Rolling upward

During the pandemic, we have all become accustomed to negative prospects. But the tyre market, both locally and abroad, is beating the odds and is set to rise within the next few years. JACO DE KLERK discovers why.

The local tyre market was worth US$2,2 billion last year, as revealed in a recent study conducted by strategic consulting and market research firm BlueWeave Consulting. The study also notes that the market is projected to grow at a compound annual growth rate (CAGR) of 4,8% during the forecast period (2022 to 2028), by which time South Africa’s tyre market is set to earn around US$3 billion in revenue. The study adds that these gains are owing to the expanding automotive industry, increasing demand for electric vehicles, and growing industrialisation within the country.

Based on vehicle types, the South Africa tyre market is grouped into passenger cars; light, medium, and heavy commercial vehicles; off-the-road tyres; and two-wheelers. “Among these, the two-wheelers segment dominated the tyre market during 2021 and held the largest share owing to growing sales of two-wheelers in the country and rising penetration of motorbikes among the younger generation,” says the study. “Additionally, the growing sales of electric motorbikes have also contributed to the dominant share of the two-wheeler segment.”

MINING ADDS TO THE MASSES

The study further reveals that a growing demand for tyres from the South Africa’s substantial mining industry is also driving the growth of the local tyre market: “Worldwide, the country has the largest reserves of platinum-group metals (PGMs) (88%), manganese (80%), chromite (72%), and gold (13%), as well as second-largest reserves of titanium minerals (10%), zirconium (25%), vanadium (32%), vermiculite (40%) and fluorspar (17%). PGMs, gold, iron ore, and coal account for 82% of sales and almost 38% (R282 billion) of exports.”

The demand for large tyres in the mining industry is also steadily growing: “For instance, in 2019, one of the largest mining contractors in the world operating in one of the largest coal mines of South Africa selected Magna Tyres’ 40.00R57 Magna MA04+C Giant tyres for Cat 793D rigid dump trucks.”

Other factors driving growth within this sector include specially-designed tyres that can withstand the severe conditions in mines (offering, for example, decreased heat build-up inside the tyres), lower fuel consumption, higher efficiency, optimised operator comfort, and prolonged service life.

MEDIUMS AND HEAVIES HELP THE HAUL

The South African medium and heavy commercial vehicle tyre market is also set to rise, according to another report, South African Medium and Heavy Commercial Vehicle (MHCV) Tire Market Research Report: Forecast (2021-2026), from ResearchAndMarkets.com, one of the largest market research stores worldwide.

The report states that the South African MHCV tyre market is anticipated to grow at a CAGR of around 3,4% from 2021 until 2026. “The growth of the market is attributed to burgeoning investment by market players to set up truck and bus tyre plants, the launch of innovative truck tyres, and a boost in the production of truck tyres in the country due to upsurge in the production of trucks locally and the burgeoning domestic and export sales of trucks,” it continues. “Moreover, the rising government inclination to curb carbon emission is propelling the demand for electric commercial vehicles such as electric buses for urban transportation.”