LMC analyst predicts a “more even” global LV tire market in 2017

Guangzhou, China – The world is looking at more even growth in light vehicle tire sales across regions in 2017, said Robert Simmons, head of rubber and tire research at UK’s agribusiness consultancy LMC International.

According to Simmons’ speech at the 2017 China Rubber Conference held in Guangzhou last week, LV tire sales are expected to increase by 3% globally this year, with India overtaking the Middle East and China as the fastest growing market at an over 8% year-on-year rate.

Putting an end to its tax incentives, China’s LV tire sales growth is pegged at just below 8% this year, compared with the highest rate of more than 10% in 2016.

The South America and East Asia markets, both seeing decrease last year, will likely have a 3% and 2% growth respectively this year.

Imports still put pressure on developed market production. US, for example, has lost 100 million unit per year capacity, mostly in replacement market, over the past 15 years, although 30 million unit per year new capacity are expected by 2020, mainly operated by overseas tire makers.

The US duties on China imports have done “absolutely nothing” for its total imports, averred Simmons. “Chinese imports have gone away from the US market but they’ve been replaced by imports from other low cost centers.”

Such duties, among other reasons, have lead to China moving its capacity elsewhere.

According to participants at the China Rubber Conference, there is 30 million unit per year overseas capacity, principally in the ASEAN countries and the US, run by Chinese tire makers, and the number is forecast to reach 60 million by the end of 2017.