Market Trends of Commercial Vehicles Tires Industry
Agriculture as Application to Shift Market Demand
- The agricultural sector is highly affected by the cyclical nature of sales. To boost the productivity on the lands of agriculturally deprived economies and to meet the food need of the growing population, OEMs are trying to build machinery installed with IoT, GPS, and Automation techniques to gain more from the land. In emerging economies, farmers are rapidly adopting mechanization practices.
- The migration of people from rural to urban regions, rising labor costs, and lack of skilled labor in most developing countries are fueling tractor sales. Shortage of farm labor and its rising cost are among the main reasons for the increasing mechanization of the farming industry.
- The increasing need for operational efficiency and the rise in labor costs are expected to boost the demand for agricultural tractors. Over the forecast period, the market for agricultural tractors will be driven by limited labor availability.
- Machinery inputs in agriculture by way of mechanization have evolved considerably in recent years in the regions. The introduction of internal combustion engines and tractors as power sources brought about a revolution in the agriculture sector by covering large agricultural areas in a short time, which in turn is likely to enhance the demand for tires in the coming years.
- Major tire manufacturers are expanding their manufacturing facilities across the regions, which in turn is likely to create lucrative opportunities for the market during the forecast period. For instance,
- In March 2021, Apollo Tire expanded its tire manufacturing facility in the Netherlands, Europe. The company expanded the Apollo Vredestein facility in the country.
- Labor-saving technologies, particularly in harvesters and tractors, are being increasingly adopted to expand farm operations. The increased liberalization would radically reinforce a structural evolution, which will help bring about increased adoption of advanced agricultural machinery tools in agricultural operations, which in turn is likely to increase in demand for tires during the forecast period.
- Major manufacturers are introducing new agricultural machinery across the globe, which in turn is likely to enhance the demand for agricultural tires in the coming years. For instance,
- In May 2022, Horsch launched Leeb VL sprayer at the fair AgroBrasília 2022 held in Brazil. The sprayer increases crop efficiency, regardless of size, whether small, medium, or large, thereby lowering input costs.
- Tire manufacturers are increasingly getting involved in making their farm tires larger to support the additional weight of farm machinery, which has grown in size to a significant extent in the last 3-5 years.
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Asia Pacific is Expected to Lead the Market
- To overcome major problems like traffic congestion, population explosion, high manufacturing costs, and aging transportation infrastructure, developing economies are now investing heavily in infrastructure development.
- The demand for construction machinery has increased in Asia-Pacific. The ongoing recovery of the region's construction industry improved business in the mining and quarrying sectors, and a favorable economic environment with low-interest rates is further anticipated to help the market grow.
- Growing electrification of commercial vehicles in countries such as China is also expected to drive the growth of the commercial vehicle tire market in the country. China has a fleet of more than 425,000 electric buses. Europe just has 2250 electric buses. This high adoption can be attributed to a strong municipal framework that many provinces in China have adopted.
- China is among the key adopters of technology and seeks to bring advancements in tire technology; the players anticipated witnessing numerous growth opportunities during the forecast period. For instance,
- In August 2022, Sumitomo Rubber announced that it would increase its electric vehicle (EV) tire production capacity in China and Europe. The company will install additional production facilities for EV tires at its plants in China and Turkey.
- The rapid urbanization in the ASEAN countries, like the Philippines, Thailand, Vietnam, and the rest of Asia-Pacific, is expected to be a factor in the increase in the demand for light, medium, and heavy commercial vehicles in the region, which in turn is likely to enhance the demand for tires during the forecast period.
- In February 2021, e-commerce giant Amazon announced a partnership with Mahindra Electric to deploy electric vehicles into its delivery network. Amazon aims to reach 10,000 EVs in fleet size by 2025. Flipkart, in the same period, partnered with Hero Electric and Piaggio to achieve a 100% electric delivery fleet by 2030. These partnerships aim to improve the charging infrastructure and include more electric vehicles in the commercial vehicles sector in India.
- With the above-mentioned development across the region, the demand for tires will be high during the forecast period.
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