Tires: A Global Strategic Business Report
San Jose, CA (PRWEB) November 08, 2011
Follow us on LinkedIn - Given its extreme sensitivity to the automotive sector, which was one of the worst affected industries during the recent economic slowdown, the global tires market ran flat with volume sales plummeting in both OEM and replacement market segments during 2008 and 2009. Demand from the automotive OEM segment especially came under the yoke of recession, as the economic crisis, which was at its peak during 2008 and 2009, resulted in considerable drop in new vehicle sales during the period, causing a flow-on effect on automotive production.
Market distortions, during this period, were largely manifested in the form of decline in consumer purchasing power, restricted access to credit, high level of unemployment, reduction in household wealth, volatile fuel prices, weak consumer confidence and the resultant postponement of new vehicle purchases. Hit by declining sales and mounting financial burden, major auto companies in the industry announced large-scale production cutbacks in a number of facilities. The credit crunch and financing shortfalls also drove some companies into bankruptcy. Plant closures, capacity idling, scaling back of operating capacity therefore, reduced opportunities for tires, especially in the OEM market. Off the road vehicles tires also took a hurting blow as a result of the collapse of the construction and mining industries.
While the OEM market took the blow on the chin, the aftermarket was relatively cushioned, primarily because auto parts and components like tires, fan belts, exhaust pipes and brake pads are less discretionary spends, and replacement of worn parts is a necessity if the vehicle needs to be kept running. This is put to perspective by the fact that while volume of tire sales to the OEM segment plunged by a massive 12.7% globally, while replacement tire sales declined only by about 1.85% in 2009. Additionally, reduced spends on new cars resulted in higher spends on maintaining old cars. With people spending more time repairing and servicing their existing vehicles rather than purchase new cars, the aftermarket witnessed relatively lower levels of decline in comparison to the OEM automotive market. The recorded decline was however the result of reduced average number of vehicle miles traveled which reduced the need for replacement of tires.
The market staged a remarkable recovery in 2010, primarily led by post recession resurgence in growth fundamentals such as recovery in GDP growth, increase in employment rates and income levels, easing of lending restrictions, improvement in consumer discretionary incomes and buyer confidence, and the resultant increases in new car purchases, automotive production and average vehicle miles traveled. The economic stimulus packages doled out by various governments to infuse vigor into automotive manufacturing brought out remarkable increase in number of new cars and trucks produced since 2010, thereby boosting the demand for tires in the automotive OEM segment.
Increase in automotive manufacturing to address the huge pent-up demand for new vehicles immediately after recession, and the tremendous growth in automotive production volumes in developing markets such as China, India and Korea have also boosted demand for tires in the automotive OEM segment. Improvement in commercial activity and freight movement also lent traction to the demand for tires in heavy truck and aircraft tire segments respectively. Increase in average vehicle miles traveled due to consumers return to established driving habits post recession helped generate substantial demand for tires in the replacement market. Consumer preference towards high-performance tires instead of the standard factory fixtures, have also boosted demand for tires in the automotive replacement market. The market over the next few years will receive the strongest growth impetus from developing markets such as Asia-Pacific, Latin America and Middle East, thanks to increase in automotive manufacturing, and new construction and mining projects underway in these regions.
As stated by the new market research report on Tires, Asia-Pacific is the fastest growing regional market for tires in the world, with volume sales from the region in OEM and replacement markets waxing at a CAGR of 7.2% and 5.2% respectively over the analysis period. Growth in the Asia-Pacific market is especially driven by India, China, and Korea, thanks to the huge demand for two-wheelers and new cars, including luxury cars in these countries, and subsequent increase in automotive production. The huge automotive production base in the region, with China especially topping the global passenger car and commercial vehicle production, transformed Asia-Pacific as the most prominent regional market for automotive tires in the world. By product, Replacement tires is the largest segment, while OEM tires is the fastest growing product segment with volume sales waxing at a CAGR of about 5.8% over the analysis period.
Major players in the global marketplace include Bridgestone Corporation, Maxxis International, Continental AG, Cooper Tire & Rubber Company, Falken Tire Corporation, Goodyear Tire & Rubber, Hankook Tire Co. Ltd., Kumho Tires Co. Inc., Michelin, Nokian Tyres plc, Pt Gajah Tunggal Tbk, Pirelli & C. S.p.A., Sumitomo Rubber Industries Ltd, Titan International Inc., Triangle Tire, Toyo Tire and Rubber Co. Ltd., Yokohama Rubber Co. Ltd.
The research report titled “Tires: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities.. The report provides market estimates and projections, in annual shipments in million units for OEM and Replacement tires, for United States, Canada, Japan, Europe, Asia-Pacific, Middle East & Africa and Latin America. Product markets analyzed include Passenger Car Tires, Truck Tires (Light Truck Tires and Heavy/Medium Truck Tires), Two Wheeler Tires, Aircraft Tires and Off-the-Road Vehicle Tires (Industrial & Utility Vehicle Tires and Farm Implement Tires) in both OEM and Replacement markets.
For more details about this comprehensive market research report, please visit –
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a leading publisher of off-the-shelf market research. Founded in 1987, the company currently employs over 800 people worldwide. Annually, GIA publishes more than 1300 full-scale research reports and analyzes 40,000+ market and technology trends while monitoring more than 126,000 Companies worldwide. Serving over 9500 clients in 27 countries, GIA is recognized today, as one of the world's largest and reputed market research firms.
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