Mexico Tire Market Growing Steadily Despite the Pandemic: Forecast to Grow at the CAGR of 6.1% by 2021

Mexico tire market is growing at a high CAGR because of the expanding automobile manufacturing in the country. Additionally, the increasing disposable income and purchasing power of the people is influencing the domestic sales of automobiles, especially passenger cars, thereby driving the markets growth

A recent study conducted by the strategic consulting and market research firm,Report Ocean, revealed that the Mexico tire market is estimated to grow at the CAGR of 6.1% in the forecast period of 2021-2027. The growth of the Mexico tire market is attributed to the high concentration of multinational tire companies that are establishing tire production plants in this region. The companies such as Pirelli, are also investing towards expanding their tire production capacity to meet the global demand and boost their exports. Furthermore, increasing automobile production in the country along with growing private vehicle ownership due to changing economic scenarios is projected to witness lucrative growth opportunities to the market in the forecast period. However, high prices of tires in the domestic market along with increasing penetration of imported used tires is estimated to act as a major restraint for the Mexico tire market growth.

The Growing Online Market is Presenting Lucrative Growth Opportunities to the Mexico Tire Market

When it comes to purchasing tires, Mexican consumers prefer offline stores. However, the online sales channels are gaining significant popularity, especially after the COVID-19 outbreak. Thus, tire brands are launching exclusive websites and mobile apps to target the younger consumer demographic to boost their sales. The third-party suppliers and distributors are also resorting to popular online platforms to hop into this growing opportunity. Moreover, consumers are attracted to the online platforms since they offer attractive deals and discounts, along with the convenience of onsite delivery, which ultimately drives market growth.

Increasing Automobile Production Estimated to Drive Mexico Tire Market

Mexico is home to several established automobile brands, such as Audi, BAIC Group, BMW, Honda, Kia, Mazda, Nissan, General Motors, etc. It is estimated that about 89% of the vehicles manufactured in Mexico are exported, with 80% destined for sales in the United States of America. Mexico's low labor costs and free trade agreements encourage manufacturers to establish production facilities in the country. As the country's automobile production increases, the demand for tires is expected to rise, propelling overall market growth during the forecast period.

Mexico Tire Market - By Vehicle Type

Based on vehicle types, the Mexico tire market is categorized into passenger cars, light commercial vehicles, medium and heavy commercial vehicles, two-wheelers, three-wheelers, and off-the-road (OTR). Among these segments, the passenger cars segment holds the largest market share. The increasing demand for private vehicles is gaining significant traction in the domestic vehicle market with consumers increasing purchasing power. For instance, the Japanese brand Nissan ranked as Mexicos bestselling car, holds 6.8% of the market share. On the other hand, the heavy commercial vehicle segment also holds a significant share in the market because of the prominent demand for buses and truck fleets in Mexico.

Impact of COVID-19 on Mexico Tire Market

The Mexico tire market came to a standstill due to the sudden outbreak of the COVID-19 pandemic. Mexico was hit by the second wave of COVID-19 in December 2020. Due to the high COVID-19 mortality rate in Mexico and government negligence, tire and automobile manufacturers halted production activities on their own initiative. Moreover, lack of workers also contributed to their decision. This decreased tire supply in both the domestic market and for export, which led to significant losses for the manufacturers. Mexico's economy lost 8.5% of its GDP in 2020 and experienced three waves of the COVID-19 pandemic. In light of these factors, the tire market will also take its time to recover from this slump during the period following COVID-19.

Mexico Tire Market - Competitive Landscape

The leading players in the Mexico tire market are Bridgestone Americas Inc., Continental AG, Cooper Tire & Rubber Co., JK Tire & Industries Ltd., Pirelli, Goodyear Mexico, Michelin, Hankook Tire de Mexico, TBC Corporation, BKT Tires, and other prominent players.

The market is highly consolidated among international players and is dominated by six multinational tire corporations. In order to target the untapped potential of the region, tire manufacturers are setting up local production facilities. Their goal is to expand their end-user base by offering a wide range of tire types. Furthermore, the adoption of competitive strategies such as partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.