Mexico Tire Market Research Report: Forecast (2024-2030)

Market Insights & Analysis: Mexico Tire Market (2024-30):

The Mexico Tire Market size is estimated to grow at a CAGR of around 8.31% during the forecast period, i.e., 2024-30. Over the past decade, Mexico has experienced generous economic growth due to factors such as strategic trade agreements, significant foreign investment, etc. With the Mexican economy seeing potential growth, the population of the middle class with higher disposable incomes is also growing, enabling more individuals and organizations to purchase both cars and commercial vehicles. In line with this, the vehicle fleet in the country has witnessed considerable growth, which subsequently is catalyzing the demand for tires.

During the historical period, Mexico experienced a remarkable surge in the number of storehouses, due to factors such as e-commerce growth, rise in manufacturing and export hub, proximity to the US market, trade agreements, etc. The growth of e-commerce and shifting consumer preferences have created a pressing need for distribution and logistics centers to meet the demands of online shoppers.  

Similarly, Mexico's strategic geographical location, adjacent to the US & near other North American nations, provides better market access to the companies. As a result, several market players are capitalizing on this opportunity and establishing their units in the country. Additionally, this is facilitating the cross-border trade. Hence, the increase in several warehouses is leading to substantial use of different types of commercial vehicles, such as small delivery vans to large trucks, forklifts, and cranes. This increased usage of commercial vehicles for logistic purposes is subsequently enhancing the demand for tires in the country.

Furthermore, the demand for industrial warehouses is surging in cities like Reynosa, Ciudad Juarez, and Tijuana, which are strategically located alongside the US-Mexico border. This is attributed to companies, that are planning to enhance their supply chains by moving manufacturing closer to their target markets. This trend is prompting higher investment in the establishment of new warehouses. For instance:

• In 2023, Mexican real estate investment trust Fibra Prologis announced its plan to invest approximately USD 700 million in warehouses in 2023.

As these extensive storage spaces surge, the usage of vehicles such as forklifts, loaders, and other material handling equipment would also surge, which subsequently would enhance the demand for tires, thereby enhancing the overall market size of the Mexico Tire market.

Moreover, the government is significantly allocating funds for infrastructural development to enhance the economic growth of the country. Owing to this, the Mexican government is supporting this by allocating significant portions of the budget towards infrastructure projects. For instance:

• In 2024, Mexico’s Ministry of Infrastructure, announced the delivery of more than 500 infrastructure projects. These projects, totalling an investment of over USD12 billion, is equivalent to approximately 1.3% of the national GDP.

The surge in construction activity, is driving the usage of off-the-road (OTR) vehicles and medium and heavy commercial vehicles (MHCVs) for material transport, site preparation, and the movement of heavy equipment essential for large-scale projects like roads and bridges. As number of OTR vehicles and medium & heavy commercial vehicles (MHCVs) surges the demand for tire designed for these vehicles would also increase during the forecast period.

Mexico Tire Market Driver:

Increase of Ride Hailing Fleets in Mexico – During the past few decades Mexico has witnessed substantial population growth in urban areas. The public transportation system in Mexico has been struggling to keep pace with population growth. Owing to this, residents of urban areas have significantly turned towards ride-hailing services, as they offer on-demand solutions for getting around. Moreover, Mexico's surging smartphone and internet penetration has made booking rides a more efficient process. As a result, more individuals are utilizing these ride-hailing applications to travel to intercity and intracity destinations. This increasing inclination towards taxi services is necessitating the top companies to expand their ride-hailing car fleets in the country, which is subsequently uplifting the demand for tires.

Moreover, the governing body of the nations has increased its focus on the tourism sector, owing to which investment in tourism infrastructure is gradually increasing. This would subsequently enhance the tourist inflows and would continue to generate significant demand for ride-hailing services. As the usage of these ride-hailing surges, the demand for tires would also subsequently increase during the forecast period.

Mexico Tire Market Opportunity:

Plan to Enhance Industrialization in Southern Mexico to Provide New Opportunities for OTR Tire Companies – The Southern Part of the nation has historically been less developed than the northern regions. As a result, the official authorities are now focusing on developing industries in this region. As a part of their industrialization program, in 2023, the Mexican government unveiled the Inter-Oceanic Corridor initiative that includes the development of around 10 new industrial parks. These industrial parks would connect the Pacific port of Salina Cruz in Oaxaca state to the Gulf coast hub of Coatzacoalcos in Veracruz state. Additionally, the administrative authorities are also offering incentives like tax waivers on rent and value-added taxes (VAT) to attract businesses to the corridor.

This industrialization would increase economic growth and provide more employment opportunities, attracting new inhabitants to the region, therefore increasing the demand for personal vehicles for commuting. Along with this, the manufacturing facilities operating in this region would also require commercial vehicles for the transportation of goods and materials. Thus, this significant increase in the usage of vehicles would drive demand for replacement tires across the regional landscape.

Mexico Tire Market Challenge:

Growing Penetration of Tire Retreading Plants – In 2019-2023, several new tire retreading plants were established in Mexico to cater to the growing demand for cost-effective OTR and Heavy commercial vehicle tires. These retreading plants refurbish the used tires by replacing their old tread with new ones. Therefore, the average cost of these tires is relatively lower than the new tires. Hence, the end-users, particularly the mining & construction industries, tend to seek these retreated tires as they are more cost-effective and economical. Moreover, this shift in preference is particularly impacting these sectors since companies within the sector are renowned for their strict cost management. Thus, as the adoption of retreaded tires continues to grow, it would pose a significant challenge to the demand for fresh tires in the country, thus slowing down the Mexico Tire Market growth.

Mexico Tire Market Trend:

Expansion of Electric Vehicle Manufacturing – In Mexico, the government has been showcasing its increased inclination towards a green economy, and in line with this, the government is providing tax reductions and other financial benefits for electric vehicle manufacturers. Moreover, there is growing demand for electric vehicles in the North American region, due to supportive regulatory measures and environmental concerns. Owing to this, many EV manufacturers are establishing production facilities in Mexico to serve both local and international markets. For instance:

• In 2024, Chinese electric vehicle manufacturer, BYD Co Ltd announced to set up a new electric vehicle (EV) factory in Mexico.

As EV manufacturers are growing in the country, the demand for tires optimized for specific EV models, that ensure performance and efficiency is growing.  Hence, the growth of electric vehicle (EV) manufacturing plants is setting a new trend in the demand for tires.

Mexico Tire Market (2024-30): Segmentation Analysis

The Mexico Tire Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2024–2030 at the national levels. In accordance to the analysis, the market has been further classified as:

Based Vehicle Type:

• Passenger Car

• Light Commercial vehicle
• Medium & Heavy Commercial Vehicle
• Two-Wheeler
• Three-Wheeler
• Off the Road (OTR)

During the historical years, Mexico underwent substantial economic growth due to rapid industrialization. The country witnessed a surge in the arrival of various foreign companies, leading to the expansion of the industrial sector. These industries raised the requirement for Medium & Heavy commercial vehicles to carry their essential commodities and run their daily task smoothly. This rise in vehicle usage, in turn, has led to a heightened demand for tires from this segment.

Moreover, the official governing bodies in Mexico are focusing on infrastructure development which is increasing the construction activity and demand for medium & heavy commercial vehicles. Based on the statistics by the Mexican Association of Automotive Distributors (AMDA), during H1 2023, about 28,838 heavy vehicles were sold, pointing to an improvement of approximately 33% compared to H1 2022. This, in turn, would have a positive effect on tire production and sales throughout the Mexico region.

Based on Demand:

• OEM
• Replacement

In Mexico, the Replacement tires have high demand due to the regular need for tire changes due to wear and tear from prolonged usage. This is common across various types of vehicles, including passenger cars and commercial vehicles. However, the nation offers favorable conditions for automakers to open their facilities. As stated by the International Trade Administration, as of 2023, Mexico is the world’s fifth-largest manufacturer of heavy-duty vehicles for cargo, presenting 14 manufacturers and assemblers of buses, trucks, and tractor trucks. In the case of heavy and medium commercial vehicles, Mexico is home to manufacturers such as Freightliner, International Truck, Kenworth, Mercedes-Benz Autobuses, Isuzu, Foton, Volvo Buses, etc. Similarly, passenger car manufacturers such as Audi, BMW, Ford Motor Company, General Motors, Honda, etc., have their manufacturing plant and assembly units in Mexico, which is creating substantial demand for tires from OEMs also.

Mexico Tire Market Recent Development:

• 2024: Yokohama Tire Corporation has showed its intend to build a new consumer/light truck tire plant at the Alianza Industrial Park in Saltillo, Coahuila, Mexico after approval by the YRC board.
• 2024: ZC Rubber has declared the opening of a 60,000 square foot prospective production plant in Saltillo, Mexico.

Gain a Competitive Edge with Our Mexico Tire Market Report

• Mexico Tire Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
• This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
• Mexico Tire Market Mexico Tire Market      Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.