Sustainable Innovations Drives the Global Tires Market, According to New Report by Global Industry Analysts, Inc.

San Jose, CA (PRWEB) February 14, 2013

Follow us on LinkedIn The tires market is heavily dependent on the overall health of the motor vehicle industry, which in turn is a barometer of general economic health in a country. While motor vehicle production trends influence demand patterns in the OEM tire market, replacement cycles influence demand patterns in the replacement tires market. Therefore, the current economic uncertainty in the United States, the worsening financial crisis in Europe and slowing down of developing countries, specifically China, are reducing demand for tires in most regional markets worldwide. Flat demand from automobile and two wheeler OEMs, and reduced demand in the aftermarket as consumers defer tire replacements, are together taking their toll on the market. The replacement market is additionally pressured by shrinking commercial vehicle fleets as a result of reduced government infrastructure spends and private capital expenditures across all industries.

In Europe, specifically, the extremely fragile backdrop of the European economy and the darkening outlook for its automobile industry will witness tire manufacturers facing an especially uncomfortable market scenario in the passenger and truck tires market. Future downgrade in the outlook for auto production cannot be ruled out, given the tumbling sales and over 8.0% decline in new car registrations in the first half of 2012 and excess production capacities.

In the United States, the expiry of the payroll tax cuts which represents one of the hidden landmines in the Fiscal Cliff deal signed in January 2013 will result in increased taxes and a shrinking paycheck for all households in 2013. The increase will come despite the extension of the bush-era income tax cuts for the middle class. On a broader scale, expiry of the payroll tax cuts will drain the economy of over US$ 100 billion in discretionary spending. Consumer unwillingness to spend can likely emerge into a challenge for the domestic automobile industry in 2013. Also, the yet to be finalized agreement on government spending cuts and debt limits additionally continues to put the tires industry on tenterhooks.

The slowing down of Chinese GDP growth is already having a rub-off impact on opportunities in the domestic automotive industry. Real demand in the domestic market is beginning to weaken. Decline in tire exports to Europe and the United States is impacting the business climate in the domestic market. Exacerbating the scenario is the Chinese governments plans to restrict auto traffic by capping car sales and restricting the issuance of license plates, which in turn has made license plates exorbitantly expensive putting cars beyond the reach of middle and low-income citizens. Also, the Chinese governments ban on the use of motorcycles on highways and freeways and in few provinces, additionally sharpens the blow on OEM two wheeler tires.

Despite the uncertainty, undeterred focus of tire manufacturers on sustainable innovations and new product developments however continues to drive optimism in the tires market. Manufacturer focus will be primarily centered on tires that are designed to meet environmental regulations and reduce costs. Tires that help serve high/ultra high performance needs, especially for sporting motorists will also gain considerable attention in the short to medium term period. Self Inflatable Tires (SITs), another innovative concept, is forecast to register high growth in the tire market. A key benefit of the SITs is optimized vehicle stability in all driving conditions and terrains. SITs utilize atmospheric air to automatically inflate an automobiles tire when in motion. Use of nanotechnology for tire manufacturing is growing in prominence.

As stated by the new market research report on Tires, Asia-Pacific represents the largest regional market worldwide. The region is also the fastest growing market with volume sales waxing at a CAGR of about 6.2% over the analysis period. Off-The-Road Vehicle Tires represents the fastest growing product segment with volume sales growing at a CAGR of about 5.6% over the analysis period. However, Passenger Car Tires represents the largest product segment by a huge margin.

Major players in the global marketplace include Alliance Tire Group, Avon Tyres, Bridgestone Corporation, Continental AG, Cooper Tire & Rubber Company, Dunlop Aircraft Tyres Limited, Del-Nat

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