Rubber Journal Asia Tyre Industry
The tyre sector gets its big break China versus India n a related market analysis, Macquarie Equities Research says that China’s tyre market is expected to maintain a Compound Annual Growth Rate (CAGR) of 10% through 2020. The agency also notes that stronger demand is expected from 20132015 due to the growth of the replacement market for cars that were sold in 2009, when sales jumped 53% year-on-year. Meanwhile, Macquarie says that Chinese vehicle sales have risen 15% year-on-year in January and February 2013, after showing weak trends in the third quarter of 2012. The spur in sales is due to the expiry of the US trade levy on China-made car and light-truck tyres in September 2012. The Obama governmentinstigated three-year safeguards were put in place to subdue the prevailing practice then of Chinese tyre manufacturers, who were receiving subsidies ranging from 10.90% to 30.69%, thus, flooding the market. The EU tyre labelling policy that took effect in November last year has also had a positive effect on Chinese manufacturers who have upgraded their brands to maintain their EU export market base. Moreover, Macquarie says Chinese tyres are almost 30-50% cheaper than the global counterpart brands. But over and above this, the Chinese tyre sector is equipping itself with more advanced technology and expanded capacities to emerge as the world’s biggest tyre production centre giving India the stiffest competition in the field. India’ s tyre market is anticipated to leap to an average 14% a year to 2017 with automotive sales that are bound to increase. This will be partly driven by the low automotive penetration and the rise in disposable incomes, according to Bharat Book Bureau’ s latest report on the Indian tyre market for 2017. Several key tyre players are also dominating the Indian market, including OEM tyre makers Apollo Tyres and JK Tyre & Industries. However, the current slow pace of tyre sales in the Indian market for medium and heavy commercial vehicles, tractors, passenger cars and motorcycles in the April-February period of fiscal 2013, as well as the penetration of both Chinese and South Korean tyres, are situations that are restraining the Indian market inching closer to China.
After a two-year hiatus, encumbered by the
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EU debt crisis, weak US recovery and its budget issues and the economic slowdown in China, the Asian tyre sector has finally gathered enough momentum to soar ahead. It is now entering a period of sustained growth and demand, which is expected to last for a decade, says Angelica Buan in this report.
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he global market is transiting to a period of opportunity for tyre makers and the replacement and service sectors through to 2022, said Dr Stephen Evans, Secretary-General of the International Rubber Study Group (IRSG) during the Tyrexpo Asia event in Singapore. Held 19-21 March, the exhibition was attended by around 4,355 visitors from 97 countries and had more than 250 exhibitors, including Federal Corp, Kenda Rubber, PT Gajah Tunggal and PT Mega Tyres as well as retreaders like Dr Stephen Evans, Secretary-General of IRSG, has forecast a “decade of Italmatic, Newera, opportunity” for tyre makers and service Kraiburg and providers Elgitread. The market is seeing an increased vehicle production resulting in OE passenger car tyre sales growing from 333 million units in 2012 to a forecast 524 million units by 2022. Replacement tyre sales will also increase from 786 million units in 2012 to 1.3 billion units by 2022. Evans estimates that there are currently 1.1 billion vehicles in use across the globe and by the end of the coming decade, more than a half billion vehicles will be added on to total 1.7 billion. He also said that demand will be led by China, which is targeting to produce 250 million vehicles over the same period; and to a lesser extent by India.
Chinese/Indian tyre makers expand in Asia t the Tyrexpo, Chinese car makers that paraded their brands included Qingdao Au-Shine
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Rubber Journal Asia Tyre Industry New designs to drive the market yre manufacturers are value adding their brands with sustainable innovations and new designs that comply with environmental standards and reduce costs. Several firms that showcased new designs at the tyre show included Singapore-based Omni United. It exhibited its flagship Radar brand’s new patterns, including the Renegade A/T, a rugged, M&S-rated, all-terrain tyre for light truck and SUV applications, available in five different sizes. Dubai-based Al Dobowi Group showcased its latest Eternity brand for truck and bus radials, truck bias, light truck, passenger car and OTR tyre range. Zafco, also from Dubai, displayed its international brand Zeetex for its range of tyres, batteries and lubricants. Meanwhile ATG (Alliance Tire Group), which is reportedly to be acquired by American private equity company Kohlberg Kravis Roberts (KKR), launched four new patterns to its materials handling range of tyres, including the Galaxy Giraffe XLW for Telehandler, Boomlift and Yard Crane applications. Indian firm BKT introduced two tyres to its materials handling range: the 445/95 R25 Airomax AM27 pattern for high-speed crane fitments and the Maglift STF solid range for fork lift trucks, together with the recently introduced Container King 18.00-25 tyre popular in Asian ports. Singaporean supplier Mindtrac launched a cross-ply truck range at the show, with its new Ultra X range of Indian-manufactured cross-ply tyres, for truck and light truck applications. Sri Lankan industrial tyre maker LAUGFS introduced two new solid fork lift tyres, the premium Ultima and economy Optima patterns in 18 x7- 8. The Ultima is targeted at OE customers in South Asia. Meanwhile, green tyres, characterised by low rolling resistance, renewable material components, and energy efficient, are also dominating the market, according to UK-based industry consulting group Smithers Rapra. In its new market report, it has forecast the global market for green tyres to reach US$70.6 billion by 2017. The report estimates that more than 1.5 billion tyres valued at a total of US$160 billion are being produced yearly. By 2017, the value would climb nearly to US$203 billion. Green tyres will account for 35% of the total tyre growth over the report’s forecast period of 2012 to 2017.
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China’s fifth largest tyre manufacturer in terms of sales and top tyre maker in 2010 in terms of growth, Aeolus Tyre, launched a complete range of PCR tyre products aimed at passenger car owners
that was showcasing its Haulking, Agromaster and Rainmaster brands. The company has already achieved US$10 million in export sales and an output of 3.2 million bias tyres, including OTR, agricultural, industrial, truck and light truck tyres. Aeolus, China’s fifth largest tyre manufacturer by sales, announced its entry into the Southeast Asia passenger car market with the launch of a complete range of PCR tyre products. Contending as a secondtier car tyre supplier, the firm is constructing a 6 million/year capacity car tyre manufacturing plant in Jiaozuo, Henan Province. It is expected to come on stream by 2015. Aeolus has long aimed for the top ten global tyre manufacturers slot and to reach a stature above South Korea’s Hankook, in terms of price and quality. Another Chinese tyre supplier, Crowntyre, has expanded its presence to the ASEAN region via its subsidiary in Singapore, Gremax Industrial. The company, which owns three independent brands, Gremax, Suntek and Tracmax, has also set up other subsidiaries in the US, Europe and Middle East to support sales volumes that have increased by an average of over 30% a year in the past six years. Last year, it sold more than 6 million units of passenger and light truck tyres. Meanwhile, Indian tyre producers at the Tyrexpo included OTR manufacturer BKT, which currently claims around 5% of the global OTR market. BKT also harbours a long-term ambition to double its market share to 10% by 2020. The company is setting up a fourth manufacturing plant to add a capacity of 385 tonnes/day to an overall output of 825 tonnes by the end of 2014. Another Indian tyre manufacturer, GRL, traditionally best known for bicycle and two-wheeler products, showcased its recent strategic investment in Off Highway Tyres, covering agricultural, industrial and construction applications. The move is part of a major development programme that will culminate in the commissioning of a new US$275 million production plant in Gujarat in 2015. The additional capacity is set to increase production from a current level of 55 tonnes/day to 358 tonnes/day. 5 M AY 2 0 1 3
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