The Mexican aftermarket tire industry generated roughly $4.5 billion in retail-level revenue last year, and is expected to keep growing at 7.4% annually over the next three to five years, according to new research from Frost & Sullivan.
Revenue includes about $2.6 billion from sales of passenger car and light truck tires, as well as $1.9 billion from medium truck tires. The passenger tire segment will grow faster than the medium- and heavy-duty vehicle segment due to increasing consumer awareness of tire quality, according to the analysis.
In 2014, distributors and installers sold about 22.7 million tires for cars and light trucks, plus 3.2 million tires for medium and heavy-duty vehicles. Frost & Sullivan expects those numbers to grow to 31.8 million passenger car/light truck tires and 4.7 million commercial truck tires by 2019.
Strong local vehicle sales and a growing economy that has increased the size and purchasing power of Mexico’s middle class are the main drivers. Additionally, poor road conditions in some areas of the country also contributed to increased tire replacements.
There are roughly 100 tire brands available in the market today, including local brands, low-cost import brands and premium brands. The top five brands – which together account for more than 40% of the market – are Bridgestone, Michelin, Continental, Goodyear and Pirelli, according to the report.
The industry will continue to be negatively affected by the introduction of used tires (both legal and illegal), which are estimated to reach about 2 million units annually, Frost & Sullivan said.
The company estimates the total number of light vehicles in operation in Mexico is growing by 2.1% each year, compared with 1.4% annual growth in the U.S. Demand for batteries, brakes, filters and other aftermarket parts will increase steadily, reaching $8.4 billion by 2017.
