Racing Tire Market size is forecast to reach $12.6 billion by 2025, growing at CAGR 4.28% during 2020-2025 owing to the increasing revenue generation from formula one racing championship. The growing number of viewership across the world opting for viewing through online channels on smartphones is set to open up new streams of revenue generation in the racing business. Apart from this the growing sponsorship in formula series is also set to buoy the racing events. These factors are analyzed to drive the racing tires market during the forecast period 2020-2025.
Racing Category – Segment Analysis
The auto racing segment is analyzed to dominate the global racing tires market in 2018 owing to the broad spectrum races in this category and the introduction of Formula E championship since 2014. Formula E racing also known as ABB FIA Formula E Championship following the price sponsorship by ABB is an electric car racing event. The championship witnessed significant contribution in terms of technology by the major auto makers such as Audi, BMW, Renault and so on. Despite the losses incurred in the first season till 2018, however, the racing series is set to witness significant growth during 2020-2025 owing to the growing sponsorship in electric vehicle racing event, thereby assisting the racing tires market growth.
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Geography – Segment Analysis
Europe acquired the major market share of around 45% of the global racing tire market in 2019 owing to the prominent presence of various types of motor sports events in the region and Europe being the pioneer in hosting racing events. Further, the presence of major automakers in the region for premium and racing class vehicles with prominent investment towards in developing these vehicles is also analyzed to be one of the major market drivers assisting the market growth. APAC is estimated to hold the second largest market share in the global racing tire market after Europe, and is estimated to witness the highest growth during the forecast period 2020-2025 owing to the growing viewer base and investments in the automotive racing business in the region.
Drivers – Racing Tire Market
Growing revenue generation in Formula One Racing Championship
Driven by the increase in number of races, advertising and sponsorships, the revenue generation in the racing business is increasing significantly. In the past couple of years these businesses are have grown out into a global franchise with more than 500 million viewers across the globe with the number of annual races to increase to around 22 in the coming years. Private equity firm CVC Capital was planning $12 billion market capitalization for Formula1, through an IPO on Singapore stock exchange in 2017 before it got acquired by Liberty Media. The growing viewership of Formula1 in Asia couple with the rising investment from leading automakers into the series is set assist the racing tires market growth during 2020-2025.
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Challenges – Racing Tire Market
High Ticket Cost and low attendance is racing events such as NASCAR
Low attendance in NASCAR series is majorly due to the feeble economic conditions. The average cost of the ticket is approximately $100, in addition to that the visitors also need to spend on travel and accommodation which are sky rocketing during the event times, thereby not easily affordable by middle class population. Due to the low attendees, the European circuits were not able to turn significant profit owing to which the ticket prices were raised to compensate. These factors are set to impact the racing events thereby impeding the racing tire market bleakly during 2020-2025.
Racing Tire top 10 companies operating in the market includes Apollo Tire, Continental Ag, Bridgestone Corporation, Pirelli C. Spa, Goodyear Tire And Rubber Co, Hankook Tire, Michelin, Kumho Tires, Yokohama Rubber Co. Ltd, Cooper Tire & Rubber Company and so on. The market is analyzed to be consolidated with these the top players acquiring majority of the shares in 2018.
Partnership & Contracts
In December 2019, Goodyear secured a multi-year contract with FIA World Endurance Championship’s LMP2 prototype class as the spec racing tire supplier for the 2020/2021 season. The Federation International de l’Automobile (FIA) recently announced to make WEC LMP2 category a single make tire series racing event.
In October 2019, Pirelli announced its confirmation as the official tire supplier for all classes of the Motul FIM Superbike World Championship until 2023. The earlier supplier agreement was till 2020 which was extended till three further seasons.
In February 2018, Cabot Corp launched the PROPEL® X carbon black series racing and ultra-high performance tires which are designed with a focus on precise handling and traction.
Key Takeaways- Racing Tire Industry Outlook
Auto racing tires market held the major share in 2019 and set to witness significant growth during 2020-2025 with the growing sponsorship in formula series events especially formula E championship.
Europe attributed to the major share of the global racing tires market owing to the region’s propriety in hosting racing events and large investments by the major automakers in this region for developing vehicles and parts specifically tailored for racing events.
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