Import competition keeps local manufacturers under pressure
London, United Kingdom (PRWEB) October 22, 2012
An integral part of the UK's automotive supply chain is the Tyre Manufacturing industry. The fourth largest European vehicle manufacturer, the UK automotive manufacturing sector is the nation's largest manufacturing industry. According to IBISWorld industry analyst Arna Richardson, “despite this however, large-scale tyre manufacturing in the United Kingdom remains troubled, due in part to strong import competition from low-cost producing countries like China”. High and volatile input costs, increasing legislative and environmental requirements and continued consolidation have also been features of the local tyre manufacturing industry in recent years.
In view of these variables, industry growth is expected to be modest over the five years to 2012-13, with average growth rates equating to an annualised 1.9%. In the same year, industry revenue will be worth an estimated £1.99 billion, up from £1.8 billion five years earlier and up 3.1% on the previous year. In contrast, domestic demand will be worth in excess of £3.0 billion – highlighting the strong role that imports play within the industry. Over the next five-year period to 2017-18, annual growth rates in industry revenue will continue to be weak to moderate. Richardson adds, “producers will continue to face strong import competition, and opportunities for growth will be limited, although there will be some potential with high-performance, green and fuel-efficient tyres, including low-rolling resistance tyres”. At the same time it is hoped that the industry will indirectly benefit from the £4.0 billion worth of new investment in the nation's automotive industry as announced in 2011 as it seeks to cement its place within the UK's low carbon economy.
Despite the fact that there is only one remaining large-scale tyre manufacturer left within the United Kingdom, Michelin Tyre, the Tyre Manufacturing industry displays a low level of concentration with the top four players accounting for less than 40% of industry revenue. Over the past decade, industry concentration levels have gradually fallen as global players exited the local industry in the face of high costs and intensifying competitive pressures from rival imported product. Concentration levels will continue to fall over the next five years, as the industry focus shifts to specialised tyre manufacturing (such as high-end or performance tyres) on a small scale.
For more information on the Tyre Manufacturing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Companies in this industry manufacture rubber tyres for cars, aircraft and for most other uses. Manufacturers also produce inner tubes for tyres. The rebuilding and retreading of tyres is also included in this industry. Tyre repair, fitting and replacing are not included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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