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
I
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.
T
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
A
4 M AY 2 0 1 3
w w w. r u b b e r j o u r n a l a s i a . c o m