AKRON—Tire demand throughout Asia is set to grow 3.8 percent annually through 2025 as the region recovers from the plunge in business precipitated in 2020 from the COVID-19 pandemic, according to a new market study.
The value of tire sales in Asia is projected to grow to $117.6 billion by 2025, with China representing nearly half of the market, according to the study, "The Future of Tires in Asia to 2025," being published by Smithers Group.
By units, Smithers said it expects Asian market consumption will total 1.53 billion tires in 2025, up from 1.29 billion in 2020; the market research firm did not provide a breakdown of tire consumption by category.
The Smithers report is vague on how much it expects the Asian market to contract this year versus 2019, stating volumes sold in the region will drop by a range of as little as 1 percent and as much as 6.5 percent. Tire, vehicle and raw materials suppliers reduced production volumes throughout much of the first half because of lower market demand or were idled temporarily following government orders.
The report's authors noted, though, that Smithers continues to monitor COVID-19's economic effect and expects to publish an update on this before year-end.
Smithers did say it expects a degree of normal operation and a return to the consistent growth seen throughout the 2010-19 decade by 2021. Low raw-materials pricing will help the initial recovery, Smithers said, with materials consumption forecast to grow by volume 3 percent a year on average for 2020–25.
The impact of COVID-19 will not be uniform across all countries or tire types, Smithers said, noting the new report offers specific forecasts for passenger/light goods vehicles; bus and truck; motorcycle, OTR and aircraft tires.
The new study includes a "comprehensive assessment" of the key tire segments by end use in nine Asian-Pacific economies and attempts to provide those in the tire industry with a road map for growth plans in the region, according to Ciaran Little, Smithers vice president, Americas and Asia Pacific, Information Division.
The outlook for three national markets—China, India and Japan—is especially important, Smithers said, as they represent 70 percent of regional demand.
While China and India will continue to grow through to 2025, Japan—along with the other mature regional economy of South Korea—will see a marginal decline in demand.
The fastest growth in the region will come from emerging markets in Southeast Asia, with Indonesia, the Philippines and Vietnam forecast to have the highest growth rates to 2025, based on their projected strong overall economic growth, rapid urbanization and a rise in middle-class consumers.
China is the pivotal market for future success, Smithers said, and one that is evolving rapidly, even as COVID-19 reshapes the driving landscape.
Driven by pressure from the Chinese government to reduce CO2 emissions and the establishment of the China Rubber Industry Association (CRIA) tire labeling system, tire development in China is now heavily focused on tires with reduced rolling resistance.
China also is to be a key breakthrough market for electric vehicles. It already is the world's largest national market for electric vehicles, due to strategic government investments.
Rapid urbanization is making tires for electric two-wheelers an immediate priority across the region. Asia also has strong potential for autonomous driving concepts, which are being investigated in many markets, although widespread deployment of these concepts is not expected to happen until the second half of the 2020s.
The report quantifies the various markets by value and volume, with over 100 tables and figures.
The report is priced at $6,500, a fee that includes access to the latest Smithers pandemic scenario modeling for this sector.