Tire Market Outlook to 2029

Global Tire Market Overview

Global Tire Market was valued at USD 200 Bn in 2023, driven by the increasing vehicle production and sales, the growing demand for replacement Tires and advancements in Tire technology. The rise in disposable income, particularly in developing economies, has also contributed to higher automobile sales, which in turn boosts the Tire market.

Market is dominated by several key players which includes Michelin, Bridgestone, Goodyear, Continental and Toyo due to their extensive R&D capabilities, widespread distribution networks, and strong brand recognition.

In 2023 Michelin acquired UK-based simulation software company Canopy Simulation. This strategic acquisition strengthens Michelin's position as a technological leader and data-driven company in the automotive industry. Michelin currently has 117 production sites in 26 countries, a commercial presence in 170 countries, and 9 R&D centers globally.

Global Tire Current Market Analysis

APAC as dominant region: The Asia-Pacific region dominates the global tire market, driven by rapid urbanization exceeding 2.3 billion people in 2023 and automotive sales of 42.6 million passenger cars. China leads in tire production and consumption, with a 20% year-on-year increase in semi-steel tire exports, totaling 287 million units. The region's robust economic growth, accounting for 69.9% of global GDP growth over the past decade, coupled with rising disposable incomes and an expanding middle class of 500 million to 1 billion, propels market demand.

North America as emerging region: North America is emerging as a pivotal player in the global tire market, driven by technological advancements like RFID chips and sensors, increased vehicle production (16.2 million in 2023), and a robust aftermarket sector. Innovation in sustainable and smart tire technologies positions the region at the forefront of industry growth. Strong economic frameworks and strategic investments, such as the $1.2 trillion Bipartisan Infrastructure Law, boost demand for tires. Rising consumer awareness about vehicle safety and stringent regulatory standards further support market expansion.

China as dominant country: China dominates the global tire market due to its vast manufacturing capacity, competitive pricing, and robust domestic demand. In 2022, China's manufacturing output was USD 4.97 trillion, a 1.36% increase from 2021. December 2023 saw vehicle production and sales volumes reach 3.079 million and 3.156 million units, respectively. Leading tire manufacturers like Linglong Tyres benefit from economies of scale. China exported tires worth $21.33 billion in 2023, up from $18.87 billion in 2022, solidifying its global leadership.

Global Tire Market Segmentation

The Global Tire Market can be segmented based on several factors:

By Tire Type: Global tire market is segmented by tire type into radial tires & base tires. In 2023, Radial Tires are the most dominant sub-segment. Radial Tires offers fuel efficiency, beneficial for long distance vehicles like commercial vehicles. Their design makes them suitable for all seasons and their flexible sidewalls makes them suitable for passenger vehicles as well.

By Distribution Channel: Global tire market is segmented by distribution channel into replacement & OEM. In 2023, replacement channel dominates the market. As vehicles age, they require more frequent tire replacements to maintain safety and performance. Moreover, the high cost of buying new vehicles encourages many owners to keep their existing vehicles longer, resulting in more frequent tire replacements.

By Vehicle Type: Global tire market is segmented by vehicle type into passenger vehicles, commercial vehicles & others. In 2023, Passenger vehicles are dominating this segment. Passenger vehicle tires typically need to be replaced every few years due to wear and tear, ensuring a steady and recurring demand. Increasing vehicle ownership, particularly in emerging markets, contributes significantly to the demand for passenger vehicle tires.

Global Tire Market Competitive Landscape

Lunar Rover Tire: In 2024, Bridgestone has introduced an innovative Lunar Rover Tire, set to be showcased at the 39th Space Symposium in Colorado Springs. The new tire utilizes a skeletal structure which includes thin metal spokes and a divided tread segment, enhancing durability and traction on the moon's rugged terrain.

Michelin Lihtion 4: In 2023, Michelin has expanded its road cycling tire lineup with the introduction of two new products: the Michelin Lithion 4. It was designed to enhance performance and provide a smooth ride which emphasizes ease of use and reliability for cyclists. This tire is suitable for a variety of road conditions, making it a versatile choice for both casual and competitive riders.

SportsRad & CrossRad: Ceat, a leading Tire manufacturer, has taken the performance of its two-wheeler SportsRad and CrossRad. This premium range of steel radial Tires is specially crafted to unleash the full potential of high-performance motorcycles. The Sportrad series is designed for high speed and cornering; while the Crossrad is a multi-terrain high grip Tire.

Global Tire Industry Analysis

Global Tire Market Growth Drivers:

Artificial Intelligence in Tires: In 2023, JK Tires uses AI, ML technologies to cater to high-end car segment in India. AI has revolutionized the tire industry by customizing tire design, manufacturing, and selection through intricate algorithms that analyze driving patterns and road conditions, enhancing performance and safety across diverse terrains.

Electric Vehicle Tires: Electric Vehicles are finding buying willingness among the consumers. In 2023, 40 million electric vehicles were sold across the globe. Leading players like Bridgestone & Michelin have launched have launched Tires for this category, focusing on durability and energy efficiency to meet the specific demands of electric vehicles.

Resilient Demand for Premium Vehicles: The premium car segment is finding strong demand from developing countries. In 2023, luxury car sales in India reached a record high of 42,731 units, representing a 20% year-on-year increase because of changing lifestyle preferences, particularly among younger professionals, and rising disposable incomes.

Global Tire Market Challenges:

Volatile Sell-in Demand: The sell-in demand, which represents manufacturers selling to dealers was more volatile than the sell-out demand, which is dealers selling to end-consumers. This volatility was due to inventory drawdowns across all dealer channels whose impact was observed in the passenger car, light truck, and truck tire markets.

Raw Material Costs: The price of essential raw materials such as rubber and steel increased. In 2023, the cost of raw rubber rose to $1,750 per metric ton. As a result, manufacturers faced higher production costs, affecting profit margins and pricing strategies.

Global Tire Future Market Outlook

Global Tire Market is projected to continue its growth trajectory, reaching an estimated value of USD 273 Bn by 2029. This growth will be driven by factors such as increasing vehicle electrification, the adoption of advanced manufacturing technologies, and the rising demand for sustainable and eco-friendly Tires.

Future Market Trends

Adoption of Advanced Tire Technologies: Over the next five years, the adoption of advanced Tire technologies, such as self-healing Tires and airless Tires, is expected to gain momentum. Vehicles will be equipped with self-healing Tires, which use advanced materials to automatically seal punctures and extend Tire lifespan. This trend will enhance vehicle safety and reduce maintenance costs for consumers.

Growth in Electric Vehicle (EV) Tires Market: The increasing adoption of electric vehicles (EVs) will drive the demand for specialized EV Tires that offer low rolling resistance and high durability. This trend will create new opportunities for Tire manufacturers to innovate and develop EV-specific Tire solutions.