According to a new report from Smithers Rapra, global* unit demand for winter tires is projected to increase at a compound annual growth rate of 3.3% per year between 2015 and 2021. However, taking into account the greater added value, improvements in mix, price increases owing to demand (largely driven by regulation), and likely only modest increases in raw materials costs, the global winter tire market is projected to grow on a value basis of 4.4% per year through 2021.
The Future of Winter Tires to 2021 estimates that, as of 2015, the global market consists of 175 million units and represents a value of more than $19.3 billion. For context, winter tires amount to just over one-fifth of total global market demand for tires in the major markets in which they are present.
Currently, the winter tire market is overwhelmingly (60%) a European one, particularly Scandinavia, Central and Eastern Europe. Other markets include Russia (often included within Europe but merits separate treatment when it comes to the winter tires), North America, Japan, and China.
The unregulated China market is anticipated to see the most unit growth, gaining at over 13% per year, compared to 3.3% for the market overall. Winter tire pioneer Nokian sees China as having the potential to attain near-European scale in the future.
As the winter tire market is a subset of the overall tire market it shares some of the drivers and trends but, importantly, it also has its own unique determining variables. The primary determinants of growth in the winter tire market are:
- Winter Severity: Highly variable, can determine volume and timing of demand
- Economic Growth: As an extra set of tires (with or without wheels) and twice-per-year changeover cans be expensive, purchasing power is essential in determining the degree of tire use
- Safety Awareness: Underlies the consumer’s willingness to buy and is the basis for efforts by governments, insurers and other stakeholders to promote use
- Regulation: A primary driver for the market though mandates for use vary on a country by country basis
- Manufacturing and Finance: Manufacture and supply are key areas of uncertainty across the value chain, though high margins mean winter tires remain attractive products
With regard to emerging technology, the winter tire market is dynamic, both in terms of incremental improvements and potential breakthrough concepts. Some research efforts have resulted in new winter tire categories and studding – long disfavored and sometimes banned – is an area of greater attention due to promising innovations such as retractable studs.
The Future of Winter Tires to 2021 provides expert analysis of economic, environmental, regulatory and technological trends affecting global winter tire supply and demand, along with current market estimates and five-year market forecasts for winter tires across key segments. More information is available at http://www.smithersrapra.com/market-reports/tire/winter-tire-technology-forecasts
*for this report, the markets of Europe, North America, Russia, Japan, and China