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What will determine future winners in tyre and automotive industry?

What will determine future winners in tyre and automotive industry?

The future is exciting, maybe even scary, but it will be immensely different than the tyre and automotive industry we know today

By Ertugrul Bahan*

Tyre industry is expected to surpass $300 billion by 2023 with a nearly 5 per cent world average CAGR. How will it be shaped in the coming years? Not all 300 tyre brands currently operating in nearly 50 countries will survive, but surely new comers from emerging markets will be on stage with great expectations. It is safe to say that companies responsive to automotive market trends and open to fast changing new technologies will come out on top as advanced technology tyres will represent a large part of the market. Who will benefit the most from these advances? The winners will be the consumers both at manufacturing and retail levels. Low cost high performance tyres will dominate the market. The push for tyre manufacturers to invest more in advanced technologies and offer new technical solutions will yield in increasingly cost effective and lean production systems. Fear of losing market share will accelerate catch-up by both industry giants and new comers.

Digitalised and integrated smart software systems will impact all industries in coming years. Companies integrating digitalization systems will highly benefit. Smart Controls with automation solutions will be the differentiating factor among tyre manufacturing plants. Smart sense and real time measurement systems will help create safer plants. Every step of production will be under control with internet speed. Plants built on smaller sites but dominated by vertical material and tyre flow systems along with modular production units will be widespread in the industry. All will reduce relative man power and secure safer products with greater sensor controls resulting in higher quality gates. Manufacturing systems developers will be among the winners as well.

Alternative sources

EPR model for tyres within regulatory framework and raw material cost concerns will force more recycled material usage by tyre manufacturers making it a standard process rather than a mere marketing tool. Natural Rubber is placed on the critical material list as part of the EU industrial strategy effective last year. More attention surely will be given to alternative and more versatile NR sources. “No rubber” and “no air” tyres will remain on the short list of industry R&D departments. Synthetic and lower environmental footprint material alternatives or gene editing techniques will diminish NR demand due to increases in the heavy duty tyre segment. More nanotechnology additives will diversify raw material and recycled material industries. Fully sustainable and recyclable new generation materials will be on stage. Suppliers that keep up with emerging environmental concerns and industry trends will also be winners.

Starting January 2019 heavy duty vehicles in EU will be required to have CO2 certification which will also cover OE tyres. New regulations will put additional pressure on truck, bus and specialty vehicle makers to put more efficient and lighter vehicles on the market. Investment in infrastructure, particularly in developing countries and fast pace of radialisation will increase demand in these segment tyres. New tread designs, new generation materials and compounds will reflect the specific needs of both TBR and OTR segments. Low carbon foot print targets will further direct manufacturers to pour more resources into R&D. Furthermore, emergence of new materials and technologies that allow for multiple retreading may be a turning point for the entyre industry. New TBR and OTR with new concept and new generation materials will be on the market. Manufacturers that can successfully change and evolve to meet these challenges will be winners as well.

Electrification

Next 5 years will possibly bring about more change to the tyre industry than past several decades. All components of the automotive industry including engines, transmission systems, on board computers and frames are changing rapidly. Electrification in vehicle industry will be the new shining star and will be one step ahead than hybridization. In addition to electric powered passenger cars, HDVs and floating vehicles will all be within the realm possibility. Packaging cell kWh cost will be the crucial point. Cheaper and lighter cells will be the turning point in fast electrification of all types of vehicles. Lighter materials for other vehicle parts are already on the market. Nanotechnology will help further development. Companies that are committed to innovation and are successful in interpreting these fundamental shifts will be in the winner category.

Low skid depths, narrower and big rim diameter tyres will continue to be installed on electric vehicles and some brands have already invested in this area. We will be able to see challenging designs in both traditional and non-pneumatic tyre categories. Future trends of electrical vehicle tyres stands at the crossroads between pneumatic and non-pneumatic structure. Research and development efforts in non-pneumatic tyre concept may result in a drastic shift in tyre technology and manufacturing process. Suspension systems, future road designs and new generation materials for next generation electrical cars, will create rooms for new non-pneumatic concepts. We will be able to see radical non-pneumatic tyres under electrical vehicles.

If non-pneumatic tyres turn out to be the reality in the coming years then all bets might be off as we try to predict who the winners will be in the tyre and automotive industry. One thing we know, the future is exciting, maybe even scary, but it will be immensely different than the tyre and automotive industry we know today.
*Ertuğrul Bahan, Senior Tyre Expert is highly experienced in tyre design engineering, manufacturing, R&D and plant operations. He has worked for many years in Brisa-Bridgestone Sabancı, Kordsa Global and Anlas Motorcycle Tire Company in managerial positions

BLURBS
Every step of production will be under control with internet speed. Plants built on smaller sites but dominated by vertical material and tyre flow systems along with modular production units will be widespread in the industry

Future trends of electrical vehicle tyres stands at the crossroads between pneumatic and non-pneumatic structure. Research and development efforts in non-pneumatic tyre concept may result in a drastic shift in tyre technology and manufacturing process

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