Report Overview

Malaysia's tire market is driven by its expanding automobile production and increasing investment in public transportation. Additionally, the nation's tire market is driven by the increased purchasing power of people and the resulting growth in private vehicle ownership.

Malaysia Tire Market- Industry Trends & Forecast Report 2027

Malaysia tire market was worth USD 1,274.2 million in 2020 and is further projected to reach USD 2,050.4 million by the year 2027, growing at the CAGR of 7.2% in the forecast period.  Malaysia's tire market is flourishing as a result of increasing automobile production and investments in public transportation. Also contributing to the market's growth is the increasing import of low-cost Chinese tires, as well as an increase in private vehicle ownership.

Source: BlueWeave Consulting

Malaysia Tire Market- Overview

A tire is a rubberized component of a vehicle that protects the rim of the wheel externally besides facilitating the smooth movement of vehicles. Its main purpose is to protect the wheel rim and provide tractive force between the road surface and the vehicle. Rubber tires are made up of tread, jointless cap piles, beads, and other materials such as synthetic rubber, carbon black, and fabric.

As the demand for personal sedans and SUVs for a variety of sports and off-road activities increases in Malaysia, the country’s tire market is also experiencing significant growth. Moreover, eco-friendly tire options, such as Michelin Energy and Bridgestone Ecopia, are making their way into the market in an effort to better suit varying driving conditions, which is expected to further drive innovation in the tire industry of the country.

Malaysia Tire Market Forecast and Trends

Growth Drivers

Increasing Tire Production Capacity

In response to the increasing demand for tires in the domestic market of Malaysia, many international tire brands are establishing their own production facilities to boost sales and exports. Malaysia has several leading tire manufacturers, including Toyo Tires, Goodyear Tire & Rubber Company, Pirelli Tire, etc. Each of these companies invests heavily in increasing production capacity. For instance, in 2017 the Toyota Tire and Rubber Company announced its plans to increase the production capacity of its facilities in Malaysia.

Growing Popularity of Smart Tires

With the growing popularity of smart automotive design, smart tires are increasingly making their space in the automobile industry in Malaysia.  The growth of the country’s tire market is driven by the increasing penetration of electric vehicles and the launch of smart tires in the market by tire manufacturers. Tire manufacturers in Malaysia are innovating their products and adding advanced technologies, such as sensors, to transform their products into smart tires. The sensors help track crucial information about the tire's surroundings, such as road temperature, tire pressure, and vehicle acceleration. Data collected is then transferred and processed into smartphones for predictive maintenance, accident prevention, etc. Thus, smart tires are likely to provide lucrative growth opportunities to the Malaysia tire market.

Restraints

High Prices of Cars Due to Import Duties

The Malaysia car market is dominated by two local manufacturers—Proton and Perodua. These two companies are backed by the government schemes through National Car Policy that acts as a trade barrier for the international car brands. High import duties make the foreign manufacturers' cars extremely expensive for the Malaysians, thus, limiting the number of vehicles on roads.  Several reports indicate that foreign cars are subject to taxes that are 200% higher than their original pricing. This reduces the number of private vehicles in the country, impacting the demand for tires.

Impact of COVID-19 on Malaysia Tire Market

The growth of the Malaysia tire market was negatively impacted by the sudden outbreak of the COVID-19 pandemic. In order to contain the spread of the deadly coronavirus, the Malaysian government issued a Movement Control Order in 2020. Moreover, nationwide lockdown and travel restrictions halted the production operations of both tire and automobile manufacturers, adversely affecting the market revenue. Furthermore, the downfall in the country’s economy directly affected the purchasing power of the consumers, which resulted in the sharp decline in the demand for private vehicles, incurring huge losses to the Malaysia tire market.

Malaysia Tire Market - By Design

Based on designs, the Malaysia tire market is segmented into radial and bias. The radial tires segment accounts for the largest share in the Malaysia tire market. Radial tires are prominently used in passenger vehicles and light commercial vehicles due to their better flexibility compared to their counterparts.  Radials are also known for their low fuel consumption, enhanced flotation and traction, and higher cutting resistance in the tread area. Also, these tires offer better performance and lower fuel consumption than bias tires, which makes them popular among end-users.

Malaysia Tire Market - By Vehicle Type

Based on vehicle types, the Malaysia tire market is grouped into passenger cars, light commercial vehicles, medium and heavy commercial vehicles, two-wheelers, three-wheelers, and off-the-road (OTR). The passenger cars vehicle segment accounts for the largest market share, driven by the increasing private vehicle ownership. According to a study titled, ‘Private Vehicle Ownership & Transportation Planning in Malaysia’ published by IPCSIT, Malaysia's population was 28.3 million in 2010, and there were 17.4 million private vehicles. The growing demand for private cars in Malaysia can be ascribed to the rising disposable income due to economic growth. The car population rate has increased in most urban cities of the country, such as Kuala Lumpur, Johor Bahru, Kuching, Penang, and Kota. Furthermore, the flourishing cab services industry is also boosting the number of passenger cars on roads, further propelling the overall market growth.

Malaysia Tire Market - By End-User

Based on end-users, the Malaysia tire market is grouped into OEM and replacements segments. The original equipment manufacturer (OEM) segment holds the largest market share because of the high concentration of automobile manufacturers, such as Bufori, EV Innovations, Perodua, Proton, etc. in the country. With an average annual production of over 500,000 vehicles, the production rate of tires is also increasing every year, fueling the demand for tires in the country. However, the replacement segment is also growing at a high rate because of the increasing private vehicle ownership and the need for periodic maintenance and replacement of tires for maximum safety.

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 Malaysia tire market is highly dominated by multinational tire corporations that have a strong presence in the country. These companies significantly invest in expanding their tire production in the country to meet domestic needs as well as boost their exports.  In addition, they offer a wide range of tires for a variety of vehicles to increase their product penetration and diversify their end-user base. In addition, this market is also characterized by the use of competitive strategies, such as joint ventures, mergers, acquisitions, partnerships, etc.

Recent Developments

• In October 2021, Michelin, the leading French multinational tire manufacturing company, announced the launch of the LTX Trail in Malaysia, a multipurpose tire targeted towards on and off-road applications.

Scope of the Report:

By Design

• Radial
• Bias

By Vehicle Type

• Passenger Cars
• Light Commercial Vehicles
• Medium and Heavy Commercial Vehicles
• Two Wheelers
• Three Wheelers
• Off-The-Road (OTR)

By End-User

• OEM
• Replacements

By Distribution Channel

• Online Distributors
• Offline Distributors