Manufacturers Reduce Stockpiling with Production Cuts during Coronavirus
Companies in the rubber tire market are facing rising inventories and are planning on production cuts during the coronavirus pandemic. As such, COVID-19 vaccines are anticipated to boost the demand for automobiles. Even Bridgestone Corporation is boosting its credibility credentials by offering US$ 100 incentive to the U.S.-based employees who choose to be vaccinated.
A major slump in the tire demand is affecting the growth of the rubber tire market. This has led to a sharp decline in natural rubber prices. Producers are working on strategies to reduce stockpiling by bringing into effect production cuts. As such, stock lifting from factories and transporting the same to auto manufacturers is taking place in a staggered manner. Thus, essential applications in agriculture tractors, construction vehicles, and public transport vehicles are helping to keep economies running during the COVID-19 crisis.
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Radial Tire V/S Bias Tire: Which is Better for Agriculture Tractors?
Bias tires, also known as diagonal tires, offer smooth ride on rough surfaces with enhanced operator comfort whilst withstanding higher loads. However, durability, increased traction, and productivity of radial tires are grabbing the attention of manufacturers in the rubber tire market and farmers alike.
Radial tires enable construction that allows the sidewall and tread to function independently. Hence, Firestone Tire and Rubber Company is capitalizing on this opportunity to boost its production of radial tires for tractors to lend flexibility and strength to tires, resulting in increased durability and improved tread wear.
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Highly Versatile Pneumatic Tires Gain Prominence in Forklifts
There is a growing demand to improve the efficiency and productivity of forklifts to cast a positive impact on the operation’s bottom line. Yokohama, a Japan-based rubber and tire company, is increasing its production capabilities in pneumatic radial, pneumatic bias, resilient solid tires, and press-on band tires to meet client specifications.
Pneumatic radial tires are superior in dissipating heat, and have set the gold standard for forklift tires used at bustling construction sites, busy warehouses, and fast-paced ports. Pneumatic bias and radial tires are being highly publicized for jobs in tough terrain, and provide more ground clearance than press-on band tires.
Airless Tires Being Touted as Future of Mobility with Reduced Maintenance Specifications
Airless tires are a breakthrough innovation in the rubber tire market. Michelin Group, a France-based multinational tire manufacturing company, has gained recognition for its new UPTIS puncture-proof airless prototype at the Tire Technology Expo Conference. New mobility needs and growing environmental challenges in the automotive industry have compelled manufacturers in the rubber tire market to innovate in airless tires.
The automotive industry is undergoing an unprecedented transformation giving rise to innovation in sustainable mobility. Airless tires are an innovative puncture-proof solution to replace conventional rubber tires in passenger vehicles. Companies in the rubber tire market are making use of high-tech materials to develop airless tires that serve the area of energy efficiency, reduce maintenance, and lower material consumption.
Bias Tires Incorporate Cut and Chip Resistance Compound for Extended Tire Life
Companies in the rubber tire market are boosting their output capacities to design bias tires built for loaders. GRI Tires, a leading manufacturer of specialty tires in Sri Lanka, is expanding its product portfolio in bias tires with multi-directional tread pattern that help to provide excellent traction in loaders for all terrain applications. Manufacturers are increasing the availability of bias tires that offer better fuel economy and ensure excellent surface-cleaning properties.
Strong casing and wide curb rib is preferred in bias tires. Manufacturers in the rubber tire market are developing bias tires that deploy impact resistance in heavy-duty operations and establish high productivity. They are incorporating cut and chip resistance compound to extend tire life.
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Rubber Tire Market: Overview
- The global rubber tire market is anticipated to expand at a CAGR of ~4% during the forecast period, owing to increased industrialization across the globe. Economic expansion has propelled the investment for the improvement of infrastructure across the globe, specifically across developing countries that are witnessing heavy construction of roads, railways, and industries. Rising demand for industrial products is boosting the development of new industries. Moreover, expansion of existing industries is propelling the market for construction equipment.
- Rapid urbanization across the globe is likely to boost the rubber tire market significantly, due to increase in construction activities where heavy commercial and construction vehicles are in high demand. In May 2018, The United Nations stated in a press release that 55% of the global population resides in urban areas, which is anticipated to reach 68% by 2050. Thus, urbanization has boosted the number of vehicles on streets and construction activities, which increases the demand for commercial vehicles and subsequently, is estimated to boost the rubber tire market across the globe.
Drivers of Rubber Tire Market
- Rise in demand for utility vehicles across the globe is likely to increase the demand for rubber tires. Last mile deliveries and advent of eCommerce have fueled road transportation traffic. Increase in number of miles driven by trucks is boosting the demand for rubber tires across the globe.
- Increase in awareness among consumers regarding vehicle maintenance, adoption of tire monitoring systems by fleet managers, and expansion of retailer and dealers network in rural areas are projected to drive the rubber tire market during the forecast period
- Global economic expansion, development of road infrastructure, and increase in number of cross-border and long haul freight transport are boosting the demand for rubber tires. The extensive spread of the pandemic across the globe is prompting consumers to own a new vehicle, which is likely to drive the sales of vehicles and consequently, propel the demand for rubber tires across the globe.
Challenges for Rubber Tire Market
- The COVID-19 pandemic has caused a majority of businesses across the globe to crumble, owing to forced shutdown of production and manufacturing activities. This has led the global economy to contract to its lowest growth rate. Majority of businesses in every industry are codependent and part of major supply chain in the market. Disruption in supply chain attributing to stoppage of transportation and shipping services, and reduced demand for vehicles across the globe have led the global automotive industry to contract in Q1 and Q2 of 2020.
- Raw material prices usually represent 35% of the tire cost. Thus, volatility in raw material prices severely affect the costing of the rubber tire. Prices of raw material, such as natural rubber and synthetic rubber, are volatile due to shortage of natural rubber cultivation or rise in Brent crude price.
Segmentation of Rubber Tire Market
- The global rubber tire market has been segmented based on tire type, vehicle type, rim size, sales channel, and region
- Based on tire type, the radial segment held a prominent share of the global rubber tire market in 2020, due to their use in passenger vehicles and the presence of large number of passenger vehicles on road. The bias tires held a significant share of the market, due to the preference of fitting bias tires in construction & mining vehicles & agriculture tractors, owing to their low price and thicker sidewalls. The solid segment is expected to expand at a steady pace due to their demand from the industrial sector in small construction vehicles. Increased sales of forklifts is anticipated to boost the demand for solid tires.
- Based on vehicle type, the passenger vehicle segment held a prominent share of the global rubber tire market. The passenger vehicle segment is likely to expand at a steady pace during the forecast period, due to rising purchase power parity of society, which, in turn, is fueling consumer demand for vehicles. Increased demand for commercial vehicles in developing countries is estimated to further propel the production of light commercial vehicles and trucks & buses, thereby boosting the demand for rubber tires.
Rubber Tire Market: Regional Analysis
- Based on region, the global rubber tire market has been segregated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
- Asia Pacific accounted for a prominent share of the rubber tire market in 2020. High usage of agriculture tractors in China and India has caused Asia Pacific to dominate the global market. Asia Pacific is followed by Europe and North America with high demand for rubber tires in these regions. Rise in construction activities in GCC countries and expansion of the mining industry in South Africa are anticipated to boost the demand for rubber tires, which, in turn, is projected to propel the rubber tire market of Middle East & Africa during the forecast period.
Rubber Tire Market: Competition Landscape
- Key players operating in the global rubber tire market include
- Apollo Tyres Ltd.
- Bridgestone Corporation
- CEAT Ltd.
- China National Tire & Rubber Co., Ltd
- Continental AG
- Cooper Tire & Rubber Company
- Giti Tire
- Hangzhou Zhongce Rubber Co., Ltd.
- Hankook Tire
- Kumho Tire Co., Inc.
- Nexen Tire Corporation
- Nokian Tyres plc
- Pirelli & C. S.p.A.
- Qingdao Fullrun Tyre Corp., Ltd.
- Sumitomo Rubber Industries, Ltd.
- The Goodyear Tire & Rubber Company
- Toyo Tire & Rubber Co., Ltd.
- Trelleborg AB
- Yokohama Tire Corporation
- Key players operating at the global level are expanding their footprint by engaging in mergers and acquisitions with several players in the industry. On January 17, 2019, Continental AG announced a partnership with Finland-based agricultural machinery manufacturer Valtra. The company is supporting the 5th annual Valtra Smart Tour. At the tour, Valtra tractors are expected to be equipped with Continental tires.
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