South Africa Tire Market Size Is Set To Fly High In Years To Come | South Africa Ltd., Apollo Tires, Auto & Truck Tyres Ltd., Bandag Southern Africa (Pty) Ltd

South Africa tire market is growing due to the growing automotive industry, growing demand for tire from the mining industry, rising industrialization. Additionally, the growing income, and penetration of cost-friendly Chinese tires in the country is also favoring the markets growth

A recent study, conducted by the strategic consulting and market research firm, Report Ocean, revealed that the South Africa tire market was worth USD 2,093.2 million in the year 2021. The data generated by the study reveals that the market is estimated to grow at a CAGR of 5.3%, earning revenue of around USD 3,041.9 million by the end of 2028. South Africa tire market is growing owing to the growing automotive industry, increasing demand for electric vehicles, and growing industrialization in the country. Moreover, the growing penetration of Chinese and cost-effective tires is also fueling the growth of the South Africa tire market.

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High Penetration of Chinese Importers is driving the growth of the South Africa tire market

The availability of a diverse selection of products from Chinese tire importers helps to drive market expansion. Around 200 Chinese and European importers bring standard tires to South Africa, such as racing tires, mining and agriculture tires, and so on, fueling the country's tire market's expansion. Furthermore, Chinese importers such as YTS provide consumers with lower-cost, lower-quality tires. Imported Chinese tires are also gaining popularity in the replacement market, which is helping to drive market expansion.

Africa currently has a burgeoning tire and vehicle market. This forces many global vehicle manufacturers to consider the price tags in connection to the GDP and per capita income of the various countries/economies in the region, as each one prepares to seize a well-defined piece of the considerable available market. The relentless change from poverty to middle-class status in many South African countries has pushed demand for autos to an all-time high in the region. However, in recent years, European tire companies have begun to lose ground to Chinese and other Asian brands in a number of rising countries around the world, not just in Africa.

In various African markets, Chinese tires are gaining favor. Many developing countries, particularly those in Africa, are price-sensitive markets, preferring to import low-cost Chinese tires over more expensive European and American models. As a result, China is becoming a major exporter of tires to a number of African countries.

South Africa Tire Market - By Vehicle Type

Based on vehicle type, the market is segmented as passenger cars, light commercial vehicles, medium and heavy commercial vehicles, two-wheeler, and off-the-road and others. The passenger car segment accounted largest market share of 42.91% in 2021. The increasing demand for personal vehicles, followed by the growing size of the automobile industry in South Africa are the major factors boosting the demand for tires in this region.

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According to the National Association of Automobile Manufacturers of South Africa (Naamsa), the number of new vehicles sold in the country has soared by 22% over the last 2 years. New car sales have gone up by 22% from 2020 levels and light commercial vehicle sales have increased 20%. The sales are expected to increase further in the coming years, further creating a growing demand for tires in the country.

South Africa Tire Market - By Distribution Channel

Based on distribution channel, the market is segmented as online and offline. The offline segment accounted for the largest market share of 78.61 % in 2021, with a market value of USD 1,645.5 million, it is expected to register the CAGR of 5.2% during the forecast period. However, the online segment is valued at USD 447.7 million in 2021 it is projected to exhibit a CAGR of 5.8 % during the forecast period.

The online segment is expected to register higher growth rate during the forecast period due to the emergence of the e-commerce websites and online purchasing of the tires. In South Africa, e-commerce is booming at an unprecedented rate. The coronavirus pandemic has definitely spurred some of this development, and while it has to be seen whether demand will hold, the hope is that culture will transform in the long run. The rapid growth of mobile and internet usage is setting the groundwork for more everyday activities, such as shopping, to become digital.

Impact of COVID-19 on South Africa Tire Market

The COVID-19 pandemic resulted in the higher prices of raw materials for tire manufacturing, which has hindered the market's growth. The high price of tires is one of the major restricting factors for the South African tire market. The exorbitant cost of tires compels many car owners to choose low-cost tires that may prove fatal in the long run. Raw materials costs are considered to be one amongst the long-term impacts of the pandemic.

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In the April of 2021, Goodyear announced that they are expecting the cost of their raw materials to escalate by $325 - $375 million mainly in the second half of 2021. This is approximately double the increase in raw material prices which was expected by them in the first of the year.

As a result of this trend, tire companies such as Michelin, Apollo tires, JK tire, and CEAT tires stated that the companies are planning to raise the prices of different product lines by 2%-8%. Low-priced tires are often under or over-inflated and dangerous to run on roads with hazardous conditions such as potholes, railroad crossings, rain, hot tarmac, etc. Moreover, because of its high cost, most people often avoid replacing their tires with OEMs. Thus, the rising prices of tires in the region have hindered the growth of the South African tire market.

South Africa Tire Market - Competitive Landscape

The leading players in the South Africa tire market are Bridgestone Corporation, Sumitomo Rubber Industries, Continental tire SA Ltd., Yokohama Rubber Company, Goodyear South Africa Ltd., Apollo Tires, Auto & Truck Tyres Ltd., Bandag Southern Africa (Pty) Ltd., Michelin, Dunlop tires, and other prominent players.

Market Segment:
By Type (Radial, Bias)
By Size (10-12, 13-15, 16-18, 19-21, >21)
By End Use (Oem, Replacement)
By Vehicle Type (Passenger Cars, Lcv, M & Hcv, Two-Wheelers, Off-The-Road, Others)
By Distribution Channel (Online, Offline)
By Region (Gauteng, Kwazulu-Natal, Western Cape, Eastern Cape, Mpumalanga, Limpopo, North West, Free State, Northern Cape)

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In terms of product launches, integration of new technology, mergers and acquisitions, and collaboration with other players and organizations, market players compete with one another. Furthermore, players in the South African tire sector are attempting to commercialize the technology as soon as possible in order to gain a larger portion of the market. Bridgestone, Michelin, Good Year, Continental AG, and Sumitono are the main tire manufacturers in South Africa, and they are all owned by international tire businesses with global footprints. These four companies provide tires to automakers and the tire replacement market, as well as sending consignments to other African countries. In South Africa, an average of 11 million tires are sold each year.

On November 2021, Bridgestone Southern Africa (BSAF) has achieved industry-leading level 3 broad-based black economic empowerment (B-BBEE) certification because to top leadership's unwavering commitment to change. Only BSAF has achieved this level of transformation. Despite the simultaneous effects of stiff competition, the Covid-19 pandemic, and an economy already in recession prior to the first lockdowns, the latest certification was achieved.

Dont miss the business opportunity of the South Africa tire market. Consult our analysts to gain crucial insights and facilitate your business growth.

The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the South Africa tire market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the South Africa tire market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.

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This release was published on openPR.