A view of traffic in Hanoi. (Photo: autovina.com)
Growing automobile sales, rising vehicle fleet, favorable government policies and increasing foreign investments in the automotive sector will drive the tire market in Vietnam, TechSci Research said in a report.
Vietnam’s rubber output also supports tire manufacturers in increasing production capacities and establishing new manufacturing plants in the country. As many as 14 tire plants were operating in the country as of 2014, churning out more than 65 million units per year.
Many domestic and global players are strengthening their footprint in Vietnam by setting up manufacturing plants here, taking into account the growing demand for vehicles in the country and the imminent rise in foreign investments as the country signed WTO and ASEAN FTA agreements, the report said.
TechSci Research pointed out that in the Vietnamese tire market, the two-wheeler tire segment makes up the lion’s share, followed by passenger car and commercial vehicle & off-the-road (OTR) tire segments.
However, the passenger car tire segment is expected to exhibit the fastest growth rate over the next five years, followed by the commercial vehicle & OTR tire segment, the market research and consulting firm noted.
A number of foreign giant tire makers including Yokohama, Bridgestone, Kumho, Maxxis, Pirelli and Michelin are few of the key tire players operating in Vietnam. Kumho Tires in 2008 invested $200 million to build a factory in Vietnam, which will have a capacity of 3.15 million tires per year.
, Taiwan’s second-largest tire manufacturer, has plans to scale up its investment in Vietnam-based tire manufacturing factory to $304 million as the investment climate in China is deteriorating.