Landscape of the passenger car tire segment in Japan
The passenger car tire segment is the most critical segment for tire manufacturers in Japan. In terms of sales, it covers more than 70% of the total tire sales for this market. Both, OEM and the replacement tire segment of the market in Japan have grown steadily to boost vendor profit margins over the past few years.
Japan is home to some of the largest global tire manufacturers such as Bridgestone, Sumitomo, and Yohohama. Large manufacturers in Japan are keen to leverage the opportunity that has emerged with the growing mini passenger car segment. Vendors are looking to launch many new variants of tires with shorter wheelbase diameters sensing this opportunity. The market is also witnessing a growing demand for tires from electric vehicles, thus prompting manufacturers to invest in this segment as well. Overall, the continuing demand for tire replacements is expected to help the passenger car tire market grow at a CAGR of over 4% during the forecast period.
Key trend: Emergence of alternatives to natural rubber
Natural rubber is one of the most important raw materials for the tire industry, and it accounts for roughly 14% of the total weight of a tire. The increase in the price of natural rubber directly impacts tire manufacturing costs. Major rubber manufacturing regions in South Asia and South East Asia are highly susceptible to seasonal damages and extreme weather conditions. In such situations, supply becomes unpredictable, thus leading to a consequent price hike of natural rubber.
An alternative to natural rubber has emerged in the form of guayule. Its cultivation requires arid climates, and the southwest Arizona region in the US suits the crop particularly well. Bridgestone and Cooper tires are putting their resources together in a joint R&D initiative to commercialize the production of guayule. Another prominent vendor, Continental has also been investing in R&D activities of dandelion rubber since 2007. The company is working on a particular species of Russian dandelion as they offer superior yields as compared to others. The focus is on innovation to bring down the cost of manufacturing by investing in alternative sources of biopolymers.
Segmentation of passenger car tires in Japan
The replacement market accounts for 54-57% of the total passenger car tire sales in Japan. Tires are either purchased online, from a retailer or a dealer. As the competition is stiff, vendors look to cut down prices by offering discounts. This trend is more evident in online channels that look to leverage consumers with price comparison of products.
Amid speculations regarding an increase in the consumption tax in Japan, the OEM market witnessed some heavy buying from consumers in 2014. Despite economic challenges and a high level of debt and inflation, this segment remains optimistic due to a rise in demand for eco-friendly and mini cars.
Market segmentation of passenger cars by application
The three main segment of the automobile market in Japan include: -
Mini cars have steadily gained popularity in urban and densely populated regions of Japan. These vehicles have smaller displacement and usually with vehicle dimensions of up to 4.7 meters in length, 1.7 meters in width, and under 2 meters in height. Known as Keis in Japan, mini cars accounted for over 30% of the market share in the year 2010. Continuous growth has helped the segment reach 39% by 2014.
Market segmentation of passenger car tire market by type
Summer tires constitute the dominant segment of the passenger car tire market in Japan. The market has also witnessed a rise in the demand for winter tires due to heavy snowfall in the year 2013 and 2014. Road safety regulations in Japan mandates replacement of winter tires in the eventuality of thread grooves getting worn out below 4 mm.
The market shares of summer tires and winter tires are calculated on the basis of replacement tire sales in Japan.
Leading vendors in the passenger car tire market in Japan
Bridgestone is one of the leading vendors in the passenger car tire market in Japan. The company has a wide geographical presence that helps it to maintain its position in the market. It has a broad portfolio of tires for multiple vehicles types. Michelin also exhibits strong presence across several segments such as airlines, automobiles, bicycles, earthmovers, farm equipment, heavy trucks, and motor cycles.
Toyo Tires and Yokohama are home grown, Japanese origin companies that are hugely popular among consumers in Japan. They specialize in wide ranging product categories such as luxury vehicles, light trucks, and SUVs as well as commercial trucks.
Other prominent manufacturers in the market include Hanook tires, Kumho Tires, Nakang Rubber, and Nitto Tires.
Other sections of the report include an analysis on the following
Impact of online purchases on the passenger car tire market in Japan
Impact of unique tire sized on the replacement market in Japan
Seasonal variations and the tire market in Japan
Overview of the automotive industry in Japan
Key drivers, challenges, and trends and their impact on the passenger car tire market in Japan
Five forces analysis of the passenger car tire market in Japan
SWOT analysis of the leading companies in the passenger car tire market in Japan