Southeast Asia Two-Wheeler Tire Market Research Report: Forecast (2023-2028)

Market Definition

The Southeast Asia Two-Wheeler Tire Market consists of two major categories, including scooters & mopeds and motorcycle tires, and focuses on the different types of tires like radial & bias. With the emergence of two-wheelers as a daily commuting medium in Southeast Asia, the demand for tires for both OEM & aftermarket segments has rapidly increased.

Market Insights & Projections: Southeast Asia Two-Wheeler Tire Market (2023-28)

The Southeast Asia Two-Wheeler Tire Market is valued at USD3.11 billion in 2022 and is estimated to grow at a CAGR of around 5% during the forecast period, i.e., 2023-28. The surging penetration of two-wheelers is primarily driving the market for two-wheeler tires. Rapid urbanization & population growth in Southeast Asian countries have accelerated the demand for efficient mobility solutions in the region. As two-wheelers provide a convenient mode of transportation for navigating through crowded streets & reaching destinations quickly, their use & demand have increased substantially.

Although, in 2020, the sales of two-wheeler (2W) tires from OEMs plummeted across the region due to a decline in the purchase of new vehicles. For instance, according to the International Council on Clean Transportation (ICCT), in 2020, Indonesia witnessed a decline in two-wheeler sales by about 43.7%, whereas the Philippines' sales declined by around 29.9%, respectively, compared to 2019. However, the inaccessibility to mobility services in the country during 2020 due to a halt in public transportation widely supported the demand for two-wheelers to fulfill the mobility needs of the individual.

Additionally, with the rising tourism activities in Southeast Asia, specifically Thailand, the Philippines, & Malaysia, the demand for efficient mobility services is growing continuously among both residents & tourists. Thus, to cater to this, mobility & logistics providers such as Gojek & GetGo, among others, are expanding in the region by adding fuel-efficient electric two-wheelers to their fleets. Therefore, the increasing expansion of e-mobility providers & production activities is citing enormous revenue growth opportunities for the Two-Wheeler Tire Market in Southeast Asia during 2023-28. 

Southeast Asia Two-Wheeler Tire Market Driver:

Growth of E-commerce & the Transition toward E-mobility: The e-commerce sector in the Southeast Asia region has grown at a considerable rate over the past years due to the rising preference of consumers & improvement in online payment facilities. In addition, the availability of a huge variety of options and lucrative pricing & discounts on purchases has also fuelled online sales. As a result, it has positively expanded the logistics sector by increasing its operational work, including home deliveries.

This growth in online sales led to the widespread adoption of both conventional & electric scooters & motorcycles by online delivery companies like Gojek, Foodpanda, etc., to facilitate early product deliveries. It has been mainly attributed to the compact size of two-wheelers, which eases commuting in crowded cities of the region. As Southeast Asia depends on electric two-wheeler imports, many companies have received funding to establish their manufacturing units in the region. For instance,

• In 2022, DatBike, a Vietnam-based electric vehicle start-up, received USD5.3 million in Series A funding for expanding its domestic electric two-wheeler manufacturing capability.

Hence, with the increasing number of e-commerce companies and the growing domestic two-wheeler manufacturing, the demand for two-wheeler tires is anticipated to rise in the forecast years.

Southeast Asia Two-Wheeler Tire Market Growth Opportunity

Favorable Government Policies for Electric Vehicle Production & Adoption: Vietnam, Indonesia, etc., are among the most polluted countries in the world, and the individuals living in these countries experience poor-quality air. According to the World Bank, in 2022, South Asia was home to around 9 of 10 cities in the world with the worst air pollution, which caused an estimated 2 million premature deaths across the region and substantial economic costs.

Therefore, to improve the quality of the air & lower emissions, the government of the countries such as Indonesia, Thailand, etc., have been encouraging the adoption of electric vehicles rather than conventional fuel-based automobiles. This push has further attracted the two-wheeler manufacturers to establish new manufacturing units in the region which would be crucial for the upsurge in the need for OEM electric two-wheeler tires. For instance,

• In 2023, Verywords Co. Ltd. announced the establishment of its electric motorbike plant in the Kandal Province of Cambodia. According to the company, this would help it to cater to the domestic as well as the export demand in the coming years for electric vehicles.

Hence, the higher adoption of electric two-wheelers and the establishment of a two-wheeler manufacturing ecosystem would offer robust growth opportunities for the Southeast Asia Two-Wheeler Tire Market during 2023-28.

Southeast Asia Two-Wheeler Tire Market Challenge:

Shortage of Semiconductors Limit the Two-Wheeler Production: The automobile industry has been experiencing a shortage of semiconductors. Restrictions caused due to the Covid-19 lockdown disrupted the supply chain and resulted in a lack of semiconductors across Southeast Asia. As economic activities resumed in 2022, the demand for semiconductors surged exponentially, especially from the automobile sector. However, microchip companies could not meet this heightened demand, which resulted in a shortage of semiconductors and, consequently, a massive decline in two-wheeler production across the region. According to the Federation of Thai Industries, motorcycle production in Thailand fell by nearly 1.26% year-on-year to 1.24 million in the first half of 2022. As a result, the demand for two-wheeler tires by OEMs also declined and hindered the overall market expansion.

Southeast Asia Two-Wheeler Tire Market Trend:

Increasing Adoption of Motorcycles for Police Patrolling: Over the years, Southeast Asian countries have been dealing with heavy traffic congestion issues due to poor road infrastructure, rising vehicle ownership, etc. For instance, according to the survey by navigation specialists TomTom in 2022, Jakarta was the 29th most congested city out of 390 surveyed cities. Similarly, Bangkok was placed 15th & Kuala Lumpur 22nd in the survey of most congested cities in 2022. Owing to these traffic congestion problems, police authorities previously faced issues & delays in reaching the emergency locations within time. Thus, to quickly respond to emergencies & outreach the desired location, the police authorities are now seeking motorcycles rather than divisional vans & patrol vans. As a result, there is an increasing demand for the motorcycles such as Harley Davidson LiveWire, Ducati, etc., designed specifically for police patrolling, consequently generating the requirement for two-wheeler tires.

Southeast Asia Two-Wheeler Tire Market (2023-28): Segmentation Analysis

The Southeast Asia Two-Wheeler Tire Market study of MarkNtel Advisors evaluates & highlights the major trends & influencing factors in each segment & includes predictions for the period 2023–2028. Based on the analysis, the market has been further classified as:

Based on By Vehicle Type:

• Scooters & Mopeds
  • Up to 100cc
  • 101cc to 125cc
  • 126cc to 150cc
  • Above 150cc
• Motorcycles
  • Up to 100cc
  • 101cc to 125cc
  • 125cc to 150cc
  • Above 150cc

Of both, scooters & mopeds held a substantial share in the Southeast Asia Two-Wheeler Tire Market, with Indonesia, Thailand, Vietnam, and the Philippines among the key countries driving higher sales of two-wheelers across the region. Scooters are widely preferred in Southeast Asia due to their ease of use, affordability, and maneuverability in congested urban areas. As a result, their demand remains high in cities & densely populated areas and, in turn, drives the sales of tires in the region.

Southeast Asia's best-selling scooter models include BEAT 110, SH100, SH125, Aerox 155, Click 125, and Vision 110. The high sales of respective models exhibit a higher inclination of customers towards low-to-mid range two-wheelers due to their affordability, mileage, & low operational costs. With the emergence of e-commerce, bike taxis, & food delivery services in Southeast Asia, the demand for two-wheeler tires would further grow in both OEM & aftermarket segments during 2023-2028.

Based on Tire Type:

• Radial
• Bias

Here, bias tires held a more prominent market in the previous few years, owing mainly to their higher load-bearing capacity & affordability than radial tires. The sustained demand for bias tire replacements due to the substantial historical sales of two-wheeler models like BEAT 110, SH100, & Honda Vision 110 contributes to market growth. However, several prominent two-wheeler manufacturers like Honda, Yamaha, Bajaj, and TVS have transitioned to using radial tires in their newly manufactured vehicles, owing to their advantages in terms of maneuverability & fuel efficiency.

As bias tires are relatively inexpensive, most two-wheeler manufacturers opt for them to keep the overall product prices low. Moreover, these tires provide a smoother ride experience due to the multiple layers of overlapping fabric cords, i.e., particularly important in areas with uneven road surfaces, which is prevalent in most Southeast Asian countries. Furthermore, their superior durability & resistance to punctures & impacts is another crucial aspect that contributes to their significant demand in Southeast Asian countries, as they mostly have rough road conditions or underdeveloped road infrastructure.

Southeast Asia Two-Wheeler Tire Market Regional Projection:

Geographically, the Southeast Asia Two-Wheeler Tire Market expands across:

• Malaysia
• Indonesia
• Singapore
• Cambodia
• Vietnam
• Thailand
• Philippines
• Rest of the Southeast Asia

Of all countries in Southeast Asia, the Indonesia Two-Wheeler Tire Market is witnessing notable growth, owing to the growing adoption of motorcycles & scooters by ride-hailing companies like Gojek, Grab, etc., to expand their fleet size and cater to the transportation requirements of individuals residing in the country. These companies offer consumers easy & affordable pick-drop facilities. As a result, the rapidly rising working population, i.e., increasingly opting for ride-hailing services for their daily commute, is surging the demand for two-wheelers and, consequently, tires. These enterprises are also expanding their fleet size to upscale their operations, i.e., another prominent aspect positively impacting the demand for two-wheeler tires in the country.

In addition, the surging use of fuel-based vehicles in the country is leading to alarming carbon emissions & poor air quality. According to International Energy Agency (IEA), in 2021, the carbon emissions from the transport sector in Indonesia were equivalent to approximately 135 metric tons. As a result, the government of Indonesia announced to have over 2 million motorcycles by 2030. Thus, in light of their vision, the government is gradually inclining towards sustainable means of transportation and encouraging the adoption of electric motorcycles & scooters, thereby creating prospects for the two-wheeler tire industry in the coming years.

Southeast Asia Two-wheeler Tire Industry Recent Development:

• In 2023, Gogoro and Cycle & Carriage Singapore (C&C) partnered with food delivery service Food Panda for a battery-swapping scooter pilot and test the use of e-scooters for commercial purposes in the country.
• In 2022, the government of Thailand announced plans to increase the domestic production of electric two-wheelers to around 3,60,000 by 2025 & nearly 6,75,000 by 2030.

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