Tires will never go out of fashion anytime in the near future and so it’s important for tire makers to figure out exactly who needs their product the most. As of now, the most happening place for tire markets seems to be the APAC region. Just like most other products in the world, rise in income levels and GDP growth rates are a couple of good ways to ascertain where the demand for tires really comes from.

As per IMF figures, North America region has been cumulatively growing at 1.7%. South America has been growing at -2.7%, and Europe at 1.6%. Africa has been growing at 2.2% and the Middle East at 4%. Asia, however, is another story entirely; Southeast Asia has been growing at 4.8% and South Asia at an astounding 6.5%. While the first and third largest economies (as per IMF, in PPP terms) India and China are contributing massively, other countries such as Myanmar, Bangladesh, Cambodia, Vietnam etc. are all growing at a rate between 6%-7%, much over the global average of 3.1% GDP growth rate. Such data is especially favourable for tire makers given that most of the countries in the Asia-Pacific region are emerging market economies, developing economies. The demand for a growing manufacturing sector and a stable services sector is much more in such economies, given that the poor quality of social safety nets vis a vis developed economies means that employment and saving rate must be high to combat uncertainties. Secondly, physical infrastructure for many of these countries is not as advanced as developed countries, but with sustained period of prosperity, capital expenditure will peak, which will drive the demand for tires in these nations.

Another factor which is enumerated by TechSci Research report “Asia-Pacific Tire Market Forecast and Opportunities, 2021” is the correlation between development of physical infrastructure, the ambition to expand manufacturing sectors and concerns about employment: indigenous automobile manufacturing. Automobile manufacturing is a vast and complex process involving design, development and manufacturing, in terms of the core manufacturing duties. Each step in this chain has its own logistics requirement which would require transportation and movement of goods etc. Each step would ensure further propagation of vehicles and a further increase in fleet size, with the feeder industries needing vehicles to create vehicles that will then be used by consumers. This is obviously, fertile hunting grounds for tire manufacturers, something that isn’t necessarily lost on them.

Goodyear, Bridgestone, MRF, CEAT, Yokohama are some of the big companies involved in the tire industry in APAC region but they are being given strong competition by Chinese companies that manufacture cheap products. This is perhaps the biggest threat to the big tire companies operating in APAC region as of now.

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