Vietnam Becoming World's 3rd Largest
The global tire industry landscape is undergoing a profound restructuring, with Vietnam leveraging multiple advantages to achieve a leapfrog development. By 2025, its tire exports are projected to reach $5.8 billion, surpassing Malaysia to become the world's third-largest tire exporter, directly challenging the long-held leading positions of China and South Korea.
This shift not only reflects the rising momentum of Southeast Asian manufacturing but also reshapes the global tire supply chain.
Low-cost advantage is the core support for Vietnam's tire industry's breakthrough. As a labor-intensive industry, tire production involves significant labor costs, and Vietnam's labor costs are 30%-40% lower than those in China and South Korea, significantly reducing operating expenses for businesses. Simultaneously, Vietnam possesses abundant natural rubber resources.
As the most crucial raw material for tire production, local supply not only shortens transportation links but also mitigates cost risks associated with international rubber price fluctuations, resulting in raw material costs approximately 10% lower than in Chinese factories.
Regarding energy and water resources, Vietnam boasts the lowest industrial water prices among major Southeast Asian manufacturing countries, with a stable supply, perfectly matching the high water consumption of tire production. Although reliance on imported natural gas presents a hidden constraint, it has not hindered the rapid establishment of low- and mid-range production capacity.
Comprehensive calculations show that Vietnam's overall tire production costs are 10%-20% lower than those of factories in China and South Korea, a gap that forms a decisive advantage in global tire market price competition.
The continued release of free trade agreement (FTA) benefits has opened up broad channels for Vietnam's tire exports. Vietnam has signed FTAs with several economies, including the EU, ASEAN, and Australia. The EU-Vietnam Free Trade Agreement (EVFTA) has enabled zero-tariff access for the vast majority of tire products, effectively circumventing the anti-dumping and countervailing duty barriers faced by Chinese and South Korean tire companies in the US and Europe.
Data shows that Chinese tire exports to the US are subject to anti-dumping duties of up to 87.9%, while Vietnam, thanks to its FTA advantages, generally sees its export tariffs to the US and European markets reduced to the 0-5% range.
Furthermore, the entry into force of the Regional Comprehensive Economic Partnership (RCEP) allows Vietnam to fully utilize regional tariff reductions and trade facilitation policies. By 2025, tire exports under the RCEP framework are expected to account for over 40% of total exports. The convenience brought by customs informatization reforms has further improved trade efficiency.
Similar to the "instant approval and signing" model for FORM E certificates enjoyed by Chinese companies, this is gradually being promoted in major industrial parks in Vietnam, significantly shortening customs clearance time and enhancing export stability.
The expansion of local enterprises and increased foreign investment have created a synergy, driving the rapid release of Vietnam's tire production capacity. Local leader Casamina has accelerated its production capacity expansion in recent years, with its newly built factory in Ba Ria-Vung Tau province in southern Vietnam boasting an annual capacity of 12 million tires, primarily covering passenger car and light truck tires. Its products, with their cost-effectiveness, have entered core markets such as Russia and Southeast Asia.
The continued investment from foreign companies further highlights Vietnam's industrial attractiveness. Global tire giant Bridgestone has increased its investment in Vietnam, focusing on increasing the production capacity of tires for new energy vehicles. It is expected that after production begins in 2027, it will add an annual capacity of 8 million tires.
In addition, many Chinese tire companies have also established factories in Vietnam, forming a "local production + local sales + global export" layout. By 2025, Chinese companies' tire production capacity in Vietnam will account for more than 35% of the local total capacity. The coordinated expansion of domestic and foreign-invested production capacity has propelled Vietnam's annual tire production from less than 50 million units in 2020 to 180 million units in 2025, providing solid support for export growth.
Vietnam's rise has posed a substantial challenge to the leading positions of the Chinese and South Korean tire industries. For a long time, China and South Korea have held the top two positions in global tire exports. In 2025, South Korea's tire exports are projected to reach approximately $5.6 billion, roughly on par with Vietnam's. While China still leads with over $20 billion in exports, its growth rate has slowed to below 3%.
It is worth noting that Vietnam currently focuses on low- to mid-range tire products. In high-end sectors such as tires for new energy vehicles and smart tires, Chinese and South Korean companies still hold technological advantages—South Korean companies Hankook and Kumho have reduced the rolling resistance coefficient of their low-rolling-resistance EV tires to 4.8 N/kN, and China's Linglong Tire's graphene tires have a lifespan of 120,000 kilometers.
