Tire Market Business Revenue Forecast

The expansion of the automobile manufacturing sector and the increase in the average lifespan of vehicles are driving the demand for tires. From $155.3 billion in 2018, the revenue generated by the automotive tire market is expected to increase to $237.2 billion in 2024. Additionally, during the forecast period (2019–2024), the market is projected to experience a CAGR of 7.7%, in terms of value. On the basis of design, there are two types of tires — bias and radial.

Of these, radial tires dominated the automotive tire market during the historical period (2014–2018), in terms of value as well as volume. This is because of such tires’ construction, which comprises crisscrossed steel belts and perpendicular polyester plies, thereby leading to a smoother ride, compared to the other type of tires. Even during the forecast period, these tires are projected to maintain their lead on the market across the world.

On the basis of vehicle, the automotive tire market is divided into passenger cars, two-wheelers, medium heavy commercial vehicles, and light commercial vehicles. Among these, the market was led by the passenger car category during the historical period, owing to the increasing sale of such vehicles, as a result of the surging disposable income. Additionally, with the rising popularity of crossover utility vehicles (CUV) and sport utility vehicles (SUV), the demand for tires for passenger cars is set to grow further during the forecast period.

The increasing lifespan of vehicles is a major driving factor for the market growth. With technological improvements, vehicles’ average life increased to 12 years 2018, from 10.5 years in 2010. The major reasons behind these are the strict government regulations and rising competition between automobile manufacturers. People are not only increasingly purchasing crossovers, but also keeping their older vehicles for a longer period than before. To keep vehicles longer, a higher tire replacement rate is necessary, which would help the market grow.

Across the globe, Asia-Pacific (APAC) has been the largest automotive tire market throughout the historical period. This is primarily because of the increase in vehicle and tire production in the emerging economies in the region. Additionally, with the rising disposable income in countries including India and China, the sale of automobiles and replacement rate of tires are also increasing. Even during the forecast period, APAC is predicted to be the largest market for tires.

Hence, as vehicle sales grow, the demand for tires would also increase in the coming years.