LONDON--(BUSINESS WIRE)--Technavio’s latest report on the global passenger vehicle replacement tire market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
Technavio expects the global passenger vehicle replacement tire market to grow at a CAGR of over 7% during the forecast period. This is due to the increasing demand for passenger cars in emerging economies like India and China, rising popularity of electric vehicles in China and the US, and decreasing rubber prices.
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- Tire brands influencing buying preferences
- Extended lifecycles increase passenger car tires replacement expenses
- Higher tire utilization with new passenger mobility services
Tire brands influencing buying preferences: Michelin ranked highest for satisfaction in luxury segment and Pirelli ranked highest in performance sports segment
“Over the last few years, young riders have been more receptive than their older counterparts to tire brands that are less established in the market. Young riders are more likely to purchase them as replacement tires. In the US, large, well established tire brands such as BFGoodrich, Goodyear, and Michelin have the highest popularity rates among all generations,” says Siddharth Jaiswal, a lead analyst at Technavio for research on automotive manufacturing.
However, Gen X and Gen Y consumers are more likely than baby boomers and pre-boomers to consider smaller or newer brands in the US market, like Cooper, Hankook, and Pirelli, when replacing the original equipment tires on their vehicles. According to a study by J.D Power, 70% of Gen X and 72% of Gen Y owners switched tire brands if they replace two or more tires, which was a significantly higher rate than boomers who were at 59% and pre-boomers who were at 61%.
Extended lifecycles increase passenger car tires replacement expenses: more replacement tires per vehicle
Passenger car replacement tire expenses increased in 2015 as compared to 2013-14. This was primarily due to vehicles being kept in service for longer periods. According to tire industry experts, replacement tire costs increased by 15% per vehicle in 2014, while the average cost of a passenger tire increased only by 2% to USD 136. This figure is 12% higher than in 2012, wherein less frequent vehicle cycling drove the need for a second or third set of replacement tires.
The North American tire industry is expected to witness more application of original equipment run-flat tires by the OEMs. With only few models having run-flat as original equipment, the pricing of run-flat replacement tires is decreasing. As run-flat tires provide better fuel economy as the spare tire and jack can be eliminated to reduce vehicle weight and create more trunk space, over time fleet drivers have become more open to run-flat tires.
Higher tire utilization with new passenger mobility services: high turnover of replacement tires
Taxi cabs are not a modern concept as they have been in use in many countries since the beginning of 19th century, like the famous London black cabs, New York yellow cabs, and Uber to name a few. They are a convenient alternative to commute without the need of driving a personal vehicle or using public transport.
“In the last decade, the automotive industry witnessed a trend of almost every household having two cars instead of one. But with the advent and popularity of new modes of vehicle ownership, such as car sharing and pooling, people are happy with one vehicle and prefer to use taxi instead of a second car,” says Siddharth.
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