Who’s Leading the Race in Global Tire Manufacturing?

Who’s Leading the Race in Global Tire Manufacturing? –> Unveiling the Surprising Trends in Production Capacity: In 2023, the number of factories owned by globally renowned tire companies has grown to nearly 500. Tire factories in Asia, Europe, and North America make up 87% of the total number globally, with their production capacity accounting for about 96%. As expected, China has the most tire factories in the world, but its production capacity is not as dominant as one might expect.

Global Tire Manufacturing Heat Map

Based on data from the U.S. Department of Transportation’s issued DOT plant identification codes & rough approximation on plant capacity, here’s a simple breakdown of factory production capacity across different continents, measured in units of 100 million:

• Asia leads with a massive production capacity of 37 hundred million units.
• Europe follows with a capacity of 4 hundred million units.
• North America is close behind Europe with a capacity of 3.4 hundred million units.
• Latin America has a smaller capacity of 1 hundred million units.
• The Middle East and Africa have the lowest capacities, with 0.36 and 0.34 hundred million units respectively.

Asia

The data shows that there are 493 tire factories worldwide with DOT (Department of Transportation) codes. Of these, China hosts 161 factories (150 in mainland China and 11 in Taiwan), making up 33% of the global tire factory count. This includes prominent China companies like Zhengxin Rubber (CST), Zhongce Rubber, Linglong Tire, Sailun Tire, Shuangqian Group, and Triangle Tire, alongside international heavyweights such as Michelin, Bridgestone, and Goodyear. Notably, 16 tire companies in China each operate more than three production bases.

However, despite this significant number of factories, China’s contribution to global tire production capacity is less than 30%, totaling 4.654 billion units. International corporations continue to lead in production capacity. The outlook for 2023 suggests a limited likelihood of an increase in tire factory numbers in China. Growth in capacity is expected to occur through mergers, acquisitions, and the enhancement and expansion of existing facilities, with environmental policies and investment costs playing a key role in shaping the development of tire production infrastructure.

Europe

Europe is the second-largest hub for tire factories, with 52 companies operating 94 facilities. Apollo Tyres from India, with two factories in Hungary and the Netherlands, supplies 6.55 million tires annually for various vehicles, boosting its global ranking and revenue – which hit $3.137 billion in 2022, a 14.82% increase from the previous year.

Michelin, Continental, and Pirelli lead in Europe in terms of factory count. Michelin operates over 20 factories, producing over 61.16 million tires yearly, while Continental’s 7 factories exceed 90 million tires annually. Pirelli maintains 8 factories with a capacity of about 43 million tires. Goodyear, after expanding with Cooper and Dunlop, operates 6 factories in Europe, though its capacity will change with the closure of its UK factory.

Since 2020, at least 6 foreign companies, including Goodyear, have been scaling back their European operations, leading to the closure of at least 7 factories over four years. With ongoing high inflation, Europe might see a further 10% reduction in tire factories in the next five years, especially in the UK, Germany, and France, due to increasing costs and decreasing efficiency.

However, some European regions like Romania, Spain, and Serbia, are emerging as favored locations for tire production due to lower cost pressures. In 2023, Nokian shifted its Russian operations to Romania, alongside Continental and Michelin. Sumitomo is expanding in Spain, and Linglong has started production in Serbia. Many tire companies remain cautious about investing in Europe, mindful of the high costs and associated risks.

South East Asia : The rising sun of tire production

South East Asia is rapidly becoming a major force in the tire industry, in stark contrast to the European tire industry’s gradual decline. This region has drawn investments not only from Chinese tire companies but also from earlier entrants including European, American, Japanese, and South Korean tire giants.

The region boasts around 9 tire factories, with a combined annual production capacity of approximately 388 million units. This represents about 10% of the global tire production capacity. South East Asia is home to 29 prominent tire companies from China, Japan, Korea, the USA, and Europe, with Bridgestone, Michelin, and Continental having a notable presence in terms of factory numbers.

Thailand leads the region with the highest production capacity, nearing 140 million tires per year. Indonesia, which houses factories from Michelin, Bridgestone, Goodyear, Pirelli, and Hankook, produces about 79.4 million tires annually. Despite having fewer factories and a lower total tire production than Thailand, Indonesia’s average factory output and the price per tire are higher, owing to the premium products offered by these industry leaders. Vietnam contributes 79.25 million tires to the global market each year. Cambodia is emerging as a crucial investment destination for Chinese tire companies, boasting an annual capacity of over 10 million tires. With further expansion by companies like Sailun and General Tire, Cambodia’s production capacity is expected to rival other South East Asian countries within the next five years. Notably, in the third quarter of 2023, Cambodia’s tire exports to the U.S. nearly doubled.

Global Tire Industry Leaders: Factory Count

In the tire industry, the adage “size matters” still holds true. Currently, only three tire companies globally have over 40 factories each: Michelin, Bridgestone, and Goodyear. Michelin has established 49 factories across North America, Latin America, Europe, and Asia. while Bridgestone owns 48 & Goodyear operates 41 factories worldwide.

In terms of production capacity, 60% of the global tire capacity is supported by ten companies: Michelin, Bridgestone, Goodyear, Continental, Hankook, Kumho, Pirelli, Sumitomo Rubber, Yokohama, and Toyo Tires. Meanwhile, Chinese tire companies continue to advance on their global upgrade path.

Summary

In summary, the global tire industry is experiencing dynamic shifts in production capacity and location. China, with 161 tire factories, is a major player, contributing 33% to the global factory count but less than 30% in production capacity. The future in China is likely to see growth through mergers, acquisitions, and expansion of existing facilities rather than through the addition of new factories, influenced by environmental policies and investment costs.

Europe, while historically a stronghold in tire manufacturing, is facing a decline with a predicted 10% reduction in factory numbers over the next five years, mainly in the UK, Germany, and France. However, Eastern European countries like Romania, Spain, and Serbia are emerging as favorable production locations due to lower cost pressures.

South East Asia, particularly Thailand and Indonesia, is rapidly emerging as a significant tire production hub, offering competitive advantages in terms of cost and capacity.

Looking ahead, the global tire industry is poised for a geographical rebalancing. While traditional powerhouses like Europe adjust to economic and operational challenges, regions like South East Asia and parts of Europe with lower costs are becoming more attractive for tire manufacturing investments. In China, the focus will be on enhancing efficiency and capacity through strategic consolidations and technological upgrades, reflecting a shift towards a more sustainable and economically viable production landscape.