Connected Tires Market Size, Share, Growth & Industry Analysis, By Vehicle Type (Passenger Cars and Commercial Vehicles), By Rim Size (12" – 17", 18" – 21", and More than 22"), and Regional Forecast, 2022-2029

The global Connected Tire Market size was valued at USD 0.75 million in 2021 and is projected to grow from USD 1.18 million in 2022 to USD 45.60 million by 2029, exhibiting a CAGR of 68.5% during the forecast period. The impact of the global COVID-19 pandemic has been unprecedented and staggering, with connected tire experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -18.0% in 2020 as compared to 2019.

Connected tires are equipped with multiple sensors which help monitor the condition of the tire and transfer the collected information to the vehicle in real-time. The tires are equipped with various IoT devices and several other sensors-based systems, including a pressure monitoring system, temperature control systems, advanced assistance system, and others. It transfers the gathered information, such as tire pressure, road condition, tread depth, acceleration, and tire temperature, which helps predict working conditions of tires, maintenance requirements, and deviation alert as well as to adjust the suspension, emergency braking, traction control, and others. The increase in technological innovation in the automotive industry is one of the primary factors supporting future developments in this technology.

Factors such as surge in demand for road safety and the growing demand for passenger vehicles equipped with advanced safety features are also propelling the growth of the market. Moreover, the increasing deployment of connected features in vehicles along with the rise in development and commercialization of autonomous mobility is another key growth factor. The technology demand will also be driven by the growing need for effective tire management from the fleet operators to reduce replacement and maintenance costs of the tires. Additionally, government support for the development and adoption of smart vehicles across developed and developing countries will provide lucrative growth opportunities for the market.

However, it is an emerging technology and currently in the nascent stage. Therefore, the high initial cost of the technology and lack of awareness among the consumers is anticipated to hamper the Connected Tire Market growth during the forecast period. In addition, the lack of related infrastructure in several developing countries across the world is further expected to hinder the growth of the market. Although, increasing focus on the development and commercialization of smart tires by prominent players such as Michelin, Bridgestone, Goodyear, and Pirelli will augment the expansion of the market during 2022-2029. For instance, in June 2021, Goodyear Tire & Rubber Company unveiled the intelligent tire technology named SightLine. This technology will provide tire conditions and feedback on road conditions to the vehicle. The system will available for OEM customers and fleet operators by the end of 2021.

COVID-19 IMPACT

Decline in the Production of Vehicles Impacted the Market Growth  

Decline in the production of vehicles since 2018 and the emergence of the COVID-19 pandemic had a significant impact on the global automobile industry. As a result of government-imposed lockdowns, the supply of car components has been disrupted. Major automakers such as Volkswagen, General Motors, Daimler, Hyundai, PSA Group, and BMW halted manufacturing during the pandemic. These factors had an adverse impact on the market during the pandemic.  

In addition, owing to nationwide lockdown restrictions across most countries, the COVID-19 outbreak created multiple supply chain problems for the OEMs and Tier 1 suppliers across the world. Thus, supply chain disruptions impeded the supply of automotive components and raw materials, leading to production delays. For instance, according to the International Organization of Motor Vehicle Manufacturers (OICA), auto production declined by 16% in 2020 globally. Countries with the largest market shares in global passenger automobile production, such as China, Japan, and India registered a decline of 15%, 14%, and 17%, respectively, in 2020 compared to the previous year.

Thus, decrease in vehicle production across the world owing the factors such as supply chain disruptions and factory closure due to the COVID-19 pandemic has affected the growth of the overall market. However, relaxation in lockdown regulations after the third quarter of 2020 resulted in a sustained recovery in vehicle production. Moreover, rapid development and commercialization of connected and autonomous vehicles by prominent market players will strengthen the market outlook post-COVID-19.  

LATEST TRENDS

Rising Trend of Adoption of Internet of Things (IoT) in Automobiles to Drive Market Growth

With growing connectivity in the Internet of Things (IoT) era, tire manufacturers are inclining toward diverse telematics solutions for mobility, data sharing, and connected vehicles. Leading tire manufacturers operating in the tire industry such as Michelin, Bridgestone, Continental, and Goodyear are testing IoT-connected sensors to provide longer tire life, higher fuel efficiency, and enhanced safety to vehicle fleet owners. For instance, Goodyear Tire & Rubber Company introduced Eagle 350 Urban, a spherical concept tire. It will exchange the data via vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication with the help of the Internet of Things (IoT) and Li-Fi, a mobile wireless technology based on the light.

Apart from tire manufacturers, leading technology aggregators such as Microsoft are also investing and focusing on the integration of various Internet of Things (IoT) systems and sensors to enhance overall vehicular safety. For instance, in April 2018, American multinational technology corporation Microsoft invested USD 5 billion in the IoT programs over the next 4 years i.e., the end of 2022. The new platform enables vehicle owners to monitor tire performance in real-time to increase operational efficiency and take appropriate measures to save expenses and improve profitability. Leveraging the investment by Microsoft, Tyre Express, a startup pioneering lifecycle management for fleet operators, developed and launched “IoT based Tire Performance Management Solution” powered by Microsoft’s Azure IoT Hub. Similar trends will transform the market outlook over the next few years.

DRIVING FACTORS

Rise of Autonomous Driving and Connected Vehicles to Drive Market Growth

The growth of self-driving autonomous and connected vehicles has accelerated the growth of the technology used in all parts of the vehicle. With the help of advanced vehicle parts, such as connected tires, vehicle manufacturers increase the efficiency of connected vehicles by getting real-time feedback from such parts. These provide functions such as data collection, analysis, and storage, which aid in decision-making.

Rapid economic growth ensures robust development of transportation infrastructure and smart city projects. Many countries, including Mexico, Canada, and the U.S., are building digital infrastructure to enable communication between automobiles and infrastructures to gather crucial information, reduce traffic congestion, and increase road safety. The rise in the construction of smart cities is predicted to propel autonomous vehicle deployment significantly, thereby fueling the adoption of smart tires. It provides real-time data on pressure & temperature, road conditions, load detection, tread wear & depth, and other parameters, which help enhance the stability and accuracy of self-driving vehicles. Thus, the widespread deployment of connected cars and autonomous vehicles is projected to open up lucrative growth opportunities for the market over 2022-2029.

Rising Integration of Advanced Features in Vehicle to Boost Technology Adoption

The growing deployment of advanced technologies in vehicles, such as tire pressure monitoring systems, temperature control systems, and others to prevent vehicle breakdowns, is expected to drive the market growth. In addition, the increased installation of various sensors in car tires, which provides real-time data analysis to vehicle users, is expected to propel the growth of market. Moreover, leading tire manufacturers operating in the tire market are investing in technology advancements, such as B-Tag Systems, which monitor and transfer tire pressure and temperature and warn the driver about tire repair, avoiding operational downtime. Moreover, the increase in the integration of artificial intelligence and machine learning in vehicle tires, such as rim management and tread detection systems, helps track the performance of tires. Therefore, the rising integration of advanced features in vehicles is expected to drive the global market.

Leading tire manufacturers are collaborating with connected vehicle technology providers for the deployment of connected features in vehicles. For instance, in March 2021, Goodyear Tire & Rubber Company entered into collaboration with a connected car technology company Voyomotive, to deploy tire monitoring solutions to make vehicle functioning more efficient. These solutions are designed to gather and analyze the tire performance data and transfer it to the vehicle.

Increasing Adoption of Intelligent Transportation System by Commercial Vehicles Fleet Operators to Aid Growth

Through digital monitoring technologies, such smart wheels enable commercial vehicle manufacturers to manage and monitor their vehicles fleets as they help in providing real-time information about the condition of tire as well as vehicle. With the rising volume of commercial vehicles over time, fleet operators have been able to monitor numerous metrics such as fuel consumption and carbon emissions, resulting in an increased need for advanced tires that give real-time monitoring of tire conditions. Through digital monitoring technologies, it enable commercial vehicle manufacturers to manage and monitor their fleets more efficiently. As the industry realizes the trend of developing these next-generation vehicles, the reliance on traditional tires is projected to be replaced by the adoption of connected and IoT sensor-enabled tires.

RESTRAINING FACTORS

High Cost of Connected Tire Along with Risk of Data Theft to Hamper Technology Adoption

The cost of all components and sensor assembly in these tires significantly increases the overall manufacturing cost of vehicles. Also, additional cost related to hardware systems, connectivity solutions charges, and telecommunications services equipped in the vehicle for operation of such tire, further rise the overall cost, which may restrict the growth of the market. Furthermore, these extremely technologically advanced tires come with a slew of issues and complexities, including malfunctions and breakdowns, requiring regular maintenance. Furthermore, the considerable danger of hackers gaining access to system data and illegal access to car functionalities might hamper the adoption of intelligent tires, which, in turn, is expected to hinder the market growth.

Lack of Uninterrupted & Seamless Internet Connectivity Could Affect Technology Potential

The primary goal of a connected tire is to share the tire-related data with the vehicle and to the outside infrastructure. Even when traveling, people require continual internet access. Customers want their cars to accomplish duties comparable to those performed by their computers or smartphones. Interrupted connectivity may be a stumbling block for the smart tire segment as it does not provide continuous internet service. This is mainly due to inconsistency in the network offered by service providers, which varies for different regions. Thus, lack of uninterrupted & seamless internet connectivity is expected to hinder the growth of the market.

SEGMENTATION

By Vehicle Type Analysis

Increasing Demand for Passenger Cars to Drive Segment Growth through 2029

Based on vehicle type, the connected tire market share is bifurcated into passenger cars and commercial vehicles.

The passenger cars segment held the largest market share in 2021 and is expected to continue its lead over the forecast period. This is primarily due to the factors such as increasing demand for road safety owing to the rise in the number of road accidents across the world.

Furthermore, increasing the sales of passenger cars globally has positively supported the segmental growth. For instance, according to the International Organization of Motor Vehicle Manufacturers (OICA), 54 million units of passenger cars were sold worldwide in 2020, whereas 24 million units of commercial vehicles were sold in the same period. Increasing the spending power of the consumer, availability of financial services to buy vehicles, and improving living standards are some of the major factors supporting the sales of passenger vehicles globally.

The commercial vehicles segment is expected to witness the fastest growth during 2022-2029. Factors such as growing demand for tire monitoring systems and rising demand for predictive maintenance from commercial vehicle fleet operators are expected to foster the segment growth. Moreover, the emergence and growing popularity of truck platooning is further expected to provide lucrative opportunities for segmental growth.

By Rim Size Analysis

Increasing Adoption of Large Rim Size in Vehicles to Drive Segment Growth over 2022-2029

Based on rim size, the market share is broken down into 12" – 17", 18" – 21", and more than 22".

The 18"-21" segment is expected to witness significant growth over the projected period. The growth of the segment is mostly influenced by the increase in sales of vehicles equipped with rim sizes ranging from 18" to 21”. Furthermore, increasing demand for luxury vehicles equipped with advanced features further supports the segmental growth as these wheels are often employed in luxury vehicles.

The more than 22" segment is expected to register the second-highest growth rate during 2022-2029. Increasing usage of big rim size in automobiles to increase cornering, traction, braking, and other aspects is likely to boost segmental growth. Furthermore, the industry is predicted to rise due to rising development and implementation of connected technologies in vehicles.

REGIONAL INSIGHTS

Europe accounted for the largest market share of the market in 2021 and is expected to continue its dominance over the forecast period. The strong presence of prominent, such as Michelin, Pirelli & C.S.p.A., Continental AG, among other key players, and technological advancements in the region are expected to drive market growth. Additionally, the rapid adoption of connected and autonomous vehicles in the region is further anticipated to accelerate the market growth in future.

Asia Pacific is likely to witness the highest CAGR from 2022 to 2029. Growing passenger vehicle sales in the emerging countries of Asia Pacific, including China, Japan, South Korea, and others, is expected to boost the market growth in the Asia Pacific. Moreover, increasing demand for effective fleet management and predictive maintenance in Asia Pacific’s well-established logistics and ride-hailing industry are anticipated to drive the growth of the market in Asia Pacific. Furthermore, growing sales of vehicles in Asian countries, such as China, India, and Japan, also fuel the growth of the market in the region.

North America is the second-largest region in the market. Rapid advancements in the development and commercialization of connected as well as autonomous vehicles is the key factor driving the growth of the region. In addition, the presence of prominent automobile technology players coupled with the greater availability of related infrastructure will further propel the growth of the market in North America.

The Rest of the World is expected to register a considerable CAGR from 2022 to 2029. Increasing adoption of technologically advanced vehicles in the regions coupled with expanding investment in related infrastructures in Latin America and the Middle East is likely to fuel the market growth in the coming years.

KEY INDUSTRY PLAYERS

Focus on Early Development of Connected Tire Technology to Drive the Competition

The market is saturated with limited players present worldwide. The companies operating in the market are focusing on the development and introduction of smart and intelligent tire. For instance, leading players such as Michelin, Pirelli & C.S.p.A., Bridgestone Corporation, Continental AG, and others are developing new connected tire concepts. In addition, major players are also adopting various strategies such as product development & testing, partnerships, collaborations, business expansion, and mergers & acquisitions to grab untapped opportunities in emerging markets.

Michelin is One of the Leading Players in the Market 

Michelin is one of the leaders in the manufacturing and marketing of tires and is based in Clermont-Ferrand, France. The company designs, develop, manufactures, and sells tires for light vehicles, passenger cars, and heavy trucks. Michelin is a pioneer in connected tire. It is the world’s largest manufacturer of sustainable, connected, and radial tires for farm machinery, civil engineering applications, and aircraft as well as the world leader in off-the-road solutions. It offers solutions built around high-tech materials and the real-time management of connected tire.

LIST OF KEY COMPANIES PROFILED:

• Michelin (France)


• Pirelli & C. S.p.A. (Italy)


• Goodyear Tire & Rubber Company (U.S.)


• Continental AG (Germany)


• Bridgestone Corporation (Japan)


• Nokian Tyres plc (Finland)


• Trelleborg AB (Sweden)


• Sumitomo Rubber Industries, Ltd (Japan)


• JK Tyres (India)


• Toyo Tires (Japan)

KEY INDUSTRY DEVELOPMENTS:

• January 2020: Bridgestone Rolls Out a New Connected Tire Concept In January 2020, Bridgestone Corporation introduced a new sensor-filled connected smart tire. These warn about tire pressure and analyze and regulate the tire pressure and life of the tire and are used in commercial fleets. Bridgestone's new connected tire is supposed to give the ADAS more information to be better at preventing crashes.


• December 2019: Pirelli & C. S.p.A. New Smart Tire That Connects to the Internet In December 2019, Pirelli & C. S.p.A. developed a new smart tire that connects to the internet. This tire gives information about road conditions and warns the driver about tread depth, tire pressure, tire temperature, and multi-axis acceleration.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

Report Scope & Segmentation