Automotive Tires Market Size, Share, & Analysis

[354 Pages Report] Automotive tire market is estimated to grow from USD 19.6 billion in 2023 to USD 21.6 billion by 2028 at a CAGR of 2.1% over the forecast period. The key factors driving the automotive tire market are the vehicle’s increased life and the miles driven every year due to regular maintenance of the car, customer awareness, and advancement in new tire technology, which has led to longer life of the automotive tires.

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Market Dynamics

DRIVER: Increase in the vehicle’s average life and annual miles driven by light-duty vehicles

The average life of a vehicle has increased over the past few years due to technological advancements, improving road infrastructure, better driving conditions, and other factors. The increase in a vehicle's average life and annual miles driven per year have created growth opportunities for tire manufacturers in the aftermarket. According to the Federal Highway Administration of the US Department of Transportation, a passenger car is driven, on average, 13,476 miles per year. This comes to more than 1,000 miles every month. The increased life of vehicles and the increased miles driven by vehicles have had a mixed impact on the automotive tire industry where the decrease in the demand for tires has put pressure on the industry, whereas on the other side, it has also led to an increased focus on tire performance and sustainability, by increasing the investments in research and development.

RESTRAINT: Highly volatile raw material prices and increased longevity of tire is affecting aftermarket sales

The raw material in the automotive tire industry plays a vital role in setting the component’s price. The raw materials for manufacturing tires include natural rubber, synthetic rubber, carbon black, steel, fabric, and plasticizers. As natural and synthetic rubber are the most critical raw materials, their demand, consumption, and price fluctuations significantly impact tire prices. According to the Association of Natural Rubber Producing Countries, in 2017, there was a natural rubber supply shortfall of about 700,000 metric tons. In contrast, the global supply of natural rubber then improved by 991,000 tons in May 2022. Over the decade, there has been a considerable variation in natural rubber pricing, which impacts automotive tire pricing and tire manufacturers to a great extent.

Increasing the longevity of tires has led to a decrease in the demand for new tires, as cars are lasting longer and being driven fewer miles. This has put pressure on the aftermarket tire industry, which has seen a decline in sales. Also, on the other hand, the increase in tire longevity has led to a rise in the demand for tire maintenance and repair services. As tires last longer, they are more likely to be rotated, balanced, or repaired. This has created new opportunities for the automotive tire aftermarket market, which has seen increased sales of these services. Overall, the increase in tire longevity has had a net negative impact on the aftermarket tire industry. However, the industry has been able to adapt by focusing on tire maintenance and repair services. This has helped offset the decline in new tire sales and allowed the industry to remain profitable.

OPPORTUNITY: Increase in eco-friendly tires due to stringent regulation and increase in bio-oils for the manufacturing process

Stringent rules and regulations are driving the global tire market for eco-friendly tires. Governments worldwide are enacting laws that require tires to be more fuel-efficient and less polluting. These regulations are being put in place to reduce greenhouse gas emissions and improve air quality. For instance, the European government has set a target of reducing CO2 emissions from cars by 37.5% by 2030. This target will require car manufacturers to use more fuel-efficient tires. Also, the US has set a fuel economy standard for vehicles requiring an average of 54.5 miles per gallon by 2025. This standard will also require the use of more fuel-efficient tires. In addition to this, many key players have invested heavily in R&D to bring eco-friendly automobile tires. Michelin Energy Saver A/S, where the tire is designed to reduce fuel consumption by up to 6%. It is made with a low rolling resistance compound that helps improve the tire’s efficiency.

Bio-oil is used as a substitute for petroleum-based oil in the production of tire rubber. This helps to reduce the environmental impact of tire production, as bio-oil is a renewable resource. For instance, orange oils, extracted from orange peels, help reduce the amount of petroleum used in tires. Tire companies are cutting down on using materials harmful to the environment while reducing friction and increasing fuel efficiency. As a result, less fuel is consumed, CO2 emissions are reduced, and the car becomes greener. Companies like Bridgestone have successfully created synthetic rubber using plant-derived materials rather than petroleum products. Other companies are also experimenting with synthetic rubber made from biomass (plant-derived material or agricultural waste). Also, Goodyear showcased that soybean oil has great potential as a natural ingredient in tires, increasing tread life by 10% and reducing the use of petroleum-based oil by up to 8.5 million gallons per year. Hence, using bio-oil will help reduce the environmental impact of tire production. As the demand for more sustainable tires grows, bio-oil will likely become an increasingly popular ingredient in tire rubber.

CHALLENGE: Increased number of mandatory tests for commercializing the tires

Regulatory organizations such as the US Department of Transportation (DOT), National Highway Traffic Safety Administration (NHTSA), European Tyre and Rim Technical Organization (ETRTO), Japanese Automobile Tire Manufacturers Association (JATMA), and others have made it mandatory for tire manufacturers to conduct specific tests on tires before commercializing. These tests include durability, endurance, traction, rolling resistance, and load carrying. Tire manufacturers have to bear the cost of mandatory tests, which are expensive. Suppose a tire fails to fulfill the requirement of any of these mandatory tests. In that case, the manufacturer cannot sell that tire in the market and suffers a complete loss on R&D. These tests indirectly increase the total cost of tires, which negatively affects their demand in the OE as well as aftermarket.

Automotive Seats Market Ecosystem.

The major OEMs of the automotive tire market have the latest technologies, diversified portfolios, and strong distribution networks globally. The major players in the global automotive tire market include Bridgestone Corporation (Japan), Continental AG (Germany), Goodyear Tire & Rubber Company (U.S.), Michelin (France), and Pirelli & C. S.p.A (Italy).

The 13”-15” rim size segment, by vehicle type, holds the largest market share.

There is a growing demand for small cars, such as hatchbacks and subcompacts. These cars typically have smaller rims and tires than larger cars, such as SUVs and trucks. The smaller rim-size vehicles usually have GVWRs under 3.0 tons, with 13” – 15” rim sizes. Furthermore, these vehicles are most popular in shared transportation, such as Uber and Lyft, typically in small cars equipped with 13”-to 15”-inch rim size tires. Cars such as the Hyundai Avante, Volkswagen Polo, Volkswagen Rapid, Hyundai Accent, and others are a few examples of 13” – 15” rim size tires.

Regarding sales, passenger cars lead the market with smaller rim sizes globally. In the Asia Pacific region, China has the highest market share of ~61% for passenger cars (i.e., 23.83 million units), where vehicles such as Hyundai Avante, Nissan Bluebird, Toyota Corolla, Ford Escort, and VW Santana are among the top-selling passenger cars which come with the tires that range in size from 13” to 15". Hence, factors such as improved fuel efficiency and less rolling resistance are driving the 13”-15” rim size tire market.

Tire having an aspect ratio >70 holds the largest market share in the tire replacement market.

These tires have a higher sidewall, which provides more comfort and a smoother ride. They also have a wider footprint, which provides better traction and stability. Higher aspect ratio tires provide better cargo protection in big vehicles and a more comfortable ride and protection from potholes on the road in buses. >70 aspect ratio tires are often more affordable than tires with a lower aspect ratio. This is because they are less complex to manufacture. Also, newer tires with a higher aspect ratio have safety features, such as run-flat technology. This technology allows the tires to continue to be driven even after they have lost air pressure, which can help to prevent accidents. Around the world, 80%–90% of heavy commercial vehicles have tires with >70 aspect ratios, which also cost more to replace than tires with lower aspect ratios. Therefore, the demand for tires with an aspect ratio of >70 is anticipated to account for the significant market share of trucks and buses over the next few years.

Retreading of Light Commercial Vehicles (LCV) is the fastest-growing segment of the automotive tire market.

Retreaded tires provide the same mileage as new replacement tires, costing 30%–50% less, and come with the same warranties. A Light commercial vehicle tire typically needs 26 liters of oil to manufacture a new tire. However, tire retreading uses only 9 liters of oil or around 34% of the new manufacturing process. On the other hand, a new set of four tires for pickup trucks costs nearly twice as much as retreaded tires, according to the Retread Tire Association. For example, the Goodyear Tire and Rubber Company (U.S.) has more than 1,700 tire retreading and servicing centers worldwide for commercial trucks. Few of the top tire manufacturers have entered the tire retreading sector. Thus, the trend of tire retreading in LCVs is gradually growing to reduce costs.

Asia-Pacific holds the largest market share for automotive tires for the original equipment (OE).

This region has well-established automobile players like BMW AG (Germany) and Volkswagen Group (Germany), Tata (India), BYD (China), Nissan (Japan), and Mitsubishi (Japan), where Asia-Pacific has become a center for the production of automobiles. The large investment in Asia Pacific has been driven by factors like low production costs, the availability of affordable labor, lenient pollution and safety regulations, and government incentives for FDIS. The Yokohama Rubber Co., Ltd. (Japan), Bridgestone Corporation (Japan), Kumho Tyre Co. (South Korea), Hankook Tyres (South Korea), Sumitomo Rubber Industries Ltd. (Japan), and other Tier-I suppliers are among the notable tire manufacturers with significant operations in the Asia-Pacific region. The companies in this location invest in expanding their manufacturing plant to cater to the increasing demand for automotive tires. For instance, Bridgestone invested USD 250 million in November 2022 to expand and renovate its tire manufacturing plant, which is located in Heredia, Costa Rica. Hence, these investments and developments in the Asia Pacific region are projected to be driven by the factors mentioned above.

Key Market Players

The automotive tire market is consolidated with players such as Bridgestone Corporation (Japan), Continental AG (Germany), Goodyear Tire & Rubber Company (US), Michelin (France), and Pirelli & C. S.p.A (Italy) is the key company operating in automotive tire manufacturing. These companies adopted new product launches, partnerships, and joint ventures to gain traction in the automotive tire market.

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The study segments the tire market:

Automotive Tire Aftermarket, By Section Width and Vehicle Type

• <200mm
• 200-230mm
• >230mm

Automotive Tire Aftermarket, By Aspect Ratio and Vehicle Type

• <60
• 60–70
• >70

Automotive Tire Aftermarket, By Rim Size and Vehicle Type

• 13–15"
• 16–18”
• 19–21"
• > 21"

Automotive Tire Aftermarket, By Vehicle Type

• Passenger Cars
• Light Commercial Vehicles
• Heavy Commercial Vehicles

Automotive Tire Retreading Market, By Vehicle Type

• Passenger Cars
• Light Commercial Vehicles
• Buses
• Trucks

Automotive Tire Aftermarket, By Season Type

• Summer Tire
• Winter Tire (Studded and Non-studded)
• All-season Tire

Automotive Tire Oe Market, By Vehicle Type and Rim Size

• Passenger Cars
• Light Commercial Vehicles
• Heavy Commercial Vehicles

Automotive Tire Oe Market, By Tire Type

• Radial Tire (Tube and Tubeless)
• Bias Tire

Recent Developments

• In June, Continental AG launched their new tire named UltraContact NXT, which comprises 65% renewable material made from agriculture waste and has ISCC PLUS mass balance certified materials. These are available in 19” sizes. These tires are made for both electric and combustion engines. For instance, Kia (South Korea) Niro, Volkswagen (Germany) ID.3, Mercedes-Benz (Germany) EQA, Tesla (US) Model 3, Audi (Germany) Q4 E-TRON, Skoda (Czech Republic) Octavia, Volkswagen (Germany) Golf 8, Audi (Germany) A3.
• In May 2023, Bridgestone Corporation launched the R192E, an electric bus tire designed explicitly for electric-powered buses. Electric buses have unique performance requirements due to their heavier battery packs and increased torque. The R192E tire is engineered to address these specific needs and provide enhanced durability, traction, and energy efficiency for electric buses.
• In May 2023, Bridgestone Corporation’s new Potenza Race tire is offered in 13 sizes between 17 and 20 inches and was developed and made in Europe. These tires are primarily used in sports cars and supercars for the roads and racing tracks for some OEMs such as Maserati (Italy), Ferrari (Italy), Porsche (Germany), McLaren (UK), Lamborghini (Italy), BMW (Germany), Audi (Germany) RS, Mercedes (Germany), and others, are supported by Potenza Race.
• In March 2023, Continental AG showcased its digital tire management system, Conti Connect 2.0. The system enables fleet managers to monitor tire condition continuously, saving fuel and reducing CO2 emissions. This monitoring feature helps prevent early tire replacements and unscheduled downtime, improving fleets' operational efficiency.
• In March 2023, Michelin showcased a tire designed for SUVs and crossovers. It is all-season specially designed to handle various conditions, including snow and ice. It features a new tread compound that provides a better grip in wet and snowy conditions. It also features a new tread pattern designed to reduce road noise.

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