Content
Tire Market Trends to Succeed in the Automotive Industry
October 28, 2022
11 min
The automobile industry is a huge driver of the global economy, which includes trillions of financial turnover, billions in profits, and millions of employment opportunities.
Can you imagine that the revenue of the manufacturing segment itself is anticipated to reach USD 115 billion by 2027? Nevertheless, the automobile industry does not consist of only the production of vehicles, it also includes consumables, tires, electronics, oils, wear-and-tear parts, accessories, etc. We’ve taken the tire niche of the automobile industry for a detailed investigation, although let’s discuss everything in order.
The size of the global tire industry is enhancing stability. Unlike automobile sales and production, the growing tendency of the tire market was not affected by the Coronavirus pandemic. In such a way, the size of the segment grew from $112.16 billion in 2019 to $121.29 billion in 2021. Great news for tire manufacturers and distributors! According to the Statista Research Department, the tire niche will jump to $154.4 billion by 2027. The industry participants face beneficial growth prospects thanks to the developments in tire manufacturing technology.
Passenger car tires are the most popular product in the segment, which captures 46% of the world market structure. Light commercial vehicles and trucks possess 19% and 13% of the market share respectively. Agricultural tractors, motorcycles and scooters, construction and mining vehicles, as well as industrial vehicles, demonstrate less than 10% of the overall sales.
Undoubtedly, stable and remarkable growth of the tire segment in the automotive industry is a considerable benefit for its participants. However, it is also critical to understand what tire trends affect such progress. We have developed a list of powerful drivers of the tire markets:
Considering the fact that the estimated worldwide vehicle production increased from 58 million items in 2000 to almost 80 million vehicles in 2022, the demand for tires is also constantly enhancing.
According to the WHO, approximately 1.3 million people die each year as a result of road traffic crashes. Unsafe vehicles are on the top list of such terrifying statistics. That is why car owners become increasingly attentive in the aspect of an in-time tire change.
Not only car drivers are looking for possibilities to decrease car accidents on the roads, international organizations and governments are also concerned about the issue and but implement additional regulations on tire quality and servicing. As a result, it stimulates sales in the segment.
The global tire market is saturated with a wide range of manufacturers from different countries of the world. Major leaders in the market are the Japanese producer Bridgestone and Michelin from France that possess the largest tire market share. In addition, Continental AG from Germany and the US brand Goodyear are also strong players that possess considerable tire market share. At the same time, the list of outstanding tire market producers includes Hankook Tire (South Korea), Pirelli C. S.p.A. (Italy), Toyo Tire Corporation (Japan), Kumho Tire (South Korea), Giti Tire (Singapore), Maxxis International (Taiwan), and Nexen Tire Corporation (South Korea). Even though the industry rivalry is rather intense, it still has low barriers to market entry that creates additional opportunities for new companies in the market.
The automotive tire market is segmented based on various criteria such as vehicle type, tire type, distribution channel, and season. These segments help manufacturers and retailers cater to specific customer needs and optimize their product offerings.
The automotive tire market is segmented by seasonal tire types into all-season, summer, and winter tires. Each type caters to specific driving conditions and consumer needs, reflecting the varied climates and preferences across different regions.
All-Season Tires: Dominating the market with a significant 55.4% share, all-season tires are favored for their versatility and convenience. They are designed to perform adequately in a variety of conditions, including dry, wet, and light snowy roads, making them a practical choice for many consumers. The demand for all-season tires is driven by their ability to handle diverse weather conditions without requiring seasonal changeovers, appealing to a broad range of drivers seeking value and efficiency.
Summer Tires: These tires are preferred in warmer climates due to their superior grip and handling on hot roads. They are designed to offer optimal performance in dry and wet conditions during the warmer months, providing better traction and braking efficiency. Summer tires make up a smaller market segment compared to all-season tires but are crucial for regions with hot climates where tire performance in high temperatures is essential.
Winter Tires: Essential for cold regions, winter tires provide enhanced traction in snow and ice, ensuring safety and performance in harsh winter conditions. These tires are made with special rubber compounds that remain flexible in low temperatures, along with unique tread patterns to improve grip on snow-covered and icy roads. Winter tires are a vital segment in areas experiencing severe winter weather, although their market share is less than that of all-season tires.
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Customers apply an attentive approach to the process of tire and auto parts choice. According to the tire industry outlook, price is the major decision factor for clients choosing tires. In addition, they also consider the year of production and country of origin which are also essential for car owners. Brand, product characteristics, size, and type of tires are on the list of tire purchase decision factors. Nevertheless, tire demand is constantly growing.
We have also investigated aspects that tire sellers need to consider to maximize their sales. As the majority of clients prefer buying tires online, it is critical to know the tire availability and price shown on the website in order to make the online shopping process as simple as possible. In addition, considering the fact that 80% of customers buy tires for 1 and/or 2 cars, a wide choice of brands, tire sizes, and consultation of professionals need to be offered by stores. The additional services of trade-in, warranty, and free delivery would also become considerable benefits when choosing the distributor of tires. Hence, take into account the developed factors of choosing a seller in order to gain competitive advantages in the market.
The distribution structure of the automotive tires e-retailing market has one major trend: the value of online channels is becoming more and more remarkable. One of the moving factors for such a condition has become the global pandemic which stimulated eCommerce. Viewing the online distribution in more detail, in the United States, carparts.com is the online shop with
the highest eCommerce net sales, with a revenue of $559 million in 2021, followed by advanceautoparts.com with $401 million. Third place is taken by carid.com with $353 million in revenue.
The level of revenue of the British online distributors is smaller. For instance, in spite of being an absolute market leader, eurocarparts.com generated $163 million in revenue in 2021. At the same time, autodoc.co.uk and carparts4less.co.uk have $61 million and $51 million in revenue respectively. Nevertheless, the power of online channels is enhancing in the tire markets in different countries.
A properly implemented digital marketing campaign is one of the key success factors for tire online stores. Hence, let’s look at which traffic channels work best in the market. The direct channel is the largest and most effective one, which captures 67.3% of the overall structure. It means that the customers in the global tire market have considerable brand awareness and loyalty to certain manufacturers. They are likely to type the URL to visit the site directly. That is why companies need to invest in the development of brand awareness and customer loyalty.
The display ads and referrals possess almost 13% each. Their remarkable shares in the structure need to be considered when developing digital marketing campaigns. At the same time, the growth opportunities for the participants of the tire market are email and social marketing channels.
Having been working with numerous companies from the automobile, automotive parts, and tire segments, Promodo has proved all traffic channels and marketing tools to work well for the market players. For instance, we have maintained market analysis, qualitative research, and quantitative research, as well as developed positioning, branding, and media strategy for car tires and rims online store Infoshina. We have been enhancing sales and revenue of the auto parts eCommerce for the Exist brand, using a retention marketing channel. If you also want to get impressive results from the digital marketing campaign, turn to our professionals.
The Asia-Pacific region continues to show significant growth in the tire market, supported by rising vehicle sales and strategic developments by key industry players. The market's resurgence post-pandemic is evident in the latest data from 2022 and 2023.
China remains a pivotal player in the Asia-Pacific tire market. In 2023, the country's tire market reached a volume of 1,270 million units. This resurgence can be attributed to the rebound in vehicle production and sales, driven by economic recovery and government incentives for automotive purchases.
India's tire market also demonstrated robust growth. Passenger vehicle sales in India showed consistent improvement, with the market benefiting from increased demand for both new and replacement tires. The market's volume is expected to continue growing, supported by the expanding automotive industry and rising disposable incomes.
Japan's tire market, which faced a decline during the pandemic, has bounced back. In 2023, Japan's tire sales improved as the country's automotive production resumed normalcy. The market is also seeing innovations, such as advanced tire technologies and new product launches tailored to specific vehicle segments.
Major tire manufacturers in the region are actively introducing new products to capture market share. For instance, Apollo Tyres introduced a new range of tires specifically designed for the growing compact SUV segment in India. Such strategic moves are expected to further drive the growth of the tire market in the Asia-Pacific region.
Sales of 17-inch and larger tires grow faster than other types of tires. It’s predicted that tire ratio with a high diameter will grow continuously in the medium-term and long-term perspective.
Airless tires are on the list of the key tire market trends. Manufacturers’ demand for airless tires rises as the popularity of EVs grows. Currently, the radial airless tires market is $32 million. The global value of the segment is expected to enhance by more than 10% by 2030.
Bridgestone introduced the concept of smart tires designed to make driving safer, which became one of tire trends. This tire sends information to the car, due to a sensor in the inner wall. The manufacturer states that the technology will be launched without increasing the product price significantly. The smart tires niche is expected to increase by more than 75% by 2030, which creates considerable opportunities for tire market producers.
Original equipment manufacturers (OEMs) are expected to account for almost 40% of the global automotive intelligent tire and sensor market in 2024, which is a considerable amount. This market is predicted to enhance from $47 billion in 2018 to $77.5 billion in 2024.
The recent trend in the automotive industry has seen a significant push towards producing sustainable tires, utilizing materials such as natural rubber, recycled rubber, and bio-based polymers to reduce environmental impact. Premium tire brands like Michelin and Bridgestone are at the forefront of this movement, focusing on innovative manufacturing processes that enhance tire durability while minimizing carbon footprints.
Undoubtedly, the automobile industry is the major driving force of the tire niche trends. That is why it is critical to view the conditions of the vehicle segment for a more profound analysis.
Currently, the global automotive manufacturing industry is estimated at $2.95 trillion which is a huge amount compared to other segments of the world economy. The Coronavirus pandemic had a considerable negative effect on the sphere because the value dropped from $3 trillion in 2019 to $2.71 trillion in 2020. In 2023, the market was worth $3.56 trillion showing the tendency for exponential growth.
Viewing the product structure, passenger cars possess a larger share in motor vehicle sales, namely 68.2%. Commercial vehicle sales experienced significant growth from 2022 to 2023. In the United States, the market saw a 14% increase, fueled by the resurgence of the rental and leasing industry, with over 1.6 million commercial vehicles registered in 2023.
The structure of global manufacturers has also changed in the automobile market. Chinese brands have increased their market share, resulting in 21.24 million units made in 2021. What is more, compared to Japan which is placed in second position in the ranking, the country produced only 6.62 million vehicles, which is almost four times less than in China.
An increasing number of electric automobiles are driving on the roads. More and more customers choose alternative fuel cars for their environmental sustainability and financial efficiency In such a way, the number of electric vehicles in use worldwide grew from 1.9 million in 2015 to 16.5 million in 2021.
Viewing the structure of the electric automobile market by type, the majority of consumers choose battery cars, although plug-in hybrids sales also continue to grow. Europe is the largest consumer of electric vehicles, enumerating 1.39 million units in 2020. China has almost the same electric vehicle in use, namely 1.33 million. Electric-engine cars are also popular in the US, South Korea, Canada, and Japan as these markets have the largest amount of plug-in automobiles.
Currently, the market share of electric-engine vehicles in the overall structure is at 3%. However, it is estimated to reach 28% by the end of 2030. Bloomberg NEF states that electric cars will capture the largest share of the industry, namely 58% by the end of 2040. Hence, we see tremendous opportunities in the niche.
Even though the automobile industry rivalry is rapidly growing, it has a list of outstanding competitors that possess the largest market share. Toyota Motors is an absolute leader in the segment of passenger cars with over 10% of the market structure. It is followed by Volkswagen and Honda which hold 6.4% and 5.3% of the market share respectively. The rank of top automobile brands also includes Ford, Hyundai, Nissan, Chevrolet, Kia, Mercedes, and BMW.
As for the electric vehicles market, a strong leader in the segment is Tesla with 17% of the worldwide structure. The Chinese manufacturer BYD is the follower that possesses 13% of the market share. Considering the fact that the majority of well-established companies launched electric-engine car models, they also form considerable competition for the market leaders. In such a way, the sales of BMW, Volkswagen, Nisan, Kia, Huinai, Renault, and Chery vary from 5% to 3% of the overall value. With the increasing popularity of battery and plug-in automobiles, the rivalry in the niche is planned to become more intense.
The global auto parts market is a large important element of the automobile segment, the size of which reaches $378.4 billion. Having beneficial growth prospects, the niche is expected to strengthen by 4% by 2027. Tires possess the largest share of expenses in the auto parts market. Consumers also spend on batteries, brake parts, filters, body parts, lighting, and electronic components, as well as wheels. In the European market, tires are estimated at 9.1% of the whole auto parts market. Hence, let’s view the global tire market itself in more detail.
Global Market of Auto Parts
Team Lead of Content for promodo.com
Content marketing manager at Promodo with 7+ years of writing.
When creating valuable business content, I always seek fresh data, interesting facts, the expertise of professionals, and meaningful insights to bring relevant ideas to the audience. I believe that good content can enrich the experience of marketers, empower business owners to make data-driven decisions, and enhance companies in growth.
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