A forecast, Bangladesh’s tyre market will receive at around 9% annual growth until 2020, on the back of thriving automobile sales, ongoing improvements in public infrastructure, and growth-oriented government policies.
The country’s annual tyre sales are close to Tk 5,000 crore and two-wheeler, light automotive, commercial vehicle tyres account for the majority of the sales, according to industry insiders.
The market size of automotive tyres reached Tk 4,750 crore last year, up from about Tk 4,000 crore in 2017, Tk 3,000 crore in 2016, and Tk 1,500 crore in 2015, according to market players.
The commercial vehicle tyre segment dominates the industry with the market size standing at Tk 3,750 crore. At least 1.5 lakh pieces of commercial vehicle tyres were sold in 2018.
Besides, 1 lakh pieces of tyres used in private cars were sold last year amounting to Tk 1,000 crore, said Mohammed Shahidul Islam, chairman of HNS, an importer of Korean Hankook tyre brand.
Two-wheeler is another prevailing tyre segment. Despite rising automobile sales, the replacement segment continues to lead the market too.
On the other hand, rural-based three-wheeler vehicles also grabbed a big chunk of the market.
Dhaka held a significant majority market share and hence emerged as the leading region in terms of tyre sales across Bangladesh.
Bangladesh now has emerged as a developing country, offering significant growth opportunities across diverse industry segments including automotive.
However, Bangladesh largely lacks in tyre manufacturing setups, which leads to tyre imports from other countries like China, India, Indonesia, Thailand and Japan due to a scarcity of raw materials, a lack of native tyre production units as well as skilled labour.
Bangladesh spends around Tk 1,000 crore to import more than 15 lakh pieces of tyres a year mainly from India, Japan and China, according to importers, distributors and sellers.
“The tyre market has been growing very fast for the last 10 years riding on the back of an increasing number of commercial vehicles,” said Nazrul Islam, general manager of Veloxo Trading Ltd, the sole importer of Indian tyre MRF.
In the commercial vehicle tyre segment, the MRF’s market share is 30%. Apollo controls 5% of the segment, Birla 10%, CEAT 3%, and Hankook 1%. The rest 51% is controlled by non-branded Chinese tyres.
In the private car tyre segment, the combined share of Yokohama, Bridgestone and Toyo and Dunlop stand at about 70%. Maxxis owns 20% share, Hankook 2%, and non-branded Chinese tyres the rest 8%.
There have been more than 20 brands along with the local ones include Gazi Group, Apex Husain, Meghna Group and Rupsha Tyres. However, available local production only covers tyres for light trucks, microbuses, motorcycles, autorickshaws and easy bikes.
However, the scenario is expected to witness a paradigm shift in the coming years as several global leading tyre companies are gearing to set up manufacturing units in the country.
This reflects an opportunity for local companies to set up an indigenous manufacturing base in Bangladesh and also enables foreign players to set up their localized production facilities to capture a significant market. Few global tyre giants have started their manufacturing units on a small scale.