Influx of Passenger Vehicles Augurs Well for Automotive Tires Market
Increased market proliferation for passenger and light commercial vehicles in the recent past has bolstered the tire market substantially. Rising demand for last-mile connectivity, increased passenger commute, and growing disposable income in the emerging nations have propelled the passenger vehicle and light commercial vehicle over the past couple of years. Increased industrialisation and soaring economic activities in the developing and developed nations have been instrumental in market growth. This, in turn, has provided a lucrative environment for automotive tire manufacturers. A higher frequency of tire replacements, primarily due to rising vehicle miles, is likely to help the market flourish in the years ahead.
The rising life span of vehicles and growing used cars market has raised the possibility for sustainable aftermarket demand over the forecast period. Emerging economies such as China, India, and Brazil have been fuelling the demand for luxury vehicles, which is likely to boost the low-profile tires demand.
The demand for automotive tires is also being led by buyers opting for used cars that require an overhaul. This is likely to unfold a new opportunity for aftermarket sales over the OEM sales.
Slump in Automotive Industry to Dampen Market Spirit
The automotive industry has been witnessing a drop in demand over the past year or two owing to a multitude of factors. Some of them are attributed to disruption caused by the entry of electric vehicles, a high price point of new launches, and the expected transition towards vehicles complying with stricter emission norms in several nations. The automotive industry also experiences a cyclical fluctuation of demand over the years. Since the last five years, the industry was growing well enough at an average growth of 3%-4%, however, over the last year, the sales have plummeted, which is an indication of cyclical fluctuation. Thus, the slump in the automotive industry is expected to affect the automotive tires market negatively.
In addition, the market is also affected due to COVID-19, which has led to lesser automobile sales. Drop in commute as most offices are moving to a virtual world is expected to discourage sales of automobiles. A disrupted supply chain and hurdles in procuring raw materials have collectively tugged the automotive tires market in the opposite direction as well.
Rising Sales of New and Used Vehicles Fuel Demand for Tires
Development of high performing engine technologies with advanced safety systems and superior aerodynamics has been the priority for automakers. As a result, they constantly investing in research and development to build automotive tires. The inception of the hybrid and electrified powertrains in ICE cars are likely to bring about the incorporation of efficient electric powertrains in automotive tires too in the foreseeable future.
For the purpose of this study, Fairfield Market Research has segmented the automotive tire market report primarily on the basis of the rim size as 12’’-17’’, 18’’-21’’, and 22”. The market displays the demand for passenger and commercial vehicle segments as well.
Further, the market has also been classified by material types such as natural rubber and synthetic rubber. The ply-based segment includes radial and biased types. Tube-based and season type tires are also considered in the research study for a holistic point of view.
Asia Pacific Leaps Forward as Governments Welcome Foreign Direct Investments
Asia Pacific region is turning out to be one of the major automotive production hubs. Key automakers like BMW AG and Volkswagen Group among others have expanded their businesses in the region. Low labour cost, better initiatives taken by government authorities towards foreign direct investment, low capital investment, and cheap overheads have made Asia Pacific one of the better choices over other regions.
Similarly, the tire manufacturers have also set their sales or manufacturing bases in the Asia Pacific regions considering the growing demand from the OEMs. Additionally, easy raw material availability from China and ASEAN countries have helped tire manufacturers to grow their business smoothly over the past years.
Low pricing and better quality offered by Chinese manufacturers is overwhelming the European and African Market. China, Japan, and India boast some of the leading tire manufacturers that are capable enough to expand their business across the globe. The price sensitivity has constrained the major players like Bridgestone Corporation and Pirelli & C. S.p.A. to grow in the Asian region. Nevertheless, change in their existing pricing strategies has aided them in acquiring a long-term contract with some of the large automakers.
Innovation to Remain Integral to Launch Improved Products
The key players of the market rely significantly on the technological advancements and different raw materials utilized in tire production. Manufacturers are focused on building cost-effective and sustainable tires with highly reliable performance standards.
Product differentiation through the use of innovative technologies has been a key strategy to stay ahead of the competition amongst players. Long-term engagements with the OEMs and automakers have been of prime importance for the tire manufacturers with the intent to increase their clientele base. The key players are simultaneously engaged in R&D activities with substantial investments to develop new products at low cost. In an attempt to capture market share, the major manufacturers are adopting different business strategies such as new product development, joint venture, and mergers & acquisitions.
Apollo Tyres Ltd, Bridgestone Corporation, CEAT Ltd, China National Tire & Rubber Co, Ltd, Continental AG, Cooper Tire & Rubber Company, Giti Tire, Hangzhou Zhongce Rubber Co, Ltd, Hankook Tire, JK Tyre & Industries Ltd, Kumho Tire Co, Inc, MICHELIN, Nexen Tire Corporation, Nokian Tyres plc, Pirelli & C SpA, Qingdao Fullrun Tyre Corp, Ltd, Sumitomo Rubber Industries, Ltd, The Goodyear Tire & Rubber Company, Toyo Tire & Rubber Co, Ltd, Yokohama Tire Corporation are some of the major manufacturers.