Off the Road Tire Market

The global market for off the road tires will witness significant growth owing to the proliferating construction activities along with farm mechanization across the globe. However, the growth of the market may be hindered by the increasing raw material prices pertaining to off-road tires.

The construction sector is progressively inclined toward the usage of efficient and improved technologies resulting in high productivity. Multiple technologies, including artificial intelligence supporting visualization of pre-construction projects, are significantly enhancing the construction activities across the globe. The adoption of construction management software and the high use of modular and prefabricated products are also accentuating the construction industry across the globe.

Increasing usage of off-road tires in the vehicles required in construction projects across the globe will positively influence the global market share over the projected timeframe. The off-road tires installed in heavy and earth moving equipment, including backhoe loaders, scrapers, dump trucks, and motor graders, aids in increased traction and reliability in extreme operating environments that will accentuate the industry share. The rising consumer inclination from conventional tires toward off-road tires for construction activities to improve their operating efficiency will, in turn, propel the off the road tire volume share across the globe.

The above figure showcases the annual spending in the US from the private and public sectors in the construction industry. The high investment by both the sectors is considerably expanding the construction sector that will, in turn, enhance the off the road tires market growth. The construction industry has bloomed with large construction projects requiring vehicles installed with off-road tires in specific geographic locations. For instance, in December 2018, Apple Inc, the high tech giant, announced an investment of over USD 1 billion for the construction of a new project in Austin (Texas). Moreover, in April 2018, Google LLC showcased the construction of data center worth around USD 600 million that will highly involve construction vehicles supporting the off the road tires during the forecast timeframe.

Rising construction operations and projects in the Middle East & Africa region owing to the increasing support from foreign investors will propel the construction sector growth. China is one of the leading financers in African infrastructures along with construction through its supportive policies, including the Belt And Road Initiative (BRI). The proliferating construction industry across the globe considerably requires the use of construction vehicles embedded with off-road tires that will positively influence the global off-road tires industry expansion over the study period.

Mining operations require high usage of heavy-duty trucks for transportation activities in uneven terrain and extreme off-road conditions. Rising usage of off the road tires for heavy-duty vehicles for increased traction and high ability to sustain increased payload capacity will create a lucrative growth opportunity for the market during the projected timeframe. The increasing competition among fleet owners, along with a high focus on product features, has forced industry players for the adoption of measures that improve tire wear resistance, quality, and reliability. Some of the off-road tires play a vital role in increased vehicle fuel efficiency by reduced rolling resistance along with tire fatigue and support fleet owners with high-profit margins. Moreover, according to the National Research Council, rolling resistance of the truck tires accounts for over 32 % of power consumption for each hour required to move a heavy-duty truck. These factors will support the off the road tires market growth.

Industry player are engaged in new product launches and developments to cope up with the rising customer demand from the mining industry. For instance, in December 2018, JK Tyre and Industries Ltd announced the launch of mine champion E4/L4 OTR tire with high durability, strength, and load-carrying capacity. The product is specially designed for installation in wheel loaders and tipper trucks used for mining applications. Thus, the increasing product usage in commercial vehicles for the mining sector will accentuate the product share over the projected timeframe.

The multiple factors considered for the manufacturing process of off the road tires include tire construction, the material compound, tread design, size/dimensions, and weight. The operational efficiency and reliability of these tires substantially depend upon the raw material or the compound used for its production. However, the rising raw material prices required for the manufacturing off the road tires are limiting the product growth during the forecast period.

Tire manufacturing companies are continuously investing in developing tires that work efficiently with both internal and external factors, such as temperature, road surface, humidity, and raw materials. Industry players engage in importing raw material from foreign countries to maintain product quality and reliability and increase their customer base in the market. However, the rising tension in international trade is considerably affecting raw material prices. Countries, including the US and China, are some of the leading importers and exporters across the globe. The increasing trade disputes between the two countries is significantly stimulating the price hike for certain raw materials required in manufacturing off the road tires.

Government authorities mandate specific duties and taxes on import and export of raw materials to support the domestic supplier and increase their revenue generation. Moreover, the increasing transportation/OFF THE ROAD TIRES costs in several counties, along with labor costs, are also increasing the raw material pricing, further restricting off the road tires market share. Some of the raw materials, including rubber required for product manufacturing, are also sensitive to the changes in climatic conditions. They require a specific type of packaging for maintaining its quality, which also adds up to the pricing. Thus, these are the factors that will limit the global off the road market share during the forecast timeframe.