Market Research Report
Commercial Vehicles Tires Market - Growth, Trends, and Forecast (2020 - 2025)
|Published by||Mordor Intelligence LLP||Product code||938161|
|Published||Content info||70 Pages
Delivery time: 2-3 business days
|Commercial Vehicles Tires Market - Growth, Trends, and Forecast (2020 - 2025)|
|Published: May 1, 2020||Content info: 70 Pages||
The commercial vehicles tires market is expected to exhibit a growth rate of over 3.5% during the forecast period 2020 - 2025.
Due to rapid urbanization, construction activities has seen a surge and developments in transport infrastructure is fuelling the growth of commercial vehicles and commercial vehicle tires. The improving economic environment in developing countries and the increasing emphasis on mechanization of agricultural activities are also factors expected to drive the growth of the market in the foreseeable future.
The commercial vehicle tires market is affected by fluctuating raw material prices, international taxes, conversion costs and utilization of manufacturing facilities. The recent global outbreak of COVID19 disease has led to many OEMs across China and other geographies to manufacture medical equipment. For instance, Singapore based tire distributer Omni United is exporting face masks to its stakeholders in Europe.
The recent COVID19 pandemic outbreak has hampered the global economy and especially automotive industry. The lockdowns in major automotive manufacturing geographies such as China, India, Europe, South Korea, Japan, etc. has led to shutting down of facilities and suspension of operations by OEMs and automotive manufacturers.
This will have a very large impact on the already shrinking commercial vehicle industry. However, COVID19 outbreak has also resulted in the growth of e-commerce sector. This factor can propel the demand for commercial vehicle components for transportation purpose during the outbreak.
Farm Mechanization Trend is Expected to Boost the Sales of Agriculture Commercial Tires
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 growing population, OEMs are trying to build machineries installed with IoT, GPS and Automation techniques to gain more from the land. In emerging economies, farmers are rapidly adopting mechanization practices.
The farm mechanization trend in China has been rising, due to increasing investments in agriculture, as well as the governmental push toward farm mechanization. Additionally, this trend has also been a result of the increase in the number of large agricultural producers and new rural organizations engaged in farming. In India, the emergence of large-scale farming equipment rental has fueled the growth of tractor market. In 2019, Mahindra and Mahindra became the largest seller of tractors in the world by selling over 333,000 tractors globally, 95% of what were domestic sales.
In many developed economies such as Japan, economy is facing the problem of ageing population. This is causing a shortage of labor in agriculture sector. Therefore, developed countries are increasing their spending on R&D of automation of farming techniques.
Africa has a large portion of uncultivated land the mechanization rate is very low. This provides a huge opportunity for OEMs to develop tractors market in Africa where tractor penetration rate is very low (1.3 per sq. km. in Rwanda to 43 per sq. km. in South Africa). Organizations such as FAO and UNIDO has come forward to support mechanization of agriculture in Africa. Many foreign players are establishing agricultural units in Sub Saharan African region due to availability of low-cost labor.
However, the recent COVID19 outbreak is likely to affect the agricultural industry on local and micro level by disruption of supply chains resulting due to global lockdowns of countries. Major Commercial Vehicle Tire manufacturers such as BKT Europe, BKT India, Goodyear, etc. have tentatively suspended their operations till 2nd week of April and the suspension is expected to continue.
Asia-Pacific is Expected to Lead the Market
To fight major problems like traffic congestion, population explosion, high manufacturing costs and ageing transportation infrastructure, developing economies are now investing heavily in infrastructure development.
The Asia-Pacific region is expected to be a major market propelling the global construction industry, with augmenting construction activities in countries, such as India and ASEAN countries (including Thailand, Singapore, Vietnam, and others). The sales of heavy trucks in Asia-Pacific region grew by 1.4% to 27872 units in 2019 compared to 27493 units in 2018. However, the COVID 19 outbreak is expected to hinder the market growth in the region during the forecast period.
Growing electrification of commercial vehicles in countries such as China is also expected to drive the growth of 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 strong municipal framework that many provinces in China has adopted.
More than 30 Chinese cities have made plans to achieve 100% electrified public transit by 2020, including Guangzhou, Zhuhai, Dongguan, Foshan, and Zhongshan in the Pearl River Delta, along with Nanjing, Hangzhou, Shaanxi, and Shandong.
Owing to the fact that China has managed to gain control over the spread of COVID19 in Wuhan, the epicenter of outbreak and a prominent industrial area involving manufacturing of vehicles for global Automotive manufacturers and lifted up the lockdown, the manufacturing of automotive components in many facilities have resumed. This is going to give some relief to commercial vehicle industry in China that recorded sales of 4.37 million commercial vehicles in 2018 that came down to 4.32 million units in 2019.
The Global Commercial Vehicles Tires Market consists of numerous international and domestic players, such as Bridgestone Corporation, Michelin, Titan International, Trelleborg Wheel Systems, Balkrishna Industries Limited, and Continental AG. Growing construction demand, aftermarket replacement rate, and acquisition activities among key players are driving growth in the market.