By: Professor Dato Dr Ahmad Ibrahim
Tire making takes up around 70% of the world’s natural rubber, NR, production. It is the biggest single user of NR. It is no wonder that tire demand has a big influence on NR pricing. The irony of it all is that most of the big tire companies in the world are not from the major NR producing countries. Most are from the industrialised West, especially those which are big manufacturers of motor vehicles. There have been attempts to lure such companies to set up shops here, with limited success. In Malaysia, a major tire brand, Goodyear, recently pulled out. Some say this may have to do with our declining NR production. Like most industries, the tire business is not spared from the impact of the global push to embrace sustainability. This may influence the use of NR.
The global tire industry has been undergoing significant changes in recent years, driven by technological advancements, shifting consumer preferences, regulatory pressures, and evolving market dynamics. Some key trends are shaping the world tire industry. The shift toward sustainability is one. There is a growing emphasis on using sustainable materials, such as NR, recycled rubber, and bio-based materials, to reduce the environmental impact of tire production. Green manufacturing is up. Tire manufacturers are adopting energy-efficient processes and reducing carbon emissions in production facilities. Companies are in fact focusing on tire recycling and reuse, with initiatives to develop tires that are easier to recycle at the end of their lifecycle.
The rise of electric vehicles has created demand for tires specifically designed to handle the unique characteristics of EVs, such as higher torque, heavier battery weight, and the need for reduced rolling resistance to maximize range. EVs produce less noise, making tire noise more noticeable. Manufacturers are developing quieter tires to enhance the driving experience. EV tires need to be more durable due to the increased weight and stress from instant torque.
Tires are increasingly being equipped with sensors to monitor pressure, temperature, tread wear, and other parameters in real time, improving safety and performance. Smart tires connected to the Internet of Things (IoT) enable predictive maintenance and data-driven insights for fleet management and individual drivers. Research is underway to develop tires with self-healing capabilities to repair minor punctures automatically. As consumers seek enhanced driving experiences, demand for high-performance tires with better grip, handling, and speed ratings is growing. All-weather tires that perform well in both summer and winter conditions are gaining popularity, reducing the need for seasonal tire changes. The increasing popularity of SUVs and off-road vehicles has driven demand for rugged, durable tires designed for challenging terrains.
Countries like China and India are leading the growth in tire demand due to rapid urbanization, increasing vehicle ownership, and expanding manufacturing capabilities. Also in Africa and Latin America. These regions are also seeing growth in tire demand as infrastructure improves and vehicle penetration increases. Governments worldwide are imposing stricter fuel efficiency and emissions regulations, pushing tire manufacturers to develop low-rolling-resistance tires that improve vehicle fuel economy. Many regions now require tires to display labels indicating their fuel efficiency, wet grip, and noise performance, influencing consumer purchasing decisions. Stricter regulations on tire disposal and recycling are encouraging manufacturers to adopt more sustainable practices.
The tire industry has seen significant consolidation, with major players acquiring smaller companies to expand their product portfolios and geographic reach. The market is highly competitive, with both established brands and new entrants vying for market share through innovation, pricing strategies, and partnerships. The rise of e-commerce platforms has made it easier for consumers to purchase tires online, leading to increased competition and price transparency. Tire companies are leveraging digital channels to reach consumers, offering personalized recommendations and virtual tire fitting tools.
The focus on safety and durability is an obvious trend. Run-flat tire allow vehicles to continue driving even after a puncture, improving safety and reducing the need for immediate roadside assistance. Consumers are increasingly demanding tires that last longer, prompting manufacturers to focus on durability and tread life. There are global supply chain challenges. Fluctuations in the prices of raw materials like rubber, oil, and steel have impacted tire production costs and pricing. The COVID-19 pandemic and geopolitical tensions have highlighted vulnerabilities in global supply chains, leading to delays and increased costs.
Tire manufacturers are increasingly using automation, robotics, and artificial intelligence to improve production efficiency and quality control. Research is ongoing into using 3D printing for tire prototyping and even production, which could revolutionize the industry. Consumers are paying more attention to the design and appearance of tires, leading to innovations in tread patterns and sidewall designs. There is growing demand for customizable tires tailored to specific driving conditions and preferences.
The global tire industry is at a crossroads, with sustainability, digitalization, and technological innovation driving transformation. As the automotive industry evolves, particularly with the shift toward electric and autonomous vehicles, tire manufacturers must adapt to meet new demands and regulatory requirements. Companies that prioritize innovation, sustainability, and customer-centric solutions are likely to thrive in this dynamic and competitive landscape. It is imperative for NR producers to constantly monitor the changing trends and assess how NR quality and form have to conform to the new stipulations.
The author is from the Tan Sri Omar Centre for STI Policy, IISDS, UCSI University, and is also an Associate Fellow at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya.
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