South Africa tire market is growing at a high CAGR due to the growing automotive industry, growing demand for tire from the mining industry, rising industrialization. Additionally, the growing income, and penetration of cost-friendly Chinese tires in the country is also favoring the market’s growth.
A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the South Africa tire market was worth USD 2.2 billion in 2021. The market is projected to grow at a CAGR of 4.8% during the forecast period (2022-2028), earning revenue of around USD 3.0 billion by the end of 2028.
South Africa tire market is growing owing to the growing automotive industry, increasing demand for electric vehicles, and growing industrialization in the country. Moreover, the growing penetration of Chinese and cost-effective tires is also fueling the growth of the South Africa tire market.
The growing automotive industry in the country is driving the South Africa tire market. According to Naamsa, South Africa’s automotive business council, the automotive industry is one of the most relevant industries in the South African economy contributing around 4.9% to the country’s GDP.
The manufacturing of automobiles contributes 2.8%, while the retailing of automobiles contributes 2.1%. Naamsa reported that South African exports of vehicles and automotive components topped R175.7 billion (USD 11.02 billion) in 2011, contributing 13.9% to the total exports.
Automobiles sales are growing by leaps and bounds across South Africa. Naamsa reveals that domestic new vehicle sales reached 41,588 units in November 2021, an increase of 6.6% from 39015 vehicles sold in November 2020. Furthermore, the total exports of automobiles are up by 8.09% compared to the same period in 2020 and reached 273,838 units in November 2021. The growing automotive industry and growing sales & exports of automobiles have created a growing demand for tires in the country and therefore, is driving the growth of the South Africa tire market.
The mining industry of South Africa is one of the largest in the country. South Africa’s Department of Mineral Resources estimates its ore reserves to be 2.5 trillion dollars. Worldwide, the country has the largest reserves of Platinum-group metals (PGMs) (88%), Manganese (80%), Chromite (72%), and Gold (13%), as well as second-largest reserves of Titanium minerals (10%), Zirconium (25%), Vanadium (32%), Vermiculite (40%) and Fluorspar (17%). PGMs, gold, iron ore, and coal account for 82% of sales and almost 38% (R282 billion – USD 17.68 billion) of exports.
With the growth of the mining industry in the country, the demand for new and efficient equipment is growing. The demand for large tires is also steadily growing in the mining industry. For instance, in 2019, one of the largest mining contractors in the world operating in one of the largest coal mines of South Africa selected Magna Tyres’ 40.00R57 Magna MA04+C Giant tires for Cat 793D rigid dump trucks. Other factors driving South Africa tire market growth include the demand for specially designed tires that can withstand severe conditions in mines with decreased heat buildup inside the tire, lower fuel consumption, higher efficiency, optimized operator comfort, and prolonged service life, all of which create a growing demand for tires from the mining sector.