Tire sales set to skyrocket in U.S. over seven years

The pneumatic tire market in the U.S. is expected to grow by about $20 billion over the next seven years, to be worth more than $60 billion in 2022, a new report forecasts.

San Francisco-based Grand View Research has released new data showing the global market for air-filled tires is set to grow from $192.4 billion to $334.5 billion over the same period. The study looks at both automotive and aerospace industry demand for tires, but automotive makes up the bulk of the expected increase.

Big rise in tire sales expected in North America

The report suggests the North American market will witness a “significant rise” with a compound annual growth rate (CAGR) of more than six percent between 2015 and 2022. The authors claim a strong demand for four-wheel vehicles will drive the rise.

“The region has major companies such as Ford Motor Company and General Motors Corporation, which have been at the forefront of technological advancements and innovations,” the report says.

“Automotive growth in the region, primarily U.S., is expected to spur product growth over the forecast period.”

This graph shows the anticipated growth in both original equipment manufacturer and replacement tire demand in North America.

North America pneumatic tire market revenue by sales, 2012-2022, (USD Billion)

Much of the anticipated global growth in tire demand will come from the rapid increase in vehicle production, mostly in India and China where populations are booming, lifestyles are changing and consumers increasingly have more disposable income.

In 2013 total vehicle production in China was 15 million units, which the report authors say is expected to have “a positive impact on the market” over the forecast period.
Increased automotive production in countries including the U.S., Mexico, Indonesia, Japan, South Korea and Germany will also drive tire demand globally.

U.S. regulation on tire disposal will be a challenge

The report suggests regulations governing the use of tires and their disposal are providing a major challenge for the industry.

“The U.S. Centers for Disease Control and Prevention recommends removing discarded tires from housing properties as they can become a breeding ground for mosquitoes,” the report states.

“In addition, The Environmental Protection Agency classifies tires as municipal solid waste rather than hazardous waste. Nevertheless, tires that are thrown away instead of recycled cause serious environmental problems.”

Airless tires won’t have a big impact

The report authors looked at substitute products—like semi-pneumatic and airless tires—and their potential impact on the traditional tire market over the next seven years but concluded their impact would not be great because such products generate heat while driving and increase wheel weight.

“Hence numerous manufacturers recommend the use of pneumatic tires as opposed to its substitutes, which in turn is expected to augment industry growth over the forecast period.”

But just how long that will remain the case is yet to be seen. Many manufacturers are spending a fortune developing airless tires, with Hankook announcing in July last year it was edging towards commercial production.

For more information or to buy a copy of Grand View Research’s report, visit their website.