Analysis: New tire capacity on the way

London –  Despite market uncertainty, global tire production projects and expansions are progressing – including plans in Asia, Africa and North America.

Service Long March Tyres (SLM) – part of China’s Long March Group – for instance is moving ahead with plans for an initial public offering on the Pakistan Stock Exchange (PSX).

Proceeds will “partially finance” a dedicated passenger car radial (PCR) tire facility; the official PSX notice showing that SLM plans to raise PKR5.5-7.8 billion (€17-25 million) through the IPO.

The total estimated cost of the PCR project is PKR22.5 billion (€70 million), to be funded through a “balanced mix of IPO proceeds, internally generated cash flows, and long-term financing”.

Work on the Pakistan project is expected to commence in the fourth quarter of fiscal year 2026 (ending 30 June 2027), said SLM.

The first phase of the project has an annual production capacity of 2 million units and is scheduled to officially start production in January 2028. By 2029 and 2030, annual production capacity will increase to 2.5 million and 3 million units respectively.

SLM is a joint venture 49% owned by China’s Long March and 51% by local company Service Industries.

It currently operates a truck & bus radial tire plant in Pakistan’s Sindh Industrial Trading Estate with an installed capacity of 1.6 million units per year. This, said the company, will rise to 2.2 million units per year by fiscal year 2028.

Vietnam plans

Elsewhere in Asia, Zhongce Rubber Group has approved plans to invest Yuan1.04 billion (€130 million) in a new tire production facility in Vietnam.

The project, titled “Zhongce Vietnam tire production base (phase I)”, will be developed in Ho Chi Minh City and is designed to produce 5 million semi-steel radial passenger car tires per year.

Construction is scheduled to begin in July, with a build period of 12 months, said ZC Rubber in a stock exchange filing.

According to the filing, the move is aimed at “further expanding production and sales scale,” improving overseas capacity layout and enhancing competitiveness in international markets”.

ZC Rubber added that a multi-country manufacturing footprint will allow it to “flexibly adjust supply” and better navigate global trade frictions.

The Vietnam plant will target export markets including Asia-Pacific as well as other countries in Europe, North America and Asia, where the group said demand for Chinese-brand tires is “steadily growing.”

ZC Rubber expects the project to generate annual revenue of around Yuan848 million (€106 million) at full capacity, with an estimated return on investment of 17.5%.

Egypt complex

Meanwhile, China’s Shandong Linglong Tire is in talks with Egypt’s Ministry of Investment and Foreign Trade to establish a $2 billion (€1.7 billion) integrated tire manufacturing complex. It plans to export the bulk of output to markets including the US and Persian Gulf states.

The project, under discussion with local partner Nile Co. for Projects and Trade (Fit & Fix), would be developed in the Borg El Arab area, southwest of Alexandria, said the Egyptian ministry in a social media post.

The plant is expected to operate under a private free zone regime, with around 90% of production earmarked for export.

The complex will produce passenger car and truck tires and include upstream “nutritive industries” such as rubber and carbon black. The “vertically integrated setup” is aimed at securing inputs and improving cost competitiveness.

The post did not provide details about production capacity or a timeline for the project.

Sophie Lee, general manager for project & investment management at Linglong, said the company saw Egypt as “a suitable regional hub for manufacturing and export” given its location and trade agreements.

“We seek to transfer technology to the Egyptian market to enhance industrial capabilities,” she said.

Toyo target

In North America, Toyo Tire Corp. is considering establishing a new truck and bus tire (TBR) production facility to strengthen its supply structure in the region.

In a statement to ERJ, the Japanese group said it had identified growing demand for TBR tires in North America as a “key growth opportunity”.

Toyo has outlined a policy of “strengthening its supply structure for the North American TBR market” in its ‘mid-term plan 2026’ announced on 4 March.

It says it is “examining the possibility of establishing a new TBR production base in the North American region”.

If approved, the project would fall under the group’s broader plan to allocate Yen340 billion (€1.85 billion) in growth investments to 2030.

However, key details – such as a start-up date, scale, and sales targets – have not yet been determined.

Toyo added that it is conducting “comparative studies of multiple candidate countries and regions, including the US” for the planned factory – though no location has been decided.

The objective of the potential investment is to “enhance supply capacity and strengthen profitability in anticipation of future business growth in the North American market”, Toyo said.