|
Forecast Period
|
2025-2029
|
|
Market Size (2023)
|
USD 4.20 Billion
|
|
CAGR (2024-2029)
|
3.86%
|
|
Fastest Growing Segment
|
Light
Commercial Vehicle
|
|
Largest Market
|
Java
|
|
Market Size (2029)
|
USD 5.27 Billion
|
Market
Overview
The Indonesia Commercial Vehicle Tire
market was valued at USD 4.20 Billion in 2023 and is expected to reach USD 5.27
Billion by 2029 with a CAGR of 3.86% during the forecast period. The Indonesia
commercial vehicle tire market is experiencing significant growth due to the
expanding transportation and logistics sectors. As Indonesia’s economy
continues to develop, the demand for both freight and passenger transport
services is increasing. A surge in infrastructure projects, such as road
construction and urbanization, is further contributing to the need for more
commercial vehicles. As more vehicles hit the roads, tire replacement and new
tire demand also rise, making the tire market essential to supporting the
growing commercial fleet. The development of e-commerce and increased delivery
services is another key driver, as companies look to expand their fleets for
efficient supply chain management.
The tire market is also seeing
innovation through trends like the adoption of advanced technologies in tire
manufacturing. The rise of smart tires, which can monitor pressure,
temperature, and tread wear, is transforming the way tires are used and maintained.
This innovation allows businesses to reduce maintenance costs and enhance
vehicle performance, making them an attractive option for fleet operators.
Moreover, sustainability is becoming a more significant focus, with a growing
shift toward eco-friendly tires that are made from sustainable materials and
contribute to reduced fuel consumption. These technological and environmental
trends are opening up new opportunities for tire manufacturers to meet the
demands of both commercial vehicle owners and regulators focused on green
initiatives.
However, challenges remain that could
affect the market's growth. The volatility of raw material prices, such as
rubber and oil, can cause fluctuations in tire production costs, putting
pressure on manufacturers. Furthermore, there is intense competition in the
tire industry, which often results in price wars and reduced profit margins.
Rising fuel prices and fluctuating demand for commercial vehicles in certain
sectors also contribute to market uncertainty. Despite these challenges, the
Indonesia commercial vehicle tire market is poised for steady growth, driven by
the continuous expansion of transportation needs, technological advancements,
and sustainability efforts. These factors are expected to fuel the market’s
development in the coming years.
Market Drivers
Growth in E-commerce and Logistics
The
rapid expansion of e-commerce in Indonesia has created a surge in demand for
delivery and logistics services. Commercial vehicles, especially light
commercial vehicles (LCVs), are crucial for last-mile delivery, which is
growing rapidly as businesses strive to meet the increasing consumer demand for
fast shipping. The expansion of warehouses and distribution centers across the
country has led to a greater need for commercial vehicles to facilitate
efficient delivery services, thereby driving the tire market. For instance, In
January 2024, the International Trade Association reported that Indonesia led
the ASEAN countries in e-commerce business revenue, generating USD 51.9
billion, equivalent to approximately IDR 778.8 trillion, in 2022. The total
e-commerce revenue across ASEAN for the same year amounted to USD 99.5 billion,
indicating that Indonesia's e-commerce sector accounted for 52% of the overall
revenue.
Infrastructure Development
Indonesia's
government continues to invest in infrastructure projects, including road
networks, bridges, and ports. The development of these projects supports the
growth of the commercial vehicle sector, as improved transportation
infrastructure encourages the movement of goods and services across the
country. This growth in infrastructure directly increases the demand for
commercial vehicle tires to support the expanding vehicle fleet.
Urbanization
Urbanization is accelerating in
Indonesia, with more people moving to cities for better opportunities and
lifestyles. As urban centers grow, the demand for commercial vehicles for
public transportation, cargo, and logistics services rises. This creates a
steady demand for replacement tires and new tires for commercial vehicles,
thereby driving the tire market's growth.
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Key
Market Challenges
Volatility of Raw Material
Prices
The
commercial vehicle tire market in Indonesia faces significant challenges
related to the volatility of raw material prices. Key materials like rubber and
oil often experience price fluctuations, which affect production costs for tire
manufacturers. This volatility can result in price hikes for tires, impacting
both businesses and consumers, as well as creating uncertainties in the market.
Tire Counterfeiting
The presence of counterfeit tires in the
market poses a significant challenge. Counterfeit tires, often of substandard
quality, undermine the safety and performance of commercial vehicles, leading
to potential accidents and maintenance issues. The growth of counterfeit
products complicates market dynamics, as consumers may unknowingly purchase
these products, which can impact overall demand for high-quality tires.
Dependency on Imports
Indonesia’s tire market is highly
dependent on imported raw materials and finished products. Fluctuations in
global trade policies, shipping costs, and currency exchange rates can disrupt
supply chains, leading to delays and higher costs for local manufacturers and
businesses. The reliance on imports makes the market vulnerable to external
shocks, affecting its overall stability and growth.
Key
Market Trends
Increased Demand for Affordable Tire
Solutions
As Indonesia’s economy continues to
grow, small and medium-sized enterprises (SMEs) are increasing their presence
in various industries. These businesses often rely on commercial vehicles for
transportation and logistics. In response to this growing demand, there is a
noticeable shift toward affordable and cost-effective tire solutions in the
market. Manufacturers are producing tires that provide a balance between price,
quality, and performance to cater to businesses with tighter budgets, creating
a strong market for budget-friendly tires.
Increased Focus on Local Manufacturing
With the growing demand for commercial
vehicle tires in Indonesia, there has been a marked increase in the focus on
local tire manufacturing. Local manufacturers are ramping up production
capacities to cater to the expanding market, reducing reliance on imports. This
shift is encouraged by government policies aimed at boosting domestic
industries and promoting job creation. Local tire manufacturers are investing
in advanced technologies and production capabilities, ensuring they can meet
the demand for quality tires at competitive prices while also minimizing supply
chain disruptions. For instance, in March 2024, Sailun Group, a leading tire
manufacturer based in China, initiated a major investment project, allocating USD
250 million (EUR 230 million) for the construction of a new tire manufacturing
facility in Indonesia. This strategic initiative is a crucial component of
Sailun's extensive overseas expansion plan. The new plant is expected to have a
significant production capacity, capable of producing 3.6 million radial tires
for passenger vehicles each year, in addition to 37 kilotonnes of off-highway
tire products.
Shift Toward Radial Tires for Commercial
Vehicles
Radial tires, known for their
durability, fuel efficiency, and improved performance, are becoming more
popular in Indonesia's commercial vehicle tire market. This trend is driven by
the increasing need for tires that can handle long-distance travel and heavy
loads, especially as industries like logistics, agriculture, and construction
expand. Radial tires help reduce fuel consumption and maintenance costs, making
them a preferred choice for fleet operators in Indonesia who seek long-term
savings.
Segmental
Insights
Vehicle
Type Insights
The Indonesia commercial vehicle tire
market is segmented by vehicle type into Light Commercial Vehicles (LCVs),
Medium Commercial Vehicles (MCVs), and Heavy Commercial Vehicles (HCVs). Each
segment has unique characteristics and requirements that drive demand for
specific types of tires suited for their particular functions.
Light Commercial Vehicles (LCVs),
commonly used for small delivery, retail, and service vehicles, often require
tires that can balance fuel efficiency, durability, and cost-effectiveness.
These vehicles are used for short-distance travel, typically within urban
areas, and often operate in heavy traffic conditions. LCV tires need to be
designed for high maneuverability, quick acceleration, and good performance on
paved roads. As e-commerce and delivery services continue to expand in
Indonesia, the demand for LCV tires is steadily growing, driven by the need for
efficient last-mile delivery solutions.
Medium Commercial Vehicles (MCVs) serve
a broad range of industries, including logistics, construction, and public
transport. These vehicles often carry goods or passengers over medium to long
distances and require tires that offer a balance between load-bearing capacity,
durability, and performance on both paved and unpaved roads. MCVs may encounter
diverse road conditions, including rural roads or construction sites, and tires
for these vehicles need to withstand the wear and tear of such environments. Tires
in this segment are typically designed for enhanced traction, better heat
resistance, and increased longevity to ensure the vehicles operate efficiently
and safely under varying conditions.
Heavy Commercial Vehicles (HCVs) are
used for transporting bulk goods and heavy machinery across long distances.
These vehicles require tires with the highest load capacity, extreme
durability, and the ability to withstand harsh driving conditions. HCVs,
including trucks and trailers, often operate on highways, but they also
encounter rough roads and challenging environments, especially in remote areas.
Tires for HCVs need to be designed with reinforced sidewalls, improved tread
patterns, and materials that enhance their ability to handle the weight and
frequent long-distance travel. These tires must also provide resistance to
damage from punctures, abrasions, and excessive heat generated during
operation.
Each vehicle type within the commercial
vehicle tire market in Indonesia has its specific requirements, driving tire
manufacturers to adapt their products to meet the diverse needs of the
transportation industry. As the demand for commercial vehicles continues to
rise in Indonesia, the market for tires tailored to these different vehicle
types is expected to evolve, with manufacturers innovating to enhance
performance, safety, and cost-efficiency.
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Region
Insights
In 2023, the
dominant region in Indonesia's commercial vehicle tire market is Java. Java
remains the economic and industrial hub of the country, accounting for a
significant share of commercial vehicle usage and tire demand. The island is
home to the largest cities, including Jakarta, Surabaya, and Bandung, which
drive a substantial portion of Indonesia's logistics, transportation, and
manufacturing activities. The high population density, combined with the
concentration of businesses and infrastructure, results in a greater need for
commercial vehicles across all sectors, from retail delivery to freight
transport, all of which rely heavily on tires.
Java's
extensive road network, which links key industrial areas and urban centers,
supports a high volume of commercial vehicle traffic. This road infrastructure
facilitates the movement of goods, contributing to the strong demand for
commercial vehicle tires. As a result, Java sees a higher rate of tire
replacements, maintenance, and new tire sales. The region also experiences
significant logistics activity due to the presence of large distribution hubs
and e-commerce companies. These factors, combined with the widespread use of
light, medium, and heavy commercial vehicles in Java, create a robust market
for tires.
The growing
industrial and infrastructure development in Java further fuels the demand for
commercial vehicle tires. Industries such as construction, mining, and
agriculture depend on a fleet of commercial vehicles, all requiring
high-quality tires suited for diverse operational needs. Java also benefits
from an established and efficient supply chain network that enables easy access
to tire products, both for original equipment and replacements. As commercial
activities increase, so does the need for tires that can withstand heavy use in
urban and semi-urban areas, as well as on rural roads connecting the various
parts of the island.
The
concentration of businesses, commercial vehicle fleets, and consumers in Java
leads to a higher demand for commercial vehicle tires compared to other
Indonesian regions. The continuous economic development and urbanization in
Java ensure that this trend is likely to persist, maintaining its position as
the dominant region in the commercial vehicle tire market in Indonesia in 2023.
Recent
Developments
- In
2022, Michelin became the exclusive owner of Royal Lestari Utama (RLU), a
partnership with Barito Pacific Group. The tire manufacturer, which
previously owned 49% of the shares, has now acquired an additional 51%.
Initiated in 2015, the RLU project is designed to establish optimal
conditions for the cultivation of sustainable natural rubber in Indonesia,
covering an extensive area of 70,000 hectares in Sumatra's Jambi province
and 18,000 hectares in East Kalimantan province on Borneo. These regions had
previously experienced significant damage and deforestation prior to the
involvement of Michelin and its Indonesian partner.
- In
2023, Aeolus launched two subsidiaries in Chile and Indonesia to manage
tyre import, export, and wholesale operations. According to Tyrepress
China, the tyre manufacturer aims to enhance strategic planning, foster
international collaborations, expand its business scope, accelerate
internationalization, and improve global competitiveness. The board
approved the creation of these subsidiaries, which include "OTR"
in their names, indicating a focus on expanding the local OTR market.
- In
2024, two prominent institutional investors have allocated funds to
Indonesia's infrastructure development, reinforcing their dedication to
long-term investments in real assets. The investors have specifically
targeted the Trans Java Toll Road segments of Kanci-Pejagan and
Pejagan-Pemalang. These segments serve as the foundational assets for the
platform, which aims to secure investment opportunities totaling up to USD
2.75 billion within Indonesia's toll road infrastructure, as stated by the
group.
Key
Market Players
- PT Gajah Tunggal Tbk
- PT Bridgestone Tire Indonesia
- PT Sumi Rubber Indonesia
- Hankook Tire & Technology
- Pirelli Tyre S.p.A
- Goodyear Tire and Rubber Company
- PT Continental Tyres Indonesia
- YHI Indonesia, PT.
- Toyo Tires Indonesia
- PT Michelin Indonesia
|
By Vehicle
Type
|
By Application
|
By Demand
Category
|
By Region
|
- Light Commercial Vehicle
- Medium Commercial Vehicle
- Heavy Commercial Vehicle
|
- Construction
- Mining
- Agriculture
- Transport
- Other Applications
|
|
- Java
- Sumatra
- Sulawesi
- Kalimantan
- Rest
of Indonesia
|
Report
Scope:
In this report,
the Indonesia Commercial Vehicle Tire Market has been segmented into the
following categories, in addition to the industry trends which have also been
detailed below:
·
Indonesia
Commercial Vehicle Tire Market, By Vehicle Type:
o
Light
Commercial Vehicle
o
Medium
Commercial Vehicle
o
Heavy
Commercial Vehicle
·
Indonesia
Commercial Vehicle Tire Market, By Application:
o
OEM
Construction,
o
Mining,
o
Agriculture
o
Transport
o
Other
Applications
·
Indonesia
Commercial Vehicle Tire Market, By Demand Category:
o
OEM
o
Replacement
·
Indonesia
Commercial Vehicle Tire Market, By Region:
o
Java
o
Sumatra
o
Sulawesi
o
Kalimantan
o
Rest
of Indonesia
Competitive
Landscape
Company Profiles: Detailed
analysis of the major companies present in the Indonesia Commercial Vehicle
Tire Market.
Available
Customizations:
Indonesia
Commercial Vehicle Tire Market report with the given market data, Tech Sci
Research offers customizations according to a company's specific needs. The
following customization options are available for the report:
Company
Information
- Detailed
analysis and profiling of additional market players (up to five).
Indonesia Commercial Vehicle Tire Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]