In the past two years, the global tire industry has changed. China's tire industry has continued to grow, the U.S. market has ushered in a new round of investment boom, the European rubber industry has shown signs of recession, and the Mexican tire industry has developed rapidly.
In the next few years, Mexico's tire production capacity will exceed 100 million tires
Just over 20 years ago, Mexico's tire industry was in a slump. Amid the severe social crisis, Continental and Goodyear closed their factories in Mexico, and Tornel, Mexico's only domestic tire manufacturer, was also in financial trouble.
Today, Mexico is on track to become one of the top five tire producers in the world.
In the first half of 2024, Japan's Yokohama Rubber Co., Ltd., China's Zhongce Rubber Group and Sailun Group disclosed three large-scale projects, which will invest more than US$1 billion annually to build an annual production capacity of 24 million passenger car/light truck tires.
Mexico has been a major trading partner in the U.S. tire market over the past decade, and its tire industry is on the rise. Goodyear, Michelin Group and Pirelli have opened three factories in Mexico, each producing more than 20 million passenger car tires per year.
Data shows that the Mexican tire industry has a rated capacity of more than 65 million passenger car/light truck tires per year, and more than 1 million to 2 million truck/bus tires.
The influx of new production capacity will bring a 35% increase in Mexico's passenger car tire production capacity, which means that Mexico's tire production capacity is expected to exceed 100 million tires in the next few years.
The U.S. is Mexico's largest tire exporter
Mexico is already the second-largest source of U.S. passenger car tires and the fifth-largest source of light truck tires, according to the U.S. Census Bureau.
In 2023, the United States imported 22.8 million passenger car tires and 1.79 million light truck tires from Mexico, valued at more than $2 billion. These figures represent 14 percent of U.S. passenger car tire imports and 5 percent of truck tire imports.
With Mexican tire factories operating at 80% capacity, exports to the United States account for approximately 35% to 40% of their production.
After the new plant goes into production, most of the output is expected to be exported to the United States, which will push the United States' imports of tires from Mexico to 40 million.
Both Chinese and Japanese tire manufacturers have stressed that plans to build new plants in Mexico are primarily based on Mexico's convenience as a manufacturing base to help serve their U.S. market networks.
Sailun Group North America President Peter Koszo said at the groundbreaking ceremony: "This expansion reaffirms Sailun's commitment to providing high-quality tires to the North American market and enables the company to diversify its product offerings."
Since the United States imposed import tariffs on Chinese passenger car tires, Sailun Group has mainly supplied products to the U.S. market from its factories in Vietnam and Cambodia in the past few years. The completion of the Mexican factory will bring greater convenience and profits.
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