Global OTR (Off-The-Road) Tires Market

The growth of the construction industry in developing countries has bolstered the demand for construction and material handling equipment and is likely to impel the growth of the OTR (off-the-road) tires market significantly.

In 2015, the OTR tire market constituted 10 percent of all the tire sales accounting for USD 21 billion. Due to reduced commodity demand, the mining share in OTR tire sales has been plummeting since 2012 from 20% to 15% by volume. Market demand for OTR tires from mining is softening, and hence there exists an opportunity to renegotiate with suppliers. However, the demand for OTR tires from the mining industry is expected to surge and attain 2012-mark post-2020.

The major cost factors involved are raw materials and labor, which account for about 90% of the total cost. Currently, manufacturing plants for small/medium OTR tire sizes operate between 75% and 85% of their capacities.

Moreover, different regional organizations and national governments are increasingly focusing on enhancing the benefits from mining sector investment, which is resulting in increased mining activities across the globe. The growth of the mining and construction industry is the major factor accelerating the demand for OTR tires around the world.

How could Global OTR (Off-The-Road) Tires Market Address the COVID-19 concern?

As of 19 March 2020, the total number of global confirmed cases has reached 236,420. China has the largest number of confirmed cases as COVID-19 first appeared in Wuhan, Hubei Province. The number of confirmed COVID-19 cases has been rapidly increasing in Italy and Iran, at 41,035 and 18,407, respectively. The emergence of new cases in Asian countries has been slowing after many governments restricted travel from countries where COVID-19 is widely spread and raised entry barriers to prevent spread within the country.

As the coronavirus continues to spread, tire manufacturers to see how their companies are responding to this global pandemic and the economic challenges that have come with it. Here are some statements released by leading tire manufacturers:

Apollo Tyres said in a statement March 23 that it is scaling back production in its European plants in Hungary and the Netherlands, in addition to taking measures to protect its workforce in line with government health advisory and measures. The company also suspended production at its four manufacturing facilities in India.

Bridgestone Americas (Bridgestone) has announced plans to restart its North American commercial tire plants as well as its North American Firestone Industrial Products and Firestone Building Products manufacturing facilities on April 13. Bridgestone says its start-up plans reflect the performance trend in several key areas of its commercial and diversified products businesses not as severely affected by the current crisis. Bridgestone Bandag’s retread rubber manufacturing plants in North America resumed operations the week of March 29, due to demand by essential service providers.

Yokohama said its supply position remains strong, and it will work closely with dealers to mitigate any unexpected disruptions. Preventative measures to stem the spread of COVID-19 are in effect at all company facilities, the company added.