Increasing consumer demand for motor vehicles is directly representing the requirement for tires in the U.S. Increased focus of tire suppliers on a wide variety of opportunities which are available in today's automotive industry such as tire replacement rate are contributing for an increment in the U.S. tire market revenue. Moreover, the U.S. tire market size stood at $55.65 billion in 2018, is projected to grow at a CAGR of 4.12% throughout the forecast period 2019-2025. Increase in USTMA member companies’ investment to manufacture sustainable tires which improves safety and also to improve average lifespan of vehicles are assisting for the growth of the U.S. tire market.
Relentless developments in the U.S. tire market boosting the growth of commercial vehicles
At present, unique designs and novel materials combination is enabling the relentless developments in the tire industry. One among such developments is resulted in the form of run-flat tires, which supports a journey of 50 miles even after a puncture. Additionally, enhanced fuel efficiency, longer lifetime and improved grip with the road offered by today’s tire are replicating the advancements in the tire industry. Growing interest of tire manufacturers to prepare an innovative mix of chemistry, physics, and engineering coupled with its blend using modern tire technology is helpful in satisfying the consumer demands such as reliability, comfort, performance, safety and efficiency of the tires. Most of the makers who work for particular model vehicle provide custom-designed tires which can resist performance needs and stresses. In the U.S., 8,518,734 units of commercial vehicles were manufactured in the year 2018. Additionally, light commercial vehicles production in the U.S. increased by 4% during 2017-2018, according to the International Organization of Motor Vehicles Association. The rise in the production of commercial vehicles is boosting the growth of the U.S. tire market, compared to other vehicle types such as passenger vehicles, military vehicles, all-terrain vehicles and utility vehicles, off highway vehicles and aviation. Thus, it has been identified as the fastest growing application in the U.S. tires market, and is set to grow at a CAGR of 3.55% over the forecast period. Furthermore, the rise in the production and sales of light commercial vehicles and passenger cars in the U.S. is there by amplifying the demand for tires.
In recent times, Nokian is highly supporting the tire industry capacity expansion of the tire industry in North America. As, the foreign producers are inaugurating their first factories in the U.S., nearly six foreign tire manufacturers have been operating with projects totalling $3.28 billion in the span of last three years that is from 2016 to 2019. According to the U.S. Tire Manufacturers Association (USTMA), the U.S. tire shipments are projected to experience an increment in 2019 in accordance with July forecast. This estimation presents that the replacement passenger tire shipments records an increment of 2.6% during a span of a year 2018-2019. In addition to this, the estimated 1% growth in the light truck shipments is anticipated to positively impact the replacement tires market in the U.S. On the other hand, light truck original equipment tires are expected to increase by 6.3% from 2018-2019. Total replacement and original equipment tire shipments combined up to 330.4 million units in 2018, projected to rise by 0.7% during 2018-2019. Therefore, this anticipated growth in the replacement tire market is expected to boost the U.S. tire market in the near future.
U.S. Tire Market: Disruptive Trends
o The USTMA deals with member companies invested nearly billions of dollars along with numerous hours in the production of safe and sustainable tires. It has led to production of run-flat tires with new designs and materials, which are more fuel-efficient and durable. It is evident that they run around 50 miles, even if they are punctured. this is because of the continuous technological breakthroughs.
o USTMA members have manufacturing facilities in 18 states, which generate annual sales of more than $27 billion. As a part of 2017 tire shipments, USTMA members holds about 82% among passenger, light truck and truck tire shipments in the US.
o Modern tire technology is more focused on reducing tire fatalities. It is mixing the disciplines of chemistry, physics and engineering to provide more comfort to consumers by satisfying numerous parameters such as performance, efficiency, reliability and safety.
o In the U.S., a new Ohio law is effective from July 1st 2019, which deals with the prohibition of installation of unsafe used tires. This law is intended to protect unsuspecting consumers from these sort of installations. Moreover, this approved new law by the U.S. Tire Manufacturers Association (USTMA) and the Ohio Tire and Automotive Association is supporting value-added consumer protection and it is also imposing punishments to the retailers who are aware of the repercussion that can occur due to unsafe used tires in this country.
U.S. Tire Market: Major Players
Goodyear USA, Cooper Tire & Rubber Company, Pirelli, Continental, Michelin, Bridgestone, Yokohama, Continental, Dunlop, and BFGoodrich are some of the notable manufacturers holding the largest share in the U.S. tire market.
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