Vietnam Tire Market on Growth Track: Forecast to Grow at the CAGR of 8% in the Forecast Period
Published | 30 November 2021
Due to the expanding automobile manufacturing industry in Vietnam, the Vietnamese tire market has grown at a high CAGR. Additionally, the growing disposable income and purchasing power of the population drive the domestic sales of automobiles, particularly passenger cars, thereby fueling the market's growth…
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting, revealed that the Vietnam tire market was worth USD 2.8 billion in 2020. According to the study, the market is estimated to grow at a CAGR of 8.0%, earning revenue of around USD 4.8 billion by the end of 2027. The expanding automobile manufacturing industry drives Vietnam’s tire market. With increasing disposable income and consumer purchasing power, domestic sales of automobiles, especially passenger cars, are increasing. Therefore, leading automobile brands such as Suzuki, Honda, Ford, Mitsubishi, Toyota Motor, etc., are expanding their manufacturing capacities in order to meet the growing demand for automobiles in Vietnam. This will likely increase tire demand in Vietnam. However, high import taxes on tires and stiff competition from global tire manufacturers for local tire brands may be a huge restraint for the growth of the Vietnam tire market.
Growing Popularity of Cab Services Driving the Vietnam Tire Market
Cab services are significantly gaining traction in Vietnam due to the increasing penetration of smartphones and popularity of ride-hailing services among the younger demographic. Cab companies like Uber, Mai Linh, Vinasun, Grab, etc., are offering cars and motorbikes for passengers as well as delivery services. Additionally, they are launching their standalone applications to offer one-click booking and online payments to add to the convenience of the customers. With increasing cab vehicles on roads, the frequency of tire wear and tear will rise, further boosting the demand for tires for replacement purposes.
Increasing Disposable Income and Growing Demand for Vehicles Projected to Boost the Market Growth
Due to the increasing disposable income of consumers and the lower cost of vehicles due to domestic production, Vietnam is experiencing a significant increase in the demand for automobiles. This is anticipated to fuel the demand for tires in the forecast period. With increasing purchasing power, more and more people are buying passenger cars for their daily purposes. Commercial automobiles, such as trucks, buses, cargo vans, etc., are also gaining significant traction due to economic growth, which is projected to drive the market demand for tires in Vietnam.
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Vietnam Tire Market - By End-User
Based on end-users, the Vietnam tire market is segmented into OEM and replacements. The original equipment manufacturer (OEM) segment accounts for the largest market share because of the expanding automobile manufacturing operations in Vietnam. The manufacturers are significantly investing towards expanding their production capacities which are anticipated to boost demand for tires in the region. Furthermore, Vietnam is also one of the manufacturing grounds for some of the leading automobile players such as Kia, Toyota, Honda, Ford, etc., which drives the growth of the OEM segment.
Impact of COVID-19 on Vietnam Tire Market
The COVID-19 outbreak negatively impacted the growth of the Vietnam tire market. The lockdown restrictions imposed by the government in light of increasing COVID-19 cases and shortage of workforce due to social distancing norms obstructed the automobile and tire manufacturing operations. In addition, as a result of the office closures and other closures, the demand for tires for replacement purposes also decreased, resulting in huge losses for tire manufacturers. However, the market is anticipated to recover from this setback in the post-COVID-19 period as the manufacturing activities resume in the country.
The leading players in the Vietnam tire market are Danang Rubber, Bridgestone Tire Mfg., Camso Vietnam Co., Ltd., The Southern Rubber Industries Joint., Kenda Rubber Co., Ltd., Topocean Consolidation Service Co., De Well Group LLC Vietnam., Mentfield Qv Logistics, Yokohama Tyre Vietnam Inc., Công Ty TNHH Cao Su Thời Ích, and other prominent players.
The market is untapped and therefore, holds great potential for new entrants. Moreover, some established players cover substantial shares in the market. The companies are focusing on launching innovative and wide range of products for various vehicle types. They are also embedding advanced technologies, such as IoT, to gain a competitive edge. 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 Vietnam tire market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the Vietnam 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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