Increasing Demand for Automobiles to Drive European Automotive Tire Market
The high demand in the European automotive tire market is due to the requirement for tire replacement and flourishing automotive industry. In 2018, the market valued $20,037.8 million and it is expected to garner $26,327.8 million by 2024, advancing at a 4.5% CAGR during the forecast period (2019–2024). A tire is a circular component that is fitted around the rim of the wheel and filled with compressed air, which helps in transferring the vehicle load from the axle to the ground.
The growth in the European automotive tire market is primarily due to the prosperity of the automotive sector. Being home to major automotive players, Europe is one of the largest markets for automobiles. The growth opportunities are most abundant in the passenger car segment, as this witnesses the highest sales among all. Further, the increasing average age of vehicles, strict regulations, and popularity of green tires are expected to add to the market growth. The flourishing automotive industry, highly skilled workforce, and presence of large consumer base are instrumental in driving the demand for tires.
The vehicle type segment of the European automotive tire market is classified into medium & heavy commercial vehicles, two-wheelers, light commercial vehicles, and passenger cars. The highest sales in the historical period were reported by passenger cars. This can be attributed to the surging sales of crossover utility vehicles (CUVs) and sport utility vehicles (SUVs) that resulted in an increased demand for tires. The sale of CUVs and SUVs rose by 18.0% year-over-year in 2016–2017 as well as in 2017–2018. During the forecast period, the same classification is expected to register the highest sales.
Private labeling is one of the areas which can be of great importance for the European automotive tire market. Private labeling in the automotive sector refers to the manufacture of the product by one company and its sales being done under the brand name of another company. This is done by manufacturers to meet the high demand for products and maximize their profits by selling tires at a high margin. This helps manufacturers stay focused on brand management rather than worrying about the manufacturing process.
Hence, the market for automotive tires in Europe is projected to witness considerable growth in the forecast period due to technical advancements and the increasing sales of passenger cars.
