Farm tire sales continues to be weak due to the broader sluggishness in the farm equipment market, 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.
Sluggishness in the US farm sector remains a key restraining factor for the growth of 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.
Manufacturer focus has shifted to digitalization and adoption of innovative technology. Product differentiation has emerged as a key strategy for market players to increase sales. The prevailing low commodity prices are influencing farm owners to boost operational efficiency, while reducing overheads. These developments have compelled farm tire manufacturers to launch technologically superior and cost-efficient products in the market. In view of the evolving end-user demand, launch of innovative agriculture tires that are equipped with sensors is likely to gain ground during the assessment period.
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 to make changes to production. Farm tire manufacturers are now including cost-effective offerings in their portfolio.
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 inches. 20 to 45 inch rim diameter to grow at the highest CAGR, signifying a shift towards large radial tires. Size will continue to be a key focus area for manufacturers during the assessment period.
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 lucrative market.
The insights presented here are from a research study on Farm Tires Market by Fact.MR