The global rubber compound market size is anticipated to enter a period of prolific expansion owing to the rapidly rising demand for electric cars across the globe, shares Fortune Business Insights™ According to the International Energy Agency (IEA), in 2019, worldwide electric car sales stood at 2.1 million, surpassing 2018 levels and bringing the total global electric car stock to 7.2 million. Moreover, electric cars, the IEA highlights, accounted for 2.6% of the total car sales globally and registered a 40% year-on-year increase. Electric cars require sophisticated tires to withstand the heavy weight of the battery pack powering the vehicle.
Rubber compound tires will be crucial in maintaining the fuel economy of electric vehicles as these vehicles experience instantaneous torque, which puts pressure on tires and is highly likely to lead to rapid wear & tear of the tires. Since compound rubber tires are engineered from a wide variety of materials and are customized according to the end-use requirement, their demand is predicted to steadily rise as the adoption of electric cars grows in the next few years.
Highlights of the Report:
- Quantitative & qualitative analysis of the factors shaping the market size, share, and revenue;
- Comprehensive assessment of each market segment;
- Detailed examination of the leading market players and business strategies; and
- Careful study of the regional dynamics influencing market growth.
Market Restraint
Deflated Demand for Automobiles amid COVID-19 to Retard Market Growth
The automotive industry has been one of the hardest-hit industries by the coronavirus pandemic as adoption of remote working systems, social distancing measures, and unprecedented economic downturn have led to a massive demand slump for vehicles worldwide. A study by the Oxford Business Group found that the region’s light vehicle market contracted by 44% in March 2020, while China’s automotive market plunged by 79.1% in February 2020. India’s automotive market, according to the Society of Indian Automobile Manufacturers (SIAM), has been pushed back by four to five years, with this year’s sales figures resembling those of 2016. The cumulative effect of low demand, reduced workforce at factories, and supply chain disruptions have forced leading to carmakers close some of their plants. For example, Fiat Chrysler announced the shutdown of its plants in Serbia, Poland, and Italy, while Volkswagen closed its plant in Tennessee, US, as well as some plants in Italy and Spain. Since rubber compounds are extensively utilized in the automotive industry, any setback to this industry will naturally affect the market for rubber compounds.
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Regional Insights
High Rubber Compound Consumption to Fuel the Market in North America
Geographically, North America is projected to dominate the rubber compound market share in the upcoming years owing to the wide adoption of rubber derivatives in the region’s well-established automotive industry. Additionally, compound rubbers are also witnessing rising demand from the region’s footwear industry, which will benefit the market.
In Europe, the market will enjoy a healthy growth period on account of the massive investments in tire technologies made by the region’s large carmakers such as BMW and Fiat. On the other hand, the market in Asia Pacific will derive growth from the booming demand for cars in India and China along with the robust chemical manufacturing industry in the region.
Competitive Landscape
Top Companies to Focus on Establishing Presence in Developing Markets
The competitive milieu in this market is characterized by the increasing intensity of activities by key players to establish their operations in developing economies in Asia and Africa. Apart from this, few other participants are investing in the development of sustainable tire solutions to diversify their offerings.
Industry Developments:
- September 2020: Yokohama Rubber announced plans to build a new plant in the Special Projects Zone in Vishakhapatnam, India to expand the production capacities of the Alliance Tire Group. With a planned investment of USD 165 million, Yokohama intends to produce 55 tons in rubber weight at the new facility.
- July 2020: The Goodyear Tire & Rubber Company released the Goodyear Assurance ComfortDrive, the company’s all-season tire with novel tread design and sidewall properties. The tire solution has been made from soybean oil, which is bio-based and renewable and promises fuel economy, long tread life, and works efficiently in cold and wet conditions.
List of Key Players Covered in the Rubber Compound Market Growth:
- NOCIL LIMITED
- PARAA RUBBER
- Wacker Chemie AG
- Barnwell Services Limited
- PJSC KAUCHUK
- Hexpol Compounding HQ
- GestiónMediambiental de Neumáticos, S.L.
- Omega Rubber Industries
- Yokohama Rubber Co., Ltd.
- The Hygenic Corporation
- RUBBERATKINS
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