Emerging tire themes: 5 trends setting the stage for 2024

An inflection point.

That's what Goodyear CEO Richard Kramer called the moment in which the tire industry stands. Because a lot is happening in this moment to shape the industry for the future.

Sustainability strides and the unprecedented pace of innovation and technology are changing the industry. And it's doing so amid familiar headwinds—both economical and geopolitical.

Here are five tire industry trends that emerged in 2023. And they're trends that are setting the stage for 2024.

Something is happening in Europe, at least when it comes to tire preference. Yes, European consumers are starting to think a little more like their North American counterparts.

They're gravitating to all-season tires.

"The all-season tire, long shunned by drivers on this continent, has seen a remarkable success in Europe, with sales multiplied threefold over the last few years," Michelin said in a statement earlier this year.

And sales of all-season tires are likely to continue to grow. The French tire maker projects that, throughout the next five years, the segment will grow another 11 percent.

Why? The economy, the climate and the changing auto industry.

Michelin contends that the growth of all-season tire sales in Europe is driven in part by climate change, which brings unpredictable snowy weather. With all-season tires, drivers are better able to manage the change in road conditions.

Nokian Tyres sees it too.

The Finnish tire maker found that drivers throughout Central Europe—Germany, France, Italy and Poland—believed that all-season tires provided greater safety benefits throughout the entire year.

"The growing need for added safety in unexpected wet and snowy conditions, even out of season, is one of the major reasons why a number of European vehicles are fitted with tires which can handle all the varying weather," Catja Wiedenmann, head of marketing in Nokian Tyres Europe, said in April.

Don't underestimate the North American market.

Because while it may be a mature market, it is not done growing. And that means there is plenty of ground to gain, particularly as the automotive industry moves toward electrification.

And every one of the tire industry's major players intends to grow their market shares by increasing OE fitments, growing replacement market sales or targeting the growing EV segment.

You can count Michelin among the tire makers aiming at all three. The Greenville, S.C.-based tire maker announced more than $300 million in investments at its Nova Scotia operations and Kansas-based Camso-branded operations. The moves are intended to lay a foundation for serving high-value growing segments—EVs and larger rim diameter tires—as well as the ag market.

But Michelin is far from alone.

Bridgestone, likewise, is making moves, all aimed at not only competing in the market, but doing so with the most sustainable products possible. Nashville, Tenn.-based Bridgestone Americas Inc. broke ground on a $550 million investment in its Warren County, Tenn., truck/bus tire facility, and continues to invest in its guayule research and cultivation.

Pirelli is eyeing growth in the North American market as well. The Italian tire maker christened its $15 million R&D Center in Mexico—part of a $113 million expansion that also will add manufacturing capacity. It's a move intended to bolster competitiveness in a market where OE will be a key component to the growth strategy.

OE is also part of the equation for Kumho Tire Co. Inc., which is looking to grow its North American market share with a balance of new OE fitments and aftermarket sales growth. And it hopes a renewed focus on EV tires also will help it achieve that aim.

Giti Tire Manufacturing (USA) Inc. looks to grow by bringing more in-demand tire sizes to the North American market. And it intends to do so by continuing to scale up production at its Richburg, S.C., plant and ensuring the right product mix.

And when it comes to ambitious North American growth, you can't forget Hankook Tire America Corp. The tire maker plans to achieve its aims with production capacity increases, further development of EV-specific tire offerings and increased brand awareness. That culminates, of course, with a $1.6 billion investment in the company's Clarksville, Tenn., operations.

It's also part of a broader global plan that the tire maker hopes will vault it into the Global Tire Ranking's top five.

Expectations are changing. From consumers and OEMs alike.

They want safer, more sustainable tires that last longer, extend range and fuel efficiency, and perform better than ever before.

And they want tires to do all of that just as EVs emerge, adding complications of weight and torque that demand more durable tires and wear them faster than ever before.

The industry, of course, is up to the challenge, but OE tire fitment data shows it has a ways to go.

According to the J.D. Power OE Tire Consumer Satisfaction survey results, EV owners—upon purchasing their vehicle—expected to get about 40,000 miles from OE fitments. Instead, they got 13,000.

So the need to strike that balance between rolling resistance, grip and wear is more critical than ever. And tire companies are making strides, many offering EV-specific tires and others overhauling their portfolios to ensure every tire meets the expectations of the most demanding vehicles.

Bridgestone, though, is touting a breakthrough with PeakLife. Part of the tire maker's Enliten suite of technologies, PeakLife allows Bridgestone to pull peak performance characteristics from its tires thanks to better silica to synthetic rubber bonding.

The tire industry prides itself on its sustainability strides. And rightly so. It has, after all, made some big ones as it pursues 100-percent sustainable materials tires and continues stretching the string to optimize rolling resistance, treadwear and grip.

But when it comes to sustainability, the industry is being pushed a bit, too. Environmental advocacy groups as well as state and federal governments are pushing for greater sustainability by water, land and air.

Most prominent perhaps is 6ppd—an antidegradant that prevents cracking and splitting in tires. At some point during routine tire wear, the 6ppd from the tread reacts with ground level ozone to morph into 6ppd-quinone, a chemical proven toxic to aquatic species in the Pacific Northwest, particularly coho salmon.

And as the industry works to find 6ppd alternatives and states along the Pacific coast delve into research, environmental advocacy groups, native tribes and others who rely on fishing for their livelihoods have filed litigation against tire makers.

Meanwhile, California has proposed fuel/range efficiency regulations for tires that would set unprecedented rolling resistance standards. They're standards that tire industry experts say aren't achievable any time soon, especially without sacrificing on tire wear, which would mean more raw materials used and more end-of-life tires overall.

And when it comes to regulations, the industry is facing new clean air standards. The Environmental Protection Agency in November released a detailed proposal that would, for the first time, set hazardous air pollutant emissions standards for tire rubber mixing.

Tire rubber processing is the only of four rubber tire industry subcategories—rubber processing, tire production, tire cord production and puncture sealant applications—without emissions regulations of some kind under the Clean Air Act's National Emission Standards for Hazardous Air Pollutants.

In the end, 2023 turned out to be one of those destocking years. A year where volumes declined globally as inventories—built up in the immediate wake of the COVID-19 pandemic when supply chains untangled and manufacturing rebounded—were drawn down.

Across Europe, though, another trend emerged as tire demand continued to wane, failing to rebound to pre-pandemic levels.

So the industry is adjusting. Major tire makers have announced plans to shutter operations, and many of those targeted plants are in Germany.

Goodyear this summer detailed plans to close factories in Fulda and Furstenwalde, Germany, actions that will affect 1,750 workers. The moves were part of a broader plan that Goodyear Chairman, CEO and President Richard Kramer said involved "major cost-saving changes" in Europe and globally.

Kramer indicated that EMEA was a particular focus of the cost-savings actions, as the region had suffered operating losses for three consecutive quarters, including a loss of $19 million in the second quarter on 10.4-percent lower sales.

Michelin, in November, announced major moves of its own. Citing the negative impact of low-cost imports, inflation and rising production costs, Michelin said it would close factories in Karlsruhe and Trier, Germany. It also plans to phase out truck tire and semi-finished product production in Homburg, Germany.

The restructuring is expected to impact 1,410 employees at the facilities, which are to cease industrial activities by year-end 2025. This decision came on the heels of an October announcement that the company's North American arm would close its Ardmore, Okla., passenger tire plant by 2025.

Continental A.G., meanwhile, is winding down operations at its Aachen, Germany, tire plant. The Hanover, Germany-based tire maker announced plans to close the facility in 2021, a move that impacted 1,200 employees.