Specialty tires offer promising growth opportunities post-Covid-19 new Smithers data finds

Specialty tires offer promising growth opportunities post-Covid-19 new Smithers data finds

LEATHERHEAD, Surrey, UK and AKRON, Ohio, USA – November, 24 2020 – Worth $44.02 billion in 2019; specialty tires – for motorcycles, mining & construction, agriculture, industrial, and aviation applications – will continue to offer positive sales potential once the industry recovers from the short-term disruption of the Covid-19 pandemic.

This analysis is drawn from the recent dedicated Smithers market study – The Future of Specialty Tires to 2025. In-depth modelling of the potential impact of Covid-19 for these tires shows that a global drop of up to 2.7% in the market could happen in 2020. This is relative to the 478 million units consumed in 2019; up from 371 million units in 2015.

The pandemic has seen many tire factories closed and major disruptions to international trade. The market recovery, when it comes, will not be uniform across all classes of specialty tire, as end users adjust to different realities of operating in a post-Covid world.

For motorcycle tires a lowering of consumer purchasing power and transportation needs will favour motorcycles at the expense of entry-level car purchases in some areas – although less commuting will damage replacement tire demand. The economic outlook for Asia is especially critical, as the region accounts for the vast majority of all motorcycle tires sold.

Grip will continue to be the most pressing technical concern, and there will be a rise in demand for two-wheeler radial tires.

Off-the-road specialty tires covers formats used in mining, construction, ports and handling; agricultural and forestry; and other industrial applications, such as forklifts. These are forecast to grow at a faster rate than the tire industry as a whole in near future. Mining and construction are forecast to lose market share, and be hit by softer oil prices; though construction vehicles may benefit from planned stimulus packages for infrastructure improvements. Agricultural tire demand will see stable growth as food remains an essential even in a recession; and will witness further development of non-pneumatic tire types. Industrial tires will fall however, and only recover once a post-lockdown recovery is confirmed.

The outlook is bleakest for aviation tires. Formerly a slow but stable market, it will suffer as international travel continues to be curtailed, and many airlines face bankruptcy. This will include a renewed interest in retreading, reducing replacement aircraft tire sales.

As the specialty sector re-establishes itself after the Covid-19 disruption, there will be more emphasis on tire makers to differentiate themselves, embrace new technologies, and develop specialty models for new vehicle concepts. This will include tires for two-wheeler electric vehicles, integrating sensors to enable more autonomous driving in industrial vehicles, and employing more advanced tire compounds to optimise performance and minimise environmental impact.

Asia-Pacific will remain the most important region for specialty tires. Already accounting for over half of global volume and value in 2019, it will grow at the highest rate through to 2025. The mostly mature North American and European markets are expected to return to limited growth, once the Covid-19 economic disruption is resolved. Leisure purchases of premium motorcycles will be depressed in the short term, however.

The market outlook for each type and sub-type of specialty tire in the wake of Covid-19, and beyond is analysed in detail in The Future of Specialty Tires to 2025. Five recovery forecasts are combined with an exclusive dataset by value and volume, giving forecasts to 2025 segmented by tire type, geographic region, and 18 leading national markets.

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