Iran Tire Market Embarking Upon a Double Digit CAGR of 10.1% by 2027
Published | 02 December 2021
The Deputy Director of the non-metal industries office of Iran's Industry (Mining and Trade Ministry), announced in 2020 that Iran accounts for 41% of the West Asian tire production. Increasing demand for passenger cars and infrastructure projects in Iran are driving the growth of Iran tire market, along with the Iranian infrastructure projects resulting in a growing fleet of commercial vehicles….
Iran's tire industry has achieved outstanding growth despite the ongoing COVID-19 pandemic. A recent study by the strategic consulting and market research firm BlueWeave Consulting revealed that the Iran Tire Market was worth USD 2,178.6 Million in 2020 and is anticipated to reach USD 4,023.8 Million at a CAGR of 10.1%. The expected growth of the market can be attributed to an increase in demand for automobiles across the country. With the country's economy growing again and national sanctions relaxed by the UN Security Council, the Iranian tire market is poised for further growth. Many domestic tire manufacturers invest heavily in research and development to produce high-quality advanced tires, which in turn favors the market’s growth. In addition to increasing output, players are venturing into new fields, including wide-base tires and SUV tires. All of these factors have contributed to the growth of the Iranian tire market.
Rising R&D Efforts Strengthening the Iran tire market
Today, many domestic tire manufacturing companies in Iran spend large amounts on research and development to produce best-in-class tires that are durable and efficient. They are also increasing production capacity to Make Iran self-sufficient. For instance, in February 2021, Yazd Rubber Industries completed an expansion project at its manufacturing facility in the southern city of Yazd. According to the company, the project was launched three years ago and is expected to increase the production capacity of passenger cars and light truck tires by 3,000 and 12,000 units respectively, per day. In addition to increasing output, the companies are also expanding into new markets, such as producing wide-based tires. Wide base tires are the newest generation of heavy vehicle tires. Iranian producers produced these for the first time in West Asia. Thus, Iran's tire market is growing due to continued R&D efforts.
Fluctuating Price of Raw Materials Hindering the Market’s Growth
Natural and synthetic rubber play an important role in tire manufacturing, and their prices are wildly different. Rubber tires consist of tread, textile cord plies, jointless cap plies, steel cord for belt plies, bead reinforcement, apex, and core. Reinforcing materials, such as nylon, rayon, steel, and polyester, are also used for manufacturing tires. Steel wire and carbon black are also required for tire manufacturing. The value of these raw materials plays a vital role in determining the complete price of the tire. Market growth across the region has been negatively affected by economic ups and downs and ambiguity in raw materials prices caused by economic ups and downs.
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Passenger Segment to Witness Tremendous Growth During the Forecast Period
The tire Market is segmented into Passenger Cars, Light Commercial Vehicles, Heavy, and Medium Commercial Vehicles, Two Wheelers, and Off-the-Road Vehicles. Iran is among the top passenger car manufacturers in the world, as most of the vehicles produced in the country are passenger cars. Passenger cars dominate the market in terms of revenue and are expected to grow at a healthy CAGR during the forecast period. Moreover, the rise in the middle-class population is also contributing to the growth of this segment.
Impact of COVID-19 on the Iran Tire Market
The outbreak of the coronavirus pandemic has negatively affected the Iran tire market. Procurement of raw materials, such as rubber and metals, became challenging during the pandemic-induced lockdown. The pandemic also affected the transportation of finished goods due to disruptions in supply chains. Demand for traveling also declined due to the closure of various commercial establishments and other government restrictions. Moreover, customers were hesitant to purchase new vehicles to save money for contingencies. Each of these factors had a negative effect on the Iran tire market. However, the economy is on the mend, and the market is expected to recover soon.
Competitive Landscape
The key players dominating the market are Barez Industrial Group, Yazd Rubber Industries Complex (YRIC), Hankook Tire, Kumho Tire Co. Inc., Nexen Tire Co., Ltd., Iran Tire Manufacturing Co., Artawheel Tire Co., Michelin, Bridgestone Corporation, Goodyear Tire & Rubber Company and other prominent players. As part of their marketing strategies, the players launch new products, collaborate with other businesses, and form partnerships with other businesses. For instance, Goodyear Tire and Rubber Co. announced the acquisition of Cooper Tire and Rubber Co. in a cash and stock deal valued at USD 2.8 billion in February 2021.
The report's in-depth analysis provides information about growth potential, upcoming trends, and the Iran tire market statistics. It also highlights the factors driving forecasts of total market size. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market. The report promises to provide recent technology trends in the Iran tire market and industry insights to help decision-makers make sound strategic decisions.
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