Strong Truck Tyre Demand to Shape a Recovery of the European Tyre Market

IndexBox has just published a new report: 'EU - Tyres - Market Analysis, Forecast, Size, Trends and Insights'. Here is a summary of the report's key findings.

The auto market collapse has hit the European tyres market hard, but the increasing demand for truck tyres is to become a remedy. In the context of tightening European environmental legislation, ‘green’ tyres become more popular.

Key Trends and Insights

In 2020, the European sales of the original equipment tyres fell 23% (year-on-year) for consumer car tyres and 18% for trucks. In the replacement market, the decline was 12% for car tyres, 9% moto & scooter tyres, and 4% for truck tyres (according to ETRMA), while agricultural tyres sales remained unchanged.

The cause of the drop was the global decline in automotive production. According to the International Organization of Motor Vehicle Manufacturers, Germany (-24%), France (-39%), Great Britain (-29%), Italy (- 15%), Czech Republic (- 19%), Spain (- 20%) and Poland (- 31%) registered significant declines.

Amid asynchronous quarantine measures in different countries and disruptions in supply chains, manufacturers and distributors have accumulated large stocks of summer tyres produced in Spring 2020 and winter tyres not sold due to unusually warm weather, which has increased expenditures on storage for companies. While surplus stocks were in warehouses, the resumption of production growth was delayed.

In the 4th quarter of 2020, the demand for tyres for agricultural vehicles, motorcycles, scooters and trucks resumed growth. These downstream segments are to support the EU tyres market in 2021.

The ‘green’ tyres made from a silica-silane system become more popular in Europe amid tightening environmental requirements. ‘Green’ tyres feature a better grip on wet roads, lower rolling resistance and, as a result, higher fuel efficiency as compared to conventional tyres.

Germany to Lead in Tyre Production and Export

The countries with the highest volumes of tyre production in 2019 were Germany (74M units), Poland (48M units) and Spain (43M units), with a combined 38% share of total production. These countries were followed by Romania, Portugal, France, the Czech Republic, the UK, Italy and Hungary, which accounted for a further 50% (IndexBox estimates).

From 2012 to 2019, the most notable growth rate in terms of tyre production, amongst the key producing countries, was attained by Hungary, while tyre production for the other leaders experienced a decline in the production figures.

In 2019, shipments abroad of tyres decreased by -3.8% to 405M units, falling for the sixth consecutive year after two years of growth. Over the period under review, exports showed a perceptible decrease. The most prominent rate of growth was recorded in 2013 when exports increased by 10% year-to-year. As a result, exports attained a peak of 559M units. From 2014 to 2019, the growth exports remained at a lower figure.

In value terms, tyre exports declined to $27.5B (IndexBox estimates) in 2019. In general, exports recorded a noticeable downturn. The pace of growth was the most pronounced in 2017, with an increase of 7% year-to-year. Over the period under review, exports reached the peak figure at $32.7B in 2013; however, from 2014 to 2019, exports failed to regain momentum.

In 2019, Germany (91M units), distantly followed by Poland (37M units), Spain (33M units), Romania (31M units), France (31M units), the Czech Republic (27M units), Italy (25M units), Hungary (23M units) and the Netherlands (21M units) represented the main exporters of tyres, generating 79% of total exports. Portugal (18M units), Slovakia (17M units), Belgium (14M units) and the UK (9.5M units) took a small share of total exports.

In value terms, Germany ($5.6B) remains the largest tyre supplier in the European Union, comprising 20% of total exports. The second position in the ranking was occupied by France ($2.7B), with a 9.8% share of total exports. It was followed by Spain, with an 8.7% share.

Source: IndexBox Platform