The world runs on wheels, and almost all automotive-wheels essentially need tires.
Modern pneumatic tire production fundamentally needs synthetic or natural rubber along with other chemicals. A huge majority of the world rubber production is consumed by the tire industry. The crucial performance requirements of automotive-tires are to provide grip to the vehicle, resist abrasion, and carry and transport loads, all the while providing reasonable safety and performance to the vehicle. Different types of rubber are used for manufacturing tires for different purposes. The tire industry has been growing tremendously over the past decade, both in terms of volume and revenue, due to the increase in demand.
This trend is likely to sustain in the future as well. The Asian market is expected to provide a boost to the tire industry. The U.S. and European region is projected to witness a growth below the global average, which is boosted by rubber requirements in China. Latin America and the Middle East are also expected to up the demand for tires due to increased automotive production in the regions.
One of the primary drivers for this market is the exponential increase in the number of vehicles produced throughout the world. China, for example, is the leading consumer of bicycles and motorcycle tires, and comes second only to the USA in terms of motor vehicle tires. The population growth along with a significant rise in income levels in Asia-Pacific is the reason for the growth of the automobile industry, and indirectly the tire industry.
The governments of many countries have doled out economic stimulus packages for the automotive industry to add vigor to automobile manufacturing, which have led to an increase in the level of production and demand for tires. Tires are not only used in new vehicles, but need to be replaced in old vehicles as well due to wear and tear, which is also a major market for rubber tires. Airplane tires are a niche market, but is a high revenue contributor to the rubber tire market. However, there are certain restraints to this market.
It is highly susceptible to the prevailing macro-economic conditions of the world. Rise in fuel prices can act as a deterrent to automobile production and affect the tire industry. Due to financial burdens, several automobile manufacturers in the past had implemented large-scale production cut-backs, which affected the sales negatively.
Some of the major players in this market are Bridgestone Corporation, Goodyear, MRF, Continental AG, Maxxis International, and Eurogrip Tires among many others.