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Trends in the Global Tire Industry
© 2013 IHS Global Limited 3
CONTENTS Chapter 1: What Is A Tire? ........................................................................................ 10�
Who makes tires? ................................................................................................... 11�What is a tire? ........................................................................................................ 13�
Steelcord ............................................................................................................. 15�Textile Reinforcement ......................................................................................... 16�Rubber Compound .............................................................................................. 16�Processes ............................................................................................................. 19�Key Raw Materials .............................................................................................. 21�Reinforcing Fillers ............................................................................................... 23�Reinforcing Fibres ............................................................................................... 25�
Types of tire ........................................................................................................... 25�Off-road / earthmover tires (OTR) ....................................................................... 25�Agricultural tires .................................................................................................. 27�Racing tires ......................................................................................................... 28�Truck tires ........................................................................................................... 28�Aircraft tires ........................................................................................................ 30�Motorcycle tires ................................................................................................... 31�Buggy tires .......................................................................................................... 32�
Chapter 2: Big picture ................................................................................................ 34�Global production .................................................................................................. 37�Raw materials ........................................................................................................ 39�Globalisation .......................................................................................................... 41�Segments, sectors, and branding .............................................................................. 42�Technology ............................................................................................................ 45�Low-cost manufacture ............................................................................................ 46�China ..................................................................................................................... 47�Legislation ............................................................................................................. 48�
Chapter 3: Internal Drivers and Change ..................................................................... 51�Winter tires ............................................................................................................ 52�Consumer Vehicles ................................................................................................. 55�Commercial Vehicles .............................................................................................. 57�
Chapter 4: External Drivers ....................................................................................... 59�Raw Materials ........................................................................................................ 59�Making natural rubber ............................................................................................ 61�Butadiene is also short ............................................................................................ 63�Legislation ............................................................................................................. 64�Environmental Issues ............................................................................................. 66�Diversification ........................................................................................................ 67�Electronic chips in tires are now commercialised. .................................................... 68�
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OE Relationships ................................................................................................... 68�Chapter 5: Tire labelling ............................................................................................ 70�
Why labels ............................................................................................................. 70�Communications .................................................................................................... 71�EU labels ............................................................................................................... 73�
Winter tires and the label ..................................................................................... 75�Labels and selling price ........................................................................................ 76�Enforcement ........................................................................................................ 78�Impact since introduction .................................................................................... 79�
Japanese scheme .................................................................................................... 80�The United States ................................................................................................... 81�Other countries ....................................................................................................... 83�Marketing communications .................................................................................... 84�On-line sales ........................................................................................................... 85�
Chapter 6: Retail and Service ..................................................................................... 86�On-line retailing ..................................................................................................... 89�
Chapter 7: Key Profit Opportunities ........................................................................... 92�Car/Light Truck ..................................................................................................... 92�Winter Tires ........................................................................................................... 93�UHP segment ......................................................................................................... 97�Runflat Tires .......................................................................................................... 98�Truck Tires ............................................................................................................ 100�Moto Tires ............................................................................................................ 101�Aircraft Tires ......................................................................................................... 102�Agricultural ........................................................................................................... 104�Off-Road ............................................................................................................... 105�
Chapter 8: Technologies ........................................................................................... 107�Bio technology ...................................................................................................... 110�Extended Mobility ................................................................................................. 111�
Air Maintenance Technology .............................................................................. 115�Sensors in the Tire .............................................................................................. 116�
Compounding Ingredients ..................................................................................... 118�Solution-SBR ..................................................................................................... 119�Polybutadiene .................................................................................................... 120�
Reinforcement ....................................................................................................... 120�Steelcord ............................................................................................................... 121�Manufacturing Technology .................................................................................... 122�Recycled rubber ..................................................................................................... 122�
Chapter 9: Industry response ..................................................................................... 126�Michelin ............................................................................................................... 126�Bridgestone ........................................................................................................... 130�
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Goodyear .............................................................................................................. 132�Continental ........................................................................................................... 134�Pirelli .................................................................................................................... 136�Yokohama ............................................................................................................ 137�Hankook ............................................................................................................... 138�Apollo ................................................................................................................... 139�
Chapter 10: Europe .................................................................................................. 141�Expansion & Contraction projects in Europe .......................................................... 145�
Bridgestone ........................................................................................................ 145�Continental AG .................................................................................................. 145�Cooper Tire & Rubber Co. .................................................................................. 145�Goodyear ........................................................................................................... 146�Michelin ............................................................................................................. 146�Nokian Tires ...................................................................................................... 146�Pirelli Tire S.p.A. ............................................................................................... 146�Sumitomo Rubber Industries .............................................................................. 146�
Market shares ........................................................................................................ 146�Chapter 11: North America ...................................................................................... 149�
Overview .............................................................................................................. 149�Imports increase – especially from China ............................................................... 152�Expansions ............................................................................................................ 153�
Bridgestone Corp. ............................................................................................... 153�Continental A.G. ................................................................................................ 153�Hoosier Racing Tire Corp. .................................................................................. 153�Group Michelin .................................................................................................. 153�Specialty Tires of America Inc. ........................................................................... 153�Yokohama Rubber Company ............................................................................. 154�
Chapter 12: China .................................................................................................... 155�Volumes continue to increase ................................................................................. 158�Expansion projects ................................................................................................ 159�
Continental A.G. ................................................................................................ 159�Kenda Rubber Co. Ltd. ...................................................................................... 160�
Chapter 13: Russia ................................................................................................... 161�A, B, C classification ............................................................................................. 164�Russian State steps in as Sibur moves out of tire building ........................................ 165�Big changes in B segment ....................................................................................... 166�Russian Consumers and the winter tire segment ..................................................... 168�Distribution ........................................................................................................... 169�
Bridgestone Corp. ............................................................................................... 171�JSC Cordiant ...................................................................................................... 171�Pirelli Tire S.p.A. ............................................................................................... 171�
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Chapter 14: other Asia .............................................................................................. 172�Korea and the Global Tire Market ...................................................................... 173�
Japanese tire production ........................................................................................ 173�Expansions ............................................................................................................ 176�
Apollo Tires ....................................................................................................... 176�Bridgestone Corp. ............................................................................................... 176�P.T. Gajah Tunggal Tbk. .................................................................................... 177�Pirelli Tire S.p.A. ............................................................................................... 177�J.S.C. Southern Rubber Industry (Casumina) ...................................................... 177�Shandong Linglong ............................................................................................ 177�Toyo Tire & Rubber Co. Ltd. .............................................................................. 177�Yokohama Rubber Co. Ltd. ................................................................................ 177�
Chapter 15: South America ....................................................................................... 179�Pirelli Tire S.p.A. ............................................................................................... 181�
Chapter 16: India ..................................................................................................... 182�Alliance Tire Group ........................................................................................... 185�Apollo Tires Ltd. ................................................................................................ 185�Continental A.G. ................................................................................................ 185�
Chapter 17: Supplier Profiles .................................................................................... 186�Aeolus Tire ........................................................................................................... 186�Apollo Tyres ......................................................................................................... 188�Bekaert .................................................................................................................. 191�Bridgestone ........................................................................................................... 194�Ceat Ltd ................................................................................................................ 200�Continental ........................................................................................................... 202�Cooper Tire & Rubber ........................................................................................... 217�DuPont ................................................................................................................. 220�Giti ....................................................................................................................... 224�Hankook Tire ........................................................................................................ 226�Hyosung Corporation ............................................................................................ 229�JK Tyre ................................................................................................................. 231�KIS Wire ............................................................................................................... 234�Kolon Industries .................................................................................................... 235�Kordsa Global ....................................................................................................... 236�Kumho Tire .......................................................................................................... 238�Michelin ............................................................................................................... 241�MRF ..................................................................................................................... 246�Pirelli .................................................................................................................... 248�South China Tire & Rubber ................................................................................... 253�Sumitomo Rubber ................................................................................................. 255�Teijin Aramid ........................................................................................................ 258�
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Toyo Tire .............................................................................................................. 260�Xingda .................................................................................................................. 264�Yokohama Rubber ................................................................................................ 266�
TABLES AND FIGURES Figure 1: Chart of top 50 tire makers by location of HQ [Source: Tire Industry Research] ................................................................................................................................. 12�Figure 2: Total tire sales by origin [Source: Tire Industry Research] ............................ 12�Figure 3: Diagram of structure of tire [Source: Hankook] ............................................ 14�Figure 4: Tires are complex composite assemblies [Source: www.tirelitigation.com] .... 15�Figure 5: Tire Industry Consumption of Compounding Ingredients, 2012 [Source: Notch Consulting] ............................................................................................................... 18�Figure 6: Tire Industry Consumption of Other Compounding Ingredients, 2012 [Source: Notch Consulting] ..................................................................................................... 18�Figure 7: Reinforcing Filler Demand in Passenger Tires, 2012 & 2015 [Source: Notch Consulting] ............................................................................................................... 24�Figure 8: Titan 63 inch tires [Source: Titan International] ........................................... 26�Figure 9: Deutz Agro XXL [Source: Trelleborg] ......................................................... 27�Figure 10: Pirelli’s F1 2013 Range [Source: Pirelli] ..................................................... 28�Figure 11: Continental demonstrates its winter truck tires [Source: Continental] .......... 29�Figure 12: Michelin Air X Tires [Source: Michelin] .................................................... 30�Figure 13: Hyundai Fork Lift Truck [Source: Hyundai] .............................................. 32�Figure 14: Bridgestone Airless Buggy Tires [Source: Bridgestone] ............................... 32�Figure 15: Speed / Load symbols [Source: Pirelli] ...................................................... 33�Figure 16: Tire Industry Global Sales Split [Source: Tire Industry Research] ............... 34�Figure 17: Global Car Tire Sales by Region [Source: Morgan Stanley] ........................ 35�Figure 18: Global Truck Tire Sales by Region [Source: Morgan Stanley] ..................... 35�Figure 19: European Car Tires Sales, replacements (left) and OE (right) 2010-2012 [Source: Morgan Stanley] .......................................................................................... 36�Figure 20: European Truck Tires Sales, replacements and OE 2010-2012 [Source: Morgan Stanley] ........................................................................................................ 36�Figure 21: Tire Production Worldwide (million units) [Source: JATMA] .................... 37�Figure 22: Global Light Vehicle Tire Production by Region [Source: LMC] ................ 37�Figure 23: 2011 Light vehicles and Truck Sales by Region and Channel [Source: Morgan Stanley] ..................................................................................................................... 38�Figure 24: Increasing Price of Rubber [Source: Pirelli] ................................................ 38�Figure 25: Price Trend in Sicom prices for last (10 years) Price in US cents / kg [Source: Indexmundi] ............................................................................................................. 39�Figure 26: Butadiene Demand 2014, (KT) [Source: IRSG] .......................................... 40�Figure 27: Tire Brand Pricing Strategy [Source: Tire Industry Research] ..................... 44�Figure 28: ETRMA Tire Data 2011 [Source: ETRMA] .............................................. 46�Figure 29: Car Tire Market Growth by Region 2010-2035 [Source: LMC] ................... 49�Figure 30: Truck Tire Market Growth by Region 2010-2035 [Source: LMC] ............... 49�Figure 31: Raw materials prices eased during 2012 after significant increases in 2011 [Source: Morgan Stanley] .......................................................................................... 60�Figure 32: Global Natural Rubber Scenarios (KT) [Source: IRSG] .............................. 61�
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Figure 33: Cambium Cross Section and Havea Tapping [Sources: FAO and Cirad] ..... 62�Figure 34: Butadiene monomer prices [Source: ICIS Pricing] ...................................... 63�Figure 35: Olefin Cracker Yields, (MT for MT of Feedstock) [Source:IRSG] ............... 63�Figure 36: Rolling Resistance, Abrasion Resistance and Wet Traction Triangle [Source: Evonik] ..................................................................................................................... 65�Figure 37: ETRMA RR limits [Source: ETRMA] ....................................................... 74�Figure 38: ETRMA WG limits [Source: ETRMA] ..................................................... 75�Figure 39: ETRMA dB limits [Source: ETRMA] ........................................................ 75�Figure 40: Winter Tire ‘Three Peaks’ Logo [Source: Michelin] ................................... 76�Figure 41: Tire Price Ranked by Wet Grip [Source: Tire Industry Research] ............... 77�Figure 42: Tire Price Ranked by Rolling Resistance [Source: Tire Industry Research] .. 77�Figure 43: Tire Price Ranked by Noise [Source: Tire Industry Research] ..................... 78�Figure 44: Japanese Tire Label [Source: JATMA] ...................................................... 80�Figure 45: United States Tire Label [Source: NHTSA] ................................................ 81�Figure 46: High Demand for Mobility Related Services [Source: Continental] ............. 86�Figure 47: Importance of Reliable Tires [Source: Continental] .................................... 87�Figure 48: Tire Price Comparison by Size [Source: Tire Industry Research] ................ 93�Figure 49: Winter Tire and Standard Tire Braking Time Comparison [Source: Continental] .............................................................................................................. 94�Figure 50: EU Winter Tire Rules: Country-by Country [Source: Continental] ............. 95�Figure 51: Winter Tire Market Penetration [Source: Continental] ............................... 96�Figure 52: Regional Demand for Carbon Black versus Highly Dispersible Silica in Passenger Tires, 2009 [Source: Notch Consulting] ..................................................... 109�Figure 53: ETRMA Tire Data 2011 [Source: ETRMA] ............................................. 141�Figure 54: European Car Tires Sales, replacements and OE 2010-2012 [Source: Morgan Stanley] .................................................................................................................... 142�Figure 55: European light vehicle tire sales development: OE channel (left) Replacement channel (right) [Source: Pirelli] ................................................................................. 142�Figure 56: European Truck Tires Sales, replacements and OE 2010-2012 [Source: Morgan Stanley] ....................................................................................................... 143�Figure 57: European light vehicle tire sales development: OE channel (left) and Replacement channel (right) [Source: Pirelli] ............................................................. 143�Figure 58: European Passenger Tire Market Share, 2001-2010 [Source: Morgan Stanley] ................................................................................................................................ 147�Figure 59: European Truck Tire Market Share, 2001-2010 [Source: Morgan Stanley] . 147�Figure 60: ETRMA tire plants [Source: ETRMA] ..................................................... 148�Figure 61: North American Car Tire Sales – OE (left) and Replacement (right) [Source: Pirelli] ...................................................................................................................... 150�Figure 62: North American Truck Tire Sales – OE (left) and Replacement (right) [Source: Pirelli] ........................................................................................................ 150�Figure 63: North American Car Tire Sales by Volume – OE (left) and Replacement (right) [Source: Morgan Stanley] ............................................................................... 151�Figure 64: North American Truck Tire Sales by Volume – OE (left) and Replacement (right) [Source: Morgan Stanley] ............................................................................... 151�Figure 65: Tire Review’s Tire Brand study 2012 - Consumer Tires [Source: Tire Review] ................................................................................................................................ 152�
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Figure 66: Tire Review’s Tire Brand study 2012 - Medium truck tires [Source: Tire Review] .................................................................................................................... 152�Figure 67: Car Tire Market Growth by Region 2010-2035 [Source: LMC] .................. 155�Figure 68: Truck Tire Market Growth by Region 2010-2035 [Source: LMC] .............. 156�Figure 69: China OE Car Tires, Month by Month [Source: Pirelli] ............................. 156�Figure 70: China OE Truck Tires, Month by Month [Source: Pirelli] ......................... 157�Figure 71: China Replacement Truck Tires, Month by Month [Source: Pirelli] ........... 157�Figure 72: Russian Market Share by Manufacturer [Source: Cordiant] ....................... 161�Figure 73: A-, B- and C-Segment Tire Market Share in Russia 2010-2012 [Source: Cordiant] ................................................................................................................. 164�Figure 74: A-, B- and C-segment Growth 2007-2018 by Volume (left) and Value (right) Source: Nokian] ....................................................................................................... 165�Figure 75: Russian B-Segment market share by manufacturer 2011-2012 [Source: Cordiant] ................................................................................................................. 167�Figure 76: South America OE (left) and Replacement (right) Car Tires, Month by Month [Source: Pirelli] ........................................................................................................ 179�Figure 77: South America OE (left) and Replacement (right) Car Tires, Month by Month [Source: Pirelli] ........................................................................................................ 179� Table 1: Tire manufacturer profitability in 2011 [Source: Tire Business] ...................... 40�Table 2: Global Tyre Markets 2009-2015 [Source: Morgan Stanley] ............................ 49�Table 3: The number of major international auto car tires Commodity Trends (2010) [Source: Korean Trade Association statistics (KOTIS)] ............................................... 88�Table 4: Tire Rating compared with Maximum Speed Allowance [Source: ERMC] .... 97�Table 5: Share of World Tire Production by Geographic Region (units x 103 tons (produced rubber)) [Source: IRSG] ........................................................................... 155�Table 6: Top domestic tire makers (2010) .................................................................. 158�Table 7: Korean tire production (Unit: one thousand, %) [Source: KOTMA] ............. 173�Table 8: Japanese Sales of Replacement Tires [Source: JATMA] ............................... 174�Table 9: Japanese Sales of OE Tires [Source: JATMA] .............................................. 174�Table 10: Japanese Production of Automotive Tires and Tubes [Source: JATMA] ..... 175�Table 11: Sales of summer tyres and winter tyres for replacement (for four-wheeled vehicles) [Source: JATMA] ....................................................................................... 175�Table 12: Indonesian vehicle market - Domestic Auto Market & Eximby Category Jan-Dec 2012 [Source: GAIKINDO] ............................................................................... 176�Table 13: Indonesian vehicle market - Domestic Auto Production by Category Jan-Nov 2012 [Source: GAIKINDO] ...................................................................................... 176�Table 14: Category-wise Tire Production in India Financial Year 2010-11 - 2011-12 (April-December) [Source: ATMA] ........................................................................... 182�Table 15: Total Tire Production in India F.Y. 2004-05 T0 2010-11 [Source: ATMA] .. 182�Table 16: Category-wise Export of Tires Financial Year 2010-11 - 2011-12 (April-September) [Source: ATMA] .................................................................................... 183�
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Trends in the Global Tire Industry
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Initial data from 2013 suggest that the bottom may have been reached though few in the industry expect significant recovery during 2013.
In the first two months of 2013 replacement truck tire sales in Europe were around 7% of the same period in 2012. OE truck replacement sales were ahead by just 1%.
Global production
The troubles of Europe aside, China continues to dominate world tire production.
Figure 21: Tire Production Worldwide (million units) [Source: JATMA]
China now dominates global tire manufacture. China makes more truck tires than any other country and in 2008, it took top slot in the car tire segment as well. Perhaps more significant is the speed with which this dominance has been achieved. See the rise of the orange (China) blobs below.
Figure 22: Global Light Vehicle Tire Production by Region [Source: LMC]
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