Australia Tire Market Research Report Forecast: (2022-2027)

Market Overview

Australia is amongst the most prominent destinations for countries like the US for automotive component exports. Yet, the exports are now becoming challenging as automakers (like Ford & Toyota) are ceasing manufacturing facilities, resulting in all vehicle imports in the country.

On this end, the government of Australia imposed bans on the export of whole baled scrap tires in 2021 to reduce waste, enhance the recycling rates, and build a recycling industry in Australia.

Exporters in the country now require a license for shipping tires overseas. The waste tires are banned except for those processed into crumbs, granules, shreds, processed into fuel, exported for retreading, & those that would be reused in vehicles overseas.

Market Insights

The Australia Tire Market is projected to grow at around 4% CAGR during the forecast period, i.e., 2022-27. The growth of the market is likely to be driven by the rapidly increasing number of large-scale construction projects, including the development of roads, highways, & buildings, among others, owing to the mounting focus of the Australian government on infrastructural developments. It, in turn, is augmenting the demand for several heavy commercial vehicles.

Hence, the requirement for Off-the-Road (OTR) tires for applications like loading, excavating, bulldozers, trenchers, etc., is escalating swiftly & driving the tire market in the country. In addition, the presence of minerals, coal, & metal mines and a considerable space for large-scale mining is another prominent aspect soaring the demand for OTR tires for heavy vehicles engaged in such projects. 

Besides, the growing popularity of sports bikes & cars, especially among the younger population, entwined with increasing tourism in the country, is boosting the sales of SUVs & Motorbikes and, in turn, augmenting the demand for robust tires. Moreover, gradually rising migration in Australia is another crucial aspect behind the mounting sales of vehicles, thereby boosting the tire market.

Key Trend in the Australia Tire Market

• Growing Focus of the Australian Government toward Infrastructural Developments

With the escalating need for improved road connectivity & better infrastructure in the country, the government of Australia is investing substantially in several construction projects, owing to which the demand for light & heavy commercial vehicles is increasing significantly. It, in turn, is fueling the need for tires with firm grips, better load capacity, greater stability, low rolling resistance, and improved traction.

Hence, it is generating growth opportunities for the automakers & tire manufacturers to accelerate their production capabilities, introduce new tires & vehicles, expand their product portfolio & visibility, and contribute to the Australia Tire Market expansion through 2027.

Impact of Covid-19 on the Australia Tire Market

The Covid-19 pandemic had a decelerating impact on most industries where the Australia Tire Market was no exception. The travel bans & hampered transportation & logistics resulted in disruption of the export-import business. Besides, the subsequent contractions in the kilometers driven and the severely reduced new registrations caused significant demand-supply gaps. Moreover, the hindrance in the supply chains further resulted in the shortage of raw materials and delays in the deliveries of pre-produced tires. Several tire manufacturers had to reduce their production capabilities & eventually shut down the facilities due to the growing shortage of raw materials & labor.

However, with the gradual improvement in the pandemic situation & a declining number of cases, the Australian government uplifted the restrictions & allowed automotive & tire manufacturing units to resume their operations. It, in turn, generated growth opportunities for the leading players to increase their manufacturing capacities and introduce new product lines to meet the burgeoning demand for tires.

Market Segmentation

Based on Type of Vehicle:

• Passenger Car
• Light Commercial Vehicle
• Buses and Trucks
• Medium and Heavy Commercial Vehicles
• Off the Road (OTR)
• Two Wheelers
• Three Wheeler

Amongst all vehicle types, passenger cars are anticipated to continue their dominance in the Australia Tire Market during the forecast period. It owes principally to the growing customer preference toward owning vehicles for commuting across Australia entwined with the changing living standards & increasing purchasing power of people, i.e., fueling the sales of these cars and swiftly augmenting the demand for tires in the country.

Additionally, prominent automakers & tire manufacturers introducing new passenger cars & tires in their product offerings are also expected to boost the sales of passenger cars & their tires and drive the market in the coming years.

On the other hand, Two-Wheelers are projected to demonstrate the fastest growth in the Australia Tire Market during the forecast period. It attributes principally to the mounting awareness among people about their benefits like easy commuting across small areas, cost-effectiveness for people with budgets, and easy parking. It, in turn, is positively influencing the demand for tires & driving the market.

Based on Type of Tire:

• Radial 
• Bias

Of both, Radial tires acquired the largest share of the Australia Tire Market in recent years. It owes to the increasing government focus on infrastructural developments by laying out several construction projects for roads, highways, buildings, complexes, etc. It, in turn, is propelling the demand for heavy commercial vehicles like bulldozers, excavators, cranes, etc., and augmenting the demand for radial tires, owing to their low rolling resistance, massive load capacity, stability on different terrains, firm grip, and flexible sidewalls.

In addition, with the growing number of mining activities for the excavation of metals like iron, gold, diamonds, etc., the demand for heavy vehicles is rising swiftly. It is further instigating the need for radial tires for their toughness, minimal fuel consumption rate, & robust grip on roads, among other advantages, and driving the Australia Tire Market through 2027.

Market Dynamics:

Key Driver: Increasing Construction Activities

Since the government of Australia is increasingly focusing on the development of the country's infrastructure, the number of construction projects for roads, highways, complexes, residential & commercial buildings, educational institutions, healthcare facilities, among others, is escalating swiftly. It, in turn, is propelling the demand for robust vehicles & construction equipment like bulldozers, cranes, excavators, and others.

As a result, this mounting demand for heavy vehicles is directly impacting the requirement for robust tires to deliver improved grips, stability on different terrains, and low rolling resistance & traction, among other capabilities. Therefore, automakers & tire manufacturers are seeking different opportunities to introduce new vehicles & tires and expand their production capacities to suffice the burgeoning tire requirement and boost the market in the coming years. 

Possible Restraints

• Fluctuating Prices of Raw Materials

The volatility in prices of raw materials like rubber, crude oil, etc., is restraining tire manufacturers from producing large volumes of tires & resulting in overall expensive production. It, in turn, might act as a significant growth challenge for the Australia Tire Market and limit the demand for tires, especially among the cost-sensitive population, in the coming years.

• Harmful Effects of Rubber 

Acids produced from rubber when burned for tire production are dangerous for both humans & the environment. Hence, the Australian government is laying out stringent regulations on the utilization of rubber for tires, which is another prominent aspect that might hamper the overall expansion of the Australia Tire Market during 2022-27.

Growth Opportunity: Growing Encouragement for the Adoption of Electric Vehicles (EVs)

With growing concerns over the alarming levels of pollution & environmental degradation, the government of Australia is taking initiatives for encouraging people to adopt Electric Vehicles (EVs) as an alternative for transportation in order to reduce dependency on non-renewable fuel & contribute to environmental sustainability. It, in turn, is generating growth opportunities for both automakers & tire manufacturers to introduce new vehicles & tires and expand their visibility across the country. Hence, the gradual adoption of these Electric Vehicles (EVs) is anticipated to positively influence the tire market across Australia in the coming years.

Key Questions Answered in the Market Research Report:

1. What are the overall statistics or estimates (Overview, Size- By Value, Forecast Numbers, Segmentation, Shares) of the Australia Tire Market?
2. What are the region-wise industry size, growth drivers, and challenges?
3. What are the key innovations, opportunities, current & future trends, and regulations in the Australia Tire Market?
4. Who are the key competitors, their key strengths & weaknesses, and how do they perform in the Australia Tire Market based on the competitive benchmarking matrix?
5. What are the key results derived from surveys conducted during the Australia Tire Market study?