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Passenger Car Segment Dominates Ethiopia Tire Market

December 22, 2015

According to the TechSci Research report, "Ethiopia Tyre Market Forecast & Opportunities, 2020," the passenger car segment is expected to continue its dominance in the country's tire market through 2020. Backed by rising automobile sales, expansion of automobile fleet, and favorable government policies, the tire market in Ethiopia is expected to witness significant growth over the next five years.

Ethiopia's tire market is a replacement-driven market as all the vehicles are imported into the country due to absence of any automobile manufacturing facility in Ethiopia. Horizon tire is the only domestic tire manufacturing company in the country, while other global tire players such as Bridgestone, Goodyear, Michelin, Hankook, Yokohama, etc. operate through import route, according to the researchers.

Because of the unstable political environment, automobile as well as tire companies have been facing challenges in conducting their operations in the country over the past few years. However, with the country gradually regaining political stability, coupled with better fiscal and regulatory policies, Ethiopia is expected to evolve into a more open and stable economy over the course of next 5-10 years, which would eventually have a positive impact on the country's automotive industry. Moreover, Ethiopia's vehicle motorization rate (including passenger cars and commercial vehicles) stood at two vehicles per 1,000 people. Consequently, the country is expected to continue witnessing growth in the sales of vehicles, thereby driving tire demand during the forecast period, according to the researchers.

"During 2015-20, OTR tire segment is expected to emerge as the fastest growing tyre segment, followed by light commercial vehicle tire, two-wheeler tire, passenger car tire and medium and heavy commercial vehicle tire segment. Nevertheless, passenger car tire and light commercial vehicle tire segments accounted for the lion's share of more than 75 percent of the total tire market in Ethiopia in 2014, with medium and heavy commercial vehicle tires, two-wheeler tires and OTR tires following the league," said Karan Chechi, research director with TechSci Research.

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