The Tyre Industry In East Africa

The global economic downturn has had an adverse impact on the growing tyre industry in East Africa...

The tyre business in East Africa is undergoing a major transformation as the demand-and-supply equilibrium has been disturbed by the recent global economic crisis which continues to have a huge impact on the tyre industry in Kenya, Uganda and Tanzania.

The rising demand for tyres in Africa has led to stiff competition between tyre manufacturers from all across the world seeking to garner a major share of the market for tyres in the new and emerging African markets. Traditionally, European tyre manufacturers had had a monopoly over the African markets and many European brands were top selling tyres in many African countries.

However, in recent times, European tyre firms are beginning to loose ground to Chinese and other Asian brands in many emerging markets not only in Africa, but around the world. Chinese tyres are gaining popularity in several African markets. Many developing countries, specially in Africa, are price-sensitive markets and prefer to import low-priced Chinese tyres rather than the expensive European and American brands. As a result, China has emerged as a leading exporter of tyres to many African countries in recent times.

“Many tyre manufacturers shut down their plants during the financial crisis and so are playing catch up even today,” says Micky Bassi, a director at Tyremasters Limited, a Kenya Top 100 company. “Supply is still way behind demand and with manufacturers unable to cater for everybody, we have to be careful and plan way ahead to ensure we get the supplies we need.”

Tyre Importers in Africa

Kenya’s leading tyre manufacturer Kenyan manufacturer, Sameer Africa, has been importing tyres from China to meet a strong demand for low priced products in the East Africa market. The company also installed a light truck tyre assembly machine recently and also increased capacity. “We were not making enough money from our tyre production unit so we borrowed to finance the importation of tyres that we don’t make” said managing director, Eric Kimani.

The Chinese brands imported by Sameer Africa include Dyna and Triangle. “The tyres are affordable but very durable. When we import we don’t just bring anything, we buy quality,” he added.

Usually, it takes 90 days for confirmed shipment to arrive in East Africa from suppliers overseas. Sometimes it takes as long as six months and the company doesn’t always get what it wants. “Tyre manufacturers were hoping the situation would stabilise this year but it didn’t happen,” says Bassi.

The increasing demand by China for raw material is another challenge. The country’s need for steel, which has starved other markets, is seen in rubber as it buys huge qualities of the commodity. Piracy in the Horn of Africa has resulted in ships using alternative routes and incurring higher insurance costs, which are passed on to clients. All these factors have contributed to the escalating cost of tyres.

“At the moment tyre prices in Kenya are changing every 15-20 days. We can absorb small price changes but a level reaches when we have to pass on the increasing cost to consumers,” says Bassi. “This upward trend is expected to continue until worldwide supply stabilises.”

Liberalisation of the industry in the 1990s created a huge market for grey products – imported tyres that enter the market without paying import duty and tax thereby making them cheaper. Tyremasters has survived by maintaining uncompromising quality at an affordable price backed up by good service.

Tyres from Dubai to Africa

Wholesalers and traders in Dubai have been meeting the rising demand for automotive tyres in Africa in recent times. The close gographical proximity as well as an extensive network of wholesalers in Dubai has helped tyre dealers in Dubai cater to the demands of the African markets. Tyre dealers in Dubai have been supplying a whole range of tyres to many African markets – right from passnger car tyres, radials, truck tyres, bus tyres, agricultural tyres, offroad tyres, industrial tyres to motorcycle as well as cycle tyres.

Some of the major suppliers of tyres in Dubai that are exporting tyres to Africa on a regualr basis include:

• Al Muqarram Auto Parts
• Bagader Trading
• BBG Trading
• Safeer Tyres
• Zafco Tyres

African buyers prefer to buy tyres from Dubai because of the easy availability of a comprehensive range of tyres ay competitive prices, cheaper shipping costs to Africa (compared to China), as well as the cheaper air fares to Dubai and easy availability of visas.

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Africa Tyres Dealers Directory: Database of Tyre Importers in Africa

In a bid to help tyre manufacturers and suppliers help find importers, wholesalers, dealers and agents in Africa, the African Business Pages has compiled a special directory that lists tyre importers in over 24 African countries. The Africa Tyre Dealers Directory is now availbale as a a digital download at a nominal price and has played an instrumental role in promoting direct B2B contact between African tyre importers and tyre manufacturers and suppliers from all across the world.

The Africa Tyre Dealers Directory has been adapted for online distribution and is now available in Excel format as an instant digital download from Africa Business Pages. The Africa Tyre Dealers Directory has served as a useful database for those wanting to export tyres to Africa and to reach potential buyers in Africa. You can download the directory HERE.

 

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