Market Definition
Tires play a crucial role in automobiles by performing several functions, including holding the vehicle's weight, transmitting energy while accelerating & braking, changing or maintaining direction, etc. They also provide traction between the vehicle & road to absorb shocks. Usually made of rubber, tires comprise tread, beads, joint-less cap plies, & other materials, including synthetic rubber, polyester, carbon black, etc. Worldwide, tires are available in a wide range of sizes & styles to suffice the varied requirements of different vehicles & customers. The escalating sales of passenger & commercial vehicles in emerging economies worldwide are driving the global tire industry. Moreover, both developed & developing countries are witnessing a rapid rise in infrastructural activities, i.e., resulting in higher demand for construction vehicles and, consequently, tires.
Market Insights
The Global Tire Market is expected to grow at a CAGR of 3.85% during the forecast period 2023-2028 and would reach USD 318.57 Billion by 2028.. With the emergence of more efficient vehicles and a smoother infrastructure, the global tire market is experiencing rapid growth & changes. The rise in vehicle production in developing countries and increased competition among tire manufacturers are the prime aspects projected to drive the market in the forecast years. Besides, since modern farming methods are becoming increasingly popular nowadays, there's a growing focus on mechanizing farming activities, which would result in a boom for the tire industry in the agriculture sector.
Considering the Covid-19 scenario, the import-export of essential raw materials required for manufacturing automotive tires reduced abruptly amidst the pandemic, resulting in decreased automobile usage. The steep decline in the production of new vehicles & stringent movement resulted in reduced production & delayed replacement of tires and has shaken the industry. However, in the later phase, new strategies are implemented by the players to sustain the market in any situation that comes unannounced.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2018-21 |
| Base Year: 2022 | |
| Forecast Period: 2023-28 | |
| CAGR (2023-2028) | 3.85% |
| Regions Covered | North America, South America, Europe, Middle East, Russia & CIS, Africa, Asia Pacific |
| Key Companies Profiled |
Bridgestone, Michelin, Goodyear, Continental, Pirelli, Sumitomo, Hankook, Yokohama, Cheng Shin, Zhongce Rubber, GITI, Toyo, Kumho, Apollo, CEAT, MRF, Others |
| Unit Denominations | USD Million/Billion |
In fact, several tire manufacturers are actively working on countermeasures to minimize the impact by collaborating with global automotive OEMs (Original Equipment Manufacturers). Besides, they are also vigorously extending their services to online platforms with responsive customer service. In addition, their digital transformation to engage with potential buyers has further been a game-changer, resulting in a recovery of the tire market. Numerous vehicles worldwide are back on roads and are allowing the market to flourish & recover from revenue losses.
In addition, the introduction of rimless, airless, run-flat, & green tires shall also drive the Global Tire Market over the forecast years. Among these innovations, Run-flat tires allow you to continue driving your vehicle even they have got punctured, thereby giving you time to find a shop or a safe place to change them.
On the other hand, since the automotive industry has become increasingly interested in establishing sustainability strategies based on ESG management, green tires have been developed. These tires comprise only carbon black and offer lower rolling resistance, enhanced fuel efficiency, & better grip on wet roads than conventional tires.
Nevertheless, the rapidly expanding Electric Vehicle (EVs) industry due to various initiatives by governments of different countries worldwide to curb carbon emissions caused by ICE vehicles and the rapid depletion of fossil fuels, i.e., leading to the increasing adoption of EVs, is also contributing significantly to the overall growth of the global tire market. The most prominent factors driving tire sales for EVs include growing concerns over vehicle maintenance & safety, the longer average life of vehicles, and more kilometers driven per year.
Recent Developments in the Global Tire Market
Market Segmentation
Based on Type of Vehicles:
Of them all, Passenger Cars are projected to dominate the Global Tire Market with the largest share during 2023-28. Modern Passenger car tires are made up of different materials like natural rubber (NR), synthetic rubber (SR), and thermoplastic elastomer (TPE). The widespread use of these materials while manufacturing passenger car tires owes to their beneficial properties, including high mileage, low rolling resistance, and good gripping on wet roads.
Besides better durability, these materials provide a better wear resistance than materials like steel-belted radials used earlier in passenger car tires. The mounting sales & production of vehicles and the growing interest of consumers in luxury vehicles, such as SUVs & CUVs, especially across countries like India & China, are crucial aspects projected to drive the global tire market for passenger cars over the forecast years.
On the other hand, a significant rise in car rental & sharing services worldwide is leading to the increasing sales of LCVs (Lightweight Commercial Vehicles), viz., minivans, pickup trucks, & buses, which, in turn, is driving the global tire market. Moreover, the rapidly expanding industries like manufacturing, processing, logistics, tourism, & hospitality are also creating a substantial demand for LCVs across different regions across the globe, which is another crucial aspect projected to drive the Global Tire Market for LCVs in the years to come.
Furthermore, three-wheelers are also expected to contribute decently to the Global Tire Market growth during 2021-26. Carriers or passengers are transported, usually through three-wheelers that offer short- to medium-distance public transportation, last-mile connectivity for goods transportation, etc. Three-wheelers are rapidly gaining popularity worldwide due to their superior fuel efficiency, compact design, cost-effectiveness, & low emissions. Moreover, they require relatively lower maintenance than heavy- or medium-duty trucks.
Based on Type of Tire:
Of both, Radial tires dominate the global tire market, owing prominently to the superior strength & flexibility they offer. Radial tires absorb impacts & shocks and provide better comfort to drivers. They transfer more power of the vehicle to the ground, which helps lower fuel consumption & enhances performance. The treads & sidewalls of radial tires function independently. Moreover, their characteristics like lesser vibrations, prolonged tire life due to less heat generated, and reduced vehicle maintenance costs are other crucial aspects further contributing to their burgeoning sales worldwide and dominance in the global tire market.
On the other hand, the demand for Bias tires is projected to observe significant growth over the forecast years, mainly due to the surging mining & construction activities and farm mechanization worldwide, i.e., infusing the demand for equipment like excavators, loaders, heavy trucks, etc., and, consequently, Bias tires.
Due to the crosshatch construction, these tires offer tougher sidewalls, allow smooth rides on rough surfaces, and are less expensive than radial tires. However, the tread of Bias tires tends to wear fast due to high rolling resistance (HRR) & high traction, which affects the fuel economy. Hence, their overall demand is relatively much lesser than radial tires.
Based on Season:
Of these three, the demand for All-season tires is likely to grow significantly during the forecast period since they offer superior traction in both wet & dry road conditions. They are well-suited for driving vehicles across regions with light winters & summers and wet roads. Their year-round performance in such weather conditions makes them an ideal choice among users. Besides providing drivers with a safe & confident driving experience, all-season tires perform adequately in all seasons.
Moreover, the tread pattern of all-season tires has specially designed blocks & grooves to ensure smooth water evacuation in wet road conditions. On the other hand, on snowy or cold & frozen roads, long & numerous threads present on the tread help them grab the surface and provide sufficient traction & stability to the vehicle, thereby ensuring a smoother & quieter ride. Hence, based on the factors cited above, their global demand is considerably higher than other tires.
Regulatory Landscape in the Global Tire Market
Regional Projection
Geographically, the Global Tire Market expands across:
Amongst all regions globally, Asia-Pacific is expecting the largest share of the Tire Market during 2023-28, owing to the burgeoning sales of passenger & commercial vehicles in emerging economies like China & India on account of rapid urbanization & increased industrial activities. As a result, automotive & tire manufacturers are establishing production plants & expanding their presence across the region. Various strategic collaborations between automakers & tire manufacturers in India are also augmenting the regional market growth.
Moreover, massive investments in Asia-Pacific's automotive sector due to low production costs, economic labor, flexible norms for emissions & safety, and various government initiatives for FDIs have also contributed to the burgeoning tire sales in the region. Besides, countries like India, Japan, & South Korea are immensely focusing on their respective agriculture sectors, which would surge the demand for automotive tires for agricultural vehicles across these countries and, in turn, drive the regional market in the coming years.
On the other front, North America is anticipated to show steady market growth in the coming years, owing to an upsurge in the demand for high-performance tires, coupled with notable innovations in tire technology. Across the region, the US is experiencing mounting EV sales and the rapidly developing technologically advanced autonomous vehicles. Moreover, changes in taxation policies and increasing consumer inclination toward durable & comfortable tires are also contributing considerably to the tire market in the country.
Furthermore, the surging popularity of pickup trucks & similar LCVs (Light Commercial Vehicles), significant investments by tire manufacturers in making green tires, and the soaring demand for retread tires are other crucial aspects projected to accelerate the regional market growth in the coming years.
Market Dynamics
One of the most prominent factors projected to drive the Global Tire Market during 2023-28 is the rapidly surging Electric Vehicle (EV) production across developing countries. Growing awareness about the environment, coupled with increasing oil & gas prices worldwide, are shifting consumers toward buying EVs, which, in turn, would contribute significantly to the global tire market growth.
Electric cars require special tires for a variety of reasons. In comparison with ICE (Internal Combustion Engine) vehicles, tires used in EVs have to deal with more weight & provide better torque. Hence, with burgeoning EV sales across developed countries, the demand for their tires is also rising significantly, which, in turn, would drive the global tire market in the coming years.
The volatile raw material prices might restrain the growth of the Global Tire Market during 2023-28. As for all other commodities, the prices of raw materials determine the tire cost. The surging prices of butadiene & EPDM rubber due to their limited production are hampering the production & sales of tires. Consequently, the lack of a constant raw material supply has caused tire prices to rise uniformly, with replacement costs becoming unaffordable for many prospective buyers.
Furthermore, though tire manufacturing companies are constantly investing in developing sustainable materials, the amount of waste produced by tires is also increasing substantially. Due to this, governments of various countries worldwide have imposed stringent guidelines for tire manufacturers to adopt sustainable waste management solutions, which would lead to additional costs and, in turn, hinder the overall market growth, owing to the limited number of buyers.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The Tire Market is projected to grow at a CAGR of around 3.85% during 2023-28.
A. The rapid increasing penetration of Electric Vehicles is driving the tire industry while fluctuating prices of raw materials are likely to hinder the market growth during 2023-28.
A. Goodyear has introduced a new ElectricDrive all-season tire along with two new sizes of the ultra-high-performance (UHP) ElectricDrive GT tire. And Ceat revealed new WINENERGY X3-R tires specifically designed for electric buses to be used on urban roads.
A. Bridgestone,Michelin,Goodyear,Continental,Pirelli,Sumitomo,Hankook,Yokohama,Cheng Shin, Zhongce Rubber, GITI, Toyo, Kumho, Apollo, CEAT, MRF, Others
A. Passenger Vehicles are anticipated to emerge as an area of remunerative opportunities for the leading players in the Tire Market during 2023-28.
A. Asia-Pacific would offer substantial growth prospects in the Tire Market during 2023-28.
