Introduction
In recent years, an increasing number of tire companies have turned their focus to the passenger car tire segment. However, tire market trends indicate that this sector has experienced a noticeable decline due to various factors, including economic shifts, technological advancements, and changes in consumer behavior. This article will analyze the reasons behind this downturn, examine its impact on manufacturers and consumers alike, and explore potential strategies for market recovery in the coming years.
Tire Market Trends Overview
In September 2024, the EU passenger car market continued its downward trend, with sales declining by 6.1%. Among the four major markets in the region, three experienced negative growth: France (-11.1%), Italy (-10.7%), and Germany (-7%). On the other hand, Spain saw a healthy rebound with an increase of 6.3%.
Data shows that in the first nine months of 2024, new car registrations in the European Union remained stable, with a slight increase of 0.6%, approaching 8 million units. Spain (+4.7%) and Italy (+2.1%) performed well, while the automotive markets in France and Germany experienced declines of 1.8% and 1%, respectively. In September 2024, battery electric vehicles accounted for 17.3% of the EU automotive market, up from 14.8% last year. However, sales so far this year have decreased by 5.8%, causing the total market share to drop from 14% last year to 13.1%. Additionally, registrations of plug-in hybrid vehicles saw a sharp decline of 22.3%.
Despite the intense competition in the tire industry, there has been significant investment in the sector over the past two years. Notably, a large number of investment projects have surged into the PCR (Passenger Car Radial) market. Several tire companies, including global leaders like Michelin, Bridgestone, Goodyear, Continental, and Giti, have invested in PCR tire production capacity. Additionally, Chinese tire companies are also investing in both domestic and overseas PCR tire markets.
Frico Cambodia Tire
In this dynamic landscape, Frico stands out with its state-of-the-art tire factory in Cambodia. This facility benefits from lower production costs, access to skilled labor, and proximity to emerging markets in Southeast Asia. This allows Frico to offer a competitive tire price in Cambodia. Frico’s commitment to quality and innovation ensures that its passenger car tires meet the highest standards, making them a reliable choice for consumers seeking performance and durability. Here’s a brief introduction to several Frico tire products for you.
E-TOURING 2
E-TOURING 2 Frico Cambodia tire combines exceptional manoeuvrability with superb, fuel-efficient performance. Developed in the pursuit of driving pleasure, it is excellent in the wet, reducing braking distance significantly whilst boasting quietness and grip for a high level of total performance.
Sizes: 195/60R15 195/65R15 205/55R16 205/65R15 …
LAND SPORT
LAND SPORT Frico Cambodia tire enhance performance and safety. The connections between shoulder blocks increase resistance to deformation and improve the transmission of longitudinal forces to the road, ensuring even contact. An optimized distribution of voids in the center part of the tread pattern enhances water drainage, promoting better grip during wet conditions. Additionally, high-volume slots in the shoulder optimize water flow for local contact, while chamfered edge sipes help avoid edge lift and further optimize tire contact.
Sizes: 215/45ZR17XL 215/55R17 225/45R17 225 45 r18 tyres…
RYTANK TERRAIN A/T
RYTANK TERRAIN A/T Frico Cambodia tire are designed for superior performance across various terrains. Their enhanced block pattern provides excellent grip on loose surfaces like dirt and gravel, ensuring stability and control. Built for durability, they feature reinforced sidewalls and robust tread blocks to resist punctures and abrasions. With a self-cleaning tread design that expels mud and debris, these tires maintain optimal traction. Despite their ruggedness, they also minimize road noise, offering a comfortable ride for daily driving.
Sizes: 205/60R16 27X8.50R14TL 31*10.50R15LT LT235/75R15 …
Factors Contributing to the Decline
The decline in the global passenger car tire market can be attributed to a number of factors, including economic challenges, technological changes, environmental regulations and supply chain disruptions.
The global economic downturn, especially after COVID-19, has significantly impacted consumer spending and purchasing behaviour. Consumer confidence has dropped as a result of inflation and economic uncertainty, which has also decreased demand for new tires and cars. Furthermore, the market for replacement tires is shrinking as more and more customers prioritize buying necessities over non-essentials.
The market for tires has seen unprecedented growth as a result of the popularity of electric vehicles (EVs). The need for traditional passenger car tire has decreased as a result of this change, even if it also offers manufacturers options. Additionally, consumers are replacing their tires less frequently due to advancements in Tire technology, such as longer-lasting Tires and retreading possibilities, which lowers demand overall.
Greener tires are being developed as a result of stricter pollution regulations and mounting demand on automakers to increase fuel economy. Although this is spurring innovation, tire makers are facing difficulties.
Regional Analysis
North America’s passenger car tire market has been stagnant and declining in recent years. Economic issues such as inflation and supply chain interruptions have caused a slowdown in car sales, lowering demand for replacement Tires. Furthermore, rising gasoline prices and economic instability have led to a trend toward more cost-conscious shopping habits. Key problems for the region include the rising dominance of electric vehicles (EVs), which require specialized passenger car tire, as well as increased competition from low-cost Tire makers in other regions.
Tight environmental laws have a big impact on the passenger car tire industry in Europe, especially when it comes to emissions and fuel economy. Environmentally friendly technology has advanced as a result of consumer demand for greener tires, but producers still face obstacles including growing production costs and the need for constant innovation. The conventional tire retail environment is also being impacted by changes in customer behavior.
With the help of developing nations like China and India, the passenger vehicle tire market in Asia Pacific is still expanding at the quickest rate. The demand for tires is growing rapidly due to factors including urbanization, rising earnings, and rising automobile ownership. With regional Chinese producers growing their worldwide footprint and vying for market share from well-known names, the competitive environment is getting more intense. Although the area has a lot of room to develop, there are obstacles to overcome, such as pressure on prices and the need for innovation to adapt to shifting customer tastes.
Rapid increases in automobile ownership and infrastructural development have a significant impact on the tire industry in Latin America and Africa. Markets in these areas are, nonetheless, also marked by a high degree of price sensitivity, with buyers frequently placing a higher value on cost than tire quality. Market expansion has been impacted by supply chain problems and regional economic instability. Despite obstacles like inflation and political unpredictability impeding quick market development, tire imports and domestic production are increasing throughout Latin America. In contrast, the African market is still in its infancy but is developing, particularly in urban areas where the need for affordable and long-lasting tires is being driven by the continent’s burgeoning middle class.
Future Outlook
In terms of future prospects for the global passenger car tire market, it is expected to recover slowly but steadily, driven by a recovery in global economic activity, increased car sales and growing demand for replacement tires. The tire market is expected to stabilise and grow gradually over the next few years as the automotive industry adapts to new technologies and consumer demand. However, the recovery is likely to be uneven, with growth rates varying across regions depending on economic conditions and market dynamics.
There are bound to be concerns that a frantic expansion of production capacity will once again fall into a major industry reshuffle caused by blind capacity expansion. After all, the supply exceeds demand, go to production capacity is always hanging over the head of the tire business Damocles sword. But from the current capacity expansion of enterprises, and the expansion of product categories, there is no need to worry. For example, the head of these companies have got rid of the inherent impression of Chinese tire companies, really become the best gallop in the international market. Even the little-known small tire companies, after a large amount of capital into the takeover, also changed the second spring. Strong financial support and mature commercial operation for the development of tire enterprises to form a certain guarantee.
Conclusion
In short, a combination of supply chain disruptions, changing consumer habits, technological advances and economic downturns have led to a significant contraction in the global passenger tire industry. The growing popularity of electric vehicles and the increasing demand for environmentally friendly passenger car tire solutions make this sector both a possibility and a problem. Although capacity expansion is currently growing at a slightly faster rate than tire demand, as the global economy recovers, a recovery on the demand side will only happen in the blink of an eye, and all tire companies are now simply preparing for the dawn of what is to come.
