Five key trends driving high performance tire sales

Five key trends driving high performance tire sales

The high performance passenger car tire sector is a star performer. The segment easily outpaces the rest of the passenger car tire market and is a source of market growth and profitability for materials suppliers, tire manufacturers, car companies and tire dealers.

For many years high performance tires were bought only by car enthusiasts strictly for their handling and speed attributes. In today’s market, they are finding broader consumer acceptance as aesthetics and image play an increasing role in purchasing decisions. To meet these changing demands, tire manufacturers have had to evolve the product to offer a broader range of features and benefits such as ride comfort, reduced noise generation and better fuel efficiency.

Now Smithers is able to draw on its most recent market data to identify the five key trends that are driving the market for high performance tires.

Population growth in emerging markets

In response to considerable population growth – especially in the emerging economies of Africa, India, and Asia Pacific – vehicle ownership is expected to rise significantly, which in turn will drive growth in the tire industry. Of the three major markets, Asia Pacific is predicted to be the fastest growing.

The volume of high performance passenger car and light goods vehicle tire market by percentage share by region for 2015

The volume of high performance passenger car and light goods vehicle tire market by percentage share by region for 2015 (millions of units) – Source: Smithers 
 

The increasing car ownership will largely be driven by demographics and wealth. Greater affluence among the middle class in emerging economies will lead to a significant increase in those able and wanting to own vehicles. The new middle class in these regions is demanding premium vehicles, including sport utility vehicles, luxury passenger cars and sports cars that are likely to be fitted with high performance tires.

Original equipment fitments

The high performance tire sector has become very popular with original equipment (OE) manufacturers and with consumers in the replacement tire market. As a result, tire producers are targeting the OE segment for further growth and R&D spending. These low-profile tires that are built for higher speeds, account for more than half of the global OE tire market, according to research by Smithers, which has made them an integral part of vehicle design and the driving experience.

Auto manufacturers began using high performance tires mainly as factory equipment on luxury passenger cars. Over the years, they have grown in popularity among drivers of premium sport utility vehicles and most recently crossover utility vehicles. Sales of these vehicles continue to climb in correlation with the growing global middle class and their desire for status and mobility.

Vehicle fuel efficiency requirements

Improving fuel efficiency is a growing theme in the tire industry. In terms of tire design, this is mainly achieved by reducing rolling resistance. Government regulations that are demanding higher fuel economy from vehicles are probably the most immediate and important driver for change in the way high performance tires are being made. Fuel economy standards like corporate average fuel economy (CAFE) in the US are playing a major role in controlling tire technologies and markets.

Better vehicle fuel economy will also improve air quality standards. Around the globe, serious targets have been set to protect the climate, driven by the Kyoto protocol. In the European Union (EU), transportation is the only economic sector where CO2 emissions are constantly increasing, especially in vehicular transportation.

Tire labelling

Led by the EU, tire labelling has created a set of mandatory minimum standards for a number of tire properties, especially fuel efficiency. Tire labelling is considered by many to be one of the most important legislative initiatives in recent times and it gives consumers key information on tire properties, including fuel efficiency, which will help them make more informed choices.

Although tire labelling in is different phases of development across the globe, all of the schemes include criteria for fuel efficiency and wet grip. The EU’s tire labelling scheme has been in effect since 2012, and legislators have said they will consider raising minimum standards over time.

Next-generation high performance tires

Because of the more mainstream acceptance of high performance tires, leading tire makers are continuing to employ new technologies in the development of ultra-high performance tires that push the limits of size, speed and performance characteristics.

These tires are for the true sports car enthusiast and are often proven on the race track. They are developed with proprietary technology, specialized polymer and silica compounds, as well as unique tread designs to achieve their desired performance results. To meet evolving customer demands, many of these next-generation high performance tires now claim multi-season driving safety, ride comfort, low noise, better fuel efficiency and extended tread wear.   

This research is based on Smither report The Future of High-Performance Tires to 2020. The report is available for purchase now and provides key market information for those involved in the high performance tire market.

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