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Vietnam’s tyre market forecast to hit US$2.7 billion by 2020 PDF Print
Sunday, 22 November 2015 13:42

VIETRADE - The tyre market in Viet Nam would likely to reach US$2.7 billion by 2020, TechSci Research, a research based global management consulting firm, said in its recent report.


PR Newswire quoted the report as saying that prominent factors that contributed to the market’s fast growth included rising automobile sales, surging automobile fleets, favorable government policies and increasing foreign investment in the country's automotive sector.


Domestic rubber industry also played its part in boosting the tyre market by providing several opportunities for manufactures to open more factories and increase their production capacities, according to the report.


As of 2014, around 14 tyre plants operated in the country, providing more than 65 million units per year.


The growing demand for vehicles in Vietnam also encouraged more global and domestic companies to establish plants in the Southeast Asian country as move to strengthen their presence here, the report noted.


The Government, on its part, had inked World Trade Organization and ASEAN Free Trade Area agreements with neighboring countries to encourage foreign investment.


All these factors had been fuelling OEM (original equipment manufacturer) growth and replacement demand for automotive tyres in Vietnam, the report revealed.


According to the report, in domestic tyre market, the two-wheeler tyre segment accounted for the largest portion, followed by passenger car and commercial vehicle and off-the-road (OTR) tyre segments.


However, the passenger car tyre segment was expected to exhibit the fastest growth rate over the next five years, followed by the commercial vehicle and OTR tyre segment, it added.


Karan Chechi, a research director at TechSci said Vietnam’s tyre market was dominated by the replacement tyre market which accounted for over 80% of total tyre demand in the country.


The share of replacement tyre market was expected to increase further during the forecast period due to growing automobile sales, which was translating into higher fleet size, thereby boosting the tyre demand in the replacement market, he said.


The report entitle "Vietnam Tyre Market Forecast and Opportunities, 2020" has evaluated the future growth potential of Vietnam tyre market and provided statistics and information on market structure trends of Vietnam tyre market.


According to the Vietnam Automobile Manufacturer Association (VAMA), car makers in Vietnam sold a combined 9,785 units in September, up 24% month-on-month and 28% year-on-year.


Of the figure, 4,070 units were cars and 5,715 units were trucks, up 32 per cent and 19 per cent month-on-month, respectively.


In a statement released earlier this month, VAMA said that if the recovery continued, the association would maintain its forecast of 109,000 units for the year compared with the original forecast of 100,000.


Meanwhile, Doanh nhan Sai gon newspaper quoted the Ministry of Industry and Trade as saying that Vietnam's car consumption was likely to grow strongly, especially when free trade agreements the country had entered into took effect.


The ministry forecasts that domestic demand for automobiles would reach about 800,000 to 900,000 vehicles by 2025, and some 1.5 million to 1.8 million units by 2030./.

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