The market for OTR Tires is forecast to reach $7.57 billion by 2025, growing at a CAGR of 4.75% from 2020 to 2025. The significant rise in the demand for agriculture, construction and mining machinery is set to boost the OTR tires market during the forecast period 2020-2025. The rising off-high way vehicle sales, is a key driving factor for the OTR tires market. The growing mining activities and the significant deployment of the commercial vehicles is further escalating the market growth rate.
- Asia-Pacific dominates the OTR Tires industry owing to rising production of automobiles in the region alongside the wide presence of agriculture and construction sector
- Increasing demand for the off-highway vehicles and the adoption of the advanced technologies such as tire monitoring system is set to contribute to the growth of the market.
- Increasing adoption of sustainable and environment-friendly automotive components and implementation of stringent government regulations related to automobile emissions will increase the market demand for OTR Tires during forecast period.
End user – Segment Analysis
The commercial vehicles production has risen by 2% in 2019 as stated by OICA majorly due the high demand from agriculture and construction machinery. The construction and mining segment is analysed to hold highest market share in 2019 owing to the vast construction and mining projects in various developing economies. Bacanora Lithium has announced plans to begin the construction of Sonora project in Mexico with an investment of $420mn in the second quarter of 2020, and has also stated that it is set to be Mexico’s first large-scale lithium mine. Therefore the growing projects are significantly set to impact on the market growth rate during the forecast period 2020-2025.
Geography – Segment Analysis
In 2019, APAC dominated the OTR Tires market, followed by North America and Europe. This is majorly attributed to the high procurement of the off highway vehicles in the countries such as China and India. As Agriculture is the major factor for the economies in India, China, Vietnam and so on, the procurement of the agriculture machinery is significantly high thereby contributing to the market growth rate. Adding to this, the growing mining sector is further contributing to the OTR tires market. In 2015, Newmont has also invested $500m in a significant expansion of the Boddington gold mine’s south pit, thereby extending the mine’s lifespan until 2025. All these factors are significantly contributing to the growth of the market during the forecast period 2020-2025.
Drivers –OTR Tires Market
- Increasing sales of off-highway vehicles
The significant rise in the off-highway vehicles such as tractors, agricultural machinery and so on is set to boost the market growth rate. The increasing adoption of the heavy vehicles in agriculture and construction as well are impacting the growth of the market. Adding to this, the adoption of the monitoring systems for the tyres in the commercial sectors is set to further escalate the market growth rate.
The significant rise in the mining sector alongside the deployment of the heavy machinery is set to contribute to the growth of the market. In June 2019, Canadian bullion producer Yamana Gold has announced that the current Phase 1 expansion of Brazil-based Jacobina mine is expected to increase the mine’s output to about 170,000 ounces a year by 2021. These growing mining activities is set to drive the OTR tires market during the forecast period 2020-2025.
Challenges – OTR Tires Market
- Low cost tires from unorganized market
The availability of the low cost tires from the local players as unorganized market is impacting the market growth rate. The significant growth of the local players in the market is certainly hindering the market growth rate. The high adoption of the repair services of the tires from the local players is certainly impacting on the market during the forecast period 2020-2025.
Technology launches, acquisitions, and R&D activities are key strategies adopted by players in the OTR Tires market. Transmission repair driver market is expected to be dominated by major companies such as Continental, Bridgestone, Michelin, Goodyear, Pirelli among others.
- In October 2019, Continental announced plans to launch a bias line of General brand OTR tires in 2020, including L5series, E3 series, and E4 series line.