Malaysia Tire Market Building Up Steam: Forecast to Grow at a CAGR of 7.2% by 2027
Published | 01 January 2022
Malaysia tire market is growing at a high CAGR because of the expanding automobile manufacturing in the country. Additionally, rising per capita spending in the country has also led to an upgrade of vehicles, especially passenger cars, which favors the market’s growth. Furthermore, the country is also witnessing an increase in the demand for technologically advanced replacement tires, which in turn is driving the market…
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the Malaysia tire market was worth USD 1,274.2 million in 2020. According to the study, the market is estimated to grow at a CAGR of 7.2%, earning revenue of around USD 2,050.4 million by the end of 2027. Malaysia tire market is growing at a robust pace because of the increasing demand for passenger cars. The aftermarket for tires has also grown rapidly in recent years as automobiles have become more and more sophisticated and require regular maintenance for maximum tire safety. Additionally, Malaysia is also gaining attention as an automobile production country as leading brands, such as Bufori, EV Innovations, Perodua, Proton, etc., have production units in the country. With increasing domestic and international demand for cars, these companies are investing in expanding their production capacities, which is anticipated to drive the Malaysia tire market during the forecast period.
Increasing Automobile Production is Driving Malaysia Tire Market
Around 27 automotive OEMs operate in Malaysia, including Nissan, Toyota, Hyundai, BMW, Bufori, Volvo Car Manufacturing Malaysia, etc. Malaysia's automotive industry is the third largest in Southeast Asia and ranked 23rd in the world, producing over 500,000 vehicles annually. Due to the increasing demand for automobiles in the Malaysian market, these OEMs are significantly expanding their production capabilities. As a result, Malaysia is expected to experience an increase in demand for tires during the forecast period.
Growing Number for Private Vehicle Ownership Favoring the Malaysia Tire Market Growth
Malaysia's rapid economic growth and increasing per capita income are driving the demand for automobiles in the country. As of December 31, 2019, there were 31.2 million units of motor vehicles registered in Malaysia, according to the Road Transport Department (JPJ) of the Ministry of Transport. This includes cars, trucks, and motorcycles. Additionally, passenger cars dominate the market in Malaysia since they are the preferred mode of transportation among consumers. With automobile brands launching new models at affordable prices to reach the middle-income group of society, consumers have a variety of options to choose from. Furthermore, as the number of passenger cars on the road increases, periodic maintenance and tire replacements will become more necessary, driving up the demand for tires in the country.
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Malaysia Tire Market - By Distribution Channel
Based on distribution channels, the Malaysia tire market is segmented into online distributors and offline distributors. The offline distributors segment accounts for the largest market share because of the established partnerships among tire brands and distributors and suppliers for the sales of original tires. Furthermore, the presence of specialty stores that offer a wide range of tires from trusted brands is also contributing to the growth of this segment. However, the online distributor segment accounts for the largest market share as numerous tire brands are launching websites to improve their market presence and boost their sales. The online segment has gained significant traction, especially after the COVID-19 pandemic and is likely to gain the upper hand in the post-pandemic era.
Impact of COVID-19 on Malaysia Tire Market
The unprecedented COVID-19 outbreak tremendously halted the growth of the Malaysia tire market. As soon as the country imposed Movement Control Order in March 2020, lockdown, and travel restrictions have obstructed the production and distribution operations, incurring huge losses to the country’s tire market. Furthermore, work-from-home and online schooling significantly restricted the mobility and the need for transportation, due to which the demand for tires registered a sharp decline. Now in the post-COVID-19 period, the tire brands are partially restarting their operations and shifting their businesses through online channels, which is anticipated to present immense growth opportunities to the Malaysia tire market during the forecast period.
Malaysia Tire Market - Competitive Landscape
The leading players in the Malaysia tire market are Goodyear Tire & Rubber Co., Michelin Malaysia Sdn. Bhd, Continental Tyre Malaysia Sdn Bhd, Bridgestone Tyre Sales Sdn. Bhd, Hankook Tire Malaysia Sdn. Bhd., Toyo Tyre Malaysia Sdn. Bhd., Maxxis Tires Malaysia., Pirelli Tyre S.p.A, Yokohama Rubber Company, BKT Tires, and other prominent players.
The market is highly dominated by multinational tire corporations which have a presence in the country. As part of their efforts to meet domestic needs and boost their exports, the companies invest heavily in expanding their tire production in the country. As part of their product offerings, they also launch products for a variety of vehicles to penetrate the market and broaden their end-user base. Furthermore, the adoption of competitive strategies, such as partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the Malaysia tire market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the Malaysia tire market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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