Research and Markets said in their report “Iran Tyre Market Forecast and Opportunities, 2020” that easing up on nuclear programs may bring back foreign tyre companies that left the country.
The replacement tyre segment accounted for around two-third of the market share in 2014. However, expected increase in automobile production during the forecast period is expected to increase the share of OEM tyre segment during 2015 to 2020. Over the last few years, various international tyre brands like Bridgestone, Continental, Michelin etc. had restricted their operations in the country due to imposed sanctions on Iran.
Consequently, over the course of last few years, tyre market in Iran has been dominated by domestic tyre companies like Barez Tyre, Kavir tyre, Yazd Tyre, etc.
Easing of sanctions is expected to trigger re-entry of leading international players into the country, which would reduce the market dominance of domestic tyre manufacturers in Iran in the coming years.
Iran has the largest automotive industry among the Middle Eastern countries. However, on account of sanctions imposed on Iran by P5 nations (China, France, Russia, UK and US) due to continuous expansion of nuclear programs by the country, the automobile production and sales witnessed a decline during 2010 to 2014
However, after protracted negotiations between Iran and P5 nations, a Joint Comprehensive Plan of Action (JCPOA) was signed by both the sides in Austria on July 14, 2015. This move is expected to stimulate economic activity in the country over the next five years, which in turn, would boost growth prospects for automobile and tyre industry in Iran.
Anticipated revival in automobile industry is expected to drive OEM as well as replacement tyre demand, which is expected to translate into double digit growth of the country’s tyre industry during the forecast period.