Recently, the authoritative testing agency Smithers released the latest market report “The Future of global tires in 2024” forecast.
According to the International Monetary Fund (IMF), global GDP will fall by 3% in 2023, the worst since the Great Depression and worse than the global financial crisis more than a decade ago.
In this case, the tire markets in the five different regions performed similar to the initial forecasts: in terms of annual growth (or decline), the Asia-Pacific region performed the best, the most developed markets in Europe and North America the lowest, the remaining developing markets in South and Central America, and the Middle East and Africa were in between.
Global tire five major trends
In 2024, the tire industry faces challenges and opportunities include: further evolution of the regulatory environment (label extension, fuel efficiency and lower emissions), transportation technology and mobile technology (electric and autonomous vehicles) development, the progress of tire technology, many terminal use application requires higher performance / load requirements, and sustainability.
Smithers analysis identified the following major trends and drivers for the global tire industry over the next five years:
01 Most regions / countries are expected to continue global economic growth, supporting a gradual increase in the number of vehicles produced and used. At the same time, higher performance and load requirements for many vehicles and tires will support a strong demand for high performance (HP) and quality tires. Global trends include a shift in demand growth opportunities to emerging economies and more use of radial tyres (for example in India) and premium tires.02 The growing end uses support the replacement needs, from passenger cars and light trucks, medium and heavy trucks and buses to motorcycles, engineering vehicles (generally including mining, construction, port, agricultural and industrial use) and aviation.03 Transportation and tire regulations, including fuel economy requirements and consumer labeling standards for automobile manufacturers, will continue to drive the adoption of innovation and technology by OEM (vehicle manufacturers) and tire manufacturers and their suppliers. Further pursuit of low rolling resistance (LRR), and further emphasis on lightweight tires and aerodynamics.04 Adaptation and development of tire related services will be accelerated to better meet end use requirements such as fuel efficiency, performance, reliability, durability and smart / data / predictive analysis. Ownership will develop further as vehicle sharing and fleets become more common and complex in more applications. The expansion and increased efficiency of e-commerce (including wholesale and retail rationalization in the interest of the private equity sector) are changing the way it is distributed.05 Companies are more focused on the sustainability of the entire life cycle, from raw materials to recycling. Increased automation and efficiency of production (including artificial intelligence and “smart factories”), relative reductions in material use, and the pursuit of zero waste and zero defects are transforming manufacturing and helping to limit production costs.
Global tire growth forecast for the next five years
It expects all subdivided uses and types to grow in number and value by 2024, with special applications such as motorcycles, high-performance cars and OTR tires leading the market.
The value of the global tire market will increase from $239 billion in 2019 to $280 billion in 2024, at a compound annual growth rate (CAGR) of 3.2%. The global tire industry is expected to achieve growth, and the industry is adapting to the challenges brought by global complex matrices such as tire categories, material inputs, and segmentation uses. The global tire market is estimated to be worth $262 billion in 2023, and this trajectory of the post-pandemic recovery is expected to continue into 2028.
In terms of quantity, the average annual growth rate will reach 3.5% by 2028
Asia-Pacific markets, led by India, will grow at a compound annual growth rate of 6.4% by 2028.
The global electric vehicle tire market is expected to grow from $15.6 billion in 2022 (estimated) to $46.2 billion in 2027
During the reporting period, electric vehicle tires grew at a compound annual rate of 24.3%
The global OTR tire market is estimated to be worth $59.4 billion in 2022. With the recovery slowing in 2022, the projected annual growth rate of 5.7% (by value) over the five years to 2027
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