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Major function of tire is to protect rim and provide the tractive force between road surface and the vehicle. The ongoing pandemic has undoubtedly slowed down the market as the production had come to halt in many regions. Since the beginning of April slowly the plants have been partially restarted and the market has started at slow pace.
Overall the tire development process has been shortened. The electrification of light trucks has led to changes in the tire manufacturing, as the EVs have quicker start power than the diesel trucks the tires are subjected to wear and necessary changes in production becomes inevitable.
Last mile delivery and e-commerce in different regions will impact positively to the commercial vehicle tire segment. Increase in last mile deliveries will increase the demand for sub 20 inch rim size tires i.e. 16, 17.5 and 19.5 inches tires.
The global economy remains dependent on Asia for 90% of the natural rubber supply. U.S. imported about $140 million worth of natural rubber in March 2021 alone, according to USTMA data.
The global natural rubber market was valued at nearly $XX billion in 2020, and demand for rubber is expected to increase. The global economy now faces a rubber shortage because of multiple supply chain disruptions.
The original equipment shipment for light truck and truck tire is expected to decrease by more than 30%. Whereas, the replacement shipment is expected to witness a small decline by 7%. The global rubber market was valued at nearly $40 billion in 2020, but an analysis predicts the natural rubber market could be worth nearly $68.5 billion by 2026.
The steer tire 1 of the 3 segments based on the position of the tires in the truck vehicles is fitted to the front axle. Many steer tires are considered to be all position tires.
The drive tire is mounted on the rear axle of the vehicle. They are mounted in dual wheel configuration. These tires are provided with spied tread for superior traction. Similar to drive tires trailer tires are also mounted in dual wheel configuration. These are expected to withstand heavy loads and have reinforced sidewalls to protect against curbing.
Since the trailer tires are more in number in multi axle vehicle to withstand heavy loads the trailer tires are the occupy larger market share in the segment.
The Aftermarket sales channel outsold OEM market in every region. Average life span of truck and buses based on wear and tear was found to be 3-4 years. The current crisis period has affected the vehicles sales and thus slowdown in the OEM market.
The presence of large number of competitors providing the same performance and range plays an important part in increased sales in aftermarket segment.
The increase in tariffs on Chinese imported products in 2019 caused a major turbulence in the market, as more than 3/4th of the market was occupied by China produced goods compared to domestically produced products.
Due to the ongoing COVID-19 pandemic and aftermath is expected to affect the tire market in the region. The original equipment shipment for light truck and truck tire is expected to decrease by more than 30%. Whereas, the replacement shipment is expected to witness small decline by 7%.
For 2021, USTMA projects an Original Equipment (OE) shipment increase of 5.2 million units & a replacement shipment increase of 27.7 million units Y-o-Y across vehicle segments.
Comparing with 2020, Original Equipment (OE) shipments for passenger, light truck and truck tires are expected to increase by 9.9%, 6.2%, and 25.3% respectively, with a total increase of 5.2 million units. Replacement shipments for passenger, light truck and truck tires are also projected to increase by 10.1%, 13.2%, and 14.6% respectively, with a total increase of 27.7 million units.
Due to the ongoing COVID-19 pandemic the rubber producers have to deal with many problems and they are working against all odds like climate change and also the fight for shipping containers.
The OE truck tires market in 2019 saw a dip by 10% compared to 2018. While, the replacement market in the region witnessed a negligible growth in 2019.
In Europe, the increased in the duties on the Chinese imports led to high spike in the imports form ASEAN and South Korea. The imports from ASEAN in the last 2 years grew by 215 % in 2018 and 170% 2019. The South Korean imports in 2018 were witnessed growth by 117% and 7% in 2019.
In 2020, original equipment was the most strongly affected segment recording a dip of 18% in the truck tyres segment. However, in the replacement market of truck tyres the volume fell by only 4% Y-o-Y and ended at 12.08 million units.
In 2020 the top countries in the sales of replacement truck and bus tires were found to be Turkey, Germany and Italy completing the top 3.
The demands for commercial vehicles increased by 43.9% in the first 5 months of 2021. All four major EU markets improved their overall results along with their increase in demands for HCV, MHCV, MHBC (Medium & Heavy Buses & Coaches) which accelerated by 40.1%, 34.7% and 18.1% respectively.
In Q-2021, each of the tyre segments witnessed a significant increase compared to previous year. Truck tyre replacement increased by 42% followed by the Moto and Scooter segment (41%. Overall, the tyres replacement increased by 44% Y-o-Y. After 6 months the numbers looked promising and the market was inching closer to pre-COVID numbers.
The below chart shows the sales of truck and bus tires of top 5 5 European countries in 2019:
In order to address the concern raised by the recent climatic laws enforced, European tyre industry is ready to contribute to the decarbonisation goals. Mobility has a role to play as a pillar of this ambition. Hence, ETRMA’s members have been committed to reducing their CO2 footprint throughout the tyre life cycle and investing in innovative and sustainable mobility technologies for many years now.
The over the road equipment like earth moving equipments’ tire has witnessed higher demand than the truck tire equipment. China which held 64% share in 2017 in the exports of truck tires to Europe, now holds 16% share as of 2019 and is the 3rd highest exporter to the region.
Sailun Group Co Ltd has planned to double the capacity of radial truck and bus tires at its Liaoning plant. They are planning to reach 6 million units a year by 2022.
Guizhou Tire is setting up 2 new factories in the Guiyang province and the capacity is slated to be 3 million truck tires a year.
Year 2019 has witnessed combined 31% increase in LCV, truck and bus tire production in the country.
Import duties on tires in the country are expected to be increased from 15% to 40% after tires were included in the products list to undergo basic customs changes in the 2020 Budget.
The global economy remains dependent on Asia for 90% of the natural rubber supply. Therefore the tyre companies in India are now trying to leverage their profit by adapting various changes in their operations, business strategies and investment decisions.
India finds an immense potential for growth for the Indian Tyre Industry in the emerging new world order. However, effective collaboration between the industry and raw material partners is imperative to harness this potential .
JK Tyre & Industries is working on de-bottlenecking operations to enhance capacity amid an expected surge in demand post the second wave of the pandemic, as well as reducing long-term debt by a third, or Rs 1,500 crore, over the next three years.
The US continues to be the largest market for Indian tyres accounting for 17 per cent of total tyres exported from the country during the year, Tyre exports from India grew by 10 per cent in value terms in 2020-21 to touch Rs 14,097 crore .
Whereas citing the latest data released by the Ministry of Commerce, ATMA said in volume terms tyre exports went up by 8 per cent and reached 3.64 crore . In the last five years, tyre exports from India have gone up by 60 per cent from Rs 8,825 crore in FY16 to Rs 14,097 crore in FY21, barring a marginal contraction witnessed in tyre exports in FY20.
The EU council is adopting new rules of labelling the tires. They are now including more visible information such as fuel efficiency, wet grip and noise, these parameters will help the customers to buy the best tire for the vehicle.
There have been continuous efforts to minimise the pollution and waste caused by the old tires ever year. About 1 billion tyres reach the end of their life every year, to encounter this Michelin has partnered with Swedish start-up Enviro and bought 20% of its stake to recycle the tires to new raw materials using pyrolysis process.
Bridgestone (Japan), Michelin (France) and Goodyear (US) are the top 3 CV tire manufacturers in the world. The Asian tire manufacturers occupy the highest market share China, Japan and India the major contributors. Some of the Asian manufacturers are Yokohama (Japan), MRF (India), Zhongce (China), Sumitomo (Japan) Linglong (China), Hankook (South Korea) and Apollo (India). Some of the European and American manufacturers are Pirelli (Italy), Continental (Germany), Zenises (UK), Cooper Tires (US).