Recent research into the global tyre market has shown that the value is set to jump significantly by 2027, moving from $112.16 billion in 2019 up to an estimated $154.40 billion.
This will be a rough compound annual growth rate (CAGR) of around 4.1% between 2020 and 2027. We’ll be reviewing statistics and information around what is causing this global increase, as well as key information about the global market.
What is causing the global tyre market to grow?
The global automotive tyre market is propelled by increases in automotive production and vehicle sales across a variety of segments. There is also a higher level of competition between tyre manufacturers than in previous years.
As new technologies and materials are integrated into the wider tyre industry, innovation is what will likely boost the overall growth within the market. This will build into larger plans from the automotive industry surrounding fuel efficiency and safety considerations.
However, there are some factors which could limit the CAGR and result in falling short of the 2027 value estimation. Price fluctuations of raw materials, logistics issues, and advancements in retreading processes for older tires could prevent the global tyre market from reaching its full potential.
How has the global tyre market grown recently?
Between 2015 and 2020, the worldwide tyre market experienced moderate growth in CAGR of 4%. In 2020 alone, the global demand for tyres reached around 3.37 billion units.
Part of what has buoyed up this growth is the ability for more people to purchase passenger cars and premium segment bikes. As the standard of living has increased on average across the globe, many have bought vehicles as a form of improving their social mobility. As eCommerce sites have come into their own as well, buying tyres online is a growing segment – although offline channels still lead in sales.
This increase in demand led to a relative rise in production of both automobiles within popular cars being sold and common tyre profiles. During the pandemic, many turned to purchasing both new and second-hand vehicles as a means of transport where restrictions would otherwise prevent them from getting around.
A greater demand has also led to mergers and acquisitions within the automotive sector on both an international and domestic scale. By doing so, many manufacturers have increased their presence within the automotive industry and widened their production capabilities.
Which countries contribute most to the global tyre market?
Looking at records from 2017, China held the top spot within the tyre market with around 49% of the overall market share. This is a dramatic increase over its position 10 years previously of 21% of the market, showing how the growth in GDP and demand for cars has boosted its position.
Behind China are Europe, the United States, India, and Japan as other key markets which make up large portions of the global tyre market. However, India is set to move up in order as its demand within the automotive industry is set to increase. Time will tell to see how the global tyre market rolls on and capitalises on higher levels of demand in the coming years.
