Tire makers must prepare for many scenarios

HILTON HEAD, S.C.—In a time of rapid technological and market change, tire makers have to be ready to implement a number of future scenarios to ensure solid technology and business development, according to a speaker at the 34th Clemson University Global Tire Industry Conference.

"The automotive industry is changing faster than any other time in its history," James A. Popio, vice president of operations, North America, for Smithers Rapra, said at the recent conference in Hilton Head. "Global dynamics and social dynamics are changing quickly. The future is not clear, so we must be ready for any number of scenarios."

Global economic, health and trade policies are helping to fuel the rapid change in markets, according to Popio.

Growth in China is slowing down, he said, but global Gross Domestic Product is expected to exceed 3 percent globally for the next five years, he said.

There also are many uncertainties in international trade and development, according to Popio. Reductions in U.S. tariffs on Chinese tires combine with potential U.S. steel and aluminum tariffs to make the picture on trade unclear, he said.

Brexit, the U.S. exit from the Trans-Pacific Partnership and the threatened U.S. withdrawal from the North American Free Trade Agreement have caused shifts in the global trade outlook, according to Popio.

So have changes in global tire manufacturing, with transfers of production from China to Southeast Asia and recent investments in Eastern Europe and the U.S., he said.

With expanding market shares for SUVs and sports cars, high-performance, specialty and premium tires are now much more in demand, according to Popio.

The advent of electric vehicles is creating higher load demands because of heavy battery packs, while the development of autonomous vehicles is creating new impetus toward fuel efficiency, higher performance, reliability, durability and intelligence via sensors, he said.

Low-rolling-resistance, run-flat and winter tires are more popular than ever, he said. Global urbanization is driving growth in motorcycle tires, he said, while off-the-road tires are rebounding after years of decline.

With the changes in tire demand come changes in the materials used to make tires, according to Popio. There is rising demand for high-density silica and SSBR, for low rolling resistance; orange oil, biomass and alternative natural rubber sources such as guayule and dandelions, for sustainability; and materials to provide lighter tire weight and inner liner improvements.

The five top trends affecting tire technology, according to Popio, are:

• Electric vehicle development and market expansion;
• Autonomous vehicle development;
• Intelligent tire development;
• Shifts in consumer business models, such as ride sharing and subscription models; and
• Increased mobility and urbanization in developing countries.

All of these trends present opportunities to tire makers, and all of them present different growth scenarios in which effective use of technology are a must, according to Popio.

There are many different questions that must be answered in each area, he said.

"If electric vehicles increase in market share, will the U.S. follow the lead of China, Germany, and other EU countries?" he said. "How does battery technology affect vehicle weight and range? How will extreme cold and hot weather affect vehicle performance?"

The one certainty, Popio said, is that tire design requirements will have to change to accommodate technology.

Tire designs also must change as vehicles change to full and nearly full autonomy, according to Popio. There are the questions of how much data will be needed from tires to achieve vehicle autonomy; how easy it will be to integrate information from tires with other technologies in the vehicle; what level of tire sensing will become mainstream; and how will retrofits and the aftermarket deal with sensor replacement.

The global tire industry is solid and growing, though in some pockets more than others, Popio said. "Tire technology needs to adapt to revolutionary change in automotive technology, revolutionary business models, and urbanization and mobility increases," he said. "Scenario planning will assist technology and business development."