New York – The global tire market is set to grow at a CAGR of 8.4 percent, between 2016 and 2021, according to a recent study.
The report by US market research firm TechSci Research found that growth will mainly be driven by developments in the global automotive market, which it said was “poised to grow at a brisk pace over the next five years”.
Backed by an anticipated stabilisation of crude oil prices and growth in the global economy, the growth in the car market will consequently boost tire sales in the coming years, said research director Karan Chechi.
During 2011-2015, both car production and sales grew at a sluggish pace globally, with CAGR growth figures of 1.37 percent and 2.59 percent during 2011-2015, respectively.
Key reasons for weak demand included the Eurozone crisis and a slump in the crude oil prices post-2013, the report added.
Crude oil prices declined from above $100 per barrel levels in 2011 to under $50 per barrel levels in 2015, thereby posting a negative CAGR of more than 16 percent during 2011-2015.
This, said the report, resulted in a decline in revenues in the Middle East and lower expenditure for construction and infrastructure.
The decline, therefore, impacted the sales of OTR (off-the-road), LCV (light commercial vehicles) and M&HCV (medium & heavy commercial vehicles) and related products such as tires across the region.
The drop in oil prices also added to the post-economic crash decline in Europe, which saw Portugal, Italy, Ireland, Greece and Spain most affected.
However, TechSci said, the region has witnessed signs of revival since 2013 due to several bailout packages offered by the European Union and the International Monetary Fund.