Mexico tyre market grew at 19% CAGR 2009-2012
Tyre market revenues in Mexico grew at around 19 per cent compound annual growth rate (CAGR) between 2009 and 2012, according to a report published by Research and Markets.
The combination of Mexico’s relatively cheap skilled labour, proximity to the United States, membership of NAFTA and 12 free trade agreements with world’s growing economies such as EU, Japan, Canada, and the United States, are said to have made the country “an ideal production centre for automobiles and components”. However the report also suggests that the automobile population in Mexico is underperforming with only 275 cars per 1,000 people as of 2012. On the flip side this is said to indicate “enormous market potential for the automobile sales and is further anticipated to contribute to the demand for tyres subsequently in the country”. OEMs such as Nissan, GM, Toyota and Volkswagen have already established their production plants in the country and are also planning to expand their existing capacities to cater to the growing demand of domestic and global market. Moreover the likes of BMW, Audi, and Hyundai have also announced plans to set up facilities in Mexico.
Research and Markets’ latest report on this area “Tyre Market Forecast & Opportunities, 2018” suggests that growing automobile production in the country coupled with the continuous increase in demand from the replacement tyre market explains why Mexico’s tyre market revenues have grown at the CAGR of around 19 per cent during 2009-12. The large scale investments by the world’s major automotive manufacturers are consequently driving the demand for tyres particularly in the OEM segment, while continuous increase in the sales of passenger cars along with the fact that Mexico has one of the world’s largest fleets for buses and trucks is driving the demand for tyres in the replacement market. Continental, Bridgestone, Cooper, Michelin and J K Tornel (owned by Indian tyremaker JK Tyres) are described as the major dominant companies in the tyre market, while likes of Pirelli, Hankook, and Yokohama are in process of setting up their business in the growing tyre market of Mexico.