THE REPUBLIC of the Philippines is currently positioning itself amongst the best performing economies in Asia, having posted 7.8% GDP in the first quarter of the year.
Despite this development, passenger car ownership in the country is comparatively lower than its other ASEAN neighbours, according to a report by global consultancy firm, TechSci Research.
Nonetheless, the firm forecasts that car ownership is expected to increase in the near future given that the Philippine government is taking several initiatives such as easy availability of loans and promoting growth of rubber production that could also encourage the growth of the tyre market.
Moreover, its Government plans to increase the domestic production for natural rubber (NR) from 138,710 ha in 2010 to over 200,000 ha by 2016, translating to an annual increase of over 10,000 ha.
Leading the handful of tyre manufacturers in the country is Japanese firm Yokohama. They are also expected to increase their production over the coming years.
The increase in NR production is also likely to draw foreign investments in the country’s tyre market, said TechSi.
The major revenue generating regions for Philippines tyre market includes the National Capital Region (NCR), which is comprised of Metro Manila, and suburban areas; Cebu City in the Visayan region; and, Davao City and Cagayan De Oro City, in the Mindanao region.
The introduction of National Automotive Manufacturing Industry Strategy (NAMIS) in 2013 and increasing rubber plantation areas in the country are expected to stimulate the tyre market of Philippines. The industry is also witnessing growth in the demand for vehicles and automotive firms such as Toyota and Mitsubishi have planned to increase their production output during the forecast period.
This would also contribute directly to the demand for tyres in the country. The growth of replacement tyre market and increase in tyre retreading will contribute significantly to the tyre market in the Philippines.