Tire Cord Fabrics Market Analysis

Tire Cord Fabrics Market Deep Dive – PESTLE, Porter, SWOT

The tire cord fabric market is expected to undergo a series of changes in the coming years as it adapts to the changing demands of the transportation and automobile industries. As a key component of tire manufacturing, tire cord fabric is a critical component of tire performance, safety, and longevity. Various factors are expected to influence the tire cord fabric market in the coming years, including the growing number of vehicles on the road, the technological advancements in the materials used in cord fabrics, and the growing emphasis on the environment and the importance of green products. Also, the growing demand for high-performance tires, owing to the rise of electric vehicles and the need for better fuel efficiency, will influence the competitive landscape. The market will also be affected by the rising prices of raw materials, as well as the need for innovation to meet the increasingly stringent regulatory requirements. Consequently, the tire cord fabric market is expected to undergo a series of changes in the coming years. As the industry evolves, it is essential for manufacturers, suppliers, and investors to understand the trends and opportunities in the market.

PESTLE Analysis

• Political:
  In 2024, the tire cord fabric market will be affected by various political factors, including the policies of trade and tariffs. The U.S. government has imposed a 25-percent tariff on the import of some imported tire cord fabrics from some countries. Therefore, tire manufacturers have changed their sourcing strategies. The European Union has also issued regulations to promote sustainable development and requires that by 2025, at least 30 percent of the material used in the production of tires should be recycled, which will also affect the supply chain of tire cord fabrics.
• Economic:
  The tire cord fabric market in 2024 is characterized by fluctuating raw material prices. In the past year, the price of the main raw material for tire cord fabrics, PET, rose by about 15 percent to a level of about 5,000 yuan per ton. This was mainly due to the supply chain disruption and the increasing demand for automobiles. Also, in 2024, the world inflation rate is expected to be around 3.5 percent, which will affect the purchasing power of consumers, which may lead to a decrease in the sales of automobiles, which may indirectly affect the demand for tire cord fabrics.
• Social:
  In 2024, the trend towards eco-friendly and sustainable products is growing. Surveys show that 68% of consumers are willing to pay a premium for tires made from sustainable materials. This is pushing manufacturers to develop new cord fabrics for tires. The growing popularity of electric vehicles (EVs) is also influencing consumers. With sales of EVs expected to reach 15 million in 2024, tire manufacturers are modifying their products to meet the special requirements of EVs, such as reduced rolling resistance.
• Technological:
  In 2024, the tire cord fabric market will be largely influenced by the technological developments. In particular, the automation of the weaving process has increased the efficiency of the production process by up to 20 percent, allowing the manufacturer to reduce costs and improve the quality of the product. Also, the development of smart tire technology, in which sensors are embedded in the tires to monitor their condition, is gaining momentum. It is expected that by the end of 2024, up to 10 percent of new tires will be equipped with this technology. The tire cord fabric manufacturers are under increasing pressure to invest in R & D in order to remain competitive.
• Legal:
  The main factors influencing the tire cord market in 2024 are regulations concerning the use of chemicals and the disposal of waste. In the European Union, manufacturers must register more than 144,000 chemical substances used in production. These regulations require a significant investment in testing and documentation, which is estimated to reach up to $1 million for medium-sized companies. In addition, labor regulations are tightening, and the minimum wage in some countries is increasing, which will affect the cost of production.
• Environmental:
  In 2024, the tire cord fabrics market is mainly driven by environmental considerations. Efforts to achieve sustainable development have led to the imposition of stricter emissions standards, with the EU aiming to reduce greenhouse gas emissions by up to 55% by 2030. Tire makers are therefore compelled to seek out eco-friendly materials and aim to use at least 25% of recycled materials in their products by 2025. At the same time, the tire industry is under pressure to improve its tire recycling rates, as only about 20% of tires are currently being recycled. This is a major challenge for tire cord fabrics manufacturers and requires them to come up with new solutions.

Porters Five Forces

• Threat of New Entrants:
  The market for tire cord fabrics is moderately protected due to the capital- and technology-intensive production processes. Competition is not fierce and although the established players have a large share of the market and enjoy strong brand loyalty, new entrants can find opportunities by focusing on niche markets or new products. However, the presence of strong competitors and the need to comply with industry standards can be a deterrent to many potential new entrants.
• Bargaining Power of Suppliers:
  The bargaining power of the suppliers in the tire cord fabric market is relatively low. There are many suppliers of raw materials such as polypropylene and polyamide. Hence the buyers have a wide choice of suppliers. This also reduces the bargaining power of suppliers. The buyers have long-term contracts with their suppliers, which also stabilizes the costs.
• Bargaining Power of Buyers:
  The buyer's bargaining power in the tire cord fabric market is high, because there are many suppliers and the cost of changing suppliers is low. Buying in large quantities, large tire companies can get the best price and terms. The high-quality tire market is also conducive to the buyer's bargaining power.
• Threat of Substitutes:
  The threat of substitution in the tire cord fabric market is moderate. There are alternative materials that can be used in the manufacture of tires, such as steel belts or other synthetic fibers, but these substitutes often do not have the same performance characteristics as traditional tire cord fabrics. However, as technology and materials science continue to advance, it is possible that in the future, new substitutes will emerge that could threaten the market.
• Competitive Rivalry:
  Competition in the tire cord fabrics market is high, with a number of established companies competing for market share. Competition is based on price, quality, and innovation, resulting in aggressive marketing and continuous product development. The number of competitors and the slow growth of the market further intensify competition.

SWOT Analysis

• Strengths:
  • High demand for durable and high-performance tire products.
  • Established supply chain and manufacturing processes.
  • Technological advancements in fabric production enhancing quality.
• Weaknesses:
  • Dependence on fluctuating raw material prices.
  • Limited diversification in product offerings.
  • Environmental regulations increasing production costs.
• Opportunities:
  • Growing electric vehicle market driving demand for specialized tire fabrics.
  • Expansion into emerging markets with increasing automotive production.
  • Innovation in sustainable materials and recycling technologies.
• Threats:
  • Intense competition from low-cost manufacturers.
  • Economic downturns affecting automotive sales.
  • Rapid technological changes requiring continuous investment.

The tire cord fabrics market in 2024 is characterized by a strong demand driven by the need for high-performance tires, supported by established manufacturing processes and technological developments. But it is also characterized by high volatility in the prices of raw materials and the pressure of regulations. Opportunities come from the growing electric vehicle market and the potential for innovations in sustainable materials. Threats include competition and economic fluctuations.