The CUV/SUV market has grown exponentially in the last few years, forcing tire manufacturers to create new products to keep up with this demand.
In this MTD exclusive, tiremakers and marketers discuss challenges and opportunities they see in the CUV/SUV tire segment.
MTD: What do you see as the biggest challenges and opportunities in the CUV/SUV tire market over the next five years?
Brandon Stotsenburg, vice president, automotive division, American Kenda Rubber Co. Ltd.: Kenda addresses the SUV/CUV segment as either metric applications for automotive platforms or light truck applications that apply for platforms for light trucks. Over the next five years we will see several market drivers that Kenda will address related to these products:
a. As electric vehicle (EV) applications become a higher percentage of the vehicle park, Kenda will selectively add sizes to our current patterns that are optimized for the specific applications and driver needs. There will be an increasing percentage of vehicles that will benefit from optimized rolling resistance, low noise, enhanced ride and improved wear. while meeting the vehicle’s needs for the torque associated with EV.
b. Additionally, we see a continued size growth as many of these applications will require larger rim diameters ranging from 18- to 22-inches-plus. If the North American consumer continues to move away from smaller cars toward the mid-size or larger SUVs, Kenda will adapt its production capacities to reflect the demand.
c. There will be an additional need for higher performance applications as the OEMs are moving toward higher speed ratings. Offering V, W or Y-rated applications that meet both summer and four-season needs will require design and manufacturing adaptions.
d. Kenda has also been addressing the move to more four-season touring applications providing the benefits of touring or grand touring tires for enhanced SUV performance enhanced by 3-Peak Mountain Snowflake (3PMS) ratings. Kenda believes that the market will need increasing confidence in wet performance, as there appears to be increasing indicators for higher rain events.
e. These vehicles are also adapting to the flexible use that many consumers want to have. When originally developed, SUVs were primarily for on-road use. Most OEMs specify tires that are H/T or touring tread patterns. However, consumers increasingly want to have products that reflect their personalities and intended use. These include both on-highway and more hybrid designs capable of better performance in off-road settings. Kenda loves this flexibility and will be offering its new Klever A/T Trail pattern to meet this growing demand. As there are EV applications reflecting this demand, we will add those products to this pattern, too.
Kenda welcomes these challenges and believes that we will provide our Kenda Family network with excellent solutions matching our positioning as premium performance at a value price.
Steven Liu, vice president of product development for Hercules Tire, American Tire Distributors Inc.: The demand for CUV and SUV tire fitments has grown tremendously and will continue to grow, aligned with the trend in new vehicle sales.
Year-to-date, cross utility sales through May increased by 9.6%, while all other segments remained flat or declined.
We anticipate that the CUV/SUV segment will continue to outperform the overall market in terms of growth, driven by ongoing diversification in these vehicle offerings. New vehicles are increasingly segmented within the CUV/SUV category, spanning from economy to luxury, and available in various sizes.
With CUV/SUV sales surpassing those of passenger sedans and effectively dominating the market, there is a significant opportunity in replacement tire sales due to shorter adoption periods for aftermarket tires, compared to original equipment (OE) tires.
Over the past five years, there has been a noticeable trend toward trading down in brand/tier choice when consumers shop for their second or third set of replacement tires.
Karl Jin, divisional head of product and pricing for PCLT tires, Apollo Tyres Ltd.: The landscape of the CUV/SUV market is undergoing rapid evolution, posing formidable challenges for tire manufacturers. Since 2010, the number of OE tire sizes has nearly doubled, soaring from 70 to 130 by 2023.
This surge is fueled by the introduction of new vehicle models and a myriad of size options across different trims.
Meeting the diverse demands of this segment necessitates substantial investment, requiring the development of distinct tires that meet increasingly sophisticated performance standards.
The introduction of electric vehicles (EVs) further complicates this dynamic market. Alongside the varied applications of touring, all-weather and all-terrain tires, a significant 30% of CUV/SUV sizes for 2024 models are designated for EVs.
Iris Ocasio, senior product planner, Bridgestone Americas Inc.: Over the next five years, we expect the CUV/SUV market to continue to grow rapidly as consumers increasingly prefer larger vehicles over sedans.
With this shift, the primary challenge is size proliferation. As demand for CUVs/ SUVs increases, the segment has seen a surge of more OE fitments in a wider range of tire sizes. This diversity makes it difficult to accommodate all new sizes, requiring manufacturers to be strategic in prioritizing where to expand their fitments.
The CUV/SUV segment is not only expanding in size, but also diversifying in the types of tire fitments. For example, some vehicles are designed with ultra-high performance (UHP) OE fitments, while others in the same category are equipped with all-terrain (A/T) tires.
Historically, SUVs predominantly used highway tires and the current market has demanded a broader range of options, including UHP, all-season, all-terrain (A/T) and mud-terrain (M/T) tires.
Nick Davis, senior category product manager, North America, Goodyear Tire & Rubber Co.: We anticipate that there will be more CUVs and SUVs on the road than traditional passenger sedans and coupes in the next five years. This creates an opportunity for tire dealers to focus on the top CUV/SUV sizes as they grow in popularity and include them in their stocking strategies.
Additionally, vehicles in this category are featuring larger rim sizes, driven by OEMs. Growth in this segment is anticipated to be driven by 19-inch rim sizes and above.
Moonki Cho, product manager, Hankook Tire America Corp.: CUV/SUV tires include a variety of options, including touring, all-terrain and all-weather. These types of tires are then categorized based on the behavior, high load and use of vehicles, all of which are different from that of a passenger car.
It is important that manufacturers understand the type of vehicle consumers are driving and the environment in which they are driving, so that continued innovation and development meets these needs.
In the past, SUVs were primarily considered vehicles for outdoor activities or driving on specific terrains. Recently, there has been an increase in consumers looking for both the convenience of city driving and off-road performance. We have seen an increase of consumers choosing all-terrain tires, even when their vehicles are primarily used for city driving.
The preference for tires that offer excellent traction in various driving conditions, as well as the rising number of consumers who prefer the aggressive design of these tires, is growing.
Eric Schmedding, product category manager, Michelin North America Inc.: The CUV/SUV tire market continues to grow significantly, both from the increasing number of sizes needed, as well as the tire performances required.
As CUV/SUV models have diversified from compact crossovers to full-size SUVs, there’s a growing demand for specialized performance, such as off-road capabilities, all-season versatility and enhanced fuel efficiency.
Shawn Denlein, president, sales and marketing, Kumho Tire USA: The popularity of SUVs and CUVs continues to grow globally, growing at just over 16% last year, according to vehicle count data, driving increased demand for specialized tires.
In fact, according to the U.S. Tire Manufacturers Association (USTMA), the CUV/SUV segment of the tire market is expected to fuel most of the growth in tire sales over the next several years and that trend is continuing as more carmakers are releasing more models in this category, including EVs.
This growth is also consistent with the larger rim diameter growth (18-inch and higher) that is projected by the USTMA to be at least 58% of the overall tire market by 2029, with the CUV/SUV volume specifically projected to be about 75% of the market.
As vehicles become more technologically advanced, such as with the growth of EVs, tire technology needs to continue to evolve to meet the unique needs of these vehicles, including increased range efficiency though reduced rolling resistance, improved treadwear to handle the high torque and heavier vehicle weight due to the EV batteries — and the ability to reduce road noise due to quieter cabins in EVs.
Jay Lee, product director, Nexen Tire Americas Inc.: The CUV/SUV tire market is highly competitive, with numerous brands and products vying for consumer attention, which puts pressure on pricing and profit margins.
Keeping pace with technological advancements — such as smart tire sensors and advancements in tire materials, improved durability (and) reduced rolling resistance — can be costly and complex.
SUVs and CUVs are increasingly popular worldwide, driving a growing demand for tires tailored to these vehicles. Opportunities exist for tire manufacturers to differentiate themselves through innovative technologies, such as all-weather performance and improved tread life.
Andre Oosthuizen, chief marketing officer, Pirelli Tire North America: Four out of five cars sold today (are) SUVs. Consumers are favoring the versatility, higher seating position and comfort that SUVs offer. As the SUV market evolves, it’s driving an increased demand for high-performance tires that cater to both traditional combustion and electric vehicles.
These emerging market trends are considered as we strategically refine our product offerings and ensure we meet market demands effectively
Ken Coltrane, vice president of marketing and product development, Prinx Chengshan Tire North America Inc.: With the CUV/SUV now being the predominant segment in the market, one of the challenges is keeping up with SKU count inflation.
As electric vehicles continue to grow, this also presents a challenge. Do we introduce an EV-specific tire or just make sure we have the appropriate EV sizes and load capacities in our existing lines? Each of these challenges, of course, represents an opportunity for us to continue to grow our presence in North America.
Tsuyoshi Johnson, director of product planning , Falken Tires, Sumitomo Rubber North America Inc.: The biggest challenge in the CUV/SUV tire market stems from the vast segmentation of the CUV/SUV landscape over the past few years. Originally, the SUV segment was created for their utilitarian use.
Now, like cars, they’ve created different subsegments to meet the wants and demands of consumers. This includes everything from commuter CUVs and SUVs to luxury SUVs (and) high-power sporty CUVs, to name a few.
We’re also seeing OEMs catering to the adventure crowd, with fitments featuring all-terrain tires from the factory. So many subsegments presents a lot of potential confusion (around) which product lines to carry and which ones will resonate with customers.
Another challenge is understanding the state of the hybrid and electric CUV/ SUV market. It seems we’re currently in a transitional phase, where people aren’t fully ready to convert to EVs, which has made it difficult to figure out if CUV/SUV electric vehicles are the future or not. It’s a fact that a number of electric CUV/ SUVmodels have launched over the past few years, but sales forecasts are not as aggressive as they once were.
The greatest opportunity exists in knowing which subsegments are popular in your specific area, preparing you to offer the correct tires for those vehicles and your customers.
Nick Gutierrez, territory sales and marketing director, Sentury Tire USA: With the ever-expanding CUV/SUV market and new vehicles being manufactured each year, our challenge is to keep up with the demand for new tire sizes and to ensure Sentury Tire offers a wide selection of options to accommodate the OEMs.
Joaquin Gonzalez Jr., president, Tire Group International LLC: The CUV/ SUV tire market is highly competitive and with the growing popularity of SUVs and CUVs, more tire manufacturers are entering the market.
This has led to increased competition and the need for tire manufacturers to differentiate their products. At the same time, consumer preferences are constantly evolving, forcing manufacturers to keep up with these changes.
Factors such as fuel efficiency, durability and noise reduction are becoming increasingly important to consumers and tire manufacturers need to adapt their products to meet these demands. Also with the advancement of technology, there are opportunities for manufacturers to develop innovative solutions — forcing them to continually invest in research and development.
Chris Tolbert, director of sales, Trimax Tire: Let’s think about this with a little bit of tire history. The SUV is a spinoff from a truck and minivan. Then we super-sized them. Recently we downsized them to a CUV. We implemented H/T, A/T and M/T and then evolved with R/T and X/T. Fifteen inches moved to 16 inches and 17 inches. Plus-size aftermarket tire and wheel packages exploded. Now, OEM has 18-, 19-, 20- and 21-inch tires.
Internal combustion engine vehicles are evolving to hybrid and EV. The electronics, cameras and censors of newer vehicles continue to get better and better.
Consumers want a comfortable, smooth ride performance. They also want the look, but not the noise or rough ride. Tire sidewall appearance has become just as important as the tread area.
Moving forward, the CUV/SUV tire market will continue to adapt, adjust and change with consumer wants and needs.
Paul Sepetjian, head of private brands, Turbo Wholesale Tires LLC: The biggest opportunity I see in this segment is the pace at which it is growing. The CUV/SUV tire market is one of the fastest-growing segments in the entire industry and it’s going to be cool to see how companies navigate around the competition of it and distinguish their brands through innovation and creativity.
The biggest challenges I see in this segment are that some of the tier-one and two tires have done a good job capturing the market, as well as the fact that it is not an extensive segment where there will be multitudes of sizes.
This is where innovation can grow the market and segment, but for now, it will be hard for new brands to come into this field and change buyers’ habits and perceptions.
The fact that it is growing at such a high pace, it’s worth the risk of investment. But those are the few things that will make it hard for brands in different tiers or brands that haven’t dabbled in this segment yet to make a swift entry.
Kevin Nguyen, manager of product planning, Yokohama Tire Corp.: The biggest opportunity in the CUV/SUV tire market is the large volume of these vehicles on the road today and the steady growth over the next five years as CUV/ SUV vehicle sales are projected to be 60% of all new vehicle sales by 2028.
The biggest challenges will be developing new technologies to continually improve the tire’s performance and treadwear to match the evolving CUV/SUV market.
CUVs/ SUVs come equipped with many different tire sizes and performance characteristics. In today’s market, there are compact CUVs that use passenger vehicle-sized tires, mid-size CUVs that use crossover-specific sized tires and larger CUV/SUVs that use highway terrain light truck-sized tires.
Just as important as having the right tire size is having the right product that matches the SUV/CUV characteristics, whether that be an all-season tire, high-performance tire, off-road capable tire or EV-specific tire.
Zhongce Rubber Group Co. Ltd (ZC Rubber): In the next five years, the demand for SUV and CUV tires will rise significantly, driven by the increasing market share of these vehicles. We anticipate that large-sized CUVs will be the primary growth segment. This presents a substantial opportunity for tire manufacturers, but also brings challenges.
To meet the demands of SUVs and CUVs, tires must offer superior handling performance and safety. These vehicles require robust tires to support their larger bodies and higher ground clearance. Manufacturers must develop tires that are more durable, safer and provide better grip.
Additionally, the rise of electric SUVs and CUVs introduces new requirements. Tire manufacturers need to create tires specifically for electric vehicles, focusing on low noise, low rolling resistance and ensuring adequate mileage.
To capitalize on these opportunities, tire manufacturers must continually innovate and upgrade their technologies to meet the growing market demand and deliver higher-performance, more environmentally friendly products.
