Argentinian Tire Market to Grow 12% by 2020
The tire market in Argentina is forecast to grow at a CAGR of around 12% during 2015-2020 driven by reviving automobile production and sales, according to the TechSci Research report, "Argentina Tyre Market Forecast & Opportunities, 2020."
Devaluation of the peso, high inflation rates, and widening current account deficit are factors that have fueled decline in automobile production and sales in Argentina during 2010 to 2014, according to the report.
Moreover, the decline in automobile production was fueled by poor demand from key export markets, due to the economic slowdown. These factors created a bearish environment in Argentina automobile industry, resulting in a decline in OEM tire demand. However, backed by a vehicle fleet of over 18.50 million in 2014, replacement tyre market in Argentina grew at a faster pace compared to OEM demand over the last five years, according to researchers.
The Argentinian tire market was dominated by the passenger car tire market in 2014, due to rising passenger car sales and expanding passenger car fleet size. Fate, Bridgestone, Michelin and Pirelli are few of the leading tire brands operating in the country. Apart from these tire brands, the country also imports various other tire brands from different parts of the world. Dominance of domestic brands can be attributed to their competitive pricing strategies compared to other international tire brands available in the country, acording to the report.
"Argentina is increasing its focus on tuning its monetary and fiscal policies to support economic growth," said Karan Chechi, research director with TechSci Research, a research based global management consulting firm. "Government has also been planning to offer tax incentives to investors in Argentina, thereby attracting investments in the country. These factors are expected to support economic growth and aid in the recovery of Argentina automobile industry. Expected recovery in automobile production and sales, backed by tentative revival of macroeconomic factors is forecast to drive the country's tyre market over the next five years."