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Strong Truck Tyre Demand to Shape a Recovery of the European Tyre Market

tyre market

Strong Truck Tyre Demand to Shape a Recovery of the European Tyre Market

IndexBox has just published a new report: ‘EU – Tyres – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The auto market collapse has hit the European tyres market hard, but the increasing demand for truck tyres is to become a remedy. In the context of tightening European environmental legislation, ‘green’ tyres become more popular.

Key Trends and Insights

In 2020, the European sales of the original equipment tyres fell 23% (year-on-year) for consumer car tyres and 18% for trucks. In the replacement market, the decline was 12% for car tyres, 9% moto & scooter tyres, and 4% for truck tyres (according to ETRMA), while agricultural tyres sales remained unchanged.

The cause of the drop was the global decline in automotive production. According to the International Organization of Motor Vehicle Manufacturers, Germany (-24%), France (-39%), Great Britain (-29%), Italy (- 15%), Czech Republic (- 19%), Spain (- 20%) and Poland (- 31%) registered significant declines.

Amid asynchronous quarantine measures in different countries and disruptions in supply chains, manufacturers and distributors have accumulated large stocks of summer tyres produced in Spring 2020 and winter tyres not sold due to unusually warm weather, which has increased expenditures on storage for companies. While surplus stocks were in warehouses, the resumption of production growth was delayed.

In the 4th quarter of 2020, the demand for tyres for agricultural vehicles, motorcycles, scooters and trucks resumed growth. These downstream segments are to support the EU tyres market in 2021.

The ‘green’ tyres made from a silica-silane system become more popular in Europe amid tightening environmental requirements. ‘Green’ tyres feature a better grip on wet roads, lower rolling resistance and, as a result, higher fuel efficiency as compared to conventional tyres.

Germany to Lead in Tyre Production and Export

The countries with the highest volumes of tyre production in 2019 were Germany (74M units), Poland (48M units) and Spain (43M units), with a combined 38% share of total production. These countries were followed by Romania, Portugal, France, the Czech Republic, the UK, Italy and Hungary, which accounted for a further 50% (IndexBox estimates).

From 2012 to 2019, the most notable growth rate in terms of tyre production, amongst the key producing countries, was attained by Hungary, while tyre production for the other leaders experienced a decline in the production figures.

In 2019, shipments abroad of tyres decreased by -3.8% to 405M units, falling for the sixth consecutive year after two years of growth. Over the period under review, exports showed a perceptible decrease. The most prominent rate of growth was recorded in 2013 when exports increased by 10% year-to-year. As a result, exports attained a peak of 559M units. From 2014 to 2019, the growth exports remained at a lower figure.

In value terms, tyre exports declined to $27.5B (IndexBox estimates) in 2019. In general, exports recorded a noticeable downturn. The pace of growth was the most pronounced in 2017, with an increase of 7% year-to-year. Over the period under review, exports reached the peak figure at $32.7B in 2013; however, from 2014 to 2019, exports failed to regain momentum.

In 2019, Germany (91M units), distantly followed by Poland (37M units), Spain (33M units), Romania (31M units), France (31M units), the Czech Republic (27M units), Italy (25M units), Hungary (23M units) and the Netherlands (21M units) represented the main exporters of tyres, generating 79% of total exports. Portugal (18M units), Slovakia (17M units), Belgium (14M units) and the UK (9.5M units) took a small share of total exports.

In value terms, Germany ($5.6B) remains the largest tyre supplier in the European Union, comprising 20% of total exports. The second position in the ranking was occupied by France ($2.7B), with a 9.8% share of total exports. It was followed by Spain, with an 8.7% share.

Source: IndexBox AI Platform


3 Prominent Trends Driving Tire Cord and Fabric Market Growth

Automobiles are complex structures, made up of several different parts that contribute to the long-term functioning and efficiency of the system. From the gearbox to the engine, to the steering and suspension, to brakes, and more, each part of the vehicle serves a certain purpose.

Arguably one of the most important components of a vehicle is the tires. Tires are the parts the connect the vehicle to the surface and play a key role in making vehicles stop, steer, and move.

Considering the prominence of the components in a vehicle, the internal structure of a tire is of great importance, given that it is responsible for the strength and reinforcement of the tire. Tires are made of several different layers. The first is the outer layer that comes into contact with the road surface, known as the tread, which has imprinted patterns that help maintain vehicle directionality and maximize braking and cornering performance. Next comes the carcass, which acts as the skeleton of the tire’s insides, and holds the weight of the vehicle. The carcass is overlapped by tire cords, which secure the tire to the wheel, and are wound together at the end of the last part, the bead.

Tire cords and tire fabrics especially are key reinforcing materials for the tires and are designed to maintain the quality of the tires and improve durability. In earlier days, cotton was a prominently used cord fabric in vehicle tires. However, modern tire cord materials include rayon, nylon, polyester, and steel, among others. These materials offer several beneficial properties such as controlled deformation, high tensile strength, and abrasion resistance, which have contributed to their use as core components in the global tire cord and tire fabrics market in recent years.

Steel continues to garner interest as the preferred tire cord material

Steel first began to draw attention as a cord material in the late 1930s, when Michelin developed the first tire with steel cord plies for large buses and trucks, in order to reduce the ply-count of the tire whilst maintaining optimum strength. This development enabled the reduction of ply-counts to the two-to-four range, which in turn contributed to a significant drop in heat generation and resulted in prolonged tread life.

Over the years, radial tires began to gain popularity even in passenger vehicles. As the adoption of these tires began to rise, so did the demand for steel cords. Given that steel has higher tensile strength than rayon or nylon, the material quickly became the core tire cord material for radial tires, which require great tensile strength. Studies suggest that the production of steel cords and tire bead wires in South Korea crossed over 223.8 thousand metric tons in 2019.

Steel cords are made predominantly from strands of high-strength carbon steel and are used in the reinforcement of radial tires. These steel cords are a combination of many think wires, designed to improve the shock absorption capabilities of the tire, whilst ensuring optimum passenger comfort. Furthermore, the use of high-grade steel in tire cords can help the tire withstand high levels of stress, thereby enhancing the safety and stability of the vehicle during driving.

Strategic initiatives among industry players open up lucrative growth prospects for the tire cord and tire fabrics industry

Many key players in the global tire cord and tire fabrics market are implementing a range of organic and inorganic growth strategies to strengthen their position in the global business landscape, as well as to create new opportunities for the development of advanced tire fabrics.

To illustrate, Indorama Ventures Public Co Ltd joined hands with Jet Investment in 2018, to acquire the largest producer of tire cord fabrics in Europe, Kordárna Plus. The deal included one production site each in Slovakia and the Czech Republic, leading to a combined tire cord and tire fabrics production capacity of more than 57,000 tonnes annually.

Likewise, in May 2020, global materials solutions provider Trinseo completed its acquisition of Synthomer plc’s VP latex (vinyl pyridine latex) business. VP latex is one of the main ingredients in tire cord fabric binders and is responsible for creating a strong bond between the rubber and the tire cord during the manufacturing process. The deal included the transfer of customer lists, product recipes, and other intellectual property associated with Synthomer’s tire cord binders business to Trinseo.

Burgeoning interest in environmentally friendly and bio-based alternatives for conventional cord materials

Proliferating concerns regarding GHG emissions across the globe, alongside the rapid depletion of natural resources owing to expanding consumer demands, is prompting the tire cord and tire fabrics industry to work towards developing more sustainable options for tire reinforcement in recent years.

Modern passenger car tires consist largely of tire cords made from polyamide 6.6, which is derived from 100% fossil sources. In order to address this, PHP Fibers initiated a research project to find sustainable alternatives to polymer materials for tire reinforcement. In the study, PHP found bio-based polyamide polymers PA 6.10, PA 10.10, and PA 4.10 to be suitable candidates. These polymers contain sebacic acid, which is a dicarboxylic acid derived from castor oil, as a key building block in their molecular structure.

Upon investigation, these bio-based polyamide polymers showed distinct advantages over their fossil-based counterparts, in the form of less moisture pickup, lower density, and low to negative emission of carbon dioxide.

South Carolina Rolls In Two Major Tire Manufacturing Deals

Los Angeles, CA – South Carolina has scored big with two major foreign tire makers saying they will invest millions to expand their manufacturing operations in the state.

Japan-based Bridgestone Tire Co. Ltd. has said it will open a plant to make giant, off-road radial tires for earthmoving and mining equipment at a new facility in Aiken County, while France’s Michelin Tire Co. has begun operations at a new facility in Piedmont producing the company’s newly-developed TWEEL airless radial tire.

The Bridgestone plant will cover 1.5 million-square-feet and is the second tire manufacturing plant the company has built in Aiken County. The company has operated a passenger tire facility in Graniteville since 1998.

In 2011, Bridgestone announced a planned $970 million investment to build the company’s first U.S.-based off road radial tire plant, as well as expand production capacity at Bridgestone’s steel cord manufacturing facilities in Clarksville, Tennessee, and Saga, Japan.

The opening of the new Aiken County plant “completes the largest portion of the planned investment,” the company said. Both the Clarksville and the Saga facilities will supply the steel cord used in making the tires that will be produced there.

Michelin’s new manufacturing plant in Piedmont is the first the company has built anywhere in the world to produce its new TWEEL airless radial tire – touted by the French company as a tire with commercial applications “that never goes flat.”

The new tire concept was developed at the company’s research center in Greenville, one of Michelin’s three global technology centers.

The TWEEL is a non-pneumatic tire that changes the configuration of a conventional tire by combining the tire and the wheel assembly into a single, solid unit comprised of a rigid hub connected to a shear beam by means of flexible, deformable polyurethane spokes.

The new 135,000 square-foot facility represents Michelin’s 10th manufacturing facility in South Carolina and the 16th in the U.S. The company said it will invest about $50 million in the new plant.