Market and product

World demand to rise 4.3% annually through 2017

World demand for tires is forecast to rise 4.3 percent per year to 2.9 billion units in 2017. In value terms, sales of tires are projected to increase 7.9 percent annually to $281 billion. Growth in the tire market will continue to be led by developing countries in the Asia/Pacific region, particularly China and India. Global demand for tires will also be supported by improved economic conditions in the developed countries of Western Europe and North America, but gains in these regions will continue to trail the global average.

Majority of new growth to occur in the Asia/Pacific region

The Asia/Pacific region will be responsible for the bulk of global tire demand gains, accounting for two-thirds of total growth through 2017. China is the largest national market for tires in the world, representing 22 percent of global demand in 2012. Growth in demand for tires in China will not match the rapid gains posted over the 2007-2012 period -- as expansion of both motor vehicle production and usage will slow -- but China will remain among the world’s fastest growing markets. Other major tire markets in the Asia/Pacific region include Japan and India, which ranked as the world’s third and fourth largest, respectively, in 2012. India is expected to surpass Japan as the world’s third largest tire consumer by 2017.

Demand for tires in North America and Western Europe will show improvement relative to the 2007-2012 period, but gains will remain below two percent per annum in both regions through 2017. Stronger economic environments will result in advances in both new vehicle production and vehicle usage, supporting growth in demand for tires. However, slow growth in population and the motor vehicle stock will serve to constrain gains. In addition, the losses in new vehicle production that occurred in both regions between 2007 and 2012 will not be fully recovered, as significant production capacity was permanently transferred to lower-cost developing countries.

Non-motor vehicle markets to grow fastest

Gains in the dominant motor vehicle market will be driven by growing motor vehicle usage in developing countries, spurring demand for tires in both OEM and replacement applications. The market for motorcycle tires is forecast to expand at an above average rate through 2017. Relative to motor vehicles, usage of motorcycles is concentrated in faster growing developing regions. The tire segment that includes industrial, agricultural, aircraft, and other tires will post the fastest growth, supported by demand in developing regions; however, these will remain a very small portion of overall tire demand.

Study coverage

This study analyzes the 2.4 billion unit world tire industry. It presents historical demand data for 2002, 2007 and 2012, and supply and demand forecasts for 2017 and 2022 by market (e.g., light vehicle, medium and heavy vehicle, motorcycle, industrial), world region, and for 26 countries.

The study also considers market environment factors, details industry structure, evaluates company market share and profiles 32 industry competitors, including Bridgestone, Michelin and Goodyear. - freedoniagroup.com