The last time I wrote about the best tyre industry innovations in 2021, I thought it would be natural to follow this up with an outlook for the European tyre market in 2022. In short – the market is stranger than ever. As the sea freight costs skyrocketed from Asia to all over the world around a year ago, many importers were uncertain if they would still be able to sell budget tyres, particularly from China in Europe, as the landed costs approached, or in some cases even exceeded, the cost of European produced second and third-tier brands. For this reason, many importers decided to skip not just the winter season imports but also the summer season, and the result is an almost historic shortage of budget tyres. Well, one could say that budget tyres are in the market no more, as the freight costs in some cases could amount to 50 percent of the tyre cost prices, pushing retail pricing into the realm of second-tier brands. Especially for truck and bus tyres, the shortage developing in 2022 is massive, and it’s not limited to Asian products.

As if this wasn’t enough, the cost of everything is increasing as well. Both commodities and raw materials are turning costlier at speeds not seen in a long time, with almost historically high inflation rates in the Euro Zone on the coattails. So, the picture of the tyre market has become increasingly oblique. There are still stocks of tyres from 2020 and 2021 where cost prices were drastically much lower than they are now, and this means that there may be offers of premium brands from 2020 floating around with unit prices for comparable sizes that are actually cheaper than the equivalent from a Chinese brand produced in 2022. It must be confusing for consumers until the stocks are depleted, and the segments normalise. The only difference is that the price gap between premium and budget has become much smaller. So, what will that do to market shares? Only time will tell. But as long as there is a shortage, I’m confident that tyres in all segments will still be sold, no matter what.

As I’m writing this, Russia has invaded Ukraine, and apart from the massive tragedy that it is, it has caused even further disruptions to supply chains, material and commodity availability, and the general purchasing power of European consumers. As the shipping lines to Russia are halted because of the war and massive exodus of foreign businesses in the country, and they are also reduced to US as the port congestion and carrier queues on the West coast have reached unmanageable levels for the carriers, the lines and container availability is expected to ease up a bit for European destination ports, which means that sea freight costs could also be on the way down again. But there are so many factors pulling in both directions that any sane person would abscond from placing large bets on anything.

In Europe, the pandemic is gradually disappearing, and only some countries still have restrictions in place. But the situation is drastically different in Asia, especially China, where new lockdowns are underway, and the virus is spreading like never before since the very first outbreak. Knowing how swiftly the Chinese government shuts everything down and enforces curfews on whole cities when they have just a few infected, it’s very likely that logistics and port terminals will be hampered or closed off completely, and that could knock all stability in the shipping market out once more.

The only thing that is clear so far is that cost complexity for tyre production, supply chain, and distribution has increased by an incredible factor over the past two years. Local production has never had such an advantage over Asian output as it has now. Still, on the other hand, the cost of raw materials and freight costs for said materials have increased tremendously, as have road transportation and distribution costs. The cost of production is growing all over the globe as the cost of electricity and steam supply is also multiplying. However, as salaries are following the extremely high inflation rate, the most automated production facilities still have an advantage over the labour-heavy ones.

All these factors, in the end, affect budget tyres the most, as they are more sensitive to fluctuations in raw material and production costs and are particularly vulnerable to high freight and labour costs. At the moment, budget tyres from China are on par with or above several Japanese and Korean brands, and even second-tier brands produced in Eastern Europe. While this will certainly increase their prices gradually to distance themselves from the budget brands a bit more in terms of pricing, they don’t regulate overnight, and that means that effectively there is no budget segment in Europe for the major part of 2022 barring the second tier-priced brands made in countries all over the world that are usually priced very differently in the market.

I believe I’ve said many times that Chinese tyres are more competitive when the market is enjoying low costs all through the supply chain, as the raw material costs and transportation costs make up for most of the cost structure, while it accounts for a smaller fraction of the cost structure of a second-tier or premium brand tyre – here the heavier cost elements are R&D, testing, marketing etc. which is notoriously lacking in most Chinese tyre cost structures. So, in the current market, one might wonder where the customer segment for Chinese tyre products is as we move further into 2022. Depending on who you’re rooting for, the outlook might be very bleak.

As part of a strategic effort to increase its presence in the region's premium original equipment (OE) market, Kumho Tire has confirmed its plans to establish its first tyre production facility in Europe by 2027.

The company has shortlisted Poland, Serbia and Portugal as possible locations for the plant, which is projected to need an investment of more than KRW1 trillion (USD 705 million). The decision is closely linked to Kumho’s ambition to strengthen its partnerships with European automakers and was revealed by Kumho Tire CEO during the South Korean premiere of Kumho's new Ecsta Sport tyre line.

Kumho has recently secured OE supply contracts with major brands such as Mercedes-Benz, BMW and Volkswagen Group. At the moment, Kumho runs eight tyre production plants in China, Vietnam, South Korea and the US. Its capacity to compete in the premium OE market, however, has come to be perceived as being constrained by the absence of a European production base. Through the benefits of local production, the new facility will improve response to European client requests, save freight costs and shorten delivery times, all of which will strengthen the company's partnerships.

Sentury Tire USA has opened pre-enrolment for its two associate dealer programmes (ADPs), the Delinte HYPERDRIVE Associate Dealer Program and the Landsail Elyte Associate Dealer Program, underscoring the company’s commitment to rewarding dedication and partnership to the Landsail and Delinte brands.

The ADPs, which are customised for each brand and intended to encourage dealers, will formally start on 1 June 2025. Both programmes give dealers access to special benefits, incentives and strong tools to help them expand their businesses. This involves dependable customer service, effective marketing and worthwhile financial incentives to promote dealers' success at every stage.

Beginning in Q3, dealers may earn up to USD three per tyre through the Delinte HYPERDRIVE Associate Dealer Program. Dealers can receive retroactive benefits for purchases completed in Q2 if they register before 1 June. The awards are available for all Delinte PTR, LTR and the new DV3 LMD AS last-mile delivery tyres. For all Landsail PTR and LTR tyres, independent dealers that sign up for the Landsail Elyte Associate Dealer Program can also earn up to USD three per tyre. For customers who sign up by June 1, the new LMD 100 AS last-mile delivery is also eligible for the benefits and will get the same early bird incentive for Q2 2025.

No initial order is necessary. Dealers only need to register to begin making money. According to the monthly programme rewards structure, 48 tyre purchases each month are eligible for a reward of USD one per tyre, 120 tyres are eligible for a reward of USD two per tyre and 240 or more tyres are eligible for a reward of USD three per tyre.

ENSO, a London-based tyre manufacturer engaged in the production of sustainable tyres specially designed for electric vehicles (EVs), has launched its new ENSO Premium range of EV-specific ultra-high-performance (UHP) tyres aimed at drivers of high-performance EVs such as the Tesla Model 3 and Model Y.

Specifically designed for electric passenger vehicles, the ENSO Premium range comes with A/A EU-label ratings for both energy efficiency and wet grip. The tyres are designed to provide safety, increased range and a reduced total cost of ownership. Conventional tyre designs frequently fall short of the special performance needs of electric vehicles, which include greater vehicle weight, regenerative braking and higher torque loads. By lowering tyre wear and rolling resistance, ENSO Premium takes care of these issues.

The company is an authorised provider of replacement tyres for LEVC's electric taxis and has partnered with Uber to install its tyres in high-mileage metropolitan areas. The company now plans to grow throughout Europe and North America, and with ENSO Premium, it is now offering its services to individual EV owners throughout the United Kingdom. According to ENSO, the range offers advantages including longer tyre life and fewer replacements, lower energy usage, fewer charging stops and lower CO₂ emissions and tyre particle pollution.

Gunnlaugur Erlendsson, CEO and Co-Founder, ENSO, said, “We’re plugging a long-standing gap in the tyre market by offering EV drivers a purpose-built, affordable, premium EV tyre alternative that matches the innovation of their EV.”

Kraton Corporation, a leading global sustainable producer of specialty polymers and high-value bio-based products derived from pine wood pulping co-products, has announced a general price hike in North America for its SBS, SIS and HSBC product lines with effect from 1 May 2025.

Following a careful analysis of the effects of recently implemented tariffs, related cost increases and a conclusion that the company cannot independently absorb these repercussions, Kraton is adopting these pricing hikes, according to a company statement. The company further said that it will keep an eye on the scene and reassess these measures promptly in the event that conditions and US import tariffs alter.