Growth In Volume, Value To Continue
By TA News Bureau:
Art Mayer, author of Smithers Rapra’s The Future of Global Tires to 2022, says the highly diversified global tyre industry valued at $223 billion in 2017 is set to see further growth. Dominated by passenger car and light truck tyres, the industry is quickly adapting to meet global market challenges. The industry is expected to grow in volume and value terms through 2022. Analysing the information gathered from sources in trade, government, technical, and business, Mayer has put together an in-depth analytical study integrating quantitative and qualitative data. He has tapped into information from interconnected supply chains and from all lifecycle participants from raw material suppliers to OEs, manufacturers, distributors and marketers, motorists and fleet managers. In an interview to Tyre Asia, Mayer says that the underlying growth fundamentals of the global tyre industry are good across end-use sectors and regions
Tyre makers all over the world still face enormous challenges in terms of demand shifts, raw material usage, impact of regulations, changing trends in design, production and distribution. Smithers Rapra, which has global coverage of the tyre industry, studied these issues to give exclusive insights into the tyre industry’s highly diversified marketplace in its recently published The Future of Global Tires to 2022.
The Industry Briefing authored by Art Mayer investigates how tyre manufacturers are meeting increasing global demand, heightened environmental regulations and consumer labelling requirements. He has noted that the tyre industry has demonstrated dynamism following consumer demand for quality standards, pressure from OEMs and government regulators. Increased reliance on automation technologies, heightened environmental regulations and consumer labelling requirements have been the major trends impacting the tyre industry worldwide.
Smithers Rapra report forecasts that global tyre manufacturing will grow nearly 4 per cent per year through to 2022, driven by increased demand, tyre innovations, and continuing capital spending and capacity expansion by tyre suppliers. “The tyre industry currently is in the middle of a boom cycle, both with respect to capital spending and net capacity additions,” says Mayer.
“Overall, industry capacity stands at approximately 2.4 billion units, and on a net basis global capacity is expected to grow nearly 3% per year over the forecast period, slower than capital spending and production and demand growth. Rationalization of some overcapacity in certain markets like China and likely increases in capacity utilization contribute to this difference.”
Elaborating on the key findings of his report, Mayer told Tyre Asia in an interview: “Underlying growth fundamentals are good across end-use sectors and regions. Regulations and more rigorous user requirements will continue to drive innovation and uptake, especially at the OE level. Tyre labelling schemes and increased fleet ownership (more sensitive to fuel economy) will help grow a more sophisticated replacement market.”
Developments impacting plants and manufacturing processes include the uptake of new vehicle powertrains, logistical burdens, the emergence of new markets, mergers and acquisitions, and the increased value and scarcity of real estate. Tyre market drivers with direct impact on manufacturing include environmental and tyre regulations, changes in materials and tyre designs, and demands on tyres – to improve on all three points of the Magic Triangle of performance – rolling resistance, wear life, wet grip – combined with higher added value (e.g. tyre information via sensors), the report has revealed.
Impact of innovation
When asked what are the major impactful innovations that are forecast for the tyre industry from the present year through 2022, Mayer said: “With the incorporation of sensors, integrated with connected or autonomous vehicle systems, tyres will become an important information source, helping leading tyre companies evolve towards mobility services providers.”
He also said further materials advances will help overcome the traditional tradeoffs in pursuit of lower rolling resistance. These factors are adding significant pressure to innovate tyre manufacturing as a whole, as well as individual process steps – such as mixing, tyre building, and curing. Trends such as outsourcing, material use minimisation, plant specialisation, and geographic location changing the structure and footprint of production are happening.
When asked whether he anticipated changes in the design and composition of pneumatic tyres, he said the trend is towards more sustainable materials, more natural rubber (and substitutes) and bio-sourced materials. This will continue, with “complete sustainability” being the goal.
Regarding the impact of autonomous/electric vehicles on the tyre industry, Mayer has some interesting observations to make. He says there will be an ever-increasing premium on lower rolling resistance to increase energy efficiency and battery range. Most autonomous cars will probably be electrics.
This will call for higher performance that is required due to EV torque and acceleration, while taller and narrower tyres, at higher PSI, may come to characterize most autonomous passenger vehicles. Truck tyres may change less, due to higher load requirements being a major priority.
Greater reliability needs may boost run flats in the short-term, and raise interest in non-pneumatics as concepts become more viable outside current niche segments.
Movement towards fleet ownership of autonomous vehicles will change the vehicle service and replacement tyre buying process. With more buyers looking at value over the tyre’s lifetime, tyre use could change, with RFID chips or sensors making contracted mileage easier. This supports the evolution from tyre manufacturer to mobility partner.
Evolving vehicle requirements will accelerate development of concepts such as adaptive tyres, e.g., retractable studs for winter tyres, Mayer said.