Leatherhead, UK – The Asian tire market is set to reach $117.6 billion (€99.4 billion) in 2025, up from an estimated $97.4 billion this year, according to a recent report by consulting company Smithers.
Recovering from Covid-19 and embracing new mobility concepts, such as electric vehicles, will drive the growth, which is expected to be at compound annual growth rate (CAGR) of 3.8%.
In terms of volume, market demand is expected to rise from 1.29 billion units to 1.53 billion units over the five-year forecast period, said the 21 Oct report, titled “the future of tires in Asia to 2025.”
According to the research, in 2020 tire volumes in the region will drop, by 1.0%-6.5% relative to 2019 due to disruptions caused by the Covid-19 pandemic.
Smithers expects “a degree of normal operation” and a return to the consistent growth seen through the 2010s by next year.
As low raw material pricing will help the initial recovery; the report foresees a 3% growth in the volume of tire raw materials consumption over the five-year period.
The largest rise in demand, it anticipated, will be for highly dispersible (HD) silica.
While China and India will continue to grow through to 2025, Japan along with the other mature regional economy of South Korea will see a marginal decline in demand, according to the report.
The fastest growth in the region, Smither expects, will come from “emergent markets” in South East Asia.
"Indonesia, the Philippines, and Vietnam are forecast to have the highest growth rates to 2025, posited on strong overall economic growth, rapid urbanisation, and a rise in middle-class consumers investing in their first vehicles," it said.
Representing just under half of Asian consumption in 2020, China will be “the pivotal market” for future success, according to Smithers.
The Chinese market, the report said, is “evolving rapidly, even as Covid-19 reshapes the driving landscape.”
“Tire technology in China is now heavily focused on lower rolling resistance tires; driven by pressure from the Chinese government to reduce CO2 emissions and the establishment of the China Rubber Industry Association (CRIA) tire labelling system,” the report noted.
In addition, China is proving to be a key breakthrough market for electric vehicles, and is already "the world’s largest national market for electric vehicles, due to strategic government investments."