Rubber Journal Asia Tyre Industry
Relying on safety and sustainability Globally, rubber demand is expected to grow 1.8%
Luc Minguet, Chief Procurement Officer at French tyre maker Michelin, said the supply of rubber will be adjusted, because most rubber plantations are run by smallholders “who will not be able to make a living at the current prices.”
in 2015 and 4.1% in 2016, while plummeting rubber prices, due to oversupply, continue to impact rubber-producing countries in Southeast Asia. The biggest buyer of rubber, the tyre
Middle classes to drive growth of tyre sector eanwhile, IRSG expects tyre sales to grow. “Passenger car tyres sales will reach 1.72 billion units by 2023 from 1.23 billion in 2014; commercial vehicle tyre sales will reach 727 million units from 479 million units and 1.6 billion vehicles are to be on the roads by the end of the decade,” said Evans. While truck and passenger car tyre sales have expanded slightly in North America and are flat in Europe, car tyre sales continue to increase in new markets such as China, India, Southeast Asia, Brazil and Mexico, according to LMC Automotive. In his keynote address at the rubber summit, Richard J. Kramer, Chairman/CEO of Goodyear, said the growth of the middle classes in developing markets will be a key driver for industry growth. “The significant GDP growth in emerging markets and the continuing emergence of the middle classes will lead to increased vehicle sales.” Kramer also sees growth opportunities in matured markets, like Europe, the US and Canada. “The growth is being driven by the changing mix to high value-added tyres with increasing technology. Profitable segments – such as winter tyres, SUV tyres and light truck tyres – offer higher margins.” Furthermore, Kramer discussed how the newest generation of consumers, the Millennials, are changing the retail landscape for the industry. “In the US, there are 80 million millennials that have a US$1 trillion buying power. They have the leverage, and are buying what they want, when they want, and how they want,” he said. He advised tyre makers to become consumerdriven and technology savvy, stating that Millennials were resorting to buying products online. “We have to transform tyre buying and sell a convenient and frictionless experience with our product and make the tyre buying process easier.” Kramer pointed out that Goodyear had become the first tyre maker in the US to sell tyres online.
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sector, has been enjoying a period of relatively strong growth, against the back of demands for better safety standards, such as tyre labelling. These were some of the issues addressed at the World Rubber Week held from 24-25 March in Singapore, organised by SingEx Exhibitions, in partnership with International Enterprise (IE) Singapore, International Rubber Study Group (IRSG) and Singapore Exchange (SGX).
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t the opening of the biennially-held rubber week, Stephen Evans, Secretary-General of IRSG, said, “This is the fifth year of disappointing global demand, against excess capacity, and a general sentiment of gloom, due to the slowdown of the Chinese economy.” The oversupply of rubber is brought about by expansions of plantations in Southeast Asia from 20112014 and will hold on until 2016, according to Evans. The glut is expected to drop to 51,000 tonnes by 2016, from 77,000 tonnes in 2015. With tyres accounting for 70% of natural rubber use, tyre companies are certainly not complaining about the cheaper prices of rubber. For instance, Goodyear Tire & Rubber Company North America’s largest tyre maker, said its record income of US$1.7 billion in 2014, up 8% from a year earlier, was helped by lower raw material costs.
Safety issues tightened with tyre labelling yre labelling will become an industry standard and allow for product differentiation, said Kramer. Europe was the first to apply it in 2012, followed by the US and Latin American countries.
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Goodyear expects to launch the rice huskbased silica tyre this year
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