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Global market review <strong>of</strong><br />
automotive tyres – forecasts<br />
to 2014<br />
2008 edition
Page i<br />
Global market review <strong>of</strong> automotive<br />
tyres – forecasts to 2014<br />
2008 edition<br />
July 2008<br />
by Matthew Beecham<br />
Published by<br />
Aroq Limited<br />
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Page iv<br />
Contents<br />
Contents<br />
Single-user licence edition............................................................................................................. ii<br />
Copyright statement.................................................................................................................. ii<br />
Incredible ROI for your budget – single and multi-user licences............................................... ii<br />
just-auto.<strong>com</strong> membership........................................................................................................iii<br />
Contents.......................................................................................................................................... iv<br />
List <strong>of</strong> figures ................................................................................................................................. vi<br />
List <strong>of</strong> tables .................................................................................................................................. vii<br />
Preface ............................................................................................................................................ ix<br />
Research methodology ............................................................................................................ix<br />
Report coverage....................................................................................................................... ix<br />
The author................................................................................................................................. x<br />
Chapter 1 Introduction.................................................................................................................... 1<br />
Chapter 2 The market ..................................................................................................................... 2<br />
Market trends ............................................................................................................................ 2<br />
Market players........................................................................................................................... 4<br />
Bridgestone ...................................................................................................................... 4<br />
Q&A with Bridgestone................................................................................................ 4<br />
Continental ....................................................................................................................... 6<br />
Cooper Tire & Rubber ...................................................................................................... 6<br />
Goodyear.......................................................................................................................... 7<br />
Hankook Tire ....................................................................................................................7<br />
Kumho Tires .....................................................................................................................8<br />
Michelin ............................................................................................................................ 8<br />
Pirelli................................................................................................................................. 9<br />
Sumitomo Rubber Industries ............................................................................................ 9<br />
Toyo Tire & Rubber Co Ltd............................................................................................... 9<br />
Yokohama Rubber............................................................................................................ 9<br />
Emerging markets................................................................................................................... 13<br />
China .............................................................................................................................. 14<br />
Hungary .......................................................................................................................... 16<br />
India................................................................................................................................ 16<br />
Indonesia ........................................................................................................................ 16<br />
Kazakhstan.....................................................................................................................17<br />
Mexico ............................................................................................................................ 17<br />
Nigeria ............................................................................................................................ 17<br />
Poland ............................................................................................................................ 18<br />
Romania .........................................................................................................................18<br />
South Africa ....................................................................................................................18<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page v<br />
Contents<br />
Thailand.......................................................................................................................... 19<br />
Vietnam .......................................................................................................................... 20<br />
Investments in Western Europe.............................................................................................. 20<br />
Investments in North America................................................................................................. 21<br />
Investments in Asia................................................................................................................. 22<br />
Market shares ......................................................................................................................... 23<br />
World .............................................................................................................................. 23<br />
European markets .......................................................................................................... 24<br />
North American markets................................................................................................. 26<br />
Asian markets................................................................................................................. 27<br />
Market size.............................................................................................................................. 29<br />
Market forecasts...................................................................................................................... 31<br />
Chapter 3 Technical review.......................................................................................................... 38<br />
Defining the elements ............................................................................................................. 38<br />
Latest innovations ................................................................................................................... 39<br />
Q&A with Goodyear ................................................................................................. 40<br />
Q&A with Continental............................................................................................... 47<br />
Tomorrow’s tyres..................................................................................................................... 51<br />
Chapter 4 Manufacturers.............................................................................................................. 53<br />
Amerityre................................................................................................................................. 53<br />
Bridgestone............................................................................................................................. 55<br />
Continental Corp ..................................................................................................................... 57<br />
Cooper Tire & Rubber............................................................................................................. 61<br />
Goodyear ................................................................................................................................ 62<br />
Hankook Tire........................................................................................................................... 71<br />
Kumho Tires............................................................................................................................ 73<br />
Michelin................................................................................................................................... 74<br />
Pirelli ....................................................................................................................................... 77<br />
Sumitomo Rubber Industries .................................................................................................. 79<br />
Toyo Tire & Rubber Co Ltd ..................................................................................................... 80<br />
Yokohama Rubber .................................................................................................................. 82<br />
Appendix 1 Glossary <strong>of</strong> terms ..................................................................................................... 83<br />
Appendix 2 Tyre speed rating symbols ...................................................................................... 85<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page vi<br />
List <strong>of</strong> figures<br />
List <strong>of</strong> figures<br />
Figure 1: Manufacturer shares <strong>of</strong> global tyre market, 2007 (% <strong>of</strong> market value) ............................ 23<br />
Figure 2: European market shares for OE and replacement tyres for passenger cars and light<br />
trucks, 2007 (% <strong>of</strong> volume)....................................................................................... 25<br />
Figure 3: European market shares for OE and replacement tyres for medium- and heavy-duty<br />
trucks, 2007 (% <strong>of</strong> volume)....................................................................................... 25<br />
Figure 4: North American market shares for OE and replacement tyres for passenger cars and<br />
light trucks, 2007 (% <strong>of</strong> volume) ............................................................................... 26<br />
Figure 5: North American market shares for OE and replacement tyres for medium and heavy-duty<br />
trucks, 2007 (% <strong>of</strong> volume)....................................................................................... 27<br />
Figure 6: Chinese market shares for OE and replacement tyres for passenger cars and light trucks,<br />
2007, % <strong>of</strong> volume.................................................................................................... 28<br />
Figure 7: Korean OE tyre market shares, 2007 (% <strong>of</strong> volume) ....................................................... 29<br />
Figure 8: Korean replacement tyre market shares, 2007 (% <strong>of</strong> volume) ........................................ 29<br />
Figure 9: World market shares for OE tyres for passenger cars and light truck applications by<br />
geographical region, 2007 (% <strong>of</strong> volume)................................................................. 30<br />
Figure 10: World market shares for OE tyres for medium- and heavy-duty truck applications by<br />
geographical region, 2007 (% <strong>of</strong> volume)................................................................. 30<br />
Figure 11: Continental AG’s passenger and light trucks tyres sales by region, 2007 (% <strong>of</strong> net<br />
sales) ........................................................................................................................ 58<br />
Figure 12: Continental AG’s <strong>com</strong>mercial vehicle tyres sales by region, 2007 (% <strong>of</strong> net sales) ...... 59<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page vii<br />
List <strong>of</strong> tables<br />
List <strong>of</strong> tables<br />
Table 1: Bridgestone’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales) ........................ 10<br />
Table 2: Goodyear’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales)............................ 10<br />
Table 3: Michelin’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales) .............................. 11<br />
Table 4: Cooper Tire & Rubber’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales) ........ 11<br />
Table 5: Hankook’s sales by geographical region, 2003-2006 (% <strong>of</strong> net sales) ............................. 11<br />
Table 6: Kumho’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales) ................................ 12<br />
Table 7: Pirelli’s sales by geographical region, 2004-2007 (% <strong>of</strong> net sales)................................... 12<br />
Table 8: Toyo Tire & Rubber’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales) ............ 12<br />
Table 9: Yokohama’s sales by geographical region, 2003-2007 (% <strong>of</strong> net sales) .......................... 13<br />
Table 10: Manufacturer shares <strong>of</strong> global tyre market 1997-2007 (% <strong>of</strong> market value) ................... 24<br />
Table 11: World light vehicle tyre sales, split by OE and replacement units, by region, 2004-2014<br />
(m units).................................................................................................................... 32<br />
Table 12: European Union light vehicle tyre replacement units (by country), 2004-2014 (m units) 34<br />
Table 13: World medium- and heavy-duty truck tyre sales, split by OE and replacement units, by<br />
region, 2004-2014 (m units) ..................................................................................... 35<br />
Table 14: World tyre sales (all applications) split by OE and replacement units, by region, 2004-<br />
2014 (m units)........................................................................................................... 36<br />
Table 15: Amerityre’s Arcus tyre <strong>com</strong>pared with run-flat tyres........................................................ 54<br />
Table 16: Bridgestone’s tyre operations worldwide, 2008............................................................... 55<br />
Table 17: Goodyear’s tyre sales by operating segment, 2002-2007 (m units) ............................... 63<br />
Table 18: Goodyear’s worldwide tyre sales, OE and replacement, 2003-2007 (m units) ............... 64<br />
Table 19: Goodyear’s North American Tire sales, OE and replacement, 2003-2007 (m units)...... 64<br />
Table 20: Goodyear’s European Union Tire sales, OE and replacement, 2003-2007 (m units)..... 65<br />
Table 21: Goodyear’s Eastern Europe Tire sales, OE and replacement, 2003-2007 (m units)...... 65<br />
Table 22: Goodyear’s Latin American Tire sales, OE and replacement, 2003-2007 m units) ........ 66<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page viii<br />
List <strong>of</strong> tables<br />
Table 23: Goodyear’s Asia Pacific Tire sales, OE and replacement, 2003-2007 (m tyres) ............ 66<br />
Table 24: Goodyear’s strategic business units, 2008 ..................................................................... 67<br />
Table 25: Goodyear’s tyre-related facilities by country, 2008 ......................................................... 68<br />
Table 26: Hankook Tire production facilities worldwide, 2008 ........................................................ 72<br />
Table 27: Michelin’s production sites worldwide, 2008 ................................................................... 75<br />
Table 28: Pirelli tyre plants worldwide, 2008...................................................................................77<br />
Table 29: Sumitomo Rubber Industries’ net sales and operating in<strong>com</strong>e, 2006 and 2007 (JPYm) 80<br />
Table 30: Toyo Tire & Rubber Co Ltd’s sales by business segment, 1998-2007 (JPYm) .............. 81<br />
Table 31: The Yokohama Tire Company Ltd’s tyre-related facilities in Japan, 2008...................... 82<br />
Table 32: Tyre speed rating symbols (mph/km/h)........................................................................... 85<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page ix<br />
Preface<br />
Preface<br />
Research methodology<br />
This <strong>report</strong> is intended to provide an overview <strong>of</strong> the road tyre industry,<br />
providing top-level market fitment, volume and value forecasts through 2014.<br />
Our forecasts are not extrapolative but dependent on the underlying drivers <strong>of</strong><br />
supply and demand. Our forecasts are largely based on interviews with the<br />
author’s extensive international network <strong>of</strong> industry contacts. This allows us to<br />
consider and explain the meaning and implications <strong>of</strong> industry events, rather<br />
than <strong>of</strong>fer simple description based on in<strong>com</strong>plete data.<br />
Our approach is divided into two distinct methodologies:<br />
○ qualitative interviews – these are generally opinion-based, which aim<br />
to build knowledge about future tyre market trends and <strong>com</strong>pany<br />
strategies; and<br />
○ quantitative interviews – typically fact-based, focused on establishing<br />
market values, shares, and volumes.<br />
Our research typically concentrates on applications for light vehicles which<br />
include all cars, light trucks and the various cross-over vehicle styles such as<br />
sports utility vehicles and people carriers. These vehicles collectively account<br />
for about 96% <strong>of</strong> the global vehicle build.<br />
Our market forecasts are set out by region, i.e. the European Union, Eastern<br />
Europe and Russia, North America, Asia, Africa, South America, Middle East<br />
and the Gulf, and the rest <strong>of</strong> the world. For the purposes <strong>of</strong> <strong>this</strong> <strong>report</strong>, the<br />
European Union includes Austria, Belgium, Denmark, Finland, France,<br />
Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain,<br />
Switzerland, Sweden and the UK.<br />
Report coverage<br />
In <strong>this</strong>, the fifth edition <strong>of</strong> <strong>this</strong> <strong>report</strong>, just-auto reviews the key market drivers<br />
for road tyres, and updates the market analysis. Following our market overview<br />
in Chapter 1, just-auto’s product fitment forecasts in Chapter 2 predict in some<br />
detail how the OE and replacement market for passenger car, light truck,<br />
medium- and heavy-duty truck tyre market will evolve in the European Union;<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page x<br />
Preface<br />
Eastern Europe and Russia; North America; Asia; Africa; South America;<br />
Middle East and the Gulf; and the rest <strong>of</strong> the world from 2004 through to 2014.<br />
This chapter includes exclusive Q&A interviews with senior executives <strong>of</strong><br />
Bridgestone, Continental and Goodyear. An updated review <strong>of</strong> new product<br />
developments is presented in Chapter 3, while Chapter 4 provides brief<br />
pr<strong>of</strong>iles <strong>of</strong> the major manufacturers, namely Bridgestone, Continental, Cooper<br />
Tire & Rubber, Goodyear, Hankook Tyres, Kumho, Michelin, Pirelli, Sumitomo,<br />
Toyo Tyres, and Yokohama.<br />
The author<br />
Matthew Beecham has more than 15 years’ experience <strong>of</strong> researching, writing<br />
and analysing market and technical trends in the global automotive<br />
<strong>com</strong>ponents industry. Since 2000, he has served as an associate editor for<br />
just-auto. In addition to tyres, he authors a range <strong>of</strong> global auto <strong>com</strong>ponents’<br />
market research reviews, including batteries, braking systems, coatings,<br />
clutches, cockpits, driver assistance systems, door modules, electric motors,<br />
engine cooling systems, exhaust systems, front-end modules, fuel injection,<br />
fuel tanks, glazing systems, ignitions, interiors, lighting, mirrors, ro<strong>of</strong> systems,<br />
shock absorbers, spark plugs, rotating electrics, tyre pressure monitoring<br />
systems, wheels and wipers. Matthew’s freelance assignments have included<br />
working for AT Kearney, McKinsey, Kuwait Institute for Scientific Research,<br />
Motorsport Industry Association, Motor Industry Research Association and the<br />
Economist Intelligence Unit. He has also written for magazines including Car<br />
Graphic (Japan), JAMA (Japan) and <strong>Auto</strong>motive Engineer (UK). He was<br />
awarded a PhD in automotive technology transfer from Cranfield University.<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page 1<br />
Chapter 1 Introduction<br />
Chapter 1 Introduction<br />
Although only one-quarter <strong>of</strong> road tyres are specified and bought by the<br />
vehiclemakers, <strong>this</strong> segment <strong>of</strong> the market is significant as it drives technical<br />
development and has a major influence over the aftermarket. Indeed, the<br />
popularity <strong>of</strong> sports utility vehicles (SUVs), minivans and cross-over vehicles<br />
has prompted manufacturers to redesign their tyres. In terms <strong>of</strong> innovation, the<br />
accent remains on improving tyre dimensions, weight, rolling resistance, noise,<br />
and fuel efficiency. Interest in run-flat tyres is another major focus <strong>of</strong> research<br />
and development. In an exclusive interview with just-auto, Franco Annunziatto,<br />
managing director <strong>of</strong> Bridgestone’s technical centre in Rome, told us: “Car<br />
manufacturers continually improve their technologies, and we as tyre<br />
manufacturers have to move with them. Current demands are for lower rolling<br />
resistance tyres, with lower pass by noise, with no reduction in wet grip<br />
properties, and with adequate riding <strong>com</strong>fort level.”<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page 2<br />
Chapter 2 The market<br />
Chapter 2 The market<br />
Market trends<br />
The tyre market is divided into two sectors: OE and replacement. OE tyres are<br />
defined as those supplied to vehicle makers to be fitted to new vehicles while<br />
replacement tyres are those which are fitted subsequently. Car and truck tyres<br />
are clearly the most widely used types <strong>of</strong> tyre, based on total value <strong>of</strong> sales.<br />
There is a wide range <strong>of</strong> both car and truck tyres designed to serve different<br />
purposes.<br />
Although brands have always played a part in tyre marketing, they have<br />
assumed much more importance in the last decade with the emergence <strong>of</strong><br />
global players, and the acquisition <strong>of</strong> a portfolio <strong>of</strong> existing brands as a result<br />
<strong>of</strong> the takeover <strong>of</strong> other firms. The increasing segmentation <strong>of</strong> the car market<br />
has led directly to a much more <strong>com</strong>plex segmentation <strong>of</strong> the tyre market.<br />
There has always been a price differentiation, with the luxury vehicles having<br />
more expensive tyres fitted and, conversely, the smaller utility vehicles fitting<br />
economy tyres. With the advent <strong>of</strong> specialist vehicles such as super sports<br />
cars, sports utility vehicles and minivans, <strong>this</strong> has led to specialist tyres being<br />
developed for them, usually at above-average prices. This is particularly the<br />
case for the OEM market, where the increasing sophistication <strong>of</strong> vehicle<br />
design has led to specific tyres being designed for specific vehicles, but it is<br />
also true <strong>of</strong> the replacement market. There is a tendency for the OEM brand to<br />
be specified for replacement tyres for any vehicle, but for some specialist<br />
vehicles <strong>this</strong> be<strong>com</strong>es almost obligatory, as there are very few makes <strong>of</strong> tyre<br />
designed for some low-volume vehicles.<br />
Tomorrow’s tyre market is expected to be led by the ultra high-performance<br />
(UHP) tyres which <strong>of</strong>fer enhanced driving control, run-flat tyres which ensure<br />
safe driving even in the event <strong>of</strong> a flat tyre, and ultra fuel efficiency tyres which<br />
improve fuel efficiency. In particular, with the rapid growth <strong>of</strong> the hybrid vehicle<br />
market, the tyre industry has recently been concentrating on developing fuel<br />
efficient products.<br />
Other factors impacting on tyre design include increased chassis development.<br />
In addition, the larger number <strong>of</strong> car segments have led to an increase in the<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page 38<br />
Chapter 3 Technical review<br />
Chapter 3 Technical review<br />
Defining the elements<br />
Tyres remain a key technology within chassis engineering. Quite apart from<br />
the fact that vehicle grip and handling behaviour ultimately depends entirely on<br />
the physics and mechanics <strong>of</strong> what happens within the four tyre contact<br />
patches, the tyres also make significant contributions towards determining ride<br />
<strong>com</strong>fort (since the tyre contributes up to xx% <strong>of</strong> the total spring rate), internal<br />
and external vehicle noise, and economy.<br />
An important distinction in car and truck tyres is made between bias tyre<br />
construction and radial tyre construction. Radial-ply tyres have long since<br />
be<strong>com</strong>e the norm for light-duty vehicle use. Bias-ply tyres are now only fitted to<br />
motorcycles, bicycles, excavating machines and industrial and agricultural<br />
machines. Michelin first introduced steel-belted radial tyres in Europe in 1948.<br />
Radial tyres are so named because the ply cords radiate at a xx degree angle<br />
from the wheel rim, and the casing is strengthened by a belt <strong>of</strong> steel fabric that<br />
runs around the circumference <strong>of</strong> the tyre. In radial tyres, the ply cords are<br />
made <strong>of</strong> nylon, rayon or polyester. The belt-over-wrap <strong>of</strong> a radial tyre uses less<br />
tread distortion under load and more sidewall distortion. The advantages <strong>of</strong><br />
radial tyres include longer tread life, better steering characteristics and less<br />
rolling resistance, which increases fuel consumption. On the other hand,<br />
radials have a harder riding quality, and since they are technologically more<br />
<strong>com</strong>plex than bias-ply tyres, they are about xx% more expensive to make<br />
when volumes are <strong>com</strong>parable. Because <strong>of</strong> their construction, radial tyres<br />
require a different suspension system from that used by cars designed for<br />
bias-ply tyres.<br />
Tyres are classified according to the respective requirements <strong>of</strong> various<br />
vehicle types and sizes, and operating conditions. The essential data – tyre<br />
dimensions, load ratings, specified inflation pressures and authorised speeds –<br />
are standardised in the interests <strong>of</strong> interchangeability in the following seven<br />
tyre categories:<br />
○ engine-driven, two-wheeled vehicles – motorcycles and motor<br />
scooters;<br />
○ passenger cars;<br />
○ light-duty trucks – including delivery trucks;<br />
© 2008 All content copyright Aroq Ltd. All rights reserved.
Page 53<br />
Chapter 4 Manufacturers<br />
Chapter 4 Manufacturers<br />
Amerityre<br />
Amerityre Corp was founded in 1995 as American Tire Corporation. The first<br />
products developed and sold by the new <strong>com</strong>pany were polyurethane foam<br />
tyres based on the <strong>com</strong>pany’s proprietary chemical formulation technology.<br />
Since the tyres were fabricated using a closed-cell polyurethane material, they<br />
could never go flat. Thus, the <strong>com</strong>pany has registered the Flatfree trade mark<br />
for <strong>this</strong> product. These tyres are currently fitted to a variety <strong>of</strong> applications,<br />
including bicycles, wheelchairs, lawn and garden products, and golf carts. In<br />
1999, the <strong>com</strong>pany changed its name to Amerityre Corp and continued<br />
development <strong>of</strong> its Flatfree technology.<br />
In 2001, Amerityre developed polyurethane elastomer pneumatic passenger<br />
car tyres that were able to be driven for xx miles without air pressure and with<br />
several holes in the sidewalls. These tyres did not incorporate conventional<br />
tyre reinforcement materials, such as beads, belts and plies. Buoyed by <strong>this</strong><br />
innovation, the <strong>com</strong>pany’s engineers then developed a system for integrating<br />
these reinforcement materials in its Elastothane tyres. This system, dubbed<br />
the Arcus Run-Flat Tire, is designed to operate at normal air pressure, yet<br />
continue to perform normally for up to xxx miles without air. These Elastothane<br />
products include tyre fill, solid tyres, <strong>com</strong>posite tyres and pneumatic passenger<br />
vehicle tyres. In April 2004, Amerityre <strong>com</strong>pleted testing to Federal Motor<br />
Vehicle Safety Standard (FMVSS) xxx <strong>of</strong> its so-called Arcus design passenger<br />
car tyre and in November 2007 <strong>com</strong>pleted testing to the new FMVSS xxx<br />
specification.<br />
Since <strong>com</strong>pleting <strong>this</strong> testing, the <strong>com</strong>pany says it has begun discussions with<br />
<strong>com</strong>panies that are interested in licensing its technology, providing them with<br />
<strong>sample</strong> tyres. The <strong>com</strong>pany states: “While <strong>com</strong>panies evaluate <strong>sample</strong> tyres,<br />
we will focus on finishing the design and development <strong>of</strong> the manufacturing<br />
equipment required to produce the polyurethane road tyre in <strong>com</strong>mercial<br />
volumes. We are discussing the construction and installation <strong>of</strong> a pilot<br />
manufacturing facility capable <strong>of</strong> demonstrating <strong>this</strong> production capability with<br />
potential strategic partners.”<br />
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Aroq Ltd , Seneca House , Buntsford Park Road , Bromsgrove , Worcs , B60 3DX , UK .<br />
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