Egypt tire market has shown
significant growth in the past few years and is anticipated to increase at a
high rate over the period of 2024-2028. Due to the spread of the COVID-19
pandemic in Egypt most of the many tire manufacturing companies have faced a
consequential decrease in the production of tires due to full or partial
lockdown in the country also and to reduce the spread of the coronavirus across
the country. The Egypt tire market has witnessed an unanticipated halt in the
supply chain, which might take time to get back to normal in different regions,
as the total economic impact of COVID-19 is massive and most of the leading
tire companies are reporting a significant decline in earning and increase rise
in raw material costs. The lockdown and restrictions affected the sales of
passenger cars, motorcycles, light commercial vehicles, and medium & heavy
commercial vehicles which in turn, and that led to a decline in the sales of
tires used in these vehicles. The imposition of lockdown in many phases in the
country led to the restrictions on all supplies of tires across the different
cities of thein the country. As a result consequence, the import and export of
tires and vehicles were temporarily halted in various regions.
Foreign tire companies in Egypt are also faced with the
challenge of diversifying or moving out of the supply chain that is based in
Egypt. Due to the declaration of lockdown in order to prevent the spread of the
COVID-19 virus, almost all the automobile factories, showrooms and workshops in
Egypt were shut down, leading to a sharp drop in production and sale of tires
in the country. The country is also facing an increase in restrictions on its
foreign commercial activities and access of foreign technologies due to
COVID-19 in the country. According to the government, GDP grew by 3.6% in 2020,
and in 2022, GDP grew by 13.90%. The tire industry has also played a
significant role in raising the GDP in 2022.
Government Incentives
for Tire Demand in the country
To boost auto sales, which was negatively impacted by the
coronavirus outbreak, the Egyptian government has put forth several incentive
programs. The government has introduced many subsidy policies on the purchase
of electric vehicles. Due to this, many people are showing interest in buying
electric vehicles.
The increased demand for electric vehicles has encouraged
tire manufacturers to innovate and introduce new features in electric vehicle
tires, such as additional weight holding capacity as electric vehicles are
heavier than combustion engine vehicles due the weight of batteries. Also, electric
vehicles produce very less noise, so the noise from the wind noise and tires are
more noticeable, so tire manufactures are focusing on making tires with
different thread patterns that cut down on the acoustic effects. All these
developments are likely to fuel the demand for tire in Egypt over the next few
years.
Economical Pricing and Technological
Developments Driving Egypt Tire Market
With Egypt being the world's largest producer and exporter of
automobile tires, Egyptian tire brands have a strong foothold in the global
tire market. The demand for tires from the OEM (Original Equipment
Manufacturers) is getting high with time as the tire industry has higher share
in the replacement market. The demand for replacement tire in the Egyptian aftermarket
is quite high compared to the rest of the world.
Thanks to affordable pricing and advanced technologies, tires
are in high demand across the country. Egyptian tire brands have gained
significant popularity due to their cutting-edge technology that they offer at
affordable costs compared to other international tire brands. They are reasonably-priced
and of high quality as Egypt production sites have extensive quality control
systems. This factor is expected to drive the demand for Egypt tire market in
the forthcoming years.
Rise in concerns regarding fuel
efficiency and safety
In response to the increasing
safety concerns, the government of Egypt is introducing stringent regulations for
the performance of tires, including saving on wet grip, and reducing the
braking distance. Therefore, there are numerous growth opportunities for the
tire manufacturing companies to produce tires that meet the required standards.
Technological breakthroughs are leading to the development of extremely
efficient tires that improve the overall fuel efficiency of automobiles. The
tire manufacturers are using self-inflate technology and low rolling resistance
(LRRT) technology to improve safety and improve the fuel efficiency of tires.
Pneumatic tires are becoming more and more popular for increasing the
efficiency of vehicles. Pneumatic tires, which are mainly related to safety as
well as fuel efficiency, are expected to be in high demand in the coming years.
Therefore, it is expected that increased concerns about safety and improved
fuel efficiency will create significant growth opportunities for the companies.
Recent
Developments
. The Arab Organization for
Industrialization (AOI) has signed a contract with Hill International. The moto of this
contract is to manufacture tires in Egypt and to support the local manufactured
tires by increasing the sales of these tires in the country. Hill International
will manage the main factors that are needed to consider while manufacturing
all kind of vehicles tires in the country, such as passenger car tires,
agriculture vehicle tires, bus tires, and medium & heavy-duty commercial
vehicle tires. To reduce the dependence on the imported tires, the President of
Egypt has issued a directive regarding exploiting national manufacturing
capabilities to deepen local manufacturing, advancing local industrialization, localizing
modern technology, transfer, and working to reduce imports. All these efforts
will help in contributing to increase the value of Egyptian products in the
country.
Technological
Advancements
The technological advancements
made in tires are such as rimless tires now been used in vehicles as it helps
to improve puncture resistance, the use of lightweight elastomers. Nowadays
green tires are being manufactured as they are produced from renewable
materials, which need less amount of energy to make compared to the other tires.
These tires are made of nylon rubber which make tires to have low rolling
resistance. Nowadays, tire
manufacturers are using new materials which are made up of different components
to manufacture tires, such as nickel aluminum, bronze, manganese.
Advancements in tire technology
have revolutionized the commercial vehicle tire market. Manufacturers are
developing tires with improved tread designs, reduced rolling resistance, and
increased load-carrying capacities. These innovations not only enhance tire
performance but also contribute to fuel efficiency and carbon footprint
reduction – a critical aspect sought by both logistics companies and public
transportation providers.
Rising
Investment in Logistics & Public Transportation to help the Commercial
Vehicle Tire Market
Logistics is one of the largest sectors
in the country for transporting goods. In different cities there is a high
requirement for commercial vehicles of all categories to transport goods. The
logistics industry has undergone a paradigm shift in recent years. E-commerce
and online shopping have become the norm, necessitating a seamless and timely
delivery of goods. As a result, logistics companies are expanding their fleets
of commercial vehicles, ranging from trucks and vans to last-mile delivery
vehicles. With increased usage, there is a higher demand for durable and
efficient tires capable of handling heavy loads and long distances.
Urban congestion, environmental
concerns, and the need for sustainable transportation have led to renewed focus
on public transportation systems. Governments and municipalities around the
world are investing in modernizing and expanding public transit networks,
including buses, light rail, and metro systems. This surge in public
transportation is expected to drive demand for commercial vehicle tires
optimized for passenger comfort, fuel efficiency, and reduced emissions.
The demand for commercial vehicle
tires has increased in the country due to factors such as high demand from the
end-users, such as oil & gas, logistics, mining, public transportation, e-commerce,
etc. The sales of commercial tires have been pushed with the high growth rate
and fast industrialization and urbanization in the country. The demand for the school
buses has also increased in the country as the school has re-opened after the
pandemic, due to which the demand for the tires has also increased.
Market
Segmentation
The Egypt tire market is segmented based on vehicle type, demand category, tire
construction type, region and competitive landscape. Based on the vehicle type,
the market is classified into passenger car, light commercial vehicle, medium
& heavy commercial vehicle, two wheelers. Based on the demand category, the
market is divided into OEM and replacement. Based on tire construction type,
the market is divided into radial and bias. Regionally, the market is divided into
Cairo, Alexandria, Giza, Rest of Egypt.
Company
Profiles
Bridgestone Middle East &
Africa Fze, Michelin AIM FZE, TyrePro Egypt.Co (Continental AG), Goodyear Egypt
L.L.C SUMITOMO RUBBER MIDDLE EAST FZE., Hankook Tire & Technology Co.,
Ltd., Alexandria Tire Co. S.A.E - Pirelli Egypt., The Yokohama Rubber Co., Ltd,
Zhongce Rubber Group Co., Ltd., and Cheng Shin Rubber Industry Co. are
among the major market players in the Egypt tire Market.