Bridgestone has unveiled four major trends set to redefine the original equipment (OE) market as the automotive industry steers towards a transformative future. With a longstanding reputation as a pivotal tyre supplier and partner to the globe's leading car manufacturers, Bridgestone's insights are particularly prescient, spotlighting the evolving dynamics within a sector at the cusp of significant change.
Adjusting to the New Normal in Europe's Car Market
The European automotive sector has navigated a tumultuous path, from the pandemic-induced disruptions of 2020 to the semiconductor shortages of 2021, culminating in the inflation and energy price hikes of 2022. Despite a robust recovery in 2023, with sales bouncing back in double digits, OE demand remains 20% shy of the pre-COVID era. Bridgestone's analysis suggests this isn't a mere blip but a structural shift, with the rising cost of new vehicles earmarked as a primary catalyst.
The Electric Vehicle Revolution Accelerates
Electric vehicles (EVs) have taken a commanding stance in the European market, with battery-powered models accounting for 14% of car registrations in the first ten months of 2023—surpassing diesel. As the EU and UK edge closer to the 2035 zero-emissions deadline, OEMs are doubling down on EV innovation. Bridgestone notes the shift towards more affordable EVs, with new models expected to retail for under £22,000, addressing cost concerns alongside improving range and charging infrastructure.
Sustainability: A Growing Imperative for OEMs
Sustainability has transitioned from a lofty goal to a concrete operational pillar within the automotive industry. Bridgestone highlights a marked increase in the demand for detailed CO2 footprint disclosures and the use of renewable and recycled materials in tyres. This shift underscores the industry's commitment to environmental stewardship, with OEMs keen on sourcing, certifying, and integrating sustainable materials at scale.
Challenges for Newcomers in a Mature Market
The automotive landscape has proven challenging for new entrants, dispelling early predictions that EV development would level the playing field. Bridgestone's commentary points to the complex realities of scaling car production and securing necessary capital—challenges exacerbated by rising interest rates. While the anticipated revolution may resemble more of an evolution, the landscape remains fertile for innovation.
Bridgestone's prognosis for the OE market underscores a period of intense evolution, driven by technological advancements, sustainability imperatives, and shifting consumer demands. As the industry adapts to these emerging trends, Bridgestone's role as a facilitator of progress and partner to OEMs is more crucial than ever, paving the way for a future where innovation and sustainability converge on the road ahead.
