Black Donuts urges Chinese tire makers to consider Europe as “next big step”

Yantai, China – Finland-based tire consulting company Black Donuts Engineering (BDE) has encouraged Chinese tire makers to consider Europe as their “next big step” in terms of foreign investment.

During an October conference by tire machinery maker VMI, BDE chief executive officer Kai Hauvala described Europe as an “underutilised opportunity” for tire companies.

According to Hauvala, the global tire industry is undergoing significant transformation, driven by at least three parameters of shifting consumer choices, evolving environmental regulations, and innovative technologies.

The transformation, he explained, means that the industry is shifting from the conventional supply-push business model to a demand-pull one.

Europe, with its diverse markets and climatic conditions, plays “a central role” in this transformation, the BDE official added.

According to Hauvala, the European tire market has experienced significant growth, with a projected value of $68.4 billion (€63 million) in 2023 and expectations of a 5% compound annual growth rate (CAGR) through 2033.

“European consumers’ expectations for quality, safety, and sustainability make it a strategic region for tire manufacturers,” he added.

Among the key factors contributing to the attractiveness of Europe is the market diversification based on weather variations, consumer demand, and vehicle types.

This, Hauvala said, allows manufacturers to reduce risks and maintain stable revenues.

Furthermore, Europe’s “extensive transportation network” enables efficient distribution, while access to advanced technology and innovation hubs allows for “cutting-edge tire development”.

Moreover, sustainability initiatives in Europe align with the growing demand for eco-friendly tires, opening doors to new consumer markets.

According to the tire industry veteran, establishing a European presence also enhances brand reputation and trust among local customers.

“Europe’s strategic location provides access to multiple major markets, making it an ideal hub for tire manufacturers seeking global expansion,” he added.

Europe, he concluded, also offers various opportunities for premium, budget-friendly and sustainable tires with a broad range of income and consumer segment.