Dec 18 , 2015
The global market for truck tires is estimated to see steady, if uneven growth, over the next 10 years according to the latest market research from Smithers Rapra.
The Smithers Rapra report “The Future of Truck Tires to 2025” estimates that 2015 will see the sale of 477 million units. The demand for truck tires on a global basis is expected to grow modestly, but steadily, from 2015 through 2025 at an average year-on-year growth rate of 3.3% per year, reaching nearly 658 million units at the end of the study period.
The market for truck tires is very diverse. It ranges from light passenger vehicles – including crossover utility vehicles, sports utility vehicles, minivans and pickup trucks – up to heavy-duty construction and 18-wheel long-haul tractor-trailers.
Across the major relevant markets for truck tires, economic growth has been uneven in recent years, with slow growth or even contraction in the US, European, and Japanese markets partially compensated for by accelerated growth in the emerging economies of China and India. In 2015, there are signs of some recovery in the US, though Europe remains sluggish, and Chinese expansion is poised for a slowdown.
Global Truck Tires by region to 2025, million units
Global vehicle sales continue to recover from the 2009 trough associated with the financial crisis. A rebound is currently underway in the US market, driven by the advanced age of the average vehicle, low interest rates, and a gradual economic upturn.
At the same time, growth in China has been decelerating, while Japan’s has stagnated and India’s is declining from a peak that was second only to China. In an otherwise turgid Europe, the UK has been a standout.
Looking forward, the picture looks bright in terms of motor vehicle sales, given prevailing assumptions about population growth and expanding middle classes. The Organisation for Economic Co-operation and Development (OECD) expects global vehicle demand to double by 2030. This will support growth in the tire industry, but also puts enormous pressure on the environment and trigger political and regulatory responses that will greatly shape the industry and market alike.
The pressure that tire makers are being put under by original equipment manufacturers (OEMs) to help attain fuel economy and emissions goals is intense in the light truck segment and is growing in the medium/heavy segment as well. The adoption of alternative powertrains such as hybrids and electric drives is changing tire design requirements, and ever more effective low rolling resistance designs are in demand.
Tiremakers are exploring different materials, such as harder wearing nanomaterials, and technologies, ‘intelligent’ tires and non-pneumatic tires. This is part of the wider industry push for improvements in fuel economy and to overcome the current trade-offs between grip, wear and rolling resistance on truck tires.
In addition, manufacturers are seeking out alternative, more sustainable, raw materials to minimise dependence on volatile commodities like natural rubber and oil-derived products.
While mature markets have generally reached peak mobility in terms of vehicle ownership, the middle classes in emerging economies are steadily growing and seeking greater mobility. In 2010, the combined middle classes of Brazil, Russia, India and China numbered about 800 million people. That number is expected to double to around 1,600 million people in 2020.
Meanwhile, it is also predicted that over half of the world’s population will live in cities by 2030. This is the result of migration into cities in the pursuit of economic opportunity in the developing world; societal trends in the developed world – such as the reversal of suburbanization in the US; and government policies designed to encourage or mandate concentration in urban planning.
As world citizens become principally city-dwellers, there will be growth in medium and heavy truck haulage to provide them with goods, as well as light trucks for commercial applications.
Tighter government and environmental regulation
Motivated by climate and other environmental and political concerns, government regulation will continue to be a primary influence on global tire production, use, and demand. The EU is particularly active, and in effect is setting the standard for most of the rest of the world. It was EU emission requirements that first drove tire manufacturers to develop low rolling resistance tires, a development that has made the bloc the leader in penetration of this technology. Likewise, the EU’s adoption of new requirements, such as tire labeling, is sparking adoption in other markets as well.
Environmental agreements, laws and regulations aimed at reducing CO2 emissions and increasing fuel economy have also been positive drivers of the tire industry’s growth and transformation. These regulations have had the effect of hastening the search for alternative, sustainable raw materials – which have hitherto been handicapped by volume supply and price issues – and adding urgency to the pursuit of new vehicle and tire technologies that reduce energy usage.
This research is based on the new Smithers Rapra report The Future of Truck Tires to 2025. This vital market strategy tool for companies across the truck tire supply chain is available for purchase now.