BURNABY, Canada — An anticipated recovery in automobile sales and production, coupled with a growing vehicle fleet, are expected to drive Argentina's tire market over the next five years.
The country's tire market is forecast to grow at a compound annual growth rate (CAGR) of about 12 percent during the 2015-2020 period, according to the report, “Argentina Tire Market Forecast & Opportunities, 2020,” compiled by Burnaby-based global research and consulting firm TechSci Research.
The company said the devaluation of the peso, high inflation rates and a widening current account deficit are factors that fueled the decline in automobile production and sales in Argentina between 2010 and 2014. Moreover, the decline in automobile production was fueled by poor demand from key export markets, due to an economic slowdown. TechSci said these factors “created a bearish environment” in Argentina's automobile industry, resulting in a decline in OEM tire demand.
However, backed by a fleet of more than 18.50 million vehicles in 2014, the replacement tire market in Argentina grew at a faster pace compared to OEM demand over the last five years, the firm reported.
In 2014 the Argentina tire market was dominated by passenger tires, due to rising car sales and the expanding size of that fleet, TechSci said, noting that Fate, Bridgestone, Michelin and Pirelli are some of the leading tire brands in the country. Apart from these, the country also imports various other tire brands while “dominance of domestic brands can be attributed to their competitive pricing strategies compared to other international tire brands available in the country,” TechSci said.
Karan Chechi, research director with TechSci, said the “government of Argentina is increasing its focus on tuning its monetary and fiscal policies to support economic growth. The government has also been planning to offer tax incentives to investors in Argentina, thereby attracting investments in the country.
“These factors are expected to support economic growth and aid in the recovery of Argentina's automobile industry. The expected recovery in automobile production and sales — backed by a tentative revival of macroeconomic factors — is forecast to drive the country's tire market over the next five years.”
TechSci said its report on the Argentina tire market evaluated the future growth potential of the market and provides statistics and information on market structure and trends while also identifying and analyzing “emerging trends along with essential drivers, challenges and opportunities available” in the market.
TechSci has offices in Canada, the United Kingdom and India.