Forecast Period
|
2026-2030
|
Market Size (2024)
|
USD 3.85 Billion
|
CAGR (2025-2030)
|
7.11%
|
Fastest Growing Segment
|
Two-Wheeler
|
Largest Market
|
Java
|
Market Size (2030)
|
USD 5.82 Billion
|
Market
Overview
The Indonesia Tire market was valued at
USD 3.85 Billion in 2024 and is expected to reach USD 5.82 Billion by 2030 with
a CAGR of 7.11% during the forecast period. The Indonesian tire market is
experiencing strong growth, driven by increasing vehicle ownership, especially
motorcycles. Motorcycles are the primary mode of transportation in urban areas
due to their affordability and ability to navigate traffic. As motorcycle sales
rise, so does the demand for replacement tires. The growing middle class,
better access to financing, and government initiatives to promote electric
vehicles (EVs) are further driving tire demand in the passenger vehicle sector.
EVs require specialized tires for optimal performance, creating a new market
opportunity. For instance, Indonesia is targeting 5.2% economic growth in
2024, driven by domestic consumption and investment, despite challenges from
declining commodity prices and economic conditions in China. Domestic
consumption, contributing 57% to GDP in 2023, remains a key driver, supported
by an 8% salary increase for 3.7 million civil servants and higher
election-related spending. The motorcycle industry, the world's third-largest,
continued its post-pandemic recovery, with sales reaching 6.5 million units
(+2.2%), marking the third consecutive annual increase and a return to
pre-COVID levels. The electric vehicle segment surged 62.9%, surpassing 100,000
sales for the first time, fueled by a $455 million government subsidy aimed at
supporting 800,000 new electric motorcycles and converting 200,000 combustion
models. Chinese EV leader Yadea expanded its footprint with a major investment
in Indonesia, inaugurating a 28,000-square-meter production facility in Bekasi,
West Java, with an annual capacity of 300,000 units.
Indonesian consumers are increasingly
opting for higher-quality, fuel-efficient, and durable tires. This shift is
fueled by a rising focus on long-term cost savings and vehicle safety. Tire
manufacturers are responding by developing low rolling resistance and
eco-friendly tires. E-commerce platforms are also reshaping the market,
allowing consumers to purchase tires conveniently online, driving sales and
brand visibility.
However, challenges persist, including
the widespread presence of counterfeit and low-quality tires that pose safety
risks. The volatility of raw material prices, such as rubber, also impacts
production costs. Additionally, road conditions in rural areas cause quicker
tire wear, prompting manufacturers to design more durable products. Despite
these challenges, the Indonesian tire market presents significant opportunities
for innovation and growth, especially in the two-wheeler and passenger vehicle
segments.
Market Drivers:
Rising Motorcycle Ownership
Motorcycles are the most popular mode of
transportation in Indonesia, particularly in dense urban areas and rural
communities. With traffic congestion in cities like Jakarta and Surabaya,
motorcycles offer a faster, more affordable alternative for daily commuting.
The growing middle class and increasing disposable income have enabled more
Indonesians to afford motorcycles. This has directly driven the demand for
motorcycle tires, including replacement tires, because of the high usage and
the frequent need for tire maintenance.
Increase in Passenger Vehicle Sales
With an expanding economy and rising
disposable incomes, the demand for passenger vehicles, particularly cars, is
also increasing in Indonesia. Financing options, such as installment payments
and low-interest loans, have made vehicles more accessible to the middle class.
As more families and individuals purchase cars, the need for tires both
original equipment and replacement—has surged. The demand for tires that offer
better fuel efficiency, safety, and performance has also increased,
contributing to the growth of the tire market for passenger vehicles.
Urbanization and Infrastructure
Development
As urbanization in Indonesia continues
to accelerate, more people are moving to cities and purchasing vehicles. At the
same time, ongoing government investments in infrastructure—such as road
construction, public transportation projects, and the expansion of highways are
making car ownership more practical. Urbanization increases vehicle numbers,
leading to a higher demand for tires, both for new vehicles and replacements.
As road conditions improve, tire longevity and performance become more
important for urban consumers, further driving the tire market. For instance,
Indonesia has designated a state budget of 25.5 billion USD for infrastructure
development in 2025, which encompasses the ongoing construction of
infrastructure in the new capital city of Nusantara, located on Kalimantan
Island.
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Key
Market Challenges
Raw Material Price Volatility
The tire industry is heavily dependent
on raw materials like rubber, oil, and synthetic polymers, all of which are
subject to price fluctuations. Global market volatility in these materials can
lead to higher production costs for manufacturers, which may, in turn, raise
tire prices for consumers. In Indonesia, where price sensitivity is high,
manufacturers may find it challenging to balance the cost of production with
the need to remain competitive while maintaining profitability.
Competition from Imported Tires
The Indonesian tire market faces
significant competition from imported tires, particularly from neighboring
countries in Asia. These imported tires, often at lower price points, can
undermine local manufacturers' market share. While local brands may focus on
product quality and innovation, they face challenges in competing with cheaper
imported options, which can attract price-sensitive consumers. This competitive
pressure makes it difficult for domestic manufacturers to capture and maintain
market share.
Supply Chain and Logistics Disruptions
Indonesia’s archipelagic geography poses logistical challenges for tire distribution, especially to remote regions. Inconsistent infrastructure development, port congestion, and rising transportation costs impact timely deliveries and inventory management, affecting both manufacturers and retailers. The country’s vast and varied landscape requires a well-coordinated supply chain, yet inefficiencies in road networks and inter-island shipping create delays and added expenses. Dependence on imported raw materials further complicates logistics, as international shipping disruptions, customs delays, and fluctuating fuel prices add uncertainty. Small and medium-sized tire retailers often struggle with stock shortages due to distribution inefficiencies, impacting sales and customer satisfaction. The need for an optimized warehousing system and advanced tracking technologies is growing, but implementation costs remain a barrier for many businesses. Digitalization in logistics, such as real-time tracking and automated inventory systems, is gradually being adopted to improve efficiency. Investments in infrastructure projects by the government may help address some of these challenges, but short-term supply chain issues persist. Companies that can develop robust distribution networks and leverage data-driven logistics solutions will have a competitive advantage in ensuring a consistent and reliable supply.
Key
Market Trends
Increasing Use of Radial Tires
Radial tires are becoming more popular
in Indonesia, particularly for passenger vehicles, due to their superior
performance, longer lifespan, and better fuel efficiency compared to bias
tires. As consumers and OEMs (original equipment manufacturers) seek tires that
offer better stability and handling, radial tires have gained a larger market
share. Radial tires’ lower rolling resistance and higher durability make them
an attractive option for both new vehicle purchases and replacement tires in
the Indonesian market. For instance, in March 2024, Sailun Group revealed
its intention to establish a manufacturing facility in Indonesia, which will
have the capacity to produce 3 million semi-steel radial tires, 600,000
all-steel radial tires, and 37,000 tonnes of off-the-road (OTR) tires each
year. The company plans to allocate an investment of USD 251.44 million for
this initiative, with USD 204.29 million designated for the construction of the
plant located in Demak, Central Java.
Eco-Friendly and Sustainable Tire
Solutions
As environmental awareness grows, both
consumers and manufacturers are prioritizing sustainability in tire production.
Tire companies are exploring ways to reduce the environmental impact of tire
production and disposal, with an emphasis on using renewable materials, such as
bio-based rubbers and eco-friendly manufacturing processes. Additionally, tires
that offer better fuel efficiency and lower carbon emissions are becoming more
popular, as consumers are increasingly aware of the environmental footprint of
their vehicles.
Growth in the Two-Wheeler Segment
The two-wheeler tire segment is witnessing rapid expansion, driven by increasing motorcycle sales, ride-hailing services, and the rise of e-commerce delivery platforms. The demand for durable, high-performance tires is growing as motorcycles continue to dominate Indonesia’s urban and rural transportation landscape. Young consumers and low-income households prefer motorcycles due to their affordability and fuel efficiency. The increasing adoption of electric motorcycles adds a new dimension to the two-wheeler market, requiring specialized tire solutions. Advances in tread design and puncture-resistant technologies are helping manufacturers meet evolving consumer demands.
Segmental
Insights
Tire
Construction Type Insights
The Indonesia tire market in 2024 is
witnessing a strong dominance of radial tires over bias tires. The increasing
preference for radial construction stems from its superior durability, fuel
efficiency, and ride comfort. Radial tires are widely adopted in passenger cars
and commercial vehicles due to their ability to provide better traction, lower
rolling resistance, and extended tread life. With rising vehicle ownership,
infrastructure development, and increased logistics activity, demand for radial
tires continues to surge, particularly in urban and highway applications. The
shift toward radial tires is also influenced by consumer awareness regarding
cost savings in the long run, as they require less frequent replacement
compared to bias tires.
In contrast, bias tires maintain a
presence in specific applications, particularly in heavy-duty and off-road
segments. However, their dominance is limited due to higher heat buildup,
reduced efficiency, and shorter lifespan. These tires are still utilized in
sectors where extreme load-bearing capacity and rugged durability are
prioritized, such as construction and agricultural vehicles. Despite this, the
ongoing modernization of transportation and industrial fleets is accelerating
the transition toward radial alternatives.
The dominance of radial tires is further
reinforced by government policies supporting infrastructure growth, leading to
increased highway usage and long-distance transportation needs. The expansion
of ride-hailing services and logistics networks also contributes to a stronger
demand for radial tires, which offer better performance in high-mileage
scenarios. As consumer preferences evolve and fleet operators focus on
operational efficiency, radial tires continue to gain a larger share of the
Indonesian market in 2024.
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Region
Insights
In 2024, Java emerged as the dominant
region for tire sales in Indonesia. As the economic and industrial hub of the
country, Java plays a crucial role in the automotive and tire markets. This
island is home to the majority of Indonesia’s manufacturing facilities,
including those of automotive producers, and accounts for a significant portion
of the nation's automotive demand. Jakarta, the capital, is a major center for
business and transportation, driving a large demand for both passenger and
commercial vehicle tires. The high density of vehicles on the road in this
region, combined with its economic activity, leads to the frequent replacement
of tires and increased demand for new models.
The urbanization and infrastructure
development in Java has led to more vehicles being used across various sectors,
including private transportation, logistics, and public transport. The rise in
e-commerce and the expanding retail sector further boosts the need for
transportation, and with it, the demand for durable and efficient tires. This
makes Java not just a leader in terms of volume, but also a critical market for
innovations in tire technology, with an emphasis on tires that offer better
fuel efficiency, longer life spans, and greater road safety, particularly for
vehicles navigating the region's densely trafficked streets.
The region’s transportation system, comprising
both roadways and commercial vehicles, has a significant impact on tire
consumption patterns. In Java, consumers typically demand a variety of tire
types suited for different vehicle categories, including cars, trucks, and
buses. The growth in logistics and distribution networks, especially in cities
like Surabaya, Bandung, and Yogyakarta, also contributes to the rise in tire
sales, as these sectors depend on reliable transportation networks for goods
movement. Additionally, the continued expansion of mass transit systems and the
push for electric vehicles (EVs) further shape the tire market on the island,
as tire manufacturers adapt to new trends and technological advancements.
Recent
Developments
- In
November 2024, Zhongce Rubber Group Co., Ltd. (ZC Rubber) announced that
its newly established Indonesian subsidiary, PT. Matahari Tire Indonesia
(MTI), has successfully manufactured its inaugural all-steel radial tire.
Although the facility is currently in the ramp-up stage, the production of
this initial tire represents a noteworthy advancement in addressing the
increasing demand for high-quality tires in both domestic and global
markets.
- In
August 2024, PT Gajah Tunggal Tbk launched its Giti passenger car tire
brand in Indonesia, offering a premium choice for industry experts focused
on advanced technology. The GitiSportS2, engineered in Germany, is an
ultra-high-performance tire designed to enhance luxury vehicles with
outstanding control, excellent wet traction, and superior braking
performance.
- In
2024, Chinese electric vehicle manufacturers BYD and Neta Auto unveiled
their latest models and revealed new investment initiatives during an auto
exhibition in Jakarta. Additionally, Indonesian property developer
Suryacipta Swadaya disclosed that BYD is set to establish a factory valued
at USD 1 billion on a 1.08 square kilometer site in West Java province.
The construction is scheduled to begin in August 2024, with operations
expected to start in January 2026.
- In 2025,
Michelin has announced plans to fully acquire Indonesian tire manufacturer
Multistrada, a move that strengthens its foothold in the Southeast Asian
market. This acquisition will enable Michelin to expand its production
capabilities and tap into Indonesia’s growing automotive sector. By
integrating Multistrada’s existing facilities and expertise, Michelin aims
to enhance its market share and operational efficiency in the region. The
strategic acquisition underscores Michelin’s commitment to accelerating growth
in emerging markets and leveraging local production to meet rising demand
for quality tires in Indonesia and beyond.
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
- Continental Tyres Indonesia
- YHI INDONESIA, PT.
- Toyo Tires Indonesia
- PT MICHELIN INDONESIA
By Vehicle
Type
|
By
Demand Category
|
By
Tire Construction Type
|
By Region
|
- Passenger Vehicle
- Commercial Vehicle
- Two-Wheeler
|
|
|
- Java
- Sumatra
- Sulawesi
- Kalimantan
- Rest
of Indonesia
|
Report
Scope:
In this report,
the Indonesia Tire Market has been segmented into the following categories, in
addition to the industry trends which have also been detailed below:
·
Indonesia
Tire Market, By Vehicle Type:
o
Passenger
Vehicle
o
Commercial
Vehicle
o
Two-Wheeler
·
Indonesia
Tire Market, By Demand Category:
o
OEM
o
Replacement
·
Indonesia
Tire Market, By Tire Construction Type:
o
Radial
o
Bias
·
Indonesia
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 Tire Market.
Available
Customizations:
Indonesia 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
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analysis and profiling of additional market players (up to five).
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