The market for connected tires is undergoing a paradigm shift, which is anticipated to result in a substantial compound annual growth rate (CAGR) of 45.5% during the forecast period of 2024 to 2032. This growth is primarily attributed to the incorporation of cutting-edge technologies into conventional tire systems. Reshaping the automotive industry, this revolutionary development improves safety, performance, and the overall driving experience. Integration of the Internet of Things for real-time monitoring, technological advancements in tire sensors, and the overarching objective of improving vehicle safety and performance fuel the Connected Tyre market. Nevertheless, the market is constrained by data privacy and cybersecurity concerns, which require all-encompassing solutions to guarantee the responsible and secure deployment of connected tire technologies. In 2023, the Connected Tyre market exhibited a favorable outlook, as evidenced by North America's revenue percentage leadership and the Asia-Pacific region's highest CAGR. Prominent entities utilize strategic initiatives to fortify their standings, with an emphasis on collaborative efforts and technological advancements. Anticipated to sustain the market's ascent are worldwide developments in automotive connectivity and increasing recognition of the advantages provided by connected tire solutions. With the progression of the automotive industry towards enhanced connectivity and intelligent features, the Connected Tyre market is positioned for continuous expansion, offering prospects for established and emerging participants to prosper in this ever-changing sector.
Key Market Drivers
The introduction of Internet of Things (IoT) technology into tire systems is a substantial factor propelling the market for connected tires. Embedded IoT sensors in tires furnish up-to-the-minute information regarding critical parameters including tire pressure, temperature, tread degradation, and overall performance. The aforementioned information plays a critical role in accident prevention, fuel efficiency optimization, and tire longevity extension. This driver is substantiated by the growing implementation of connected tire solutions by automotive manufacturers and fleet managers. Prominent automotive manufacturers such as Tesla and BMW, for instance, have integrated Internet of Things (IoT) sensors into their vehicles to facilitate ongoing tire health monitoring, thereby assuring optimal performance and safety.
The market has expanded substantially as a result of the rapid development of tire sensor technologies. Sophisticated sensor technologies, such as those for pressure, temperature, and tread depth, are augmenting the functionalities of connected tires. The sensors furnish precise and exhaustive data, thereby enabling meticulous surveillance and analysis. Tyre manufacturers and technology companies' ongoing research and development endeavors provide clear evidence for this driver. For example, Bridgestone and Continental are allocating resources toward sensor technologies to develop intelligent tire solutions that surpass rudimentary pressure monitoring. These solutions will include predictive maintenance notifications and real-time tread wear analysis.
The imperative to improve vehicle safety and performance serves as a persuasive impetus for the widespread implementation of connected tires. By incorporating sophisticated sensors and connectivity, automobiles are capable of dynamically adapting to shifting road conditions, optimizing tire pressure to suit various terrains, and delivering notifications regarding potential problems. The increasing international emphasis on automotive safety regulations and standards substantiates this driver. An illustration of this can be seen in the European Union's requirement that all new vehicles be equipped with tire pressure monitoring systems (TPMS), which has increased the market demand for connected tire solutions that provide a more holistic approach to optimizing performance and safety.
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Restraint: Cybersecurity Aspects of Restraint and Data Privacy
Despite the substantial expansion of the Connected Tyre market, cybersecurity and data privacy concerns represent a significant impediment. Tires are susceptible to potential cyber threats due to the integration of IoT technology and connectivity; this raises concerns regarding unauthorized access to vehicle data. The rationale behind this limitation is substantiated by the global reporting of cybersecurity breaches affecting interconnected vehicles. Due to the risk of unauthorized access to sensitive data (such as tire performance metrics and vehicle location), robust cybersecurity measures are essential. It is critical to address these concerns to promote consumer confidence and facilitate the extensive implementation of connected tire solutions.
Market By Offering
The revenue of the Hardware segment is dominated by tangible components integrated into tires, including sensors and connectivity modules. This trend can be attributed to the extensive implementation of sophisticated tire sensor technologies. Concurrently, the Software sector, which consists of intelligent platforms and algorithms that enable real-time monitoring and data analysis, demonstrates the most rapid CAGR during the forecast period of 2024 to 2032. The expansion can be ascribed to the automotive sector's growing focus on data-driven insights and analytics, which has accelerated the need for advanced software solutions to supplement connected tire hardware.
Market Segmentation By Propulsion
According to the Segmentation By Propulsion, it is evident that the Connected Tyre market will accrue substantial revenues in 2023 from both the Electric and Internal Combustion Engine (ICE) sectors, with electric propulsion exhibiting the highest CAGR. The increasing global prevalence of electric vehicles (EVs) is a significant factor in the growing need for connected tires, particularly those that are outfitted with sophisticated sensors to optimize performance and improve safety. In contrast, the ICE segment, which comprises conventional internal combustion engine vehicles, retained a significant portion of the market in terms of revenue as of 2023. The Electric category exhibits the most substantial CAGR due to the swift transition towards electric mobility and the incorporation of connected tire solutions to enhance the functionalities of electric vehicles.
Market Segmentation By Rim Size
The analysis of market revenue by rim size reveals that the 18-22 Inches category generates the most revenue, whereas the 12-17 Inches category exhibits the maximum compound annual growth rate (CAGR). Due to the preference for larger wheels among premium and high-performance vehicles, larger rim sizes significantly contributed to the overall market revenue in 2023. Conversely, the category consisting of standard and smaller-sized rims, which span 12-17 inches, demonstrates the most substantial CAGR. The expansion of this market is evidenced by the growing implementation of connected tire solutions in entry-level and mainstream vehicles, which signifies a more extensive reach into various vehicle segments.
Market Segmentation By Sales Channel
According to the sales channel segmentation, a significant portion of the market's revenue in 2023 came from both the Original Equipment Manufacturer (OEM) and Aftermarket channels. As a result of manufacturers' extensive adoption, the OEM channel, which entails the integration of connected tire solutions throughout the vehicle manufacturing process, is the revenue leader. Concurrently, the Aftermarket sector, which provides retrofitting alternatives for pre-existing automobiles, exhibits the most substantial CAGR. Increasing consumer awareness of the benefits of connected tires is driving this expansion, which has resulted in aftermarket installations that improve the safety and performance of vehicles already on the road.
Component-Based Market Segmentation
According to the component-based market segmentation for 2023, the market revenue was generated by a variety of sensors, including tire pressure monitoring systems (TPMS), accelerometer sensors, strain gauge sensors, RFID chips, and others. Revenue is dominated by TPMS, which reflects the extensive adoption of this system for monitoring tire pressure and improving safety. On the contrary, the category of accelerometer sensors exhibits the most substantial CAGR, suggesting that accurate acceleration data is becoming ever more crucial for sophisticated driver-assistance systems and the overall performance of vehicles.
Market By Vehicle Type
The market is segmented according to vehicle type, revealing that in 2023, commercial vehicles and passenger cars both make substantial contributions to the market's revenue. However, passenger cars exhibit the highest compound annual growth rate (CAGR). Passenger Cars' substantial revenue is attributable to the proliferation of connected vehicles in the consumer market. In contrast, commercial vehicles, encompassing buses and lorries, retain a significant portion of the market as a result of fleet-wide implementations. The category of Passenger Cars exhibits the most substantial CAGR due to the expanding adoption of connected tire solutions in private automobiles, which is propelled by the rising expectations of consumers regarding sophisticated safety and performance attributes.
North America Continues to Be the Global Leader
North America attained the highest revenue percentage in 2023, primarily due to the mature automotive market and the early adoption of connected vehicle technologies. The substantial market share of the region can be attributed to the confluence of favorable regulatory initiatives that promote vehicle safety technologies and the presence of key participants in the industry. Nevertheless, the Asia-Pacific region exhibits the most rapid compound annual growth rate (CAGR), underscoring the escalating need for connected tire solutions in burgeoning economies such as China and India. Rapid urbanization, an expanding middle class, and an upsurge in automobile sales are elements that contribute to the Asia-Pacific region's robust CAGR.
Market Competition to Intensify Throughout the Forecast Period
The Connected Tyre market is marked by the presence of well-established competitors who employ strategic maneuvering to preserve and augment their market standing. Prominent contenders comprise prominent technology firms and tire manufacturers that have joined forces to provide all-encompassing connected tire solutions. Top players include Bridgestone Corporation, Continental AG, Hankook Tire & Technology, Michelin, Nokian Tyres plc., Pirelli & C.S.p.A., Sumitomo Rubber Industries, Ltd., The Goodyear Tire & Rubber Co., The Yokohama Rubber Co. Ltd., Trelleborg AB, JK Tyre & Industries, Toyo Tire Corporation, Kumho Tire, and MRF Tyres major tire manufacturers and technology companies collaborating to offer comprehensive connected tire solutions. Partnerships, collaborations, technological advancements, and mergers and acquisitions constitute essential strategies. These entities prioritize the advancement of sensor technologies, the improvement of data analytics functionalities, and the expansion of their international presence. The establishment of strategic partnerships with automotive manufacturers is crucial, given that they enable the seamless incorporation of connected tire solutions into novel vehicle models. Furthermore, ongoing innovation is propelled by investments in research and development, which guarantee that market leaders maintain their technological leadership.
