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.
