INDONESIA TIRE RETREADING MARKET

Indonesia Tire Retreading Market is expected to expand at steady growth rate in the coming years owing to rising consciousness about sustainable behaviors, cost efficiency, and government initiatives to reduce carbon emissions.

Major Indonesia Tire Retreading Market Drivers and Emerging Trends

The tire retreading industry in Indonesia has experienced consistent expansion recently driven by factors such as the economic benefits of retreaded tires and the nation’s emphasis on carbon footprint reduction. Numerous commercial transport operators and logistics firms have adopted tire retreading as an environmentally friendly option in comparison to new tires which leads to substantial cost reductions. Governmental support for eco-friendly initiatives along with a burgeoning automotive sector and increasing emphasis on tire lifespan and environmental accountability has positioned Indonesia’s tire retreading market for sustained growth in the foreseeable future. The adoption of eco-friendly methods are leading businesses and fleet operators to embrace tire retreading as a means to cut down on waste and sustain resources. Cost-efficiency is another motivating factor as retreaded tires proving more economical than new ones which is particularly advantageous for commercial sector. In addition, governmental support through regulations for tire retreading and recycling is fostering market growth.

Retreading is a process where new tread is affixed to used tire casings, employing either the pre-cure method also known as the cold system and the mold cure method or hot system. Opting for retread tires offers a budget-friendly solution with potential savings ranging from 30-50% in comparison to the cost of producing new products. Choosing retread tires helps fleets save significantly on their third largest expenses after fuel and labor and are recognized for their high fuel efficiency in comparison to new tires. In addition, retreading contributes to environmental preservation by reducing the disposal of worn-out tires in landfills and minimizing the need for producing new tires. Around 14 million retreaded truck tires are purchased annually which helps to keep fourteen million worn tire casings out of landfills and waste streams. Furthermore, retreading tires saves a considerable quantity of oil as manufacturing a new medium-sized truck tire requires around 80 liters of oil, whereas retreading it uses only about 15 liters of oil. Moreover, by using 68 percent less energy in production, each retreaded tire for truck saves sufficient energy to supply an average household for 33 days.

In Indonesia, retreaded tire sales hit 13.6 million units back in 2017 even though growth has been inconsistent since then. Despite strict import regulations for truck tires, Indonesia largely relies on imports which presents significant growth potential for retreaders. The government and Michelin are also collaborating on aircraft tire retreading, with the latter having pioneered the technology in Thailand. They aim to apply this expertise in Indonesia to enhance the perception and adoption of advanced and cost-effective retreaded tires in the aviation sector which is potentially lowering airline expenses and fostering industry growth.

However, the ASEAN Free Trade Agreement has created a competitive environment in Southeast Asia which enables Thailand and Vietnam to offer tires at lower prices than those produced in Indonesia. Despite Indonesia hosts numerous large-scale tire manufacturers, their market is dwindling largely attributed to tough export conditions which includes the implementation of EU’s EUDR and further indicates a turbulent future for Indonesian retreaders. While Malaysia’s regulatory framework aligns with international standards, Thailand and Indonesia have less rigorous local regulations where stricter laws could result in better product quality but may present challenges such as requiring advanced retreading technology and higher costs for original casings. An ongoing problem frequently revolves around the enforcement of local regulations, consistently leading to a retreads negative perception that persists despite the industry’s efforts to combat it. Lack of enforcement has also facilitated illegal imports which creates pricing competition challenges for retreads. Despite retreads generally being cheaper than new tires, the presence of low-quality and tax-exempt imports blurs this price advantage which complicates matters further. Indonesia also maintains a large internal market with protective measures against imports, prompting international tire manufacturers to establish local operations that foster job growth and utilize domestic resources. Furthermore, developments in tire technology may influence the retreaded tires market demand.

Challenges in Indonesia tire retreading market outlook stem from consumers’ preferences for new tires, driven by concerns regarding performance and safety, thereby compliance with regulatory requirements for retreaded tires is critical to uphold road safety. Additionally, economic slowdown and movement restrictions during the pandemic also contributed to a downturn in the Indonesia tire retreading market. The decrease in travel resulted in reduced requirement for tire retreading and replacement services, but with the gradual resumption of economic activities, the market has started to rebound.

Segments covered in the Report:

The Indonesia Tire Retreading Market has been segmented on the basis of process and vehicle type. based on the end-user, the market is segmented into mold-cure, pre-cure. based on the vehicle type, the market is segmented into automotive (heavy trucks and buses, light commercial vehicles, off-road vehicle, others), aviation.

Market Segmentation

Indonesia Tire Retreading Market by Process

• • Mold-cure
  • Pre-cure

Indonesia Tire Retreading Market by Vehicle Type

• • Automotive
    • Heavy Trucks and Buses
    • Light Commercial Vehicles
    • Off-Road Vehicle
    • Others
  • Aviation