The broader sluggishness in the farm equipment market continues to influence farm tire sales globally, however, opportunities exist as global sales are likely to surpass 42 million in 2018. Demand is led by tractors and harvesters, with trailers and sprayers following suit. Sales continue to remain concentrated in the independent aftermarket channel, with OEM and OES complementing demand. On the back of macroeconomic and industry-specific developments, the farm tires market is likely to grow at 6% CAGR through 2028.
Sluggishness in the U.S. farm sector remains a key restraining factor for the growth of the farm tires market. Weak commodity prices have cut farm earnings, which has led to a decline in equipment spending. The sluggishness continues to impact sales of both new and replacement tires.
The prevailing scenario in the market has also induced a ‘shop for value’ trend among end users. The weakness in global commodity prices has meant that farm owners are prioritizing price over quality. The change in buying behavior has made farm tire manufacturers make changes to production. Farm tire manufacturers are now including cost-effective offerings in their portfolio.
Radial Farm Tires Continue to Outsell Bias Variants
The radialization trend in the farm tires market is tapering off, however, radial tires continue to be an attractive segment for manufacturers. In a bid to cater to the evolving demand from farm owners, manufacturers are focusing on increasing the tire size to support heavy weights. Farm tire manufacturers are shifting to Group 49, which are 7 ft. tall, and have a rolling circumference index of 256 in. The 20-45 in. rim diameter is likely to grow at the highest CAGR, signifying a shift towards large radial tires. Size will continue to be a key focus area for manufacturers in the long run.
Asia Pacific excluding Japan (APEJ) will lead the global demand for farm tires, with nearly 20 million tires expected to be sold in 2018. Growth will be complemented by steady demand in North America and Europe. The weakness in commodity prices will continue to offset gains made in these lucrative markets.
The insights presented here are from a market intelligence study on the Farm Tires Market.