South Africa has emerged as one of the fastest-growing tire markets, mainly due to the rapidly growing middle-class population that has significantly up surged automobile sales in the country. It is a price-sensitive market where consumers prefer imported & low-priced tires. As a result, it created a swiftly growing tire industry that accommodates different vehicle types, including passenger cars, commercial vehicles like buses & trucks, off-the-road vehicles, agricultural, and two-wheelers.
The South Africa Tire Market is projected to grow at a CAGR of around 4.5% during the forecast period, i.e., 2021-26. The growth of the market is likely to be driven by the rapidly increasing vehicle sales & fleet size, coupled with the swiftly expanding export business for tires. In addition, the growing prevalence of Chinese & Budget tires in South Africa has led to the availability of an extensive tire range for vehicle owners and, as a result, is positively influencing the market growth.
|Study Period||Historical Data: 2016-19|
|Base Year: 2020|
|Forecast Period: 2021-26|
|Key Companies Profiled||Bridgestone, Sumitomo, Goodyear, Continental, Michelin, Hangzhou Zhongce Rubber, Triangle, Kumho, Yokohama, and Pirelli|
|Unit Denominations||USD Million/Billion|
Besides, the substantially growing demand for passenger cars in South Africa is encouraging automakers to increase their production capabilities. Improving economic conditions & mounting inclination of consumers toward vehicle ownership are also projected to augment the market growth in the coming years. It would generate opportunities for the leading players like Bridgestone, Sumitomo, Goodyear, Continental, Michelin, etc., to develop robust tires that meet the different requirements of vehicle owners.
However, according to the International Trade Administration, the entire automotive industry of South Africa witnessed a significant slump in 2020 in terms of vehicle sales when compared to the sales of 2019. Additionally, in 2021, the automotive industry observed persistent growth, which was better than in 2020. Although the industry would continue witnessing steady growth during the forecast period, it is unlikely to cross the bars of sales earmarked in 2019.
Nevertheless, an increasing number of construction projects and rapidly expanding transportation & logistics sectors are propelling the need for commercial vehicles and, in turn, soaring the demand for tires that can provide better fuel efficiency & safer driving on different terrains.
Key Trend in the South Africa Tire Market
The South Africa Tire Market would be witnessing profitable opportunities in the coming years, mainly due to various trade agreements that have helped establish the country as an innovative tire production hub. Moreover, to comprehensively expand & sustain its tire manufacturing capabilities & units, South Africa launched APDP (Automotive Production & Development Program) in 2021. Through this plan, South Africa intends to boost its automotive sector by devising an environment for vehicle manufacturers to increase their production volumes at a massive scale. Hence, these aspects are projected to create remunerative opportunities for the leading market players in the years to come.
Impact of Covid-19 on the South Africa Tire Market
The Covid-19 pandemic had a decelerating impact on the automotive sector of South Africa, where the tire industry was no exception and witnessed a significant sales drop in 2020. With the imposition of stringent movement restrictions & lockdown by the government, the market observed several unprecedented challenges like shortage of raw materials & labor, banned tire imports & exports, supply chain disruptions, reduced consumer demand, etc. Additionally, since consumers faced fluctuations in income, their purchases were limited only to essential items, which resulted in minimal sales of vehicles & tires and massive financial losses for the leading market players.
However, with gradual improvements in the pandemic situation since 2020, the government uplifted the restrictions & allowed the recommencement of tire & vehicle manufacturing units. It, in turn, is generating growth opportunities for the prominent players in the market to expand their production capabilities and meet the increasing consumer requirements. Although the market is witnessing a steady growth pace presently, it is nowhere soon when it will cross the growth registered in 2019.