Indonesia Tire Market 2030F: Market Dynamics Overview

According to TechSci Research report, “Indonesia Tire Market – By Region, Competition, Forecast & Opportunities, 2020–2030F”, the Indonesia Tire Market was valued at USD 3.85 billion in 2024 and is forecast to reach USD 5.82 billion by 2030, expanding at a CAGR of 7.11% during the forecast period.

Indonesia stands as one of Southeast Asia’s most dynamic automotive markets, underpinned by a large population, rising income levels, rapid urbanization, and expanding industrial activity. The tire industry, a critical component of the automotive value chain, has benefited significantly from these macroeconomic and structural trends. As vehicle ownership increases across passenger vehicles, commercial fleets, and especially two-wheelers, demand for both OEM and replacement tires continues to rise steadily.

The Indonesian tire market has evolved beyond volume-driven growth to focus increasingly on quality, performance, and sustainability. Consumers today are more discerning, prioritizing durability, fuel efficiency, safety, and environmental impact when selecting tires. This shift in consumer expectations is reshaping product portfolios, driving innovation, and intensifying competition among domestic and global manufacturers operating in the country.

In addition, Indonesia’s growing role as a manufacturing and export hub for tires in the Asia-Pacific region has attracted substantial investments from leading global players. These investments are strengthening local production capabilities, technology transfer, and supply chain resilience, positioning Indonesia as a strategic market for long-term tire industry growth.

Industry Key Highlights

• The Indonesia tire market is witnessing consistent growth supported by rising vehicle ownership across all segments.

• Two-wheelers represent the fastest-growing vehicle segment, driving strong replacement tire demand.

• The transition toward radial tires is accelerating due to superior safety, performance, and fuel efficiency.

• Replacement tires account for a significant share of total demand, fueled by challenging road conditions and high vehicle utilization.

• Electric vehicle adoption is creating emerging opportunities for specialized tire solutions.

• E-commerce platforms are transforming tire distribution and purchase behavior.

• Sumatra has emerged as the fastest-growing regional market due to infrastructure expansion and industrial activity.

• Sustainability and eco-friendly tire technologies are gaining traction among manufacturers and consumers.

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Evolution of the Indonesia Tire Market

Historically, Indonesia’s tire market was primarily driven by basic mobility needs and dominated by bias tires tailored for affordability and durability. Over time, as road infrastructure improved and vehicle technology advanced, the market gradually shifted toward higher-performance products.

Today, the tire industry in Indonesia reflects a more mature and diversified landscape. The growing presence of international tire brands, coupled with domestic manufacturing strength, has increased product variety and competition. Consumers now have access to a wide range of tires designed for different terrains, vehicle types, and driving conditions.

The rise of organized retail and digital sales channels has further enhanced transparency and accessibility, allowing buyers to compare specifications, prices, and reviews before making purchasing decisions. As a result, the market is increasingly driven by informed consumer choice rather than price alone.

Market Drivers

1. Rising Vehicle Ownership

One of the most significant drivers of the Indonesia tire market is the steady increase in vehicle ownership. Economic growth, urbanization, and improved access to financing have enabled more consumers to purchase motorcycles, passenger cars, and commercial vehicles.

Motorcycles, in particular, remain the dominant mode of transportation due to their affordability, fuel efficiency, and ability to navigate congested urban roads. Each new vehicle sold contributes directly to OEM tire demand and indirectly to long-term replacement demand.

2. Expanding Middle Class and Disposable Income

Indonesia’s expanding middle class has played a pivotal role in shaping tire demand. As disposable incomes rise, consumers are increasingly willing to invest in higher-quality tires that offer better performance, safety, and longevity.

This shift has encouraged manufacturers to introduce premium and mid-range tire options that balance cost with advanced features, catering to evolving consumer expectations.

3. Growth of Replacement Tire Market

Replacement tires account for a substantial portion of total tire sales in Indonesia. Frequent usage, challenging road conditions in certain regions, and high mileage accumulation—especially among commercial vehicles and two-wheelers—necessitate regular tire replacement.

The replacement segment is further supported by increased awareness of vehicle safety and maintenance, prompting consumers to replace worn tires proactively.

4. Infrastructure Development

Ongoing investments in road infrastructure, logistics networks, and industrial corridors are supporting vehicle usage across regions. Improved connectivity encourages higher vehicle penetration in rural and semi-urban areas, driving tire demand.

At the same time, infrastructure development in industrial zones has boosted demand for commercial and heavy-duty vehicle tires.

5. Shift Toward Electric Mobility

Government initiatives promoting electric vehicles, including electric two-wheelers, are beginning to influence tire demand. EVs require specialized tires designed to handle higher torque, lower noise levels, and enhanced durability, opening new avenues for innovation.

Emerging Trends in the Indonesia Tire Market

1. Transition from Bias to Radial Tires

Radial tires are increasingly replacing traditional bias tires across passenger vehicles and commercial fleets. Their advantages in terms of fuel efficiency, road grip, comfort, and safety are driving widespread adoption.

Manufacturers are expanding radial tire production capacity to meet rising demand, while consumers are becoming more aware of the long-term cost benefits associated with radial technology.

2. Growth of Eco-Friendly and Sustainable Tires

Environmental sustainability is becoming a key focus area in the tire industry. Consumers and regulators alike are emphasizing reduced carbon emissions, lower rolling resistance, and eco-friendly materials.

Tire manufacturers are investing in sustainable rubber sourcing, recyclable materials, and energy-efficient production processes to align with these expectations.

3. Rise of Electric Two-Wheeler Tires

Electric motorcycles and scooters are gaining popularity in Indonesia due to government subsidies, lower operating costs, and environmental benefits. This trend is driving demand for tires specifically engineered for electric two-wheelers, which experience different wear patterns and torque characteristics.

4. Expansion of E-Commerce and Digital Sales

Online tire sales are growing rapidly as consumers seek convenience, competitive pricing, and access to a wider range of brands. Digital platforms allow customers to compare products, read reviews, and schedule installation services, enhancing the overall buying experience.

5. Demand for High-Performance and All-Terrain Tires

As consumers increasingly travel across diverse terrains—from urban roads to rural and plantation areas—demand for versatile, high-performance tires is rising. Tires that can withstand harsh conditions while delivering consistent performance are gaining popularity.

Market Segmentation Analysis

By Vehicle Type

Two-Wheelers

The two-wheeler segment is the fastest-growing segment in Indonesia’s tire market. The country’s status as one of the world’s largest motorcycle markets ensures sustained demand for both OEM and replacement tires.

Growth in ride-hailing services, food delivery platforms, and courier operations has further intensified tire usage, leading to frequent replacements.

Passenger Vehicles

Rising passenger car ownership, driven by urbanization and income growth, is supporting steady demand for passenger vehicle tires. Consumers increasingly prefer tires that offer comfort, safety, and fuel efficiency.

Commercial Vehicles

Commercial vehicles play a vital role in Indonesia’s logistics and industrial sectors. Demand for durable and high-load tires is strong, particularly in regions with mining, agriculture, and construction activities.

By Demand Category

• OEM Tires: Driven by new vehicle sales.

• Replacement Tires: Dominant segment due to high vehicle utilization and road conditions.

By Tire Construction Type

• Radial Tires: Fastest-growing segment due to performance advantages.

• Bias Tires: Still used in specific applications but gradually declining.

Regional Analysis

Sumatra: The Fastest-Growing Region

In 2024, Sumatra emerged as the fastest-growing region in Indonesia’s tire market. The region’s economic activity is supported by agriculture, mining, forestry, and manufacturing sectors, all of which rely heavily on transportation and logistics.

Rising vehicle ownership in both urban and rural areas has increased demand for passenger and commercial vehicle tires. Infrastructure improvements, including road expansion projects, have further stimulated vehicle usage and replacement tire demand.

Sumatra’s growing emphasis on sustainability and adoption of eco-friendly products is also influencing tire purchasing decisions. With continued industrial development and infrastructure investment, the region is expected to remain a key growth engine for the tire market.

Competitive Analysis

The Indonesia tire market is moderately consolidated, featuring a mix of global tire giants and strong domestic manufacturers. Competition is driven by product quality, pricing, brand reputation, distribution reach, and technological innovation.

Major Companies Operating in the Market

• PT Gajah Tunggal Tbk

• PT Bridgestone Tire Indonesia

• PT Sumi Rubber Indonesia

• Hankook Tire & Technology

• Pirelli Tyre S.p.A

• Goodyear Tire and Rubber Company

• PT Continental Tyres Indonesia

• YHI Indonesia, PT.

• Toyo Tires Indonesia

• PT Michelin Indonesia

Market leaders are focusing on capacity expansion, localization of production, and development of EV-specific and eco-friendly tire lines. Strategic partnerships with OEMs, investments in R&D, and expansion of digital sales channels are shaping competitive strategies.

Challenges in the Indonesia Tire Market

• Volatility in raw material prices, particularly natural rubber

• Uneven road conditions leading to accelerated tire wear

• Intense price competition in mass-market segments

• Need for continuous innovation to meet evolving consumer demands

• Supply chain disruptions impacting production costs

Despite these challenges, manufacturers are leveraging innovation, scale efficiencies, and digital platforms to maintain growth momentum.

Future Outlook

The future of the Indonesia tire market remains highly positive, supported by strong economic fundamentals, rising mobility needs, and technological advancements. Over the forecast period, the market is expected to benefit from:

• Continued growth in two-wheeler and passenger vehicle ownership

• Expansion of electric vehicle adoption and EV-specific tires

• Increased focus on sustainability and green manufacturing

• Rising penetration of e-commerce and organized retail

• Infrastructure development across emerging regions

Manufacturers that prioritize innovation, quality, and customer-centric solutions will be well-positioned to capitalize on long-term opportunities.

10 Benefits of the Research Report

1. Provides detailed market size and growth forecasts through 2030

2. Offers comprehensive segmentation analysis by vehicle type and region

3. Identifies key growth drivers, challenges, and opportunities

4. Analyzes competitive landscape and company strategies

5. Highlights emerging trends in EV and sustainable tires

6. Supports strategic planning and investment decisions

7. Enables benchmarking against industry peers

8. Assists OEMs and suppliers in demand forecasting

9. Delivers insights into regional growth dynamics

10. Enhances understanding of evolving consumer preferences

Conclusion

The Indonesia tire market is undergoing a transformative phase characterized by rising demand, technological innovation, and increasing focus on sustainability. With strong growth prospects across vehicle segments and regions, the market presents significant opportunities for manufacturers, investors, and stakeholders.

As mobility patterns evolve and environmental considerations gain prominence, the tire industry in Indonesia will continue to adapt, innovate, and expand—playing a vital role in the country’s broader automotive and economic development journey through 2030.

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