The COVID-19 virus, which emerged in early 2020, created wide-reaching changes for consumers and industry alike. As with all major manufacturing, the global tire industry has been tasked with reacting to the changing economic environment and dramatically shifting industry drivers that have occurred as markets work to recover from the pandemic. Smithers outline these drivers and trends and the outlook for the market in its new report, The Future of Global Tires to 2026.
 
The estimated value of global tire demand in 2021 is $264 billion, after some recovery from 2020, but still well below the 2019 level. Based on IMF economic growth forecasts from July 2021, we anticipate that the tire market will rebound further and exceed the 2019 level already in 2022. However, different end-use sectors and countries are expected to see longer recovery periods than others.
 
Overall, however, based on strong fundamental drivers and trends (as outlined above), we anticipate a sustained recovery through 2026, as global market value (and unit volume) reverts to something closer to the pre-COVID-19 long-term trajectory (though not fully catching up during our forecast period). As such, compound annual growth in market value is forecast to be 4.3% per year (3.6% in unit volume terms). This is a strong performance, but keep in mind that 2021, although a year of partial recovery, is also basically still a trough year relative to what likely would have been in the absence of COVID-19.
 
Raw Materials
The tire industry’s raw material procurement and consumption is one of its foundational aspects and is becoming even more critical in light of the ever-increasing demands placed on tires. In addition, the emphasis on sustainability that has come to dominate economies and transportation technology generally is increasingly also a feature of the tire industry.
 
With total consumption of tire raw materials estimated to be 47.7 million tonnes in 2021, growth going forward will trail unit volume growth in tire demand as the results of sustainability and efficiency efforts become increasingly apparent. The biggest stories are the increasing use of HDS (highly dispersing silica) to pursue ever lower targets for rolling resistance to reduce emissions in conventional vehicles and increase battery range in electric vehicles.
 
Tire market share by raw material input, 2021, by volume (% share)

 
 
 
Specialty Tires
Specialty tires, as defined in this report, include high-performance and premium tires for the most prevalent end uses (PCs/LGVs, T&Bs and motorcycles). They account for an estimated $64.4 billion in value in 2021, with a forecast average growth of 8% CAGR in value and 7.3% CAGR in volume up to 2026, which is meaningfully faster than that of the total market. 
 
The high-performance passenger car/light goods vehicles specialty segment is the largest in value and is growing rapidly, driven by the growth of CUV, SUV and pick-up truck segments. Trucks and buses show a more subdued dynamic, as the drivers are more related to fuel efficiency. Premium motorcycle tires show the highest growth rate, both in value (14.8% CAGR) and volume (12.0% CAGR), among the specialty tires, buoyed by post-COVID recovery as well as shifting momentum in Asia-Pacific towards premium motorcycles.
 
Regional Markets
As the global tire market recovers, performance at key regional and national levels will result in a range of experiences, from the developed markets, to the still largely developing and increasingly ascendant Asia-Pacific region. Led by China and India, the Asia-Pacific tire market, estimated at 1.24 billion tires and $103.6 billion in 2021, accounts for 53% of global volume and 39% of global value. Although COVID- 19 significantly impacted 2020 tire sales, the tire market in Asia-Pacific has recovered and will grow on average by 5.9% by value and 4.4% volume each year from 2021 through 2026, leading the global regional markets.
 
While other markets, especially North America, will contribute to recovery, the Asia-Pacific market will be at the forefront on manufacturing and demand trends. That region is highly diverse, with a dominance of light vehicle tires, with significant markets are also present in trucks (medium and heavy duty), buses and specialty applications such as motorcycles, off-the-road (OTR) equipment (e.g. mining, construction, ports, agricultural, industrial) and aviation tires.