Losing traction: Strong import competition and low rubber prices have driven revenue down

The industry has contracted steadily during the past five years, despite rising vehicle manufacturing activity and an increase in the number of motor vehicles registered in the United Kingdom during the period. Despite a weakened pound since the EU referendum, strong import competition, dwindling export sales and reductions in manufacturing capacity have all challenged performance during the past five years. A fall in global rubber prices towards the start of the period also dampened revenue, as it forced operators to lower selling prices. Consequently, industry revenue is expected to decline at a compound annual rate of 6.5% over the five years through 2018-19.Revenue is projected to decrease by 5.2% over the current year to £1.5 billion. A...read more.

Industry Statistics & Market Size
Revenue
£1.5bn
Annual Growth 14-19
-6.5%
Forecast Growth 19-24
Profit
Employment
5,737
Businesses
42

Industry Threats & Opportunities

  • Declining rubber prices have placed downward pressure on selling prices, limiting revenue
  • Falling demand for high-quality smaller tyres has contributed towards the rise in import competition
  • Economic uncertainty may encourage demand for retreading over new tyre purchases
  • Industry Report - Industry Investment Chapter

    The Tyre Manufacturing industry has a moderate level of capital intensity. Applying wages as proxy for labour and depreciation as a proxy for capital investment, the industry is estimated to have a capital-to-labour ratio of 1:7.94 in the current year. This indicates that for every £1.00 spent on capital, industry operators are expected to spend approximately £7.94 on wages. Conversely, for every £1.00 spent on wages or labour, industry firms spend approximately 13p on capital. Though tyre manufacturers must invest in costly production machinery, the day-to-day business of the industry is dependent upon a vast, skilled labour force. Hence, wage expenses within the industry outweigh capital expenditure...purchase to read more.

    Additional Insights for the Tyre Manufacturing Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Tyre Manufacturing Industry are

  • Optimum capacity utilisation
  • Having contacts within key markets
  • Effective cost controls
  • IBISWorld analysts also discuss how external factors such as World price of rubber and Demand from motor vehicle manufacturing in the Tyre Manufacturing industry impact industry performance..

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    What's in this report

    What is the Tyre Manufacturing Industry?

    Companies in this industry manufacture rubber tyres for vehicles, equipment, mobile machinery and aircraft, among other uses. Manufacturers also produce inner tubes for tyres. The rebuilding and retreading of tyres is also included in the industry. However, general tyre repair, fitting and replacement are excluded.

    Industry Products
  • Rubber tyres for light vehicles
  • Rubber tyres for commercial vehicles
  • Retreaded tyres
  • Aircraft tyres
  • Inner tubes and other products
  • Solid tyres
  • Industry Activities
  • Manufacturing pneumatic, solid or cushion tyres
  • Manufacturing inner tubes for tyres
  • Retreading tyres
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • World price of rubber
  • Demand from motor vehicle manufacturing
  • Demand from motor vehicle parts wholesaling
  • Total number of registered motor vehicles
  • Real effective exchange rate

  • Current Performance
  • Demand conditions
  • Trade conditions
  • Margins deflate
  • Chart: Revenue Growth

  • Industry Outlook
  • Demand conditions
  • Trade disruption
  • In a rut
  • Green tyres
  • Table: Tyre Manufacturing Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Tyre Manufacturing Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Motor Vehicle Manufacturing
  • Trailer, Caravan & Motor Vehicle Body Manufacturing
  • Motor Vehicle Parts Wholesaling

  • Key Selling Industries
  • Manufacture of Plastics and Rubber Machinery
  • Manufacture of Synthetic Rubber in Primary Forms

  • Products & Services
  • Rubber tyres for light vehicles
  • Rubber tyres for commercial vehicles
  • Retreaded tyres
  • Aircraft tyres
  • Inner tubes and other products
  • Solid tyres
  • Chart: Tyre Manufacturing Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Automotive aftermarket
  • Automotive original equipment market
  • Aircraft assemblers and other markets
  • Chart: Major Market Segmentation for the Tyre Manufacturing Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesOther
  • Chart: Cost Structure Benchmarking – Sector vs Tyre Manufacturing

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Tyre Manufacturing Industry

  • Industry Globalization
    Michelin Tyre plc, Pirelli UK Tyres Ltd, Cooper Tire & Rubber Co Europe Ltd,
  • Table: Michelin Tyre plc - financial performance
  • Table: Pirelli UK Tyres Ltd - financial performance
  • Table: Cooper Tire & Rubber Co Europe Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Tyre Manufacturing Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Tyre Manufacturing Industry
    Includes:
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Exports (2010-2024)
  • Imports (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Non-Pneumatic Tyre
  • A solid tyre made of solid rubber and plastic compounds.
  • Pneumatic Tyre
  • A tyre made of reinforced rubber and filled with compressed air, used for motor vehicles and bicycles.
  • Retreaded Tyre
  • A used tyre that has been given a new tread.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Tyre Manufacturing market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Tyre Manufacturing:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Tyre Manufacturing market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Tyre Manufacturing, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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