Growing mechanisation and infrastructure development in emerging markets is increasing demand for agriculture, construction and mining equipment as well as off-the-road tires. According to a report from Smithers, The Future of Off-the-Road Tires to 2024
, the global market for off-the-road (OTR) tires is estimated to be more than 4 million metric tons in 2019, corresponding to a value of $27.5 billion. A five-year compound annual growth rate (CAGR) of 3.8% to 2024 in volume and 4.8% per year in value was expected before the impact of COVID-19.
Construction and industrial activity have been leading market supports and drivers in the recent past, but going forward, growth will be more balanced among end-use sectors. For example, improving commodity prices are supporting the mining industry, while economic and population growth are supporting the construction, agriculture, manufacturing and shipping sectors. From an equipment perspective, development of new machines for these industries is driving OTR tire innovation. Products that can handle increased load demands and communicate their condition are now the focus.
Mining and construction
The mining and construction segments will continue to represent more than half of the market by volume. Mining and construction growth over the last several years has been restrained by the effects of soft energy and metals prices, but the aggregate mining segment (aggregate used in construction) has helped the overall market grow. Meanwhile, construction, as well as agriculture and industrial, were performing in line with overall economic growth up to 2020.
Increased demand for agriculture tractors, and construction and mining equipment is being seen in developing countries. The construction and industrial segments have continued their steady market-leading performances from the prior period, 2014–19. As before, only the growth of the smallest end-use segment, the industrial market, will outpace the market as a whole. The increase in manufacturing in developing economies is projected to drive the market for industrial equipment tires.
As global economies stabilize and resume growth, all regional markets are expected to grow through 2024. With large mining, construction, agricultural and industrial bases in place, the Asia Pacific market is already by far the largest; nearly as large as the more mature North American (including Mexican) and European (including Russian) markets combined. Further growth in Asia Pacific is supported by increasing population, higher levels of agricultural mechanization, recovery in mining, and ongoing construction activity.
Across end-use segments, load requirements are increasing, and tire product and services are a critical element in avoiding downtime. Equipment automation and the use of Big Data and predictive analytics are transforming the OTR tire business into a closer collaboration between OEMs, tire manufacturers and dealers.
Over the next five years, the industry will be more driven by data use, predictive analytics and automation – shifting from a transactional-focused model to a solutions-oriented approach. The mining and construction OTR segments will drive much of this change with OTR tires using integrated sensors for tire monitoring and management.
For further information and to download a brochure, visit The Future of Off-the-Road Tires to 2024