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Global Automotive Tire Market Benefits from Increasing Economic Prosperity Worldwide

Article Description

With the expeditious expansion of the automotive sector, companies are striving to prioritize on customer safety and comfort to keep the boom alive. With the aftereffects of the last 2008-09 recession now fading away, the automotive sector is registering double-digit growth rates in most parts of the world. This has also benefitted ancillary industries such as the tire industry, automotive electronics industry, etc.

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The global automotive tire market will exhibit a CAGR of 6.8% from 2015 to 2021, resulting in the market’s valuation increasing from US$188.4 bn in 2014 to US$298.1 bn by 2021. This market, being fairly mature, is mainly driven by the increasing demand for passenger and commercial vehicles and tires incorporating green technology. In the coming years, tires that have been remodeled using green technology will find increased adoption over old and obsolete tires. In addition, the rising economic prosperity in most parts of the world is also benefitting the automotive tire market.

Adherence to Product Specifications Determines Success of Automotive Tires

Currently, product innovation is what manufacturers are aiming for in the highly competitive automotive tire market. Today’s business environment, driven by consistent technological development, forces automotive tire companies to align developmental strategies with technological shifts in the market. In the present scenario, self-inflating tires and tires incorporating low rolling resistance technology are gaining prominence due to their higher safety and durability.

Being governed by safety statutes laid down by various governments, the manufacture of automotive tires requires strict adherence to product specification guidelines. Thus, products that are superior in quality and meet product specifications receive a mark of customer satisfaction, which in turn converts into business opportunities. Products that adhere to quality standards also help create a positive brand image and goodwill for the company.

Passenger Vehicles Dominate Automotive Tire Market

On the basis of tire safety system, radial tires and bias tires are the segments of the automotive tire market. Between the two, radial tires dominate this market. This is because radial tires are extensively used in passenger cars, heavy commercial vehicles, light commercial vehicles, and two wheelers. With technological advancement, the radial tires segment will receive a further boost in future.

By application, passenger cars, heavy commercial vehicle, light commercial vehicle, and two wheelers are the segments of this market. In 2014, passenger cars held the largest share in the global automotive tires market. This segment is expected to display robust growth in the coming years due to the consistently increasing vehicle ownership in Europe and Asia Pacific. In developed nations, such as the U.S., Germany, and France, the high purchasing power of customers has been the reason for large-scale vehicle ownership, which is benefitting the automotive tire market.

In terms of geography, Asia Pacific is the largest market for automotive tires. In 2014, this regional market was valued at US$81.5 bn and is expected to display the fastest growth in the coming years. In this region, particularly in the emerging economies of China and India, the recently gained economic prosperity has changed consumer lifestyles dramatically, allowing for big-ticket purchases such as automobiles and homes. This has benefitted the automotive tire market in this region.

Some key players in the global automotive tire market are Bridgestone, Goodyear, Michelin, Continental AG, and Michelin, among others.