BURNABY, British ColumbiaThe value of the Mexican tire market is expected to hit $8 billion by 2018, according to a new market research report, as both vehicle manufacturing and ownership in the country continue to grow.
The report, Mexico Tyre Market Forecast and Opportunities 2018 by TechSci Research, notes that tire market revenues grew nearly 19 percent annually from 2009-12 as sales of both passenger cars and heavy commercial vehicles grew at double- digit rates the last three years.
In addition, Mexico has one of the world's largest bus and truck fleets, which drives demand for tires.
Burnaby-based TechSci said its research shows vehicle ownership in Mexico is relatively low, at just 275 cars per 1,000 inhabitants in 2012, which indicates enormous market potential for the automobile sales.
Other reasons TechSci cites for Mexico's growth potential are the country's participation in 234 bilateral trade agreements, including a dozen Free Trade Agreements with 44 countries and 122 multilateral agreements, including NAFTA.
These agreements assure preferential access for the Mexican automotive products to the markets of North and Latin America, European Union, Japan, etc., TechSci said. The world's leading automotive manufacturers have established their production plants in Mexico to cater to the growing domestic and global demand.
Mexico's tire market is being driven by the automotive demand in the country as well as in the Latin American region, said Karan Chechi, research director. As Mexico has FTAs with various countries around the world, it has become the most preferred destination for the production of automobiles and its components, in order to cater to the demand of neighboring countries.
Thus, increasing investments in the automotive sector along with the growing demand for automobiles in the domestic market is anticipated to contribute significantly to the demand for tires in the next five years.
According to the report, the leading tire companies in Mexico are Continental Tire the Americas L.L.C., Bridgestone Americas, Cooper Tire & Rubber Co. (through its Corporacion de Occidente S.A. de C.V. joint venture) and JK Tornel, with Michelin Group, Goodyear, Pirelli Tire, Yokohama Rubber Co. Ltd. and Hankook Tire Co. Ltd. making inroads as well.
The report also takes into account the growing retreading industry of Mexico, which is attracting major global players as well.
TechSci said the report is based on both primary and secondary sources, including interviews with tire manufacturers, distributors and industry experts. The report breaks down the market by tire type and market segment and includes profiles of 13 companies active in the country.
The price of the report ranges from $1,800 to $4,500, depending on format and user access.