Report: Bangladesh tyre market to grow at 9% CAGR
A new report suggests the Bangladesh tyre market will grow by 9 per cent compound annual growth rate between now and 2020 due to a rise in automobile sales, improvement in public infrastructure, and growth in purchasing power.
According to the recently released TechSci Research report, “Bangladesh Tyre Market Forecast & Opportunities, 2020’’, several global tyre giants have also expressed interest in making significant investments by setting up their manufacturing units in the country.
Two wheeler tyres remain the dominant segment in overall tyre market in Bangladesh as majority of the country’s population can be described as “low income”. The trend is expected to continue over the forecast period as well. In 2014, Dhaka, the capital city of Bangladesh, held significant majority market share, and hence emerged as the leading region in terms of tyre sales throughout the country.
Automobile and tyre sales in Bangladesh are expected to grow with rise in purchasing power of people as well as growing investments and joint ventures of foreign market players. The suggestion is that this means the country may become and export destination for global tyre manufacturers.
TechSci’s report also reveals that Bangladesh is among the leading importers of reconditioned cars and generally imports them from Japan. However, this is also said to have led to a significant drop in new car sales. In order to curb this problem, the government is planning to reduce import duties levied on new cars being imported from other markets.
“Bangladesh largely lacks in tyre manufacturing set ups, which leads to tyre imports from other countries as the only feasible option to cater the growing demand. The company largely imports tyre from China, India, Indonesia, Thailand and Japan. This reflects an opportunity for local companies to set up indigenous manufacturing base in Bangladesh and also enables foreign players to set up their localized production facilities to capture significant market. Increase in local manufacturing units will generate employment as well as help Bangladesh’s infrastructure and economy to grow,” said Karan Chechi, research director with TechSci Research.