The Vietnamese tire market will top US$2.7 billion in revenue by 2020 on account of many favorable conditions, including auto sales and legislation, a global market research company said Wednesday, citing its own report.
Prominent factors that contribute to the fast growth rate of the tire industry in Vietnam include growing automobile sales, rising automobile fleets, favorable government policies and increasing foreign investment in the country's automotive sector, TechSci Research said in the “Vietnam Tire Market Forecast & Opportunities, 2020” report.
The Vietnamese rubber industry also plays its part in boosting the tire market by providing several opportunities for tire producers to establish more manufacturing factories and increase production capacities, the report said.
There were 14 tire plants across Vietnam in 2014, yielding a total output of more than 65 million units per annum, according to TechSci Research.
The growing demand for vehicles in the Southeast Asian country is also a major factor in the development of the tire market, as more global and domestic companies are establishing their manufacturing plants in Vietnam, according to the report.
The nation’s tire market and economy in general have been enhanced by growing foreign investments since the Vietnamese government signed WTO and AFTA agreements, it added.
AFTA, short for the Association of Southeast Asian Nations Free Trade Area, is a trade bloc pact supporting manufacturing in all regional countries, which was signed on January 28, 1992 in Singapore.
In the Vietnamese tire market, the two-wheeler tire segment accounts for the largest portion, followed by passenger car and commercial vehicle & off-the-road (OTR) tire segments, TechSci Research said.
“However, the passenger car tire segment is expected to exhibit the fastest growth rate over the next five years, followed by the commercial vehicle & OTR tire segment,” the company added.
OTR tires include tires for construction vehicles such as wheel loaders, backhoes, graders, trenchers and large mining trucks.
The report on “Vietnam Tire Market Forecast & Opportunities, 2020” evaluates the growth potential of the Vietnamese tire market by providing statistics and information on its structure trends, TechSci Research said.
It is also intended to provide cutting-edge market intelligence and help decision-makers take sound investment evaluation, the company added.
TechSci Research is a global market research and consulting firm which provides research-based consulting solutions for its customers worldwide, spanning a range of verticals.
The company has offices in Canada, India and the UK.