Highlights
 

• The tire majors losing volume 
   
• Smaller tire makers gaining prominence 
   
• Most trie majors saw flat or drop in profits

All of the top tire makers have now released their results for the full year 2024, and the data confirms the trends in discussion throughout the last 18 months or so.

The top tire makers are losing volumes at a rate of around 5% per year. Meanwhile, a group of new companies, referred by some market experts as the Jackals, is taking up that slack, and absorbing all the growth in the industry.

To highlight the loss of volume at the majors, we have two key charts. Michelin reports the percentage change in volumes each year. Taking that data since 2007 produces a chart like this:

Source: Tire industry research 

This takes the percentage change in volumes each year and shows how that has impacted volumes over the last 15 years or so. Michelin was growing steadily in volumes until about 2019. 

But then things started to decline. Then Covid hit, and there was a recovery in the period from 2021-2022. However, if we ignore that dip, it is pretty clear that volumes at the French tire maker are dropping by around 5% annually.

Source: Tire industry research

This chart runs over a shorter time-scale and includes the acquisition of Cooper Tire, which affected volumes significantly. Goodyear reports its actual volumes each quarter which gives higher accuracy to the chart, but we have converted those to percentage figures (on the vertical axis). This means the chart has higher resolution than the Michelin data, but it also means that annual changes – such as the acquisition of Cooper and its extra capacity – needs to be spread over four consecutive quarters. Although Goodyear completed its acquisition of Cooper in June 2021, the extra volumes from that deal only accumulated over the following four quarters, so that Q2 2022 was the maximum volume at Goodyear, but after that, the effects of loss of share are laid bare.

Factoring all that away, the underlying decline in volumes at Goodyear is the same 5% per year figure that Michelin is experiencing.

Bridgestone does not give any data on volumes, but it seems unlikely that Bridgestone faces any difference in its overall volumes compared to its other rivals at the top of the tire industry rankings. Our informal discussions around the industry confirm this view.

Meanwhile, a few of the smaller tire companies in the top-10 – Kumho, Hankook – have been significantly increasing their volumes. At the same time, Yokohama has been increasing its sales volumes through acquisitions.

That leaves Continental, Sumitomo, Zhongce and Sailun among the top-10 tire makers, and they have widely different fortunes.

Conti and Sumitomo appear to be stagnating, though both have announced substantial changes due to take place in 2025 and beyond. Continental will spin off its Automotive Division, leaving the tires activity at the centre of Continental AG’s business operations. SRI early in March announced a 10-year strategy under the name RISE2035. Zhongce is desperately short of cash and needs its IPO to go through before it can build much-needed new capacity, while Sailun is the fastest-growing tire maker in the world, if we take revenue growth over the last 5 years.

Which tire makers are growing and which are not

It is interesting to look at the growth in revenues and profits of tire makers in the last five years.
 

Source: Tire industry research 

Down at the bottom of the table, Cheng Shin and Nokian both have reasons for their negative growth. Nokian had to switch its tire production out of Russia, while Taiwanese tire maker Cheng Shin suffered badly from US tariffs on tires made in China and Taiwan and also faced internal disruption following the death of its former chairman.

Only just above those two casualties, Michelin’s tire activity reported revenues almost 10% lower in 2024 compared with 2019. Sumitomo’s tire activity was also lower in 2024 than 2019. 

Bridgestone corporate was also lower, but a lot of that was due to restructuring in its non-tire division. Bridgestone’s tires business grew slightly over the five years.

When we look at the profitability tables, the difference between the big-name brands and the up-and-coming tire makers is even more obvious

Tire makers by profitability 2019-2024

Source: Tire industry research 

What conclusions can we draw

There are some changes in the approach of some smaller tire makers. These appeared to follow an earlier change in focus from the top two tire makers. Both Bridgestone and Michelin said openly that they expected future growth to come from new businesses in digital and services area. They recruited experts in those subjects and started using the tire business as a cash cow to fund the transition.

They also let some tire experts go. Those experts soon found new roles at smaller tire makers – the ones referred to as the Jackals. Those individuals re-built strategies at their new employers. That meant ending the focus on price and starting to build brand and pricing power.

Those new strategies are now showing their effect on the rest of the tire industry.

We have teamed up with Tire Industry Research, based in the United Kingdom, for this article. Tire Industry research provides reports and research on the global tire industry.