The Indonesia tire market is poised for promising growth, with a projected CAGR of 9.9% by 2028. The market is being driven by factors such as rising disposable income and a growing fleet of automobiles. In addition, increasing two-wheeler sales and favorable macroeconomic conditions are contributing to the market’s expansion.
According to a recent study by strategic consulting and market research firm Report Ocean, the Indonesia tire market is expected to grow at a CAGR of 9.9% during the forecast period from 2022 to 2028. The market’s growth can be attributed to the rising disposable income and the increasing number of automobiles on the roads. The tire industry in Indonesia has experienced significant growth due to the growing exports of tires and the rising number of motorcycles purchased by the country’s middle class. However, fluctuations in raw material prices required for tire manufacturing and environmental concerns related to tire disposal are potential challenges that may impact the market’s growth.
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The increasing sales of motorcycles play a significant role in driving the growth of the Indonesia tire market. Motorcycles are the preferred mode of transportation in the country due to road conditions and traffic congestion. With Indonesia becoming the world’s largest two-wheeler market, particularly for brands like Honda, the demand for tires is expected to rise significantly.
The favorable macroeconomic conditions in Indonesia contribute to the market’s growth. As the world’s fourth most populous nation and the largest economy in Southeast Asia, Indonesia is forecasted to experience a GDP growth of over 5% in 2022 and 2023. The automotive industry accounts for a substantial portion of the manufacturing sector and the overall Indonesian economy. With the growth of automobiles, particularly two-wheelers, there will be an increased demand for tires in the country. Additionally, the government’s import quota regulations have led to increased exports. Indonesia ranks eighth in the world for the export of passenger car tires, bolstered by favorable foreign direct investment (FDI) and the availability of raw materials such as rubber. This has encouraged tire manufacturers to expand their operations in Indonesia, further driving the growth of the market.
The two-wheeler segment is expected to witness tremendous growth in the upcoming years. Among the various applications in the Indonesia tire market, the two-wheeler segment dominates in terms of revenue and is projected to grow at a healthy CAGR. With a growing middle-class population, there is an increasing demand for affordable and convenient transportation options, driving the growth of two-wheelers and subsequently the tire market. Factors such as the rising number of female riders and traffic congestion on Indonesian roads contribute to the growth of this segment.
In terms of tire types, the radial segment holds the largest share in the Indonesia tire market. Radial tires offer several advantages, including lower fuel consumption, reduced ground compaction and damage, and lower maintenance costs. They also have longer replacement intervals and provide better performance, driving the growth of this segment.
Key players in the Indonesia tire market include Gajah Tunggal Tbk, Bridgestone Tire Indonesia, Multistrada Arah Sarana Tbk. (Michelin), Inoue Rubber Co., Ltd., Suryaraya Rubber Indo Industries (FDR), Timsun Rubber Tire (Weihai) Co., Ltd., Goodyear Indonesia Tbk, Sumi Rubber Indonesia, Hankook Tire Indonesia, Tiga Berlian Mandiri (Tiberman), and other prominent players. These market players employ strategies such as new product launches, collaborations, and partnerships to expand their customer reach and gain a competitive edge. For example, in August 2021, TVS Srichakra, a leading manufacturer of two and three-wheeler and off-highway tires, entered the Indonesian market by launching Eurogrip Bee City, a range of two-wheeler tires customized to suit the needs of Indonesian riders.
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Market Overview
Market Size & Forecast by Value, 2018-2028
By Value (USD Million)
Market Share & Forecast
By Type
Radial
Bias
By Application
Passenger Cars
Two Wheelers
Buses and Trucks
(Off-the-road) OTR mining
By Demand Category
OEM
Replacement
By Distribution Channel
Offline
Online
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