global market review of tyres – forecasts to 2011 3rd … market review of tyres – forecasts to...

Global market review of tyres – forecasts to 2011

3rd edition

2005 edition

Page i

Global market review of tyres – forecasts to 2011 3rd edition by Matthew Beecham

August 2005

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Page iii


Table of contents

Multi-user licence edition............................................................................................................. ii Copyright statement .................................................................................................................. ii

Table of contents ........................................................................................................................... iii

List of tables ................................................................................................................................... vi

List of figures ............................................................................................................................... viii

just-auto.com’s research portfolio ............................................................................................... ix Incredible ROI for your budget – single and multi-user licences.............................................. ix

just-auto.com membership ............................................................................................................ x

Chapter 1 Introduction.................................................................................................................... 1 On a roll..................................................................................................................................... 1 Report coverage........................................................................................................................ 2

Chapter 2 The market ..................................................................................................................... 3 Market overview........................................................................................................................ 3 Market trends ............................................................................................................................ 5 Market players........................................................................................................................... 8

Bridgestone ...................................................................................................................... 8 Continental ....................................................................................................................... 9 Cooper Tire & Rubber ...................................................................................................... 9 Goodyear.......................................................................................................................... 9 Hankook ......................................................................................................................... 10 Kumho ............................................................................................................................ 10 Michelin .......................................................................................................................... 10 Pirelli ............................................................................................................................... 11 Sumitomo .......................................................................................................................11 Toyo Tire & Rubber ........................................................................................................ 11 Yokohama Rubber.......................................................................................................... 11

Market shares ......................................................................................................................... 18 World market .................................................................................................................. 18 European market ............................................................................................................ 21 North American market................................................................................................... 24 Asian markets................................................................................................................. 26

Market size.............................................................................................................................. 28 Market forecasts...................................................................................................................... 32 Capital investments................................................................................................................. 40

Relocation, relocation, relocation ................................................................................... 41 Michelin’s JV in India… .................................................................................................. 42

Page iv

Michelin’s JV in India… .................................................................................................. 42 …And Poland ................................................................................................................. 42 Hankook in Slovakia ....................................................................................................... 43 Continental in Brazil........................................................................................................ 43 Nokian to expand to Russia............................................................................................ 43 Bridgestone’s investments.............................................................................................. 44 Sibur’s growth plans ....................................................................................................... 45 Continental’s developments in Slovakia ......................................................................... 46 Yokohoma’s Asian moves .............................................................................................. 46 Pirelli strengthens relationship with Ford........................................................................ 46

Newly formed joint ventures, strategic alliances and acquisitions .......................................... 48 Pirelli and Aeolus in China.............................................................................................. 49 Michelin and Apollo in India............................................................................................ 49 Michelin and PT Gajah Tunggal in Indonesia................................................................. 49 Cooper Tire and Kenda in China .................................................................................... 49 Cooper’s stake in Kumho ............................................................................................... 50 Continental and Sime Darby Berhad in Malaysia ........................................................... 50 Michelin teams up with Hankook .................................................................................... 51

Chapter 3 Technical review.......................................................................................................... 53 Run-flat tyres........................................................................................................................... 53 Tyre pressure monitoring systems.......................................................................................... 56 Amerityre’s non-pneumatic passenger car tyre ...................................................................... 58

Exclusive interview with Amerityre Corp......................................................................... 60 Other tyre innovations............................................................................................................. 63

Goodyear........................................................................................................................ 63 Michelin .......................................................................................................................... 63 Bridgestone ....................................................................................................................65 Kobe Steel ...................................................................................................................... 65 Czech-Mate Enterprises ................................................................................................. 65 Dow Corning................................................................................................................... 66

Material trends ........................................................................................................................ 67

Chapter 4 Manufacturers.............................................................................................................. 70 Bridgestone............................................................................................................................. 70 Continental .............................................................................................................................. 73 Cooper Tire & Rubber ............................................................................................................. 77

Exclusive interview with Cooper Tire & Rubber.............................................................. 78 Goodyear ................................................................................................................................ 80 Hankook Tires ......................................................................................................................... 83 Kumho Tires............................................................................................................................ 84 Michelin ................................................................................................................................... 86 Pirelli ....................................................................................................................................... 89 Sumitomo................................................................................................................................ 90 Toyo Tire & Rubber Co Ltd ..................................................................................................... 91 Yokohama Rubber .................................................................................................................. 94

Online sources of information ..................................................................................................... 98 Free email newsletters ................................................................................................... 98


Page v

Other research reports ................................................................................................... 98 Global news and feature articles .................................................................................... 98 Search the web............................................................................................................... 98

Your feedback ............................................................................................................................... 99


Page vi

List of tables

Table 1: Tyre speed rating symbols ................................................................................................. 6

Table 2: Summary of main tyre makers’ business activities .......................................................... 12

Table 3: Bridgestone’s sales by geographical region, 2003 – 2004 (% of net sales) .................... 15

Table 4: Goodyear’s sales by geographical region, 2003 – 2004 (% of net sales) ........................ 15

Table 5: Michelin’s sales by geographical region, 2002 – 2003 (% of net sales) .......................... 16

Table 6: Cooper Tire & Rubber’s sales by geographical region, 2003 – 2004 (% of net sales) .... 16

Table 7: Hankook’s sales by geographical region, 2002 – 2004 (% of net sales) ......................... 16

Table 8: Kumho’s sales by geographical region, 2002 – 2004 (% of net sales) ............................ 17

Table 9: Pirelli’s sales by geographical region, 2004 (% of net sales) ........................................... 17

Table 10: Toyo Tire & Rubber’s sales by geographical region, 2003 – 2004 (% of net sales) ...... 17

Table 11: Yokohama’s sales by geographical region, 2001 – 2005 (% of net sales) .................... 18

Table 12: Manufacturer shares of global tyre market 1990 – 2004 (% of market value) ............... 20

Table 13: Sales comparison of Bridgestone, Michelin and Goodyear, 1990 – 2004 (US$ms) ...... 20

Table 14: World light vehicle tyre sales, split by OE and replacement units, 2001 – 2011 (Millions

of units) ..................................................................................................................... 33

Table 15: World medium- and heavy-duty truck tyre sales, split by OE and replacement units,

2001 – 2011 (Millions of units).................................................................................. 35

Table 16: World tyre sales (all applications) split by OE and replacement units, 2001 – 2011

(Millions of units)....................................................................................................... 37

Table 17: Capital expenditure of major tyre producers, 2001 – 2003 (Capital expenditures / net

sales per company, expressed as a percentage)..................................................... 41

Table 18: Recent tyre producers’ capital investments ................................................................... 48

Table 19: Amerityre’s Arcus tyre compared with run-flat tyres....................................................... 60

Table 20: Bridgestone’s tyre production plants in Japan ............................................................... 71

Table 21: Bridgestone’s tyre production plants overseas .............................................................. 72


Page vii

Table 22: Continental Corp’s tyre production for light vehicles and trucks¹, 2003 – 2006 ............. 74

Table 23: Continental Corp’s tyre production for trucks¹, 2003 – 2006.......................................... 75

Table 24: Goodyear’s tyre sales by operating segment, 2002 – 2004 (millions of tyres) .............. 81

Table 25: Michelin’s manufacturing companies ............................................................................. 87

Table 26: The Yokohama Tire Company Ltd.’s worldwide facilities, 2004..................................... 95


Page viii

List of figures

Figure 1: Raw materials used in tyre production, 2004.................................................................... 4

Figure 2: Manufacturer shares of global tyre market, 2004 (% of value) ....................................... 18

Figure 3: European market shares for OE and replacement tyres for passenger cars and light

trucks, 2004 (% of volume)....................................................................................... 22

Figure 4: European market shares for OE and replacement tyres for medium- and heavy-duty

trucks, 2004 (% of volume)....................................................................................... 23

Figure 5: European market shares for OE and replacement tyres for all vehicles¹, 2004 (% of

volume) ..................................................................................................................... 23

Figure 6: North American passenger and light truck, OE and replacement tyres market shares,

2004 (% of volume)................................................................................................... 24

Figure 7: North American market shares for OE and replacement tyres for medium- and heavy-

duty trucks, 2004 (% of volume) ............................................................................... 25

Figure 8: North American market shares for OE and replacement tyres for all vehicles¹, 2004 (%

of volume) ................................................................................................................. 25

Figure 9: Chinese tyre market shares for OE and replacement tyres for passenger cars and light

trucks, 2004 (% of volume)....................................................................................... 27

Figure 10: Korean OE tyre market shares, 2004 (% of volume) .................................................... 28

Figure 11: Korean replacement tyre market shares, 2004 (% of volume)...................................... 28

Figure 12: World tyre market shares by product application, 2004 (% of volume) ........................ 29

Figure 13: World market for OE tyres for passenger cars and light truck applications by

geographical region, 2004 (% of volume)................................................................. 30

Figure 14: World market for OE tyres for medium- and heavy-duty truck applications by


Figure 15: World market for replacement tyres for passenger cars and light truck applications by


Figure 16: World market for replacement tyres for medium- and heavy-duty truck applications by


Figure 17: World tyre market value by product segment, 2004 (% and value of sales)................. 40


Page ix

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Chapter 1 Introduction

Chapter 1 Introduction

Page 1


On a roll

The world tyre market is essentially a replacement market in terms of volume

and value. Although only one-quarter of road tyres are specified and bought by

the vehicle makers, this segment of the market is significant as it drives

technical development and has a major influence over the aftermarket. just-

auto estimates that the total OE and replacement tyre market’s volume is split

evenly between Europe, XX%, North America, XX% and Asia, XX%. High-

performance tyres represent XX% of the world market in volume but XX% of the

industry’s margin. XX% of this market is in Europe, where it is growing by XX%

a year.

just-auto also estimates that the global tyre market for passenger cars, light-,

medium- and heavy-duty truck applications accounted for nearly X.Xbn tyres

sold in 2004, of which XXXm (XX%) were replacement tyres. While the mature

developed markets of Western Europe, US, Canada and Japan display growth

year on year of about X%, the emerging markets of Central and Eastern

Europe, Russia, China, Mexico and Brazil are expected to grow (on average)

by X% per annum.

The three largest tyre suppliers – Michelin, Bridgestone and Goodyear –

collectively control XX% of the global market. These producers generate at

least three-quarters of their turnover from tyres. The mid-size manufacturers,

namely Continental, Sumitomo, Pirelli, Yokohama, Cooper Tire & Rubber,

Toyo Tire and Kumho Tire control about XX% of the world market. The

remaining quarter of the market is served by local and niche market tyre

producers.

The main drivers of innovation in the tyre market include continued focus on

run-flat tyres, reduction of rolling resistance, RFID and intelligent tyres, and

suspension/wheel/tyre/brake packages. An auto executive told just-auto: “The

European tyre market is indeed mature and not one in which you see any

dramatic changes. [The main changes have been in] the growth in tyre sizes,

speed ratings and type of technologies used. Some of the drivers include the

Chapter 2 The market

Chapter 2 The market

Page 3


Market overview

The tyre market is divided into two sectors: OE and replacement. OE tyres are

defined as those supplied to vehicle makers to be fitted to new vehicles while

replacement tyres are those which are fitted subsequently.

Car and truck tyres are clearly the most widely used types of tyre, based on

total value of sales. There is a wide range of both car and truck tyres designed

to serve different purposes.

All tyres for passenger car applications are of radial-ply construction, replacing

the old bias-ply tyres. Radial-ply tyres incorporate a semi-rigid breaker strip

under the tread and relatively little stiffening in the walls. Bias-tyres are now

only fitted to motorcycles, off-road and agricultural equipment. For commercial

vehicles, they are increasingly becoming less important. The once-dominant

bias-ply tyre received its name from the tread, where the cord threads of the

tyre casing run diagonally (or with a bias) so that they may cross each other

(cross ply). However, the more complex radial tyre, with its radial design

comprising two main sections, represents the only means of satisfying the

increasingly varied range of operating capabilities demanded of the tyres. They

are now used on today’s passenger cars and heavy commercial vehicles.

Tyres are classified according to the respective requirements of various

vehicle types and sizes, and operating conditions. The essential data – tyre

dimensions, load ratings, specified inflation pressures and authorised speeds –

are standardised in the interests of interchangeability in the following seven

tyre categories:

○ Engine-driven, two-wheeled vehicles – motorcycles and motor scooters.

○ Passenger cars.

○ Light-duty trucks – including delivery trucks.

○ Commercial vehicles – including multipurpose vehicles.

○ Excavating machines – transport vehicles, loaders and graders.

○ Industrial trucks – including solid rubber tyres.

Chapter 3 Technical review

Chapter 3 Technical review

Page 53


Run-flat tyres

Run-flat tyres are specially constructed enabling them to be driven on in the

event of loss of air pressure. It means the driver can either drive home or to a

garage to fix the tyre. Run-flat tyres allow a motorist with a puncture to drive

the car up to XXX miles (XXXkm) at a maximum speed of XXXmph (XXkm/h)

before repairing the tyre. For the carmakers, equipping their vehicles with run-

flat tyres enables them to offer security and safety benefits and, more

significantly from a commercial perspective, a reduction in the overall weight of

the car and an opportunity to optimise its load area. The extra space also

opens up further possibilities for hybrid and LPG fuelled cars. The space saver

was a reasonable idea but it was never going to be seen as the ideal.

Removing the fifth wheel altogether will be, but it needs the carmakers to lead

for the customer to follow. Given the fact that rarely all four tyres are changed

at any one time, every new car fitted with run-flats as OE is ultimately going to

increase the replacement market for such products.

A car designed with a run-flat system can be designed with more boot (trunk)

capacity because the spare wheel, jack and tools are eliminated. But the

weight saving is less because run-flats weigh more than standard tyres.

Initially, four PAX1 tyres weighed the same as five standard tyres, so there

was no net gain. But currently four PAX tyres weigh the same as 4.7 regular

tyres. “We keep working on that weight issue,” said a Michelin spokesman.

But French carmakers say heavier PAX tyres require a stronger chassis and

suspension, which adds to manufacturing costs. Tyres are also so-called

unsprung weight — mass that directly reacts with road irregularities without

being softened by the suspension — so heavier PAX tyres make it more

difficult to provide a smooth ride.

1 The PAX system consists of a special wheel and tyre incorporating a support ring that fits around

the centre of the rim. An air-pressure sensing device alerts the driver in the event of a puncture.

Chapter 4 Manufacturers

Chapter 4 Manufacturers

Page 70


Bridgestone

Bridgestone is the world’s largest manufacturer of tyres and other rubber

products. More specifically, the company produces tyres and tubes for

passenger cars, trucks, buses, construction and mining vehicles, industrial and

agricultural machinery, aircraft, motorcycles and scooters. Bridgestone also

produces antivibration and noise insulating materials, polyurethane foam

products, office equipment, industrial rubber products, building materials, belts,

hoses, marine products and other rubber parts. Tyres account for 80% of

Bridgestone Group sales worldwide.

Although Bridgestone and Firestone are household names, they are perceived

differently. What should they sum up in consumers’ eyes? In an exclusive

interview with just-auto, Andy Davies, senior manager marketing and brand

development for Bridgestone Europe, said: “The Bridgestone company was

founded over 70 years ago by Mr Ishibasi [shi = Stone, Bashi Bridge]. His

founding mission was to contribute to society by providing the highest quality

products. This mission remains today as the corporate philosophy and from

this we draw the Bridgestone brand statement: ‘Our Passion for the very best

in technology, quality and service is at the heart of our commitment to you

wherever you are in the world. Bridgestone wants to inspire and move you.’

This we also summarise into our brand message ‘Passion for Excellence’ and

through motorsport, safety, society and strong business initiatives we are

driving the Bridgestone brand forward in Europe as a premium brand.

Firestone has an equally interesting heritage based in the US, having been

founded through a close friendship between Henry Ford and Harvey Firestone.

Today the brand is perceived differently in European markets depending on

local conditions but basically it is a friendly, affordable family brand with a

strong heritage.”

The company also manufactures industrial rubber and chemical products, and

sporting goods. It sells tyres in more than XXX countries. The company

employs XXX,XXX people worldwide.

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global market review of tyres – forecasts to 2011 3rd … market review of tyres – forecasts to...

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