Goodyear Plans Expansion of HVA Tire Capacity Globally

United States: US tire maker Goodyear has allocated a budget of USD800 million to boost up the production of its high value added tires. Special focus will be on tires having rim diameters of 17 inches and greater.

Goodyear revealed that it has started with expansion projects in plants located in South Africa, China, India, Mexico and US. Moreover, it is also expected that the demand for HVA passenger tires would increase by two times, which is likely to reach about 444 million units by 2020 which is currently around 222 million units in 2015. It is also expected that all these expansion plans will boost up the capacity of large rim tires to 20 million units. The views were presented by Ms Laura Thompson, Executive Vice President and Chief Financial Officer.

As a part of its global expansion strategy, the company is expected to invest USD210 million to boost its production capacity in China by 3 million units per year by 2019. Additionally, the company will also invest USD115 million in Aurangabad, India for adding one million units. The company is also investing USD290 to USD300 million by 2016, for installing 6 million units annual capacity for their plant located in Mexico. USD20 million have been allocated for South Africa plant by 2017 for adding 1 million HVA tires in the existing plant.

In addition to this, the company is also planning to build plants in Europe with an annual capacity of 3 million units for large rim tires.

According to a recent report published by TechSci Research, “Global Tire Market Forecast & Opportunities,2021” the global tire market is forecast to grow at a CAGR of 8.4% during 2016 - 2021 on account of anticipated stabilization of crude oil price, expected rise in the vehicle sales and expanding vehicle fleet, especially in Asia-Pacific. In 2015, the global tire market was dominated by Asia-Pacific region, which accounted for a market share of around 50% in volume terms. Moreover, the region accounts for more than 60% of the tire manufacturing plants due to ample rubber production, low labor cost and favourable government policies. As of 2015, Europe had more than 15% of the global tire plants, whereas, North America’s share stood at around 10%. It is forecast that Asia-Pacific would continue its dominance in the global tire market over the next five years, owing to anticipated increase in the vehicle production, sales and vehicle fleet in the region

Techsci Research believes that, by increasing the production capacities of High Value Added tires across various facilities, the company will be able to cater to increasing demand for HVA tires, which is likely to support the market share of the company in these regions as well as globally.