The global automotive tire market size was worth USD 122 billion in 2021 and is projected to reach USD 180 billion by 2030, registering a CAGR of 4.3% during the forecast period (2022 – 2030). Automotive tires are the externally visible, rubber-coated, cylinder-shaped part of a vehicle used to cover the wheel's rim. The tire's primary function is to provide tractive force between the vehicle and the road surface while protecting the wheel rim. Because it is made of rubber, it also offers a flexible cushion, decreasing the impact of vibrations and absorbing vehicle shock. The components of a rubber tire are tread, jointless cap heaps, beads, and other materials, including synthetic rubber, carbon black, and fabric. Increased automobile production, sales across all vehicle segments, and competition among tire producers drive the global automotive tire industry. Additionally, it is projected that incorporating cutting-edge technologies into the production process will accelerate the growth of the automotive tire industry.
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Increase in Automotive Production and Sales across Different Vehicles Segment
Due to quick industrialization, which has increased sales of commercial vehicles, including trucks, tractors, and trailers, the automotive industry has recently seen tremendous expansion. The increased sales of opulent passenger automobiles and premium segment bikes are also influenced by rising disposable income and living standards. Additionally, it is anticipated that sales of electric vehicles will increase during the forecast period. The selling of electric vehicles is further aided by the falling cost of electric vehicle components, including batteries, transmissions, and alternators. As a result, as customer demand for vehicles increases across all market categories, so does the manufacturing of automobiles and the tires that go with them. Moreover, the global consolidation of the automotive sector that results in mergers and acquisitions among international and domestic vehicle manufacturers boost the growth of the automotive industry, influencing the automotive tire market share. Therefore, the development of the automobile sector is expected to increase the overall demand for tires.
The Rise in Competition among Tire Manufacturers
Due to low labor costs, which further reduce production costs and help to fulfill the growing demand for vehicles, significant automakers continue to invest in emerging nations. Due to a rise in the need for cars and the use of collaborative and consolidation manufacturing in the tire industry, the tire industry has had remarkable growth over the past ten years. At the same time, the automotive industry has seen exponential expansion.
In turn, this fosters the expansion of the vehicle tire industry. For off-road and on-road SUVs, Hankook Tire has introduced "Dynapro AT2." Because of their quietness, comfortable ride, and powerful off-road drive, these tires perform at their best in all driving circumstances. In addition, Bridgestone Corporation, the industry leader in tire manufacture, introduced BATTLECROSS E50 motorcycle tires for enduro contests. In the United States and Canada, these tires are available in one front and two rear tire sizes. Thus, such tire manufacturing companies' new strategies for expanding their business across the globe are witnessing intense competition to capture a larger market share. In addition, the global tire manufacturers are showing interest in Pakistan by taking an active step with different strategies. For instance, South Korea's second-largest tire manufacturer Kumho Tyre has sealed a deal with a Pakistani company, Century Engineering Industries, to transfer its tire-making technology for the next ten years due to the rise in intense competition in the rubber tire market. The tire market is also more volatile due to the quick changes caused by this aspect. As a result, tire makers are becoming more competitive, which supports the market's expansion.
Volatile Prices of Raw Materials.
Petroleum-based reinforcing compounds like nylon and polyester are used as raw ingredients in the production of tires. Additionally, natural and synthetic rubber is a fundamental component needed to make tires, whose prices are subject to large swings. Rubber tires are made of tread, jointless cap plies, textile cord plies, steel-cord belt plies, bead reinforcement, apex, and core. Along with the petrochemical reinforcing elements like polyester, fabric, nylon, steel, and rayon, it also includes natural rubber, synthetic rubber, steel wire, and carbon black. The cost of these basic ingredients is a significant factor in determining the tire's final price. Because these metals are traded on a community exchange basis, prices of these commodities occasionally alter due to market fluctuations in the global economy.
Recent price increases for certain essential commodities are driven by inflation and rising demand. Additionally, to meet the demand for tires from the automobile industry, market participants in the automotive tire sector need a significant number of raw materials. A substantial barrier to expanding the rubber tire business internationally is pricing uncertainty for these raw materials.
Fuel Efficiency and Safety Concerns
Governments are enacting strict tire performance restrictions, including fuel savings and wet grip-related braking distance reduction, in response to rising safety concerns. Tire manufacturing businesses will have plenty of growth chances to launch tires that can comply with governmental laws. As a result of increased technological breakthroughs, manufacturers are developing high-efficiency tires that improve automobiles' overall fuel efficiency. Ecsta PA31 pneumatic tires, which may provide excellent performance in automobiles such as sport sedans and coupes, were introduced by Kumho Tire Co., Inc. Additionally, driving ATVs and UTVs on roadways was prohibited for safety reasons. Still, new laws and ordinances are being created worldwide to enable this practice. For instance, the ATV and UTV vehicle ordinance approved in 2013 has been repealed and replaced with a new one by the Sauk County Board in the United States. Therefore, it is projected that favorable government rules for such vehicles would spur market expansion in the coming years.
The global automotive tire market is segmented into season type, vehicle type, rim size, distribution channel, and region.
By season type, the global market is divided into summer, winter, and all-season tires. The passenger car tire segment majorly drives the automotive tire market. The primary factor for the growth of this segment is the exponential rise in the demand for passenger cars globally. Also, the introduction of advanced technology in the manufacturing processes of a tire influences the automotive tire market growth. Developments in the automobile sector are expected to create more opportunities for the passenger car tire market in the future. Car production and sales have significantly increased in emerging countries such as China, India, and Brazil. The growth can be attributed to the rise in people's living standards due to a substantial increase in the per capita disposable income. This is expected to increase the overall demand for four wheelers tire segment. In addition, replacement tires are anticipated to play a significant role in the passenger car tire segment owing to their cost-effectiveness. Moreover, technical advancements and innovations in tires that can increase the overall performance of vehicles would further drive the growth of the passenger car tire segment market during the forecast period.
Vehicle type is divided into commercial vehicles, passenger cars, and electric vehicles. The commercial vehicles segment is further segmented into light & heavy commercial vehicles. The all-season segment was the highest contributor to the market and is estimated to grow at a CAGR of 4.2% during the forecast period. These tires are developed to deal with any weather, whether summer or winter. They are specially designed with an innovative and durable tread that lasts longer and can run on all surfaces. All-season radials offer maximum traction on water-filled roads, just like winter tires.
On the other hand, a firm grip is also guaranteed on dry and sand-covered patches. Most companies adopt a combination of rigid rubber and tread compounds, usually found on winter and summer radials. The tires have stable cornering and strong traction in wet and dry conditions. On wet roads, the specially designed blocks ensure smooth water evacuation, reducing the risk of hydroplaning. Moreover, the rise in the sale of vehicles across the globe creates a demand for all-season tires.
Based on rim size, the global market is categorized into less than 15 inches, 15 to 20 inches, and more than 20 inches. The 15-20 inch segment was the highest contributor to the market and is estimated to grow at a CAGR of 4.1% during the forecast period. Most passenger and commercial vehicles have rim sizes ranging from 15 to 20 inches. These tires have better traction since there is more rubber on the road, especially for vehicles carrying more than average weight. Due to their larger sidewall, fewer than 17-inch tires represent the most comfortable ride. The 18-inch tires create a bit more road noise, which is further exacerbated when the car jumps to the 19-inch wheels and tires. By performance, the 19-inch tires allow sharper turn-in and more mid-corner balance, whereas the 17-inch tire feels vague. Many tire manufacturers, such as general motors, Toyota Group, Renault-Nissan Alliance, Honda Group, and Ford, offer rim-sized tires all over the globe. Such applications drive segment growth.
Based on the distribution channel, the global market is bifurcated into OEM and aftermarket. The aftermarket segment was the highest contributor and is estimated to grow at a CAGR of 4.5% during the forecast period. Automotive OEMs are pre-installed channel types in which the tires, rims, and different services are installed with the automobile when delivered to the customer. Original equipment manufacturers (OEMs) create components and machinery that other manufacturers can sell. OEM auto parts are the same as the parts used in the construction of a vehicle since the original equipment manufacturer produces them. Aftermarket parts are made by other vendors and do not necessarily have a consistent quality or compatibility with the vehicle. An increase in automobile sales is anticipated to boost the growth of the OEM-equipped tire market. The OEM-based vehicle tire segment is expected to witness a significant growth rate during the forecast period. Furthermore, adopting advanced technology and research & development activities related to the tires from OEM eventually offer lucrative growth potential for expanding the OEM-based vehicle tire market.
By region, the global automotive tire market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
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Asia-Pacific was the highest revenue contributor and is estimated to grow at a CAGR of 4.5%. The automobile sector is one of the fastest growing sectors due to increased demand for vehicles in emerging Asian markets. The automotive tire is expected to grow at a faster rate in the Asia–Pacific region. The rise in living standards due to a substantial increase in disposable income boosts the growth of the automobile sector in this region.
Furthermore, cheap labor costs and easy accessibility of raw materials are expected to reduce the overall tire production cost in the Asia-Pacific region. This is influencing tire manufacturing companies to increase their market presence in this region. Increasing production capacity and demand for light and heavy vehicles in countries such as China, Japan, India, and South Korea further increases the need for advanced featured vehicles. This, in turn, is expected to drive the demand for tires during the forecast period.
The North American region is the third largest. North America comprises the U.S., Canada, and Mexico. North America is considered the matured automotive market. Manufacturers in North America are working toward reducing labor costs by increasing capital investment or relocating to areas with easy accessibility to raw materials. Initiatives by leading automotive giants focusing on developing advanced tires for passenger vehicles drive the growth of the North American tire market. In addition, an increase in focus on reducing carbon footprints and the rise in the need for fuel-efficient vehicles propels the automotive tire market growth.
Europe is the second largest market. The Europe automotive tire market share is projected to reach USD 49670 million by 2030, growing at a CAGR of 4.3%. The European tire industry is one of the largest and most innovative industries worldwide. Regular upgrades in tire technology increase competitiveness in the European tire market. The European automotive industry is dynamic and is a competitive sector. This is mainly due to a substantial number of automotive OEMs, as leading automotive manufacturers have manufacturing facilities in Europe. The penetration level of light commercial vehicles is more significant in all regions. European automotive manufacturers focus on technical development for efficient safety features and better-quality driving in their vehicles. In addition, companies are adopting features that can increase the fuel efficiency of their vehicle, in turn driving the growth of the automotive tire market in the European region. The surge in automobile sales across different segments and the increase in the operating life of vehicles are the factors that boost the market growth.
List of key automotive tire market manufacturers profiled