A NEW study from The Freedonia Group, a Cleveland-based industry market research firm, finds that world demand for tyres is forecast to reach 4.3% per year to 2.9 billion units in 2017. It said that growth in the tyre market will continue to be led by developing countries in the Asia/Pacific region, particularly China and India.
Freedonia forecast that the Asia/Pacific region will be responsible for the bulk of global tyre demand gains, accounting for two-thirds of total growth through 2017. China is the largest national market for tyres in the world, representing 22% of global demand in 2012. Growth in demand for tyres in China will not match the rapid gains posted over the 2007-2012 period, as expansion of both motor vehicle production and motor vehicle usage will decelerate. However, the market for tyres in China will continue to be among the fastest growing in the world. Other major national markets for tyres in the Asia/Pacific region include Japan and India, which ranked as the world’s third and fourth largest, respectively, in 2012. In Japan, sales of tyres are forecast to decline through 2017, a function of a shrinking population and falling motor vehicle exports. India will post strong growth in demand for tyres and is expected to surpass Japan as the world’s third largest tire consumer by 2017.
Meanwhile, improved economic conditions in the developed countries of Western Europe and North America will support the tyres sales, but gains in these regions will continue to trail the global average. Motor vehicles are the largest market for tyres, accounting for 73% of global demand in 2012.
North America and Western Europe sales will show improvement relative to the 2007-2012 period, but gains will remain below 2% per annum in both regions through 2017. Stronger economic environments will result in advances in both new vehicle production and vehicle usage, supporting growth in demand for tyres. Slow growth in population and the motor vehicle stock will serve to constrain gains. In addition, the losses in new vehicle production that occurred in both regions between 2007 and 2012 will not be fully recovered, as significant production capacity was permanently transferred to lower-cost developing countries. The US will continue to be the world’s second largest national consumer of tyres, accounting for 13% of global demand in 2017.