Market Definition
The tire industry across Ethiopia is witnessing a steady growth rate with the increasing penetration of Chinese tires, owing to their easy availability & affordability. Moreover, in recent years, the government of Ethiopia has demonstrated a growing focus on economic stability and laid out favorable policies to attract foreign investments, i.e., showcasing the establishment of new automakers & tire manufacturers across the country.
Market Insights
The Ethiopia Tire Market is projected to grow at a CAGR of around 4.1% during the forecast period, i.e., 2021-26. The growth of the market is driven primarily by the mounting government focus on improving the overall economic conditions of the country & its several initiatives toward addressing the declining oil prices and increasing geopolitical tensions. It, in turn, is generating lucrative opportunities for automakers & prominent tire manufacturers to establish manufacturing units across the country and boost the market.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2016-19 |
| Base Year: 2020 | |
| Forecast Period: 2021-26 | |
| CAGR(2021-26) | 4.1% |
| Key Companies Profiled | Goodyear Tire & Rubber Co., Pirelli &C. SpA, Continental AG, Michelin, Apollo Tyres Ltd., Sumitomo Rubber Industries Ltd., CEAT Tire Ltd., Maxxis International, Bridgestone Corp., MRF Ltd. |
| Unit Denominations | USD Million/Billion |
Besides, the active participation of the government & leading players in the market is attracting foreign investments into Ethiopia to set up tire manufacturing facilities, which, in turn, is improving the country's economic scenario.
Moreover, gradually improving disposable income of the rising population is portraying a swiftly escalating demand for passenger cars & two-wheelers, i.e., augmenting the demand for tires and positively influencing the overall market growth. In addition, increasing demand for low-cost tires and the extensive presence of Chinese tire manufacturers in Ethiopia further project remunerative prospects for the market across the country over the coming years.
Impact of Covid-19 on the Ethiopia Tire Market
The advent of Covid-19 in 2020 had a decelerating effect on most industries across Ethiopia, and the automotive & tire sectors witnessed a catastrophic impact. The government imposed stringent movement restrictions & frequent lockdowns to curb the spread of this dreadful disease and suspended all kinds of operations throughout the country.
As a result, the tire industry witnessed severe disruptions in the supply chain, delays in the deliveries of raw materials & pre-produced tires, and overall reduced demand for tires across the country. Moreover, as the pandemic brought some significant economic fluctuations, which portrayed the growing inclination of the government funding toward addressing the crisis, most people began investing in essential goods only. It, in turn, showcased a reduced demand for passenger cars & tires across Ethiopia.
Consequently, the leading players in the market witnessed significant financial losses amidst the pandemic. Later, the government partially uplifted the limitations that allowed tire manufacturers to resume their production & distribution operations and meet consumer requirements. Besides, numerous companies made a paradigm shift to digital platforms, offering a variety of tires with door-step-delivery & fitting services amidst the crisis, which further promoted the market expansion.
Market Segmentation
Based on the Vehicle Type:
Passenger Cars dominated the Ethiopia Tire Market with the largest share in previous years, and the same trend is projected during 2021-26. It attributes principally to the improving economic conditions of people & road connectivity and growing consumer inclination toward private ownership of vehicles, i.e., demonstrating a significant rise in the vehicle fleet and positively influencing the tire market growth across Ethiopia. Besides, the growing utilization of passenger cars in the country for transportation & cab services is another prominent factor augmenting the overall market growth for passenger vehicles.
On the other hand, the demand for Medium & Heavy-Commercial vehicles is witnessing an upswing across the country and directly influencing the requirement for Off-the-Road (OTR) tires due to the rising government focus on infrastructural developments, i.e., demonstrating accelerating construction activities and upsurging need for various heavy commercial vehicles.
Based on the Demand Type:
Here, the immense popularity of Chinese tires in Ethiopia is augmenting the market growth for replacement tires owing to their easy availability, extensive variety, and affordable price range. Besides, as the country is low in terms of motorization due to its fluctuating economic conditions, people are inclined toward purchasing second-hand vehicles, which, in turn, is escalating the demand for tire repairs & replacement and stimulating the overall market growth.
On the other hand, the growing government support through favorable policies is attracting foreign investments across Ethiopia toward establishing automotive & tire manufacturing facilities and, in turn, projecting a pool of opportunities for OEMs to rise and offer a wide range of tires to customers.
Market Dynamics
Key Driver: Growing Awareness about Timely Repairs & Replacement of Tires
With stabilizing economic conditions of Ethiopia and growing sales of passenger vehicles, the demand for tires is significantly rising in the country. In addition, consumers are becoming more aware of the significance & benefits of providing timely repairs & replacements to their vehicles & keep a check on the conditions of their tires. It, in turn, is augmenting the demand for replacement tires and playing a crucial role in driving the Tire Market across Ethiopia.
Besides, growing urbanization & rapid advancements in the automotive sector are further anticipated to upsurge the demand for new vehicles and, in turn, positively influence the tire demand. As a result, the country is set to generate lucrative growth opportunities for the leading players in the tire industry to expand their product portfolio & customer base through 2026.
Growth Opportunity: The Emergence of Electric Vehicles in Ethiopia
The concept of Electric Vehicles (EVs) has recently emerged in the country as a step toward reducing carbon emissions. This trend projects a pool of significant growth opportunities for the leading players in the tire industry to manufacture EV-compatible tires and stimulate the overall market growth in the coming years.
Key Questions Answered in the Market Research Report:
Frequently Asked Questions
A. The Ethiopia Tire Market is projected to grow at a CAGR of around 4.1% during 2021-26.
A. The rising consumer awareness about timely repairs & replacement of tires and the growing penetration of EVs are the prime aspects projected to drive the Ethiopia Tire Market during 2021-26.
A. The mounting interest of people in adopting second-hand vehicles, i.e., demonstrating a swift escalation in the demand for replacement tires, is the key trend in the Ethiopia Tire Market.
A. Passenger Cars are anticipated to emerge as an area of remunerative opportunities for the leading players in the Ethiopia Tire Market over the forecast years.
