Industry Analysis & Industry Trends
The industry has contracted steadily during the past five years, despite stimulus from rising vehicle manufacturing activity and an anticipated increase in the number of motor vehicles registered in the United Kingdom during the period. However, strong import competition, dwindling export sales and reductions in manufacturing capacity challenged growth during the past five years. The projected fall in global rubber prices also dampened industry growth, as it forced operators to lower selling prices. Industry revenue is expected to decline at a compound annual rate of 4.7% over the five years through 2016-17.
During the current year, revenue is projected to decrease by 2.9% to £1.7 billion, primarily due to continued downward pressure on prices from low global rubber prices... purchase to read more
Industry Report - Starting a New Business Chapter
As with most manufacturing industries, tyre manufacturing involves a relatively high level of capital investment into factories and machinery, which can be quite prohibitive for any entrant. At the same time, a new player will require skilled labour, which can be difficult to source. Manufacturers also need staff that have industry-related knowledge concerning tyre regulation, which may act as another barrier to entry. Furthermore, high concentration in the industry means that new entrants will find it difficult to challenge incumbent firms like Michelin and Pirelli. Tyre retreading, on the other hand, has lower barriers to entry as the capital outlay is not as high.
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