The global tire industry appears to be splitting along a new fault line. That line is whether the leadership team believes long-term profitability will come from making and selling tires, or from something around data and mobility.

There are, perhaps, five tire makers in the second category –all of them large global tire makers – while hundreds –mostly smaller companies – remain in the former category.

Most of that latter group of tire makers are justified in thinking profits will come from making and selling tire products. These are the companies that have small market shares, except, perhaps, in their home domestic market.

The bigger companies – most of whom have double-digit market shares in many of the most important international markets – are seeing their tire sales under pressure from low-cost suppliers. Many smaller suppliers are nibbling at the market share of the majors in multiple different application sectors. The smaller companies are winning on a combination of lower costs of production and substantial improvements in tire performance and sales service.

In the car and light truck markets, the big brands are increasingly being driven into smaller, high-profit niches.

In commercial tires, they have known for years that fleets need tires with a low total cost of ownership, but the top tire makers have discovered that what fleets really want is insights on how to cut costs and save money. Tires rarely make up more than around 3% of a fleet’s total costs.

To access more than that 3%, tire makers need to acquire more data on their customers’ operations and create operational models that can highlight areas of wastage among specific fleet operators.