Brazil’s automotive industry has become the most significant market globally, and tire is the circular vehicle component in Brazil’s automotive market.
The Brazil automotive tire market was valued at $1.87 billion in 2019 and is projected to reach $9.05 billion by 2027 registering a CAGR of 4.5% from 2020 to 2027. Brazil Motor Vehicles Sales were 155,081 Units in September 2021, compared to 172,778 units in August 2021, as per CEIC data. As per the publisher’s research findings, Brazil Tire Market will reach US$ 9.05 Billion by 2027. (Credit: Research and Markets)
The Brazilian automotive tire market is driven by an increase in automotive production & sales across different vehicles segment and a rise in competition among tire manufacturers. In addition, the introduction of advanced technology in the manufacturing process is anticipated to propel the growth of the automotive tire market.
However, factors such as volatile prices of raw materials and developments in the market of retreading tires are expected to hamper the growth of the market. Further, advancement in technology and fuel efficiency & safety concerns coupled with government support is expected to create numerous opportunities for the growth and expansion of the market.
Covid-19 impact on Brazilin Tire Industry
COVID-19 has created an oblique impact on the Brazil tire manufacturing industry resulting in production shut down. Automotive sales have been reduced, resulting in enormous losses for manufacturing industries. Major tire companies are facing the unavailability of skilled labor due to which production has been affected. Since the pandemic, the world has been suffering economic turbulence, decreasing new investments in tire production projects in Brazil.
However, after the long and hugely negative effect of the COVID-19 lockdown, the tire market has again gained some pace in Brazil. After a big drop in production and sales in previous months, the production of vehicles has resumed now with sales also picking up the pace, which is going to generate demand for tires in the OEM segment.
The Brazilian Tire Market can be segmented based on-demand category, vehicle type, construction type, sales channel, and region. Based on the demand category, replacement tires dominate the overall Brazilian Tire Market with more than 4/5th of the total market share.
Owing to increasing vehicle fleet size, it is expected that the trend will continue to be the same in the near future as well. Based on vehicle type, passenger car tires are leading the Brazilian Tire Market with more than half of the total market followed by LCV, M&HCV, Two-Wheeler, and OTR.
In the forecast period also, it is expected that passenger car tires will be in high demand than any other, but demand for two-wheeler tires will increase at a higher CAGR in comparison to other vehicle types. Based on construction type, radial tires are dominating in the Brazilian Tire Market over bias tires with almost 3/4th of the total share. This is mainly due to the high consumption of passenger cars and because of an increasing fleet of passenger cars, it is expected that it will dominate the market in the future as well.
Brazil Tire Industry is expected to grow with a CAGR of 6.25% from 2021 to 2027
Notwithstanding, backed by increasing per capita income, the growing demand for automobiles, and implementing favorable government schemes are all driving demand for tires in Brazil. Increase safety concerns; the governments are developing stringent tire performance regulations, wet grip-related braking distance reduction, and fuel-saving. Thus, creating ample opportunities for tire manufacturing companies to launch tires that address the Brazilin government regulations. However, factors such as developments in the industry of retreading tires and volatile values of raw elements are anticipated to hinder the growth of the tire market in Brazil.