Pune, India – The global market for original equipment (OE) tires is projected to grow at a CAGR of 5.48% from 2016 to 2021, to reach a value of $30.26 billion (€28 billion), according to a report by Indian research group MarketsandMarkets.
The demand, said the report, is driven by demand for improved fuel economy, low rolling resistance tires, eco-friendly and smart tires.
Titled “tires market for OE & replacement”, the report suggests that passenger cars will be the largest vehicle type to drive growth in the market.
According to the International Organisation of Motor Vehicle Manufacture (OICA) passenger car sales around the globe increased from 55.6 million units in 2010 to 66.3 million units in 2015.
In terms of light vehicle tires, the report went on to examine the retreading market, predicting that the light commercial vehicles sector would see the highest growth in this sector.
“Retreading of tires has always been a popular concept with heavy commercial vehicles, but with time the potential benefits of using it for light commercial vehicles has been noticed,” the report added.
Explaining the benefits of retreading in this segment, the study said that in a light duty vehicle, single tire manufacturing consumes, on an average, 26.4 litres of oil.
However, it added, retreading of the same tire consumes only 9 litres of oil, which is almost 34% of the new manufacturing process.
On the other hand, according to the Retread Tire Association, the cost for a set of four large SUV tires is around $1,000.
“Almost 50% of the cost is saved by adopting retreading for light duty vehicles,” said the market research.
In terms of regions, Asia-Oceania is estimated to dominate the tires market for OE and replacement.
The growth in Asia-Oceania can be attributed to increasing vehicle production in countries such as China, India, Japan, and South Korea, which contributed 46% of the global vehicle production in 2015.