Advantage China, Middle East
BY PTA News Bureau
The Middle East tyre market is currently growing at a good pace compared to the tyre markets in India and China. In India, where the boom in automobile sector drove its tyre industry to exciting highs, things are moving on the slow track, according to an industry analyst. However, the big picture of the Asian market shows encouraging signs.
“With the decline being witnessed in the automobile production as well as sales currently, the Indian tyre industry has been suffering a lot. However, if we will talk about the Chinese automotive market, they have registered decent growth in production as well as sales of automobiles. In a nut shell, the tyre market in China and Middle East currently appears to be better positioned than the Indian tyre market,” Karan Chechi, Research Director of TechSci Research, told Polymers & Tyre Asia in an interview.
The future of Indian tyre market will continue to be largely dictated by the growth of the automobile industry. “Subsequent to the sluggish performance in 2013, we are expecting a comparatively better year for the automobile sector in India. However, the demand for both passenger and commercial vehicles in India is anticipated to be lackluster on account of high interest rates coupled with weak consumer sentiment.
The Middle East market has a different pattern in tyre sales compared to the East and the West, he says. “The Middle East tyre market generally behaves differently compared to the Eastern as well as the Western countries. The consumers in Middle East have a very different buying pattern. Moreover, due to the region’s hot and humid climate, people generally opt for tyre replacements in every 1.5-2 years, which is significantly lower than the average tyre replacement cycle of three years prevalent across the globe. This also boosts the tyres sales in the region.
“The tyre industry in the Middle East is also known for re-exporting tyres to GCC, West Asia, Africa and East Europe. As a result, the global tyre manufacturers have established their respective offices in the Middle East to cater to domestic as well as international markets,” Chechi said.
The Middle East market is more about consumption and re-exports than production. This provides more stability to the tyre market in the region, he added.” Moreover, the Middle East countries have exhibited significant resilience from the global economic slowdown, and as a result the market has also registered lesser fluctuations in tyre sales in comparison to the other regions, globally.”
The TechSci researcher says that China will have to work hard to become a preferred tyre source in Western markets mainly because of the different trends in customer preference. Chechi said: “In the Asian tyre market, low-cost tyres are preferred but when we will talk about the European market, people are more concerned about the quality and safety. So, it will be quite a task for the Chinese tyre companies to take a leading position in the European tyre market anytime soon.
South Korea is another big player in the global tyre industry. This has been driven by the country’s status as a thriving export base for automobiles and also by the quality excellence of its products, Chechi says. “South Korea is the world’s fifth largest automobile manufacturer after China, US, Japan and Germany. It has gained the position of being one of the biggest global automobile exporters because of its quality products as well as the free trade agreements with the US, EU, and others.