer collaboration between OEMs, tire manufacturers and dealers.

Over the next five years, the industry will be more driven by data use, predictive analytics and automation — shifting from a transactional-focused model to a solutions-oriented approach. The mining and construction OTR segments will drive much of this change with OTR tires using integrated sensors for tire monitoring and management.

 

Regulation and standardization

Governments play a key role in shaping trade, driving demand and inspiring product evolution (e.g., sustainability, and potentially standardization). Government spending is also a critical supporter of OTR tire demand related to infrastructure projects and agricultural subsidies.

Unlike other segments of the tire industry, there are no regulations or standards for OTR tires in mining and construction — even in North America and Europe. This presents a problem for some customers and an opportunity for manufacturers. 

Some OTR equipment manufacturers are interested in uniform OTR performance standards including wear, speed/load, traction and temperature; but so far in the European Union, there is no strong lobby pushing standardization or labelling requirements. It is possible that standardization could be most easily achieved if led by a tire or rim association. Down the road, there is potential for European Whole Body Vibration legislation to provide impetus in this area, because the tires are implicated, especially for skid loaders. Simple tire pressure measurement systems (TPMS) that have been a legal requirement in the US since 2008 could also be a possible standard for OTR tires.

For more information on this market report by Smithers, visit https://www.smithers.com/services/market-reports/transportation/the-future-of-off-the-road-tires-to-2024.

 

 

 

 

Smithers Adds Tire & Wheel Business Development Manager

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Smithers has announced the addition of Mark Shackelford as business development manager of tire and wheel for North America as part of the Smithers Materials Science and Engineering division.

Shackelford is responsible for business development efforts for the tire and wheel industry, connecting clients to tire, wheel and snow traction testing, the Smithers Tire Analysis Report and technical consulting. He will work closely with Smithers laboratory operations managers and subject matter experts.

Read the source article at Tire Review

Smithers unifies companies under single brand identity

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AKRON — In a move designed to streamline services for its clients, Smithers Group Inc. is planning to consolidate all of its companies under a single brand identity and motto: “Innovate with Confidence.”

Read the source article at Tire Business

Global tire manufacturing output to grow 3.4% year-on-year

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Global tire production in 2019 is estimated to reach 19.25 million tonnes and is anticipated to grow at 3.4% compound annual growth to 22.75 million tonnes by the end of 2024.

Smithers Rapra’s new report, The Future of Tyre Manufacturing to 2024, estimates the global tire industry’s capital spending to be over US$15bn in 2019. Further growth by value will reflect that of production and demand, with an average annual growth of 3.3% through to 2024.

Read the source article at Tire Technology International

New technologies improve efficiencies in tire manufacturing: New Smithers Rapra report details key trends

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The need for more automation and faster size changes in tires over the last couple of decades has led to an industry manufacturing transformation. This transformation has changed factory design and driven changes in tire building machines, process equipment and tires themselves. Some changes are the result of regulations, heightened OEM and consumer performance requirements, and new tire materials. These improvements in tire manufacturing and others are detailed in the new Smithers Rapra market report The Future of Tire Manufacturing to 2024.

Improvements in manufacturing processes have been ongoing since the first tire factories and have accelerated over the last decade – spurred by the increased focus on environmental issues. The construction of new factories will help meet growing demand and handle new equipment more easily. Advances in automation have also helped significantly, although there are still significant savings to be realized, as well as increasing environmental regulations with which to comply. These together mean that improvements in manufacturing efficiencies will continue to be a focus for tire companies.

Developments affecting tire plants and manufacturing processes are as diverse as the penetration of new vehicle powertrains, logistical burdens, emergence of new markets, mergers and acquisitions, and the increased value and scarcity of real estate.

Regional developments

Tire demand and industry growth are driving manufacturing expansion at both the regional and global level. Distribution of tire manufacturing capacity and production across the major regions of the world is shaped by local tire demand from OEM and replacement market customers and favorable costs of the production factors.

Tire manufacturers tend to establish local factories in their most important sales areas, most recently focusing on Asia, according to The Future of Tire Manufacturing to 2024. The reverse is also happening with Asian producers setting up production close to customers they consider important, such as US-based OEMs. For this reason North American tire manufacturing is showing growth while the mature European market with lose share over the coming five years. Raw material prices are very similar all over the world, but labor and energy costs vary by region or country.

Tire demand drives manufacturing

Global tire demand is the ultimate driver of tire manufacturing, with both vehicles in use generating ongoing tire wear and replacement needs, and new vehicle sales requiring OEM tires to be fitted. Overall global tire demand is expected to grow 4% per year in unit terms in 2019-24.

The global tire industry as measured by tonnage of production is estimated to be 19.25 million tons in 2019, and is anticipated to grow at a 3.4% compound annual growth rate through 2024, to 22.75 million tons.

 

This growth is being driven and shaped by a variety of economic, technology and regulatory, demographic and consumer trends at the global, regional and national level, including alternative powertrains and autonomous vehicles, improvement in materials including sustainable substitutes and changing customer requirements like greater fuel efficiency with reduced emissions. There is a continuing high-performance trend towards larger OEM tire sizes/rim diameters, as well as ongoing pressure on automakers to meet emissions and fuel economy standards for individual vehicles as well as fleets, while tire companies adapt to consumer labelling schemes in Europe and increasingly, elsewhere.

Influence of vehicle mix and design

Trends in both conventional and emerging segments of motor vehicles have a critical influence on tires requirements and manufacturing, requiring a lot of planning and flexibility. For instance, a continuing shift towards light trucks away from passenger cars in developed markets coexists with growth in developing markets in entry level vehicle segments. The shifts at the OEM level have been underway for years, as seen by the continuing high growth of higher performance vehicles as well as eco-friendly vehicles and fleets.

Changes in tire types and design

A tire’s key required or desirable characteristics include safety, reliability, wet and dry traction, snow performance/wet performance, handling, high rolling efficiency, noise and life (miles)/longevity. New tire developments are constantly occurring, and there are substantial changes every year. Tire attributes in flux include tread/shape, material types and material chemistry, among others, and that does not even include the many concept tires.

Tire makers have made their primary commitment to produce ever more technically advanced tires (e.g. with sensors to measure tread depth, temperature and provide real-time alerts to drivers), run-flat tires including self-sealing tires, self-inflating tires, air-free tire  technologies, and reduced noise or noise-dampening tire technology (important for quiet electric vehicles).

Technology impact on tire manufacturing to produce these technically advance tires includes new molds, laser carving tools, new test equipment (especially for noise), as well as material changes such as different resins, silicas, and aramid fiber.

EV tire requirements

Use of electric vehicles (EVs) is on the rise and one obvious effect of the uptake of electric powertrains is the increased complexity of tire varieties. This includes the further SKU (stocking unit) proliferation from increased variation in OE tire types and sizes. Tire wear concerns with EVs make higher wear resistance critical, since traditional tires wear 30% faster on EVs than on conventional vehicles.

EV tires require optimized footprint shape and contact pressure distribution to avoid irregular wear. Maximizing battery range requires continued reduction of rolling resistance, and the additional weight of EVs may require even lighter weight tires. Quiet electric vehicles require emphasis on noise reduction on top of existing pressure from labeling schemes.

AV tire evolution

Many EV tire changes also apply to autonomous vehicles (likely to be all or mostly electric), but the introduction and spread of autonomous driving means that further changes are emerging and will have to be scaled up alongside more traditional manufacturing.

Tire sensing and communication capabilities are emerging at OE and aftermarket levels. Various types of tire condition and wear sensors and intelligent tires are in development, with some approaching market readiness in advance of the big future shift to autonomous vehicles.

Autonomous self-steering cars will mean that tire-vehicle communication becomes more important meaning tire sensors will be needed. Connected tires will contribute to road sensing, vehicle operation, and predictive maintenance (wear/damage sensing).

Emphasis on low noise and high ride quality will increase. Reliability requirements may be higher, increasing potential market for run-flat tires and eventual non-pneumatics. As AVs become the norm, the light vehicle tire may characterized by their tall and skinny shape (for aerodynamics and other attributes), sensor technology, no speed rating (driving speeds will be programmed and limited), better ride and less NVH (noise, vibration and harshness), ultra low rolling resistance (improving fuel economy), possible run-flat technology (if it can be lightweight enough) and labeling for compatibility.

For more information about the Smithers Rapra market report “The Future of Tire Manufacturing”, visit: https://www.smithersrapra.com/market-reports/tire-industry-market-reports/the-future-of-tire-manufacturing-to-2024

Janine Young is a career b2b communications professional with a background in trade journalism, corporate communications and public relations. She is a member of the Smithers Rapra reports and consultancy team that publishes market reports for members of the tire and rubber industries. She is editor of the Smithers Report, a subscription news service that focuses on tire and rubber industry trends and technology.

Read the source article at smithersrapra.com