Mexican tire demand growing 7.4% a year — study

Luxury cars and light trucks are the fastest-growing passenger vehicle segments, both of which contribute to larger rim-diameter tire sales, thereby supporting price and revenue growth, Frost & Sullivan said.

Retreaded tires are gaining favor in the heavy-duty vehicles segment and should account for a quarter of sales by 2018.

Frost & Sullivan estimates there are about 100 brands in the market, including local brands, low-cost import brands and premium brands. Bridgestone, Michelin, Continental, Goodyear and Pirelli together account for more than 40 percent of the market.

At the same, though, the industry is plagued by the proliferation of used tires — both legal and illegal — the number of which is estimated to run about 2 million annually. As a price-driven market, the researchers said, Mexico accepts used and low quality tires from China, South Korea, and the U.S. in the commercial segment.

Despite the low-cost imports, Mexico is poised to become a net tire exporter, base on the amount of investment in production by major tire makers to supply the fast-growing original equipment (OE) market, meet local market demands and export tires to the U.S. and other neighboring countries.

Six different companies produce tires in Mexico — Bridgestone Corp., Continental A.G., Cooper Tire & Rubber Co., Group Michelin, JK Tyre & Industries Ltd. and Pirelli Tyre S.p.A. — with Goodyear to join them by 2017.

Frost & Sullivan research also shows the total number of light vehicles in operation in Mexico to be growing 2.1 percent annually vs. just 1.4 percent in the U.S.

For more details on the study, go to Frost.com or call 877-463-7678.