2020-2022 MARKET OUTLOOK

Miles driven growing constantly

Car Global Miles Driven (bln)

Car global miles driven bln

Miles driven growing constantly

Car Global Miles Driven (bln)

Global# of Households width > $75k annual Income

Private Car still Dominant

Car Global Miles Driven (bln) by ownership model

Car global miles driven bln

Electric cars growing share (premium)

% EV2 Penetration on Global Premium production

Car global miles driven bln

Over the next three years, the high-end mobility market, Pirelli’s reference point, will not undergo any significant discontinuities. In particular:

  • the total amount of “miles driven” will continue to grow at the global level (2020-22 CAGR +3%, slightly slower than the preceding 5 years);
  • the number of “high-end” consumers will continue to grow at a CAGR of 8%, maintaining the same rhythm seen since 2015;
  • private car ownership will continue to dominate compared with car sharing and car service vehicles (89% in 2020, 85% in 2022);
  • the number of electric cars will continue to grow, but will still represent a contained portion of global car production (11% of total in 2020 and 20% in 2022).
Prestige and premium car parc
Prestige and premium car production
replacement tyre market

Premium/Prestige will continue to represent a key market, driven by a further increase of homologations; a growing demand in specialty products; a constant growth of the SUV and CUV (Crossover) segment; new technologies related to the development of electric and connectivity; a Synergic Car parc increasingly oriented towards High Value tyres.

For the High Value tyre market - concentrated in Europe, APac and North America – a still resilient demand is estimated for the next three years, despite a scenario of persistent pressure on prices which may be more contained for the more solid players in terms of innovation and brand.

In particular:

  • Premium and Prestige car production: 2019-22 CAGR ~+2% is expected after +1.3% in 2016-2019, in contrast with the weakness of global car production (+0.7% overall growth expected in the three years after -1.6% in 2016-2019);
  • Premium and Prestige global car parc: it is expected to reach approximately 180 million vehicles in 2022 (87% in Europe, North America and APac) with an average annual growth of ~+5% (+5.8% between 2016 and 2019) higher than the +2.9% envisaged between 2019 and 2022 for the overall car market (+3.6% between 2016 and 2019);
  • demand for ≥18” tyres: an overall growth of ~+6% on average per year between 2019 and 2022 is expected (+9.3% in 2016-2019) as a result of +7.5% in the Replacement channel (+11.7% between 2016 and 2019) and a +4.3% in Original Equipment (+6.4% between 2016 and 2019);
  • pressure on prices: the weakness of the automotive sector in 2019, unexpected given the installation of capacity at the end of 2018 and 2019 has resulted in excess capacity, with consequent pressure on prices; brand and technology, key elements in the purchase decision of a Premium consumer, are a competitive defence.
Synergic car parc
Synergic car production
replacement tyre market

Instead, the Standard segment presents different dynamics, with a persistent decline with the exception of 17” tyres:

  • Synergic Car parc: is ~90% of the world's car fleet and is estimated to reach ~1.4 billion vehicles in 2022, with an average annual growth rate of ~3%;
  • Synergic Car production: is expected to reach ~78 million units in 2022, with an average annual growth rate of ~0.5%;
  • demand for 17” tyres: an average annual growth of >1% is expected between 2019 and 2022 against a -0.8% envisaged for the smaller measures.

KEY DRIVERS OF GLOBAL HIGH VALUE MARKET GROWTH

Last Revised: 2 Mar 2020