Tire manufacturers are facing relatively rapid change in the industry, with changes in world demographics, customer expectations, environmental issues, and sustainability and government regulations making business management ever more challenging. All of these factors are driving the introduction of innovative new products, which require great change by tire companies and the supply chain. The transforming technologies involved in this process are outlined in The Future of Disruptive Technologies in the Tire Industry to 2040
, a new report from Smithers.
Tires are a major global commodity and Smithers estimated world production at approximately 2.4 billion units with a value of $239 billion in 2019. These numbers are expected to grow to 2.7 billion units valued at $280 billion by 2024 (The Future of Global Tires to 2024
– published 2019). This will most likely be affected by the COVID-19 pandemic that is facing the world in 2020, which makes short-term predictions (for 2020–25) difficult.
The tire industry is conservative, and in the past has been slow to change. The rate of change in society regarding demographics, customer expectations, sustainability, and technology is such that the industry will be forced to make changes faster than it is used to as we move from 2020 to 2040. This provides great opportunities for those who move with the changes, but presents a serious threat to the viability of companies that are not planning for these changes.
Enabling and tire-specific technologies
The technologies driving tire development over the next 20 years are divided into two classes: enabling technologies which come from outside the industry and are required to develop the specific tire-related technologies; and the tire-specific technologies themselves. The enabling technologies outlined in this report are: sustainability, sensor/RFID technology, battery technology, modeling and simulation, and biotechnology.
The technologies outlined in this report were ranked based on the following key items:
1. Is the technology incremental, or truly disruptive?
2. Impact on supply chain
3. Benefit to tire industry
4. Impact on industry value chain
5. Benefit to end user
6. Extent of infrastructure changes necessary for implementation
7. Impact on tire volume
8. Impact on industry productivity
9. New market/new product potential
10. Likelihood of long-term success
The tire-specific technologies evaluated in the report are: non-pneumatic tires (NPTs), smart-advanced, materials of high concern, smart-basic, self-healing polymers, new elastomer synthesis, new carbon black manufacturing technology, epoxidized NR, alternative NR, bio-isobutylene, bio-butadiene, bio-plasticizers, new devulcanization technology, recycling of used tires, Electric vehicle (EV) tires, biofillers, improved liners, recycled carbon black, high aspect ratio tires, and improved NR strains.
As the world deals with the COVID-19 pandemic, the long-term economic effects cannot be fully predicted. What is certain are the cost-saving measures and business adjustments that will take place for years to come due to its impact. R&D budgets, which are key to advancing disruptive technologies, are one of the early casualties if a company faces financial problems like those presented by the coronavirus pandemic. The ability of a company to maintain its R&D spending for developing new technologies will depend on the financial strength of the company, the company culture, and the effect of curtailing or shutting down a potentially disruptive program.
The public is demanding that new products, whether based on disruptive technology or not, address sustainability – especially the economic and environmental concerns. For example, the tire industry can improve both the world’s environment and the world’s economy by improving rolling resistance (less fuel per mile, thus fewer greenhouse gases) and improving wear (fewer tire wear particles and fewer tires disposed of per unit time). Additionally, this would have an economic benefit to the user of the technology.
Population growth continues, along with general aging of the population. A substantial amount of the growth will be in “less developed regions”, as defined by the United Nations, with much of the growth occurring in Africa. The expectations of populations living in the less developed regions are growing, which bodes well for automotive sales. The middle class in underdeveloped regions is expected to increase, which will lead to higher demand for vehicles, including premium vehicles. Urbanization will continue in both China and India, which may favor vehicles (and tires) for urban driving.
Regulation and legislation
Regulation and legislation are major drivers for the transportation industry and in most cases mirror consumer attitudes. Consumers are in favor of all aspects of sustainability and safety, but there will always be a tension between cost of implementation and desired results. In 2018, Michelin stated that 72% of a tire is based on petroleum. While that percentage will be reduced, the strength of the sustainability effort is unclear in light of economics. Manufacturers are trying to determine how much more consumers are willing to pay for tires to incorporate a sustainable supply chain and also equip the tires with the sensors that they are expecting.
Find out more information and download the brochure:The Future of Disruptive Technologies in the Tire Industry to 2040