The global market for truck tires is very diverse, covering the light passenger vehicle segment via CUVs, SUVs, minivans and pickups all the way to heavy duty construction and 18-wheel long-haul tractor-trailers. Based on a forecast of moderate sustained growth and barring major disruptive geopolitical or financial scenarios, demand for truck tires on a global basis is expected to grow at an average annual compound growth rate of 3.3% per year, to nearly 658 million units by 2025.
The pressure that tiremakers are being put under by OEMs to help attain fuel economy and emissions goals is intense in the light truck segment and, going forward, increasingly in the medium/heavy segment as well. The adoption of alternative powertrains such as hybrids and electric drives is changing tire design requirements, and ever more effective LRR designs are in demand.
Tire makers are exploring different materials (through processes such as nanotechnology) and technologies (such as ‘intelligent’ or non-pneumatic tires) in the push for improvements to fuel economy and to overcome the trade-offs inherent in the Magic Triangle (where performance and treadlife are balanced).
In addition, manufacturers are seeking out alternative, more sustainable, raw materials to minimize dependence on volatile commodities like natural rubber and oil-derived products.
Truck tire end-uses, defined by vehicle type, are broadly divided into light trucks and medium/heavy trucks. Light trucks consist of passenger vehicles such as CUVs, SUVs, mini-vans and pickup trucks, some of which are used in commercial applications. Medium and heavy trucks ranging from delivery trucks and service vehicles to tractor trailers are almost exclusively commercial in nature and are characterized more by fleets, although there are individual owner-operators as well.
In terms of tire volume, the two groups are similar in size. Light truck tires account for over half of global truck tire demand currently, and will continue to do so through 2025, matching overall industry growth of 3.3% per year. 2015 light truck tire demand of 253.7 million units is expected to rise to over 350 million in 2025.
Medium and heavy truck tires achieved a global demand of over 223 million units in 2015, representing a fairly stable share of the total demand, at around 47%. Keeping pace with the total, medium and heavy truck tire demand is expected to surpass 307 million units in 2025.
In terms of regional forecast, the Asia-Pacific region, led by China (despite some more recently emerging concerns), will be the main driving force in global truck tire market growth, both in terms of domestic demand and as the source of exports to other regions. This industry-leading market will grow faster than any other region, at 4.2% per year through 2025, with demand exceeding 371 million units.
Growth in the smaller, developing regions will also be strong, thanks to more mobile populations, economic development and the growth of industrial and mining trucking. Both South America and Middle East/Africa are expected to grow 3.9% per year to 34.9 million and 10.4 million units respectively. Meanwhile, despite high levels of tire innovation, the relatively slow-growing, mature markets of North America and Europe will trail, at 2.3% and 1.4% per year respectively. The US manufacturing and energy sector will lead growth in North America, while Europe (which includes Russia) remains somewhat constrained by ongoing financial and geopolitical difficulties.
The full report is available for purchase at smithersrapra.com.
March 3, 2016
Graph: Global truck tires by region to 2025 (million units)