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

Goodyear Marks 75 Years at Proving Grounds with Facility Expansion

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As it celebrates its 75th year of tire testing operations in San Angelo, Texas, The Goodyear Tire & Rubber Company is planning two new expansion projects at the facility.

Goodyear has added a second vehicle dynamics area – a 324,000 square foot paved pad – and is currently building an additional evaluation facility for off-the-road products that will include equipment for testing earthmover tires.

Read the source article at Tire Review

Professor works with NASA to design better tires for Mars

CLEVELAND (AP) — Nine years ago, NASA’s Mars rover Spirit sent its last signal from the Red Planet. The rover had ground to a halt on the sands of Mars, its tires sinking and spinning futilely in the fine-grained particles. “Spirit got stuck (and it) ended its mission,” said Heather Oravec, a mechanical engineering research associate professor at the University of Akron who is contracted to work full time at NASA Glenn Research Center in Cleveland. Spirit was willing, but its tires were weak.

Read the source article at SFGATE

The balancing act: tires and electric vehicles

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Tires all look alike. But to get the best out of an EV, tire makers have developed a whole new category of tires. Michal Majernik of the Tire and Rubber Association of Canada explains this evolving industry.

A new breed of car has hit the roads. EVs are here to stay, and it does not come as a surprise that EV tire requirements differ from the mainstream car tires for internal combustion engine (ICE) vehicles. While it is true that traditional passenger tires can be installed on an EV, the EV tire segment is evolving. How are EV tires designed? The core considerations taken into account are…

Subscribe to Automotive Innovations Magazine to read this article http://www.auto-innov.com/

Read the source article at Home – Auto-Innov

Forestry equipment tire market analysis

PMR delivers key insights on the global forestry equipment tire market in its latest research report, Forestry Equipment Tires Market: Global Industry Analysis 2013 – 2017 and Forecast 2018 – 2028.

On the basis of insights and findings in the report, the long-term stance for the global forestry equipment tire market is expected to be positive with an estimated value CAGR of 5.7% during the forecast period.

Read the source article at Tire Technology International

Scrap Tire Conference set for Dec. 4-5

GREENVILLE, S.C. — The Scrap Tire Research and Education Foundation will host its 8th Biennial Scrap Tire Conference for Dec. 4-5 in Greenville.

Read the source article at Tire Business

USTMA Launches First Industry Sustainability Report

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WASHINGTON, DC – January 28, 2019 – The U.S. Tire Manufacturers Association (USTMA) today released its first U.S. industry sustainability report presenting its members’ collective progress and shared vision for a sustainable U.S. tire manufacturing industry.

“Sustainability drives our members’ business practices and operating principles,” said Anne Forristall Luke, President and CEO of USTMA. “From engineering innovations that maximize tire longevity and performance, to ensuring driver and employee safety, to preserving the environment throughout the life cycle of a tire, our members are continually looking for ways to improve the societal contributions of their products and operations.”

Read the source article at U.S. Tire Manufacturers Association

Tire makers, universities collaborate on tire research consortium

BLACKSBURG, Va. — The Center for Tire Research is a consortium involving industry and academia that largely has operated under the radar since its inception in 2012 but quietly has played an effective role in the tire business.

Read the source article at Tire Business

Consumer and retail trends driving growth of tire market e-commerce

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E-commerce has been a key business disruptor across all industries and is forcing change, innovation and growth in the tire market. Still relatively new to the business-to-consumer replacement tire market, online tire sales sites have become significant for consumer research into tire types, attributes, reviews, pricing and availability. This trend and the expansion of e-commerce in general are leading to growth in online sales of tires, according to a new Smithers Rapra report, The Future of E-commerce for Tire Markets to 2023. (TRAC Members receive 15 per cent discount).

Across major tire market segments and geographic regions, the number of B2C replacement tires purchased online is estimated by Smithers Rapra at nearly 100 million units in 2018, or about 6.5% of the global market. This is expected to rise by an average of almost 19% per year to over 236 million in 2023, when the share will be nearly 13%.

 

E-commerce tire sales channel market 2015-23, by volume (million units)

 

Source: Smithers Rapra

 

Value growth will be somewhat higher, at 19.7% per year CAGR, from $7.1 billion in 2018 to $17.3 billion in 2023, faster than unit growth and reflecting modest price increases. While a degree of price competition within the online channel and versus offline retail will continue, the convergence of online and offline channels and the increasing importance of user experience relative to price will support higher prices in the channel over time.

End-use applications

Reflecting the numbers of vehicles in use, rates of tire replacement and rates of e-commerce penetration, the passenger car and light truck (light vehicles) segment is by far the largest, at 81% of volume in 2018, followed by motorcycles (12%) and then medium and heavy trucks and buses (7%). Light vehicles have been and remain dominant in absolute value and volume terms. In unit terms, motorcycles are a distant second, but in value terms, medium- and heavy duty trucks and buses are the next most important, although a much smaller segment.

Trends driving e-commerce tire sales

 

Consumer behaviour

Consumer preferences are ultimately the main market drivers for tire e-commerce with technology and retail developments enabling the change. Consumer behaviour and retail trends behind the uptake of e-commerce in tires include price sensitivity, reduced brand loyalty, time sensitivity and, increasingly, a desire for an omni-channel, which blends features of online and offline channels (already the case to some extent due to tire installation requirements).

Fitment proliferation

Fitment proliferation, the increasing number of available tire sizes, is also contributing to the growth of tires sales via the internet. This has been driven in part by the increase in rim diameters and the greater use of high-performance tires as OEM fitments, which is putting a strain on physical showroom and inventory space. E-commerce options help retailers and customers alike with education and availability. 

Growing economies and emerging markets

General economic and demographic growth serve as top drivers for tire e-commerce. B2C replacement tire e-commerce was initially a phenomenon of developed markets, led by Western Europe, followed by the US, which still enjoy the highest penetration rates. However, Asia-Pacific has already become the largest in unit terms and is on track to pass Europe in value terms during the forecast period, due to its large population and rapidly growing tire market (mostly motorcycle tires). Greater internet penetration and e-commerce readiness in developing markets are fueling the expansion of online tire sales. Very rapid growth will come from Eastern European countries and emerging economies such as China, India and Brazil, where levels of e-commerce penetration and vehicle density are comparatively low and growing.

For more information on the Smithers Rapra market report The Future of E-commerce for Tire Markets, visit https://www.smithersrapra.com/market-reports/tire-industry-market-reports/the-future-of-e-commerce-for-tire-markets-to-2023

Global Tire Intelligence Report

New Analysis. The world’s tire industry revenues and profitability in the first half of 2018, and analysis of the global situation.

Read the source article at tireindustryresearch.com