Tires, amongst the most prominent components of vehicles, require close inspection & timely maintenance to ensure a safe & enjoyable ride. They play a crucial role in providing a stable interaction of the car and the road by maintaining proper grip & traction and providing a safe driving experience. Hence, the leading tire manufacturers are actively working toward the production & distribution of robust tires across Nigeria, which, in turn, would boost the tire industry of the country over the coming years.
The Nigeria Tire Market is projected to grow at a CAGR of around 3.45% during the forecast period, i.e., 2022-27. The growth of the market is driven primarily by the expanding vehicle fleet in Nigeria due to a paradigm shift of people toward private ownership of vehicles for transportation, i.e., making a direct influence on the demand for tires in the country.
|Study Period||Historical Data: 2017-20|
|Base Year: 2021|
|Forecast Period: 2022-27|
|Region Covered||North, East, West, Mid- West|
|Key Companies Profiled||Continental, Bridgestone, Yokohama, Hankook, Goodyear, Michelin Kumho, Pirelli, Triangle, Hangzhou Zhongce|
|Unit Denominations||USD Million/Billion|
In addition, escalating preference for second-hand cars among the middle class & lower-income population is also playing a crucial role in the market expansion due to a surging need for timely maintenance, repairs, & replacement of tires. Besides, the swiftly expanding trade businesses, i.e., portraying surging import of tires & vehicles from countries like the US, Germany, the Netherlands, etc., are also positively influencing the growth of the tire market across Nigeria.
Moreover, the launch of the National Automotive Industry Development Plan (NAIDP), which has attracted several prominent automakers & tire manufacturers and encouraged them to establish small-scale assembly plants in the country, is another crucial aspect propelling the market growth.
Furthermore, the active participation of the government through various plans & associations like the National Automotive Design & Development Council (NADDC) in setting goals to turn out around 30% of Electric Vehicles by 2025 is another remunerative prospect for the Nigeria Tire Market to expand over the forecast years.
Impact of Covid-19 on the Nigeria Tire Market
The advent of Covid-19 in 2020 had a decelerating impact on most industries across Nigeria, where the Tire Market was no exception and witnessed severe effects of the crisis. While the government had to impose stringent movement restrictions, lockdowns, & travel bans to curb the spread of this dreadful virus, the market underwent several unprecedented challenges associated with the development, production, & distribution of tires across the country.
Additionally, shortage of raw materials & labor, a halt in import & export businesses of tires & automobiles, reduced consumer demand, and the shutdown of several manufacturing units, among others, were the prominent issues faced by the industry. Besides, since the duration of these restrictions was uncertain, the public portrayed a paradigm shift of their expenditure toward essential goods only.
Consequently, it showcased reduced sales of vehicles & tires and, in turn, introduced significant financial losses for the leading players in the tire market in Nigeria. However, with gradual improvements in the pandemic situation, the government uplifted the restrictions & allowed the recommencement of business operations. As a result, the leading companies in the market are witnessing lucrative growth opportunities to increase their production capabilities & meet the burgeoning end-user requirements in the country.