Indonesia Tire Market to Grow at 13% till 2021
Favorable government
policies, rising automobile sales and growing vehicle production to drive
Indonesia tire market through 2021
According to
TechSci Research report, “Indonesia Tire Market Forecast and Opportunities, 2021’’, tire market in
Indonesia is projected to grow at a CAGR of 13.6% during 2016 - 2021. With a
population of over 255 million in 2015, Indonesia has emerged as one of the
rapidly developing markets for automotive tires in Asia-Pacific. Powered by
rising vehicle sales, the country’s vehicle fleet has been expanding continuously
year on year. Considering growing demand for vehicles, many domestic and global
players are strengthening their footprint in the country by establishing
manufacturing plants or assembly units in Indonesia. Further, the increase in
motorization rate (passenger car & commercial vehicle) from 77 vehicles in
2013 to 83 vehicles in 2014, is also identified as a key factor for the growth
of Indonesia tire market. As per Organisation Internationale des Constructeurs
d’Automobiles (OICA), the country recorded an automobile fleet (passenger car
& commercial vehicle) of over 20 million units in 2014, which continues to
boost the country’s replacement tire market.
Indonesia
tire market has been supported by various favorable government policies. In 2013,
the Government of Indonesia approved an automobile sector development strategy termed
as Low-Cost Green Car Policy, as per which, the government would provide tax
exemptions on production of eco-friendly and low cost cars that are produced in
the country. As a result, the passenger car production in Indonesia is anticipated
to grow at a robust pace in the coming years, which is further expected to
garner support to the country’s tire market. Moreover, in 2015, the Government
of Indonesia, inked AFTA (ASEAN Free Trade Agreements) with neighboring
countries to encourage foreign investments, and this is expected to bring down
tariff levied on vehicle imports, which would eventually have a positive impact
on the country’s tire market in the coming years.
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Indonesia
construction industry, with a contribution of over 10% to the country’s GDP in 2014,
is projected to expand in the coming years. Key reasons for this growth can be
attributed to rising investments in the construction sector. Expected growth in
the country’s construction sector is anticipated to increase demand for medium
& heavy trucks in the coming years. Apart from construction sector, the
country is anticipated to witness growth in logistics industry backed by anticipated
growth in the MSME sector. As a result, demand for trucks and OTR vehicles is
anticipated to rise in Indonesia, which is forecast to drive demand for trucks
and OTR tires over the next five years. “Increasingly favorable trade policies,
growing automobile sales and expanding vehicle fleet are few of the key factors
that are anticipated to drive Indonesia tire market over the course of next
five years.”, said Mr. Karan Chechi, Research Director with TechSci Research, a
research based global management consulting firm.
“Indonesia Tire Market Forecast and Opportunities,
2021” has evaluated the future growth potential of tire market and provides
statistics and information on market size, consumer behavior and trends. The
report intends to provide cutting-edge market intelligence and help decision
makers take sound investment evaluation. Besides, the report also identifies
and analyzes the emerging trends along with essential drivers, challenges and
opportunities in tire market in Indonesia.
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