Automotive Tire OEM Market Size, Share & COVID-19 Impact Analysis, By Vehicle Type (Passenger Car, Light Commercial Vehicle, and Heavy Commercial Vehicle), By Rim Size (13”-15”, 16”-18”, 19”-21”, and Above 21”), By Design (Radial and Bias), By Tire Type (Tubeless and Tube), and Regional Forecast, 2023– 2030

The global automotive tire OEM market size was valued at USD 41.55 billion in 2022. The market is projected to grow from USD 44.40 billion in 2023 to USD 70.79 billion by 2030, exhibiting a CAGR of 6.9% over the forecast period.

Automotive tires are original tires equipped with vehicles offered by Original Equipment Manufacturers (OEMs). These tires are specified by the vehicle manufacturer and are initially fitted to the vehicle. The vehicle manufacturer works with tire companies to choose a tire that meets performance requirements such as high fuel efficiency, longevity, and balanced ride noise for their brand-new vehicle.

The rising production and sales of passenger and light commercial vehicles globally are anticipated to propel the automotive tire OEM market growth. As more people purchase vehicles, a greater demand for high-performance automobiles exists. Increasing vehicle production and high demand for passenger cars worldwide are anticipated to boost market growth over the forecast period. According to the data published by European Automobile Manufacturers Association (ACEA), over 68 million passenger cars were manufactured globally in 2022, an increase of 7.9% from a year earlier.  The rapid growth of the automotive industry is also supporting the market growth.

COVID-19 IMPACT

Significant Decline in Revenue Due to Lackluster Sales of Tires during Pandemic Affected Market Growth

The COVID-19 pandemic affected the world unprecedentedly, with many countries being forced to shut down all non-essential businesses. Work-from-home orders, temporary shutdown of manufacturing plants, and shortage of raw materials resulted in declining automotive tire production. Due to fewer people and employees commuting on the roads, tire usage decreased drastically. OEMs, such as Good Year, Hankook, and Bridgestone, witnessed a significant decline in revenue during the pandemic. For instance, Goodyear Tire and Rubber Company reported a net loss of USD 696 million in the second quarter of 2020 as compared to net income of USD 58 million a year ago.

Similarly, in 2020, Bridgestone's revenue decreased by USD 4.96 billion, which is 15% down from the previous fiscal year, to USD 28.93 billion, primarily due to a global demand decline for tires during COVID-19. However, the global automotive tire market recovered during the third quarter of 2020 as movement restrictions were eased and economic activities resumed. The automotive tire OEM industry is predicted to witness significant growth owing to growing sales of vehicles globally.

LATEST TRENDS

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Growing Demand for Airless and Non-Pneumatic Tires Set a Positive Trend in the Market

Aesthetic design, high performance, durability, and cost-effectiveness are some of the customers' primary concerns. The demand for high performance tires is increasing with the rising concern of customers using conventional tires. This is encouraging automotive tire OEMs to focus on top-end technological development and production of high-caliber products.

Advanced and high-performance tires can substantially improve the in-vehicle convenience of customers. These tires are generally airless, non-pneumatic, and cannot be punctured, providing a firm grip on roads and performing well on wet roads and during high-speed traveling. They have a smaller surface contact area than conventional tires, and it helps increase the vehicle’s fuel efficiency.

Through continued technological innovation, automotive tire OEM players are developing safer, quieter, and improved passenger car and light truck radial tires with improved eco-friendliness and cutting-edge technology. The automotive tire OEM players are also focusing on manufacturing Electric Vehicle (EV) tiers to boost product competitiveness at a higher level. For instance, in February 2023, Goodyear introduced an EV tire, RangeMax RSD, compatible with EV and gas- or diesel-powered vehicles for regional fleets. The energy-efficient tire is equipped to handle the higher load capacities of EVs, designed to deliver lower rolling resistance irrespective of the drivetrain.

DRIVING FACTORS

Growing Demand for Passenger Cars and Light Duty Vehicles is Accelerating the Market Growth

Increasing vehicle sales and production is anticipated to boost the market over the forecast period. The growing demand for passenger cars and light-duty commercial vehicles, especially in countries including China, Japan, and India, will increase tire demand over the forecast period. According to the China Association of Automobile Manufacturers report, sales of passenger vehicles witnessed robust expansion; over 1.05 million such vehicles were sold in China in March 2023, an increase of 20.4% from the previous month. The rebounding vehicle sales post-COVID-19 pandemic will catalyze market development.

Advancements in tire manufacturing technology, such as intelligent tires with built-in sensors, to reduce overall driving costs across all fleets are creating growth opportunities for the market players. Prominent players of automotive tire OEM, including Continental and Hankook are investing in technologies that will enable safer driving and vehicle management based on the data provided by the tire. Intelligent tires monitor accurate pressure and temperature readings from sensors in the tire's inner liner. For instance, in February 2023, Continental Tires launched new ContiConnect Live cloud-based solutions to assist fleets in real-time, intelligent digital tire monitoring of all vehicles in the fleet. Continental tire sensors collect data inside the tires and forward it to a telematics unit. This information can be used for truck and trailer monitoring or stand-alone trailer monitoring.

RESTRAINING FACTORS

Fluctuating Raw Material Prices May Restraint the Market Growth

The ongoing after-effects of the pandemic, in tandem with ongoing Russia-Ukraine war, have impacted tire manufacturers globally, as high raw material prices continue to impact the profit margins of the market players. Raw material prices, including rubber and other inputs linked to crude, have been on a rising trajectory since the pandemic.

High development cost is one of the factors that can restrain the market of automotive tire OEM. Developing tires that meet the specific requirements of automakers can be expensive, especially for smaller manufacturers that may not have the resources to compete with the larger companies. Tire manufacturers must comply with various environmental regulations, including safety and environmental standards. These requirements lead to higher costs and complexity in developing and producing automotive tires.

SEGMENTATION

By Vehicle Type Analysis

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Passenger Car Segment is anticipated to Lead Owing to Rising Demand from Developing Countries

The market has been categorized into light commercial vehicle, heavy commercial vehicle, and passenger car, by vehicle type.  

The passenger car segment dominated with a major market share in 2022. Growing demand for passenger cars from developing countries such as India, China, and Indonesia, amid the rise in the purchasing power of consumers, will also propel the growth of the passenger cars segment in the region over the forecast period.

The light commercial vehicle segment is anticipated to be the fastest-growing segment, with a CAGR of over 7.4% over the forecast period. The rapid boom of the e-commerce industry has propelled the demand for light-duty vehicles. The Light-duty vehicles continue to move in an upward trajectory buoyed by public investment in logistics & transportation, and construction. This has led to the wider adoption of light-duty vans propelling the demand for commercial-grade tires for these fleets.

By Rim Size Analysis

16’’-18’’ Rim Size to Dominate the Market Owing to Growing Demand for Passenger Cars

The market is categorized into 13”-15”, 16”-18”, 19”-21”, and above 21” by rim size. The 16”-18” segment dominated with a market size of USD 12.32 billion in 2022. This rim size is primarily used in passenger cars. The growing production of passenger cars has propelled the demand for 16”-18” rim-size tires.

Rim size 13”-15” is anticipated to register a CAGR of 8.4% over the forecast period. This reflects the growing demand for small cars for urban fleets and the growing popularity of shared transportation, where higher-occupancy vehicles such as buses may be less preferred in the post-pandemic period.

Tire rim size 19”-21” is anticipated to grow significantly owing to their wider usage in light commercial vehicles and SUVs. The positive market statistics can be attributed to its low maintenance cost, operating cost, and better fuel efficiency.

By Design Analysis

Radial Held a Considerable Market Share Owing to Better Traction and Lower Fuel Consumption  

Based on design, the market is segmented into radial and bias. The radial tire held a leading market share in 2022. A radial tire is expected to show significant growth over the forecast period owing to the strength and flexibility of the tire. Radial tire absorbs the bumps, impacts, and shocks, providing better comfort to the operator with a better ride. The tread and sidewall of the radial tire function independently. Radial tires transfer more power from the machine to the ground, thus helping to lower fuel consumption and higher productivity. The radial tire provides lesser ground compaction and damage to the vehicle. These factors will lead to an increase in sales of the radial tire among the passenger vehicle segment.

The bias tires segment is anticipated to grow slower over the forecast period. Bias tires are used on heavy construction owing to their stronger sidewalls, reducing the chances of tire damage when driving across rough terrain. They are designed to have less flexibility than radial, which can lead to reduced traction, increased wheel slippage, and provide a smaller footprint resulting in additional compaction. Due to these factors, the bias tire segment's growth is much less in the passenger vehicle segment. In contrast, it is steady in the commercial vehicle segment over the forecast period.

By Tire Type Analysis

Tubeless Leads the Market due to Higher Performance and Better Resistance to Heat

Based on tire type, the market is segmented into tube and tubeless.

The tubeless segment is expected to dominate the market over the forecast period. The tubeless tire has no tube inside the tire like a tube tire. Air is trapped between the tires and the rim itself with the use of the airtight seal. Due to the high speed of a passenger vehicle, the temperature inside the tire gets higher, leading to an increase in pressure on the tire tube, causing the tire to burst. But the radial tire is without a tube, has high resistance to heat, and is suited to hold air much more than a thinner tube. These factors further drive the market for tubeless tires in passenger cars over the forecast period.

The tube segment is expected to grow significantly over the forecast period. Commercial vehicles are used for the transportation of heavy loads. Considering the capability to withstand heavy loads, a tube tire is generally used in commercial vehicles. This factor will propel the growth of the tube tire in the commercial vehicle segment.

REGIONAL INSIGHTS

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Asia Pacific to Dominate the Market due to Rising Production of Vehicles in the Region

Asia Pacific dominated the automotive tire OEM market share amid rapidly growing domestic consumption, availability of cheap labor, raw materials, large population, and evolving standards. China is anticipated to dominate the region due to the tire industry's huge investment. The Chinese tire industry is the world’s largest in terms of volume. According to the China Rubber Industry Association Tire Branch report, the 38 major member companies produced over 500 million tires in 2021, an increase of 11.28% as compared to 2020.

Moreover, the rise of the middle-class group has pushed automobile demand to an all-time high, creating a growing market for all kinds of tires. Technological innovation and high investments in R&D by key players may help to maintain dominance of the Asia Pacific region during the forecast period. China is expected to hold the largest market share in the Asia Pacific region amid huge sales of advanced tires such as airless tires, 3D print tires, and puncture-proof tires.

The North America automotive tire OEM market is anticipated to grow significantly with a CAGR of 6.7% over the forecast period owing to robust demand for passenger cars and light-duty vehicles. Moreover, major market players GoodYear, Cooper Tire, Michelin, Continental, and Michelin have contributed to the region’s growth by expanding their product portfolio and investment in tire technologies. Moreover, the ever-growing demand for premium cars and compact SUVs has played a major role in the automotive tire OEM industry.

The rest of the world would witness considerable market growth as companies such as Bridgestone, Sumitomo, and Continental actively invest in countries including Africa and Brazil. For instance, in November 2022, Bridgestone announced an investment of over USD 190 million to expand its tire manufacturing plant located in Costa Rica. This investment is in addition to over USD 60 million planned for 2022-2026.  The company will be investing more than USD 250 million for five years. Moreover, rising disposable income, public infrastructure investment, and tire industry investment will drive regional market growth over the forecast period.

KEY INDUSTRY PLAYERS

Companies are Focusing on Mergers & Acquisitions and Partnerships to Gain a Competitive Edge in the Market

The companies are focusing on cost-reduction strategies, strategic partnerships, mergers, and acquisitions to enhance their product offerings. They are highly focused on using sustainable raw materials to create new tires, reduce their carbon footprint, and strengthen their global market position. For instance, in April 2023, Bridgestone developed tires using 75% recycled and renewable materials, including natural rubber, recycled plastic bottles, and recycled steel for electric SUVs and crossover vehicles.

List of Key Companies Profiled: 

• Bridgestone Corporation (Japan)


• Michelin (France)


• Continental AG (Germany)


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


• Sumitomo Rubber Industries (Japan)


• Hankook (South Korea)


• Pirelli (Italy)


• Yokohama Rubber Company (Japan)


• Toyo Tires (Japan)


• Giti Tire (Singapore)


• Maxxis (Taiwan)


• ZC Rubber (China)


• MRF Tires (India)


• Apollo Tyres (India)

KEY INDUSTRY DEVELOPMENTS:

• January 2023- Sumitomo Rubber Industries collaborated with Global Data Service Organization for Tyres and Automotive Components (GDSO) to enhance individual tire identification and management systems to enhance tire traceability. The tire manufacturer will also design a database enabling users to access data on the company's tires using RFID technology.


• October 2022 – Hankook Tire launched Smart iON AU06+, the first Truck and Bus Radial tire in its iON product portfolio for premium EVs in the Korean market. The Smart iON AU06+ is the latest addition to its iON tire family, which includes winter and summer tires for passenger EVs.


• September 2022 – Michelin launched Defender 2 tires for passenger cars and Crossover Utility Vehicles (CUVs) featuring an 80,000-mile warranty with an expansion into 19” and 20” rim sizes. The tire is designed to handle the extra weight and torque of small SUVs, minivans, and electric vehicles.


• July 2021 – Pirelli launched its first high-load index tire for electric or hybrid cars and SUVs. The tire is designed to support the weight of new vehicles equipped with batteries. It is designed to provide high driving comfort and low rolling resistance.


• June 2021 – The Goodyear Tire & Rubber Company acquired Cooper Tire & Rubber Company to strengthen its market position in the global tire industry. The combined company will offer broader options across the value spectrum to strengthen its customer base.

REPORT COVERAGE

An Infographic Representation of Automotive Tire Market

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The research report provides market analysis of automotive tire OEM and focuses on key aspects such as leading companies, product types, and leading product applications. Besides, 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 contributed to the market growth in recent years.

Report Scope & Segmentation