Rise of Industrial Activity to Boost Uptake of Off-the-road Tires
Globally, the off-the-road tire (OTR) market has evolved at a rapid pace in the last couple of decades. Increased OTR tire applications in multiple end-user industries such as mining, construction, and farming have provided favourable opportunities to the market. Widening applications of OTR tires have aided in balancing any negative demand due to fluctuation amidst any one of the end-use industries.
For instance, the mining industry has been expanding at a growth rate of nearly 3% per annum that has been keeping the OTR tire market demand upbeat. Specifically, mining industry players have been weathering through the COVID-19 storm better than other industrial sectors, mostly unscathed. This itself is likely to ensure good prospects for the OTR tire market in the foreseeable future with better impetus. Construction industry growth that has been sluggish in the last couple of years is likely to gain momentum, revive in most of the regions at around 1%-2%. Growth of industrial activity is expected to have a direct influence on the uptake of off-the-road tires that are required for earth-moving machines to operate in difficult terrains.
Improved Spending Capacity and Launch of Off-roading Vehicles to Spur Demand
Adoption of the OTR tires in the agricultural sector has been rising at a promising rate when compared to the construction and mining industries. Significant demand has been witnessed in the infrastructural sector on the back of the supportive government policies and initiatives directed towards the development of public infrastructures to build smart cities. Increased off-road adventure activities, rise in the spending capacity of the population from developed and developing nations supplemented by the launch of special off-road vehicles in the recent past has bolstered the OTR tire market demand considerably.
Soaring mining activities have also been instrumental in providing a steady momentum to the OTR tire market over the last decade and are likely to continue over the study timeframe. Emerging economies have been witnessing a spike in shelling out money towards off-road trailing activities, which is likely to provide a positive outlook for market growth.
However, in certain parts of the globe, demand was subdued with curtailed consumption of the relevant commodity, due to rising regulatory and environmental norms. For instance, in the U.S. the Clean Power Act of 2014 has curtailed a dozen of coal mining businesses, which has been identified as a hurdle to the market.
COVID-19 and Disrupted Construction Activity Hamper Market Growth
COVID-19 has caused mammoth disruption in the supply chain of the tire industry. Mainstream raw material suppliers have been facing a tough time due to domestic and international ban on transportation and logistics. The issue has been exacerbated with the zero production during the lockdown period. As a result, operating profits were squeezed and daily overheads swelled, resulting in financial pressure on the manufacturers. COVID-19 has been put significant pressure on the entire value chain that has led to disruption and delays in the final deliveries.
Planned government projects, increasing mining activities, and demand stemming from the construction sectors before COVID-19 provided a lucrative environment to the off-the-road tire market. As lockdown receive waiver in several geographies, demand is slowly limping back to normalcy.
Nevertheless, agricultural activities have retained the market momentum despite the dreadful impact of the pandemic. All these factors have attributed to the fluctuation in the OTR tire industry growth. A complete halt in the construction activities also had a disastrous impact on the OTR tire demand. With the start of the construction activities, the market is likely to witness reduced opportunities, as the government spending in this sector is expected to be constrained due to their present financial position.
Advancements on the technological front involving real-time data reception from tires for better vehicle manoeuvring and deployment of nanotechnology, manufacturers are likely to provide incredible solutions to the end users.
Mining Industry to Remain Key End User
Fluctuating OTR tire demand due to construction and other industries are being balanced out by the booming mining industry. Despite the pandemic, the mining industry remained unscathed, keeping the OTR tire demand upbeat.
Rising infrastructural activities and growing industrialization are predicted to keep the momentum of the demand smooth. Burgeoning demand for OE and aftermarket sales on the back of the rising purchasing power of the population in the developing countries has bolstered the market growth and is likely to continue in the foreseeable future.
For this study, Fairfield Market Research has segmented the Off the-road-tire market report on the basis of rim size into <25’’, 29’’-49’’, and 51’’-63’’. The study provides demand analysis based on tire type classified by radial, bias, and solid.
Agricultural Activities in Asia Pacific Generate Higher Demand for OTR Tires
Asia Pacific region is turning out to be one of the leading regions due to the rising demand for OTR tires, especially in the agricultural sector. Advancements in the agricultural activities of China and India along with increasing industrial and mining activities are propelling the demand for OTR tires.
Few manufacturers have established their manufacturing bases in the Asian regions with due consideration towards the low labour cost, better raw material availability, conducive government policies, and rising demand in the region. Rising off-road trailing adventure sports activities in North America are likely to propel the regional market’s growth over the forecast tenure.
Global Off-the-road Tire Market: Competitive Landscape
Key manufacturers are dependent on the end-use industry growth and the new product developments. Manufacturers are consistently focussing on building new tread designs that are durable and reliable in terms of performance standards.
The market is highly consolidated and steered by few large players such as The Goodyear Tire & Rubber Company, Bridgestone Corporation, Yokohama Tire Corporation, and MICHELIN among others that control a majority of the stake. Major manufacturers are implementing business strategies with a blend of new product development. Joint ventures and pricing strategies along with extended aftersales services are also likely to trend in an attempt to build a large clientele base and promote brand value.
Key manufacturers have aligned their new product development activities based on factors like operating condition, temperature, type of terrain, and load execution. Moreover, encouraged by the prediction of rising demand in the future, most of the key manufacturers have expanded their businesses, and a few have already invested significantly towards new plant establishments for expanding their existing production capacities.
For example, during May 2019, a new design for tractor tire explicitly intended for heavy-duty applications was launched by MICHELIN. As a result, many such new developments are likely to surface in the foreseeable future.
Bridgestone Corporation, Continental AG, Yokohoma Tire Corporation, MICHELIN, Sumitomo Rubber Industries, Ltd., Nokian Tyres, Trelleborg AB, China National Tire & Rubber Co., Ltd., Balkrishna Industries Limited, Apollo Tyres Ltd., Qingdao Rhino Tyre Co., Ltd., Titan International, Inc., Double Coin Tyre Group Ltd., and are some of the major manufacturers of the OTR tire market.
Key Elements Included In The Study: Global Off-the-road Tire (OTR) Market
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