U.S. Automotive Tire Market Revenue To Exceed $75.0 Billion by 2024

The U.S. automotive tire market revenue reached $57.9 billion in 2018 and it is predicted to rise to $75.4 billion by 2024, owing to the booming automotive industry and surging requirement for tire replacement, because of the growing average lifespan of automobiles, in the country. According to the estimates of P&S Intelligence, a market research company based in India, the market will demonstrate a CAGR of 5.4% from 2019 to 2024. 

The U.S. is home to several leading automobile and automotive component manufacturing companies across the world. Out of the country’s total gross domestic product (GDP), around 3.0% was contributed by the automobile industry in 2018. Moreover, with the fall in tariff, emergence of technologically advanced automobiles, such as electric and autonomous vehicles, changing preferences of consumers, and growing compliance in manufacturing processes, the industry is set to prosper even more in the coming years. This will subsequently push up the demand for automotive tires in the country.

Furthermore, the soaring manufacturing of light commercial vehicles is predicted to create lucrative growth opportunities for the players operating in the U.S. automotive tire market in the near future. Additionally, the enactment of strict regulations, growing lifespan of automobiles, and mushrooming requirement for green tires are propelling the automotive tire industry in the country. The availability of a skilled workforce, introduction of an open investment policy, provision of incentives by state and local governments for encouraging vehicle adoption, and existence of a well-developed infrastructure are also fueling the advancement of the market. 

Depending on vehicle, the market is divided into passenger vehicle, medium and heavy commercial vehicle, light commercial vehicle, and two-wheeler categories. Out of these, the passenger vehicle category contributed the highest revenue to the U.S. automotive tire market in the years gone by. This was because of the high demand for pickup trucks in the country during the last few years, which massively boosted the sales of the tires used in these vehicles.  

Hence, the demand for automotive tires will soar in the U.S. in the coming years, mainly because of the growing tire replacement rate and increasing deployment of electric vehicles in the country. 

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U.S. Automotive Tire Market to Witness 5.4% CAGR in Near Future

One of the largest automotive markets in the world is that of the U.S. In 2018, the industry contributed 3.0% to the country’s gross domestic production (GDP). Several reasons, such as existence of a large consumer base, presence of a well-developed infrastructure, introduction of an open investment policy, availability of a highly skilled workforce, and provision of local and state incentives for vehicle adoption, are responsible for the steady growth of the automotive industry in the U.S. In addition to this, the country is home to many global automobile and associated component manufacturers. Due to these, the demand for tires in the country is on a considerable rise.

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A tire surrounds the wheel’s rim to transfer the vehicle’s load from the axle to the ground and provides traction on the surface traveled over. As per a research conducted by P&S Intelligence, the U.S. automotive tire market reached a value of $57.9 billion in 2018 and is predicted to grow at a CAGR of 5.4% in the coming years. Tires are used by all kinds of vehicles: passenger vehicle, light commercial vehicle, two-wheeler, and medium & heavy commercial vehicles. Among these, the demand for tires was created the most by passenger vehicles due to the increased sales of large pickup trucks in the U.S., in the recent years.

High tire replacement rate owing to increased vehicle life acting as a major market driver

The U.S. automotive tire market is majorly driven by the high tire replacement rate. Due to various technological advancements in recent years, the average lifespan of vehicles has increased significantly. At present, vehicles in the U.S. have a lifespan ranging between 13 and 17 years. Moreover, the average life of vehicles increased considerably from 10.2 years in 2010 to 11.5 years in 2018. Factors such as fierce market competition and stringent government regulations have contributed to the vehicle’s longevity and reliability over the years. A recent study in the U.S. shows that although Americans are increasingly buying pickup trucks and sport utility vehicles (SUVs), they are also retaining their old vehicles owing to the enhanced longevity of those vehicles. This is resulting in the high replacement rate of tires used in the vehicles in the country.

Development of advanced tires being viewed as a key trend in the market

With advancements in technology and increased penetration of vehicles, the demand for tires with low rolling resistance for improved fuel efficiency, enhanced grip for increased safety, and less wear and tear for enhanced durability has risen considerably. Thus, to meet the changing requirements of the end users, players in the automotive tire market are focusing on the innovation and development of advanced products. For instance, the development of ultra-high-performance tires has helped increase the overall speed and reliability of tires. An average high-performance tire has the ability to sustain a speed up to 270 km/h, whereas an ultra-high-performance tire achieves a maximum speed of 299 km/h. These tires are also suitable for driving over rough terrains and for travelling longer distances owing to their higher durability than other tires. Thus, the development of advanced tires is the key trend observed in the U.S. automotive tire market.

U.S. automotive tire market’s competitive landscape

Some of the major players operating in the U.S. automotive tire market are Michelin North America Inc., The Goodyear Tire & Rubber Company, Cooper Tire & Rubber Company, Continental Tire the Americas LLC, Pirelli & C. S.p.A., Hankook Tire Company Limited, Kumho Tire U.S.A. Inc., Bridgestone Americas Inc., Toyo Tire Corporation, and Yokohama Tire Corporation.

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