Trends in the Global Tire Industry - · PDF fileTrends in the Global Tire Industry ... Internal Drivers and Change ... Car Tire Market Growth by Region 2010-2035

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�

SAMPLE



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�

SAMPLE



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�

SAMPLE



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�

SAMPLE



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�

SAMPLE



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�

SAMPLE



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�

SAMPLE



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]

SAMPLE

Trends in

© 2013 IH

Althouthe only

In termroughlyone thir

By chanfor lightruck re

Figu

2011 sh

Neverthvalue.

Reduct

n the Global T

HS Global Lim

ugh much oy major ma

ms of tire say 1,100 milrd of the gl

nnel, arounht vehicles;eplacement

ure 23: 2011

hares (abov

heless, the

tions in raw

Tire Industry

mited

of that growarket to hav

ales, Asia llion tires slobal total,

nd two thir about a qt tires and 2

Light vehic

ve)

global mar

w materials

Figure 24

wth was drive shown s

is also the sold each y followed b

rds of the wquarter are 2% into tru

cles and Tru

rket is grow

prices help

: Increasing

iven by expsustained po

biggest myear (car anby Europe,

world’s tiresoriginal eq

uck OE tires

uck Sales byStanley]

wing at a su

ped profitab

g Price of Ru

ports, Chinositive grow

arket, but bnd truck coNAFTA an

s are sold iquipment fos.

y Region an

ustained ra

bility in the

ubber [Sour

na’s domestwth in the l

by a smallombined), And other ar

nto the repor light veh

d Channel [S

ate of aroun

e industry.

ce: Pirelli]

tic market rlast five yea

ler margin.Asia takes reas of the w

placement shicles; 7%

[Source: Mo

nd 7% annu

38

remains ars.

Out of around world.

segment go into

rgan

ually by

SAMPLE

Trends in

© 2013 IH

The prinow co

Much onatural

Figu

In the materianearly thigh lea

As a re

As this continu

Of thoprofitab

Raw m

Raw mraw ma

Becausraw ma

The ma

In termrubber monom

n the Global T

HS Global Lim

ice of rubbome down f

of the volatl rubber.

ure 25: Price

period to 2als prices. Athe same exading to he

sult, most c

report wasue to adopt

se who didbility.

materials

material pricaterials is th

e labour coaterials is lo

ain costs w

Carbon blaSteelcord Fabric rein

ms of synthand stiren

mer.

Tire Industry

mited

ber (above) from the hi

tility in cos

e Trend in S

201, tire prAs raw maxtent. Price

ealthy profi

companies

s being prept a financial

d report, m

s

ces contribuherefore a m

osts are hiower, but st

ithin the ra

ack

nforcement

etic rubberne-butadien

is still highighs of $6/k

sts at a tire

icom pricesI

rices arounaterials haves are fallinits at the tir

have been

pared not al year runn

most were

ute over hamajor drive

gher in Eutill significa

aw material

r, the tire inne rubber (

gh comparekg seen in F

factory is a

s for last (10Indexmundi

nd the worve become ng in responre makers.

able to reta

all the data ning from A

able to sh

alf the coster of profita

urope and ant.

ls budget ar

ndustry dep(SBR). Bot

ed to historFeb 2011 to

associated

0 years) Prici]

rld increase cheaper, tnse to a glo

ain high pr

was in for April to Ma

how substa

ts of an Asability in th

North Am

re rubber, b

pends on twth are deri

rical prices,o around $3

with volati

ce in US cen

ed, reflectintire prices hobal glut, bu

rofits into 2

2012, sincerch.

antial impr

ian tire fache segment.

merica, the

both natura

wo primaryived largel

, but the pr3/kg.

ility in the

nts / kg [Sou

ng the risehave not fut margins

2012.

e many com

rovements

ctory. The .

proportion

al and synth

y types: buly from bu

39

rice has

price of

urce:

e in raw fallen to are still

mpanies

in their

price of

n due to

hetic

utadiene utadiene

SAMPLE

Documents

Trends in the Global Tire Industry - · PDF fileTrends in the Global Tire Industry ... Internal Drivers and Change ... Car Tire Market Growth by Region 2010-2035