Tire Manufacturing

Tire Manufacturing

Brief Excerpt from Industry Overview Chapter:

Companies in this industry manufacture tires and inner tubes for a variety of vehicles. Major companies include Cooper and Goodyear (US), Michelin (France), Bridgestone Corporation and Sumitomo Rubber Industries (Japan), Continental AG (Germany), Pirelli (Italy), and Hankook (South Korea).

COMPETITIVE LANDSCAPE

Demand is driven by sales of?new vehicles?and the need for?replacement tires. Because tires are largely a commodity, profitability depends on cost-efficient operations. Large companies can afford the research to develop tires from new, technologically advanced materials and can invest in improving production efficiency. Small companies can compete by producing tires or tire-related products for niche markets, such as bicycles or farm equipment. The US industry is?highly concentrated: the top four companies generate about 70% of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are tires for passenger cars (about 70%), trucks and buses (more than 20%), and farm equipment and industrial vehicles (less than 5%). Companies also make inner tubes and materials for tire repair and retreading, primarily from synthetic and natural rubber.