Sri Lanka Tire Market By Vehicle Type (Passenger Car, Light Commercial Vehicle, Medium & Heavy Commercial Vehicle, Two Wheelers, OTR), By Tire Construction (Radial, Bias), By Demand Category (OEM, Replacement), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

Sri Lanka Tire Market was valued at USD 689.0 Million in 2024 and is expected to reach USD 1072.9 Million by 2030 with a CAGR of 7.49% during the forecast period. The Sri Lanka tire market is witnessing steady growth, fueled by a surge in vehicle ownership and increased demand for replacement tires. As the automotive industry expands, both new and used car sales are on the rise, contributing to the increased need for tires. Consumers are opting for high-performance, durable tires to ensure safety and efficiency, driving tire manufacturers to offer a variety of products catering to diverse vehicle needs. This demand is particularly significant in the passenger vehicle segment, where both local and international manufacturers have expanded their offerings. Furthermore, the rise of e-commerce platforms has simplified the process of purchasing tires, allowing consumers to access a wide range of options.

Technological advancements in tire manufacturing are enhancing the quality and longevity of tires, presenting new opportunities for growth. Innovations like smart tires, which provide real-time data on tire pressure and wear, are gaining popularity among consumers and fleet operators. Tire manufacturers are increasingly adopting sustainable practices, such as using eco-friendly materials and developing energy-efficient tires. The demand for these advanced products is expected to grow as consumers become more environmentally conscious. Alongside technological developments, the demand for high-performance tires, particularly for electric vehicles (EVs), is anticipated to rise, offering another opportunity for growth in the market.

With the increasing focus on sustainability and efficiency, the tire market is positioning itself to meet the evolving needs of both conventional and electric vehicles. For instance, In September 2024, Revolt Motors, an electric motorcycle company, entered the Sri Lankan market through a partnership with Evolution Auto. It started operations in Colombo and planned to expand to other regions. The company announced it would launch all its models in Sri Lanka. By 2029, Revolt Motors aimed to establish 90 dealerships across the country to provide easy access to its electric motorcycles and high-quality after-sales service. The first phase of this expansion included the opening of 15 dealerships within the next four months, driven by the growing demand for electric mobility solutions.

Despite the growth opportunities, the Sri Lanka tire market faces a few challenges. One major concern is the fluctuating prices of raw materials, particularly rubber, which can affect production costs and lead to price volatility. Additionally, the market faces competition from imported, lower-cost tires, which may attract budget-conscious consumers but could compromise on quality and durability. Consumer awareness and education regarding tire maintenance and safety also present an ongoing challenge. Many vehicle owners do not prioritize tire care, which can lead to higher demand for replacement tires but also reduce the overall lifespan of products. These challenges, however, can be mitigated by companies that focus on innovation, quality, and customer education. The tire market in Sri Lanka is expected to continue growing, driven by technological advancements, shifting consumer preferences, and an overall expansion of the automotive sector. These are the factors driving the market in the forecast period 2026-2030..

Market Drivers

Growth in Vehicle Ownership

The increasing ownership of vehicles in Sri Lanka is one of the key drivers for the tire market. As more people purchase personal vehicles due to rising disposable incomes and improved access to financing options, the demand for tires grows accordingly. This surge in vehicle ownership is evident across various segments, including passenger cars, motorcycles, and commercial vehicles. With more cars on the road, consumers require reliable tires for both new vehicles and replacements. The growing number of vehicles also contributes to the replacement tire market, as tires naturally wear out with use. As long as vehicle sales continue to rise, tire manufacturers can expect sustained demand for their products. The demand is further driven by vehicle owners’ increasing awareness of the importance of tire safety and maintenance, prompting timely tire replacements. The rapid expansion of the automotive sector in Sri Lanka continues to fuel tire market growth, making vehicle ownership a significant contributor to the market’s upward trajectory. By the end of the third quarter of 2023, Sri Lanka had 4,849,297 motorcycles, 1,184,405 motor tricycles (three-wheelers), and 903,245 motor cars registered. In 2023, there were 12,518 new motorcycle registrations, along with 1,418 new land vehicles and 1,376 new motor cars in the country.

Technological Advancements in Tire Manufacturing

Innovations in tire technology are propelling the Sri Lanka tire market forward. Manufacturers are increasingly adopting advanced technologies to produce tires that offer better fuel efficiency, improved safety, and greater durability. Tires with innovative tread designs and enhanced rubber compounds are becoming popular, catering to the growing demand for performance and reliability. Additionally, the rise of smart tires, equipped with sensors that monitor tire pressure and temperature, is changing how consumers approach tire maintenance. These smart features help in preventing accidents and improving fuel economy, making them an attractive option for modern vehicle owners. Furthermore, manufacturers are incorporating eco-friendly technologies, such as the use of sustainable materials and tire recycling, to meet consumer demand for more environmentally conscious products. As tire technology evolves, both consumers and fleet operators are likely to continue prioritizing high-tech options, driving demand for advanced tire solutions in the coming years.

Demand for Replacement Tires

Replacement tires are a major driver in the Sri Lanka tire market, given the natural wear and tear of tires due to regular vehicle usage. As vehicles age, their tires need frequent replacements to maintain safety, performance, and fuel efficiency. Vehicle owners are increasingly aware of the importance of timely tire replacements to avoid accidents or costly damages. Additionally, many vehicle owners prefer high-quality tires from trusted brands, further boosting the demand for replacement tires. The automotive industry’s shift toward more durable and longer-lasting tire options also influences the replacement cycle. In Sri Lanka, where the vehicle fleet is growing steadily, the demand for replacement tires continues to expand, creating a consistent market for tire manufacturers. Furthermore, with the increasing number of vehicles on the road, the demand for replacement tires is expected to rise, as vehicle owners seek better performance and longer-lasting options.

Rise in Commercial Vehicle Fleet

The growing commercial vehicle fleet in Sri Lanka is another significant factor driving tire demand. Commercial vehicles, including trucks, buses, and vans, require durable tires capable of handling heavy loads and long distances. The transportation sector plays a vital role in Sri Lanka’s economy, with increased demand for goods and services. As logistics, public transport, and delivery services expand, so does the need for commercial vehicle tires. Commercial vehicles typically require tires that are more robust, offering high durability and low maintenance costs. With increased business activity and trade, the need for high-performance tires designed to withstand harsh road conditions becomes more pronounced. As a result, the tire market benefits from a growing demand for both replacement and new tires in the commercial vehicle segment, which continues to fuel market growth.

Growing Preference for Eco-friendly Tires

Environmental concerns have led to a growing preference for eco-friendly tires in Sri Lanka. Consumers are becoming increasingly aware of the environmental impact of vehicle components, and tires are no exception. Manufacturers are responding by producing tires that are more sustainable, utilizing recycled materials and biodegradable components. The development of energy-efficient tires, which help improve fuel economy and reduce carbon emissions, is gaining traction. This trend is also driven by rising fuel prices and the global push for greener solutions. Tire manufacturers that prioritize eco-friendly designs are appealing to environmentally conscious consumers, which in turn increases demand for these products. As environmental awareness continues to rise, the tire market in Sri Lanka is expected to witness an uptick in the adoption of sustainable tires that combine performance with eco-friendly features.

Key Market Challenges

Raw Material Price Volatility

A major challenge in the Sri Lanka tire market is the volatility in raw material prices, particularly rubber. The price of natural rubber fluctuates due to various factors such as weather conditions, supply chain disruptions, and global demand. As rubber is one of the primary materials used in tire production, fluctuations in its cost can significantly affect manufacturing expenses. Tire manufacturers are often forced to adjust their prices in response to rising material costs, which can impact their profitability. Moreover, the reliance on imported raw materials in Sri Lanka exacerbates the issue, as exchange rate fluctuations can further drive up costs. To mitigate these challenges, tire manufacturers are looking for ways to reduce their reliance on traditional raw materials by exploring alternative materials or investing in more efficient production technologies.

 Intense Competition in the Market

The Sri Lanka tire market faces significant competition, with both local and international players vying for market share. While local manufacturers strive to maintain cost competitiveness, international brands often leverage superior technology and stronger brand recognition. This intensifies the competition, particularly in the high-performance and premium tire segments. As more global tire brands enter the market, local manufacturers are under pressure to innovate and offer products that meet the evolving demands of consumers. Smaller manufacturers may struggle to compete on quality and technological advancements, leading to potential market consolidation. The need for tire brands to differentiate themselves through product quality, price, and customer service has become more pronounced as competition continues to increase.

Consumer Awareness and Education

A persistent challenge in the Sri Lanka tire market is the lack of consumer awareness regarding tire maintenance and safety. Many vehicle owners do not prioritize regular tire checks or timely replacements, which can lead to unsafe driving conditions. Tires that are not properly maintained can result in decreased fuel efficiency, increased wear, and even accidents. Educating consumers on the importance of tire care, including regular inspections and proper inflation, is crucial to the market’s development. Tire manufacturers and retailers are increasingly investing in customer education campaigns to raise awareness. However, overcoming cultural attitudes towards tire maintenance and establishing more effective educational programs remains an ongoing challenge for the industry.

Lack of Infrastructure for Recycling

In Sri Lanka, tire recycling infrastructure remains underdeveloped, which presents a challenge for sustainable tire disposal. The improper disposal of used tires poses environmental risks, including the accumulation of waste in landfills and potential breeding grounds for pests. Although tire manufacturers have made strides in producing eco-friendly tires, the lack of efficient recycling systems for old tires undermines these efforts. Without proper recycling facilities, used tires are often discarded irresponsibly, leading to environmental pollution. Developing a comprehensive tire recycling infrastructure would not only alleviate waste management issues but also create opportunities for new businesses in the recycling sector. This challenge requires collaboration between government bodies, tire manufacturers, and environmental organizations to promote responsible disposal and recycling practices.

Economic Instability

Sri Lanka’s economic volatility presents a challenge to the tire market, with inflation, currency devaluation, and economic uncertainty potentially reducing consumer spending power. Economic instability can lead to reduced vehicle sales and lower demand for both new and replacement tires. Consumers may delay purchasing new tires or opt for cheaper, lower-quality options, impacting market growth. Tire manufacturers and retailers must adapt to these fluctuating conditions by adjusting their pricing strategies or focusing on offering cost-effective solutions. In such uncertain times, businesses that rely on maintaining consistent demand for tires must be agile and responsive to the changing economic environment in order to sustain their operations.

Stringent Regulatory Requirements

The tire industry in Sri Lanka faces increasing regulatory scrutiny related to safety, environmental impact, and product quality. As global standards for vehicle safety and sustainability evolve, Sri Lanka is following suit by imposing stricter regulations on tire manufacturers. These regulations cover various aspects, such as tire labeling, quality standards, and the environmental footprint of tire production and disposal. Manufacturers must comply with these laws, which can increase operational costs and limit production flexibility. The growing focus on product safety and environmental sustainability means that tire companies must invest in research and development to meet these standards, ensuring that their products adhere to the latest regulations. These regulatory challenges require tire manufacturers to remain compliant, which can sometimes limit innovation or increase time to market for new products.

 Key Market Trends

Shift Towards High-Performance Tires

One prominent trend in the Sri Lanka tire market is the growing preference for high-performance tires. As vehicle technology advances, consumers are becoming more selective about the performance characteristics of their tires. High-performance tires, which offer superior traction, handling, and durability, are increasingly in demand among those who prioritize vehicle safety and driving comfort. This trend is particularly noticeable in the premium vehicle segment, where owners expect their tires to match the performance of their vehicles. Tire manufacturers are responding by producing tires with specialized tread patterns, improved rubber compounds, and enhanced durability features. This shift toward high-performance tires reflects the growing demand for tires that provide better driving experiences and contribute to vehicle efficiency.

Rising Demand for Electric Vehicle Tires

With the global shift towards electric vehicles (EVs), the demand for tires designed specifically for EVs is rising in Sri Lanka as well. Electric vehicles require tires that can handle their unique weight distribution, higher torque, and longer driving ranges. Manufacturers are developing tires with enhanced durability, reduced rolling resistance, and specialized tread patterns tailored to EV performance. The growth of the EV market is expected to drive demand for such specialized tires, presenting new opportunities for tire companies. This trend reflects the broader shift in the automotive industry towards greener, more sustainable vehicle solutions, with tire manufacturers adapting to meet the evolving needs of electric vehicle owners. For instance, Ather Energy, a leading electric two-wheeler manufacturer from India, entered the Sri Lankan market as part of its international expansion. The company announced plans to open its first experience center in Sri Lanka in the next quarter, following its market entry in Nepal in November 2023. The expansion was made possible through a partnership with Evolution Auto, a joint venture between Sensei Capital Partners, Atman Group, and Sino Lanka. Evolution Auto became the national distributor for Ather in Sri Lanka, managing sales and service operations. Ather also aimed to set up a network of fast-charging infrastructure throughout the country to encourage the adoption of electric vehicles.

Increasing Use of Digital Platforms for Tire Sales

Digital platforms are transforming the way consumers purchase tires in Sri Lanka. With the rise of e-commerce, customers are increasingly buying tires online due to convenience, competitive pricing, and a broader selection of brands and products. Online platforms offer consumers the ability to compare prices, read reviews, and select the best options from the comfort of their homes. This trend is particularly appealing to younger, tech-savvy consumers who prefer digital shopping experiences. Tire manufacturers and retailers are investing in building their online presence and optimizing their websites to provide a seamless shopping experience. As e-commerce continues to grow, digital platforms are likely to play a pivotal role in shaping the future of tire sales in Sri Lanka.

Focus on Tire Retreading

Tire retreading is gaining traction in Sri Lanka as an alternative to replacing worn-out tires, particularly for commercial vehicles. Retreading involves reusing the tire casing and applying new tread, which can significantly reduce the cost of tires while extending their lifespan. This trend is particularly important for businesses operating large fleets of vehicles, such as logistics companies and public transportation providers, as it allows them to manage tire costs more efficiently. As sustainability concerns rise, retreading also provides an eco-friendly option by reducing tire waste. Tire retreading is expected to continue growing, especially as consumers and businesses look for ways to minimize costs and environmental impact.

Sustainability in Tire Manufacturing

Sustainability is becoming a key trend in the Sri Lanka tire market, with consumers and manufacturers alike prioritizing environmentally friendly products. Tire manufacturers are increasingly focusing on reducing the environmental impact of their production processes by using renewable materials, recycling old tires, and minimizing energy consumption. Eco-friendly tires made from sustainable materials such as bio-based rubbers and recycled plastics are becoming more prevalent. This trend reflects the broader global shift towards sustainability in the automotive industry. As environmental regulations tighten and consumer demand for green products increases, tire companies in Sri Lanka are expected to continue incorporating sustainable practices in their production processes to meet evolving consumer expectations.

Segmental Insights

Demand Category Insights

The Sri Lanka tire market is segmented into two primary demand categories: Original Equipment Manufacturer (OEM) and replacement. The OEM segment includes tires that are supplied with new vehicles during the manufacturing process. These tires are specifically selected and designed to match the vehicle's performance, safety, and fuel efficiency requirements. OEM tires are provided by vehicle manufacturers to ensure that the tires complement the vehicle’s design and specifications, optimizing its overall performance. Buyers in the OEM segment typically do not have direct control over the tire choice, as the tire is included as part of the vehicle purchase package. However, the quality and features of OEM tires play a critical role in the initial driving experience, with manufacturers often selecting high-performance tires for premium models and more durable options for commercial vehicles.

The replacement segment pertains to tires that are purchased to replace worn-out or damaged tires on vehicles that are already in use. As vehicles age and tires undergo regular wear and tear, replacement becomes necessary to maintain vehicle safety and performance. Replacement tires come in a wide variety of types, such as all-season, winter, performance, and eco-friendly options. Consumers in the replacement segment typically have more freedom in choosing the tires based on their preferences, vehicle needs, and budget. Replacement tire sales are influenced by factors such as the number of vehicles in operation, vehicle maintenance schedules, and the overall age of the fleet. Vehicle owners seek tires that match the specific demands of their driving conditions, whether that’s for city commuting, long-distance travel, or commercial transportation.

Both segments are essential to the market, with OEM sales being driven by new vehicle sales, while replacement tire demand is tied to vehicle longevity and maintenance cycles. In the replacement segment, factors such as consumer awareness, economic conditions, and tire quality are important considerations that influence purchasing decisions. Tire distributors and retailers cater to both categories, offering a variety of options to meet the diverse needs of consumers. This segmentation allows tire manufacturers and sellers to address different consumer preferences and establish tailored product offerings suited to various vehicle types and usage patterns.

Regional Insights

Demand Category Insights

The Sri Lanka tire market is segmented into two primary demand categories: Original Equipment Manufacturer (OEM) and replacement. The OEM segment includes tires that are supplied with new vehicles during the manufacturing process. These tires are specifically selected and designed to match the vehicle's performance, safety, and fuel efficiency requirements. OEM tires are provided by vehicle manufacturers to ensure that the tires complement the vehicle’s design and specifications, optimizing its overall performance. Buyers in the OEM segment typically do not have direct control over the tire choice, as the tire is included as part of the vehicle purchase package. However, the quality and features of OEM tires play a critical role in the initial driving experience, with manufacturers often selecting high-performance tires for premium models and more durable options for commercial vehicles.

The replacement segment pertains to tires that are purchased to replace worn-out or damaged tires on vehicles that are already in use. As vehicles age and tires undergo regular wear and tear, replacement becomes necessary to maintain vehicle safety and performance. Replacement tires come in a wide variety of types, such as all-season, winter, performance, and eco-friendly options. Consumers in the replacement segment typically have more freedom in choosing the tires based on their preferences, vehicle needs, and budget. Replacement tire sales are influenced by factors such as the number of vehicles in operation, vehicle maintenance schedules, and the overall age of the fleet. Vehicle owners seek tires that match the specific demands of their driving conditions, whether that’s for city commuting, long-distance travel, or commercial transportation.

Both segments are essential to the market, with OEM sales being driven by new vehicle sales, while replacement tire demand is tied to vehicle longevity and maintenance cycles. In the replacement segment, factors such as consumer awareness, economic conditions, and tire quality are important considerations that influence purchasing decisions. Tire distributors and retailers cater to both categories, offering a variety of options to meet the diverse needs of consumers. This segmentation allows tire manufacturers and sellers to address different consumer preferences and establish tailored product offerings suited to various vehicle types and usage patterns.

Recent Developments

• In February 2024, Continental revealed its intentions to enhance its specialty tire production in Sri Lanka. The company intends to invest approximately 13 million Euros over the next three years to boost local pre-production capabilities.
• In July 2024, GRI received the Gold Award for Resource-Efficient and Cleaner Production at the Green Industry Awards. GRI is a worldwide leader in specialty tire manufacturing.
• In December 2024, CEAT announced its acquisition of Michelin's Midigama Tyre Division and Casting Product Division plants in Sri Lanka. The agreement also encompassed the Camso brand.
• In January 2023, Goodyear Tire & Rubber Company revealed a demonstration tire made with 90 percent sustainable materials. The tire successfully passed both regulatory and internal testing. To bring this tire to market, Goodyear plans to collaborate further with its supply chain to determine the necessary scale for producing these innovative materials at high volumes

Key Market Players

• Apollo Tyres Limited
• Bridgestone Corporation
• CEAT Limited
• Continental AG
• JK Tyre & Industries Limited
• Michelin
• MRF Limited 
• The Goodyear Tire & Rubber Company
• Pirelli & C. S.p.A.
• Yokohama Rubber Company Limited

Report Scope:

In this report, the Sri Lanka Tire Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Sri Lanka Tire Market, By Vehicle Type:

o   Passenger Car

o   Light Commercial Vehicle (LCV)

o   Medium & Heavy Commercial Vehicles (M&HCV)

o   Off-the-Road Vehicles (OTR)

o   Two-Wheeler

• Sri Lanka Tire Market, By Tire Construction:  

o   Radial

o   Bias

• Sri Lanka Tire Market, By Demand Category: 

o   OEM

o   Replacement

• Sri Lanka Tire Market, By Region:  

o    Central

o    Southern

o    Western

o    North-Western

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Sri Lanka Tire Market.

Available Customizations:

Sri Lanka Tire Market report with the given market data, TechSci Research offers customizations according to the company’s specific needs. The following customization options are available for the report:

Company Information

Detailed analysis and profiling of additional market players (up to five).

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