Light Vehicle Tyres (Rapra Market Report)

The tyre industry is the largest single rubber manufacturing industry in the world. The high performance demanded of tyres has led to extensive research and development in this field and constant innovation. This report takes an overview of the latest technology combined with the market situation worldwide. Three large companies—Bridgestone, Goodyear and Michelin—now dominate the world tyre market with a share of about 56%. There then follow four mid-sized companies, which have about 18% of the world market—Continental. Sumitomo, Pirelli and Yokohama – with a combined share of 17.6%. In total eleven companies account for 81.6% of the world market. Even though the largest companies have a turnover well in excess of $10bn, they remain largely specialist tyre manufacturers. Many of the smaller companies also concentrate almost exclusively on tyres. However, the medium-sized companies are diversifying away from tyre manufacturing. Unusually, if not uniquely in the automotive components industry, the tyre manufacturers only sell a minority of their output to OEMs. The key factor that distinguishes the tyre market from any other automotive component is the size of the replacement market or aftermarket – three-quarters of road tyres are sold as replacement tyres and only one-quarter as original equipment. The big three tyre manufacturers dominate the OE market, but other large regional players also have a share, particularly in Europe. Worldwide, the replacement tyre market for light vehicles represents about 714m tyres. The replacement tyre market is certainly more profitable for the tyre manufacturers but it has distinct problems. The general problems of slow growth and market maturity are exacerbated by cyclical growth in supply to OEMs. Despite the poor profitability of sales to OE customers and even though the replacement market represents over 70% of the passenger car tyre industry’s sales, tyre makers’ profitability is also cyclica