Loaded with opportunities, challenges
By PTA News Bureau
Global tyre industry is in for an exciting future loaded with opportunities for growth. There are also new challenges set to test the industry’s sustaining power. New technologies, innovative product developments, new markets opening up – all these will take the industry along paths hither to untreaded.
Based on the signs of economic recovery in the coming years, the global tyre industry is on a growth path by at least 3 per cent, with unit growth estimated at 4.3 per cent by 2017, says Surender Singh Kandhari, Chairman, Al Dobowi Group.
Developing countries will continue to fuel economic growth, he stressed in his speech on “Global Tyre Industry: Outlook, Opportunities and Challenges,” at the Automechanika in Dubai on June 3-5, 2014. Given size of the US economy, even moderate growth there will contribute significantly to the world economy. Europe better placed than a year back, but prospects remain unclear, he points out.
The World Bank forecast in January 2014 of 3.2 per cent growth in global economy was the first positive projection in three years. Indications of a self-sustaining recovery have begun to show among high-income countries like the US, Japan and the Euro Zone. However, concerns still exist over Europe, which is believed to be where the US was two years ago. The Bank has suggested that the US, Japan and Europe may now join developing countries as a second engine of growth in the global economy.
Kandhari foresees the US overtaking Saudi Arabia as the largest pumper of oil by 2020. There is a perceptible decline in the need for energy import in the US, where economic recovery is gaining momentum, he points out.
In the Euro Zone too confidence is climbing. Government deficits have dropped by half and austerity measures have been put in place. Productivity is improving and labour costs are falling. There is relatively low household debt. However, there is a lack of domestic sources of strength and bank lending is still on a downward trend.
In the case of Japan a natural surge is not on the cards, Kandhari feels. There is shrinking population and the country remains overregulated. Japan’s economy is largely dependent on exports and a weaker yen is assisting exports. Recovery depends a lot on corporate sector starting to spend.
China’s growth has been sustainable. New policies point to a more sustainable growth path with the GDP expected to grown by 7.3 per cent in 2014 and 7.2 per cent in 2015. The PMI suggests that a modest recovery is underway. The focus is on driving consumption – from 37 per cent in 2013 it could rise up to 42 per cent of GDP in 2020. The economy is shifting from being Fixed Investment-driven to being Consumption and Services-driven.
Full Article in PTA June/July issue