The OTR tires market is projected to grow from USD 8.7 billion in 2022 to USD 11.4 billion by 2027, at a CAGR of 5.5% during the forecast period. Increasing demand of the off-highway vehicles due to growth in infrastructure development activities, higher demand of mining products and government initiatives to raise the demand for tractors has increased mechanization of tractors, are the driving factors for OTR tires market.
Agricultural Tractors Tracks to gain pace in their growth rate
Rubber tracks/belts are composed of materials such as rubber, metal, and fiber mostly preferred on tractors instead of metal tracks and rubber tires. Rubber tracks have a larger surface area in contact with the ground. They can pull heavy loads as weight is distributed evenly without causing soil compaction. Rubber tracks provide superior maneuverability in a rough field, stability on hill slides, and floatation. According to the World Bank, the per hectare of land for one person is more in Europe than in the US. Tracked tractors are preferred for higher horsepower output like tillage operations, in which the desired farming activity is done better with large footprints area of the ground. These tracks are costly, with higher maintenance, but preferred for large farm fields for better Return on Investment (RoI). The rubber tracks in tractors are used more in Europe, followed by US, due to the availability of large farmland for farmers and to cater to the shortage of labor, which has shifted the farmers to adopt modern and advanced machinery. Titan International (USA) and Trelleborg (Sweden)operate in this region with advanced machinery for farming.
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Radial tire type to gain more traction in Asia Pacific as companies shift preference away from Bias tires
Radial OTR tires offer enhanced load-carrying capacity, generate less heat when hauling at higher speeds and for longer distances, and are more durable than bias tires. These advantages make radial OTR tires preferable to be used in construction, earthmoving, and grading applications as they last longer, reduce fuel consumption, and increase the transfer of horsepower to the ground. Asia Pacific is a cost-sensitive market, which is dominated by bias tires as they cost less than radial tires. With the increase in demand for radial tires, the market for bias tires is expected to decline in the coming years. The major competition for bias tires is low-cost radial tires offered by Chinese players. Bridgestone in South Africa has announced closing the bias tire manufacturing plant located at Port Elizabeth due to very little demand from emerging premium products in the OTR tires market. Hence this signifies that the OEMs are shifting their tire preference away from bias tires towards radial tires due to its advantages.
North America is the second largest market for OTR tire.
As a developed country it has huge infrastructure projects going on, which has resulted in the adoption of heavy vehicle equipment with the best OTR tires for reducing downtime and delivering high performance. Goodyear and Cooper Tires are the major OTR tire manufacturers in North America. A new trend for living in the USA like, living alone, divorce, and an independent lifestyle has boosted the infrastructure development in the USA. According to the IFM report in 2021, the Joe Biden government has implemented a USD 1.2 trillion investment in the Infrastructure and Jobs Act (IIJA) aka Bipartisan Infrastructure Law (BIL) in the USA which has led to new projects with USD 550 billion spending for next five years. On 15th November 2021, the Biden government has also planned to invest USD 2.2 trillion sanctioned for 166 projects to rebuild infrastructure by fixing 20,000 miles of roads and bridges overall by increasing the corporate taxes.
Key Market Players:
The OTR Tires industry is dominated by global players and comprises several regional players, including Continental AG(Germany), Bridgestone Corporation (Japan), Michelin (France), Goodyear (US), and Pirelli (Italy).
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