Malaysian tyre market to grow 9% (CAGR) in next five years

The Malaysian tyre market is forecast to grow 9.15 per cent (compound annual growth rate – CAGR) in terms of value in the period between 2014 and 2019. That’s the view of the recently released TechSci Research report, “Malaysia Tyre Market Forecast & Opportunities, 2019”. According to the report, some of the key factors driving the market include increase in volume sales of automobiles, expansion in vehicle fleet size, introduction of favorable government policies and rise in foreign investments within the automotive industry in Malaysia.

The passenger car tyre segment dominates the tyre market in Malaysia in terms of volume share, followed by the two-wheeler tyre and commercial vehicle tyre segments. The OTR tyre segment holds miniscule market share of less than 5 per cent in the country’s tyre market, but of course these are the highest value items in the tyre sector. According to TechSci, the passenger car tyre segment is anticipated to continue dominating Malaysia tyre market in the future, though its market share is likely to decline marginally over the next five years due to growth in the commercial vehicle tyre segment.

Western Malaysia, comprising Kelantan, Pahang, Selangor, Perak and Negeri Sembilan provinces, accounted for around 90 per cent share, in volume terms, in the country’s tyre market in 2013. Eastern Malaysia, comprising Sarawah and Sabah provinces, accounted for the remaining market share of about 10 per cent in the same year.

Continental, Bridgestone, Goodyear and Michelin are some of the leading players in Malaysia. However, other companies such as Pirelli, Yokohama, Hankook and Sumitomo are expected to give stiff competition to these established players during the forecast period. Malaysia being the third largest rubber manufacturing country worldwide, provides immense growth opportunities to tyre manufacturers, which are planning to establish tyre production facilities in the country.

“With easy availability of rubber and other resources, the market for retread tyre in Malaysia is also expected to register consistent growth in the next five years. Tyre retreading business in Malaysia is dominated by the commercial vehicle tyre segment, with retread tyres being used commonly in trucks and buses. While retreaded tyres are also used in passenger cars and OTR vehicles, tyre retreading involves greater cost benefits in commercial vehicles, thus explaining the dominance of commercial vehicle tyre segment in the country’s retread tyre market,” said Mr. Karan Chechi, research director with TechSci Research, a research based global management consulting firm.

The findings are broadly comparable with data published by GfK a year ago, which suggested that central Malaysia tyre retails sold 1.2 million car tyres in the first quarter of 2013. In the fourth quarter of 2010, GfK data suggested that Malaysian passenger car tyre retail sales equated to US$78 million.