Global Agriculture Tractor Tires Market

Global Agriculture Tractor Tires Market Insights:

The global agricultural tractor tires market is expected to witness substantial growth over the coming years. The market is expected to grow at a CAGR of 5.19% from 2019 to 2026. Major players in the tire manufacturing industry have diversified their offerings in the tractor tire market. Increasing investments made in farming automation in order to improve yield is expected to positively impact market growth over the coming years. 

High demand for OEM and replacement tires is expected to arise from countries in the Asia Pacific region on account of favourable government regulations & policies implemented to provide necessary boost to the agricultural industry. ICRA Limited announced that the tractor industry in India is projected to grow at a CAGR of 6% to 7% in 2019. This demand is directly proportional to government investments made in rural development and increasing quality & quantity of agricultural produce. Similarly, the need to increase average yield is also projected to drive demand for tractors in North America and Europe.

On the basis of type, the market is segmented into Bias-Ply Tires and Radial-Ply Tires. High demand is expected for radical ply tires on account of its reduced fuel consumption due to less resistance to rolling. The product is expected to register high demand in the North American and European region on account of easy adoption and availability of these products.

On the basis of end-user, the agricultural tractor tires market is segmented into OEM and replacement tires. The replacement tire market is expected to grow at a high CAGR from 2019 to 2026. The need for maintenance due to wear-and-tear in the agricultural equipment & vehicles is projected to boost the demand for replacement tires over the coming years.

Global Agriculture Tractor Tires Market: Technological Landscape

Agricultural tractor tires are primarily made using synthetic rubber chemicals and carbon black among others. Growing agricultural activities in emerging economies such as India, China and Brazil is expected to boost the market for agricultural tractor tires. With the world population growing at a steady rate, limited availability of land has led to an urgent need to enhance productivity and yield from existing cultivated land. Use of modern agricultural techniques and equipment such as tractors with high horsepower, farmers are able to delegate tedious tasks to machines which perform them much quicker and with double the efficiency. 

Furthermore, agricultural tractors are able to perform tasks such as sowing, ploughing, harvesting and transportation of material fast and efficiently, which plays an important role in time and cost optimization. Governments around the world are encouraging use of modern equipment for agriculture due to the urgency of enhanced food production. Technological advancements in agricultural tires have led to some innovations which have been able to solve some major glitches with usage of heavy tractors in fields. A major problem faced due to tractors by farmers is that of soil compaction. Heavy weight of tractors and their tires leads to densification of soil, leading to an adverse effect on crop growth. However, companies such as Alliance Tire Group, Trelleborg Wheel Systems, MITAS and Michelin have launched tires which are designed specially to reduce soil compaction, to minimize crop damage.

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Another trend which is emerging at a rapid rate in the agricultural tractor tires market is that of green tires. Green tires are made using sustainable materials that are environment friendly. Green tires provide excellent fuel efficiency as well as improved rolling resistance. Goodyear, a brand of Alliance Tire Group recently launched a new tire called Oxygene which integrates moss to improve quality of air as the vehicle functions. This technology is likely to find applications in agricultural tractor tires in near future as well. Companies such as Michelin and Bridgestone are collaborating with research organizations in order to develop sustainable yet efficient technology in tires, which can help boost their business activities. Stringent regulations by Governments especially in European countries make it mandatory for companies to display an eco-tag on every tire that is sold. These regulations have made investment in research a must for all major tire producers, in order to maintain their market for tractor tires.

Customization in agricultural tractor tires has also become extremely popular due to need for specialized tires for agricultural activities. Companies such as Balkrishna Industries, Trelleborg Wheel Systems, and others have tractor tires designed especially for use in vineyard harvesting, grasslands, swampy areas, and dry soil among others. Such specialization is likely to improve the company’s market presence to a great extent due to specialized design and superior quality of tires.

Global Agriculture Tractor Tires Market Drivers:

Increasing demand for agricultural tractors:

The demand for agricultural tractors is projected to grow at the highest CAGR in the Asia Pacific region. Countries such as India, China, Indonesia, and Singapore are expected have high demand for tractors. The Association of Equipment Manufacturers’ (AEM) concluded that there was a 9% increase in demand for 4 wheeled tractors and a decrease in sale by 10% in 2 wheel tractor. 

Asia Pacific is expected to account for a large share of the agricultural tractor market. High demand is expected to arise from countries such as India, China, Australia, Vietnam, Thailand, and South Korea. The need to improve agricultural yield to cater to the rapidly growing food demand of the increasing population is anticipated to increase the need for automation in the market over the coming years. High preference and investment in automation of the agricultural industry is projected to augment market growth over the coming years. 

Growth in agricultural activities in emerging economies:

The growing agricultural activity in emerging economies was found to be one of the major drivers of the global agricultural tractor tires market during the forecast period. The total global population is estimated to reach close to 8 billion by year 2025. This has thus created an urgent need for improvement in farm productivity all over the world. The Sustainable Development Goals set by the United Nations in 2015 which were adopted globally, set a crucial target to double productivity of small and medium scale farmers. Adoption of these targets has effectively made Governments aware of the need for adoption of modern agricultural techniques in order to enhance farm productivity.

Agriculturally driven emerging countries such as India, China, and Brazil are adopting new methods such as advanced plant breeding, improved irrigation, machine driven harvesting and other operations. Modern agricultural techniques essentially reduce labor intensive operations, and allow machines to carry out tedious time consuming jobs, leading to higher yield and productivity. Major global tire manufacturers such as CEAT, JK tyres, and Balkrishna Industries are based in India which is one of the biggest agrobased economies in the world. Governments in India, China, Brazil, and Indonesia are providing enormous subsidies and benefits to farmers to encourage adoption of newer techniques in farms. Organizations in these countries are also reaching out to small scale farmers to educate them about deployment of automated machines in their everyday activities, and spread awareness about the correct usage of advanced equipment.

Steady growth in agricultural activities and initiatives taken by the Government to promote agricultural productivity is expected to boost the demand for advanced agricultural tires in emerging economies. Further, benefits provided by the Government and global need to improve farm yield is likely to further augment the growth in the global agricultural tires market.

Increase in market for replacement tires:

Tractor tires are exposed to high levels of stress owing to pulling implements and working in the field. Due to extensive wear and tear and long hours in the field, tractor tires need to be replaced from time to time to ensure effective results. Tractor tires need to be strong and well-maintained as they carry the heavy burden of the tractor’s body, while performing tasks on field involving soil which leads to fast degradation. Over the years, tractors start showing their age through cracks and bubbles.

Owing to these factors, replacement of tires has become an important segment in the agricultural tractor tire market. Rising number of tractors of different sizes, heavy usage and accessibility to tires is likely to boost the demand for tractor tires during the forecast period. Stringent regulations with respect to quality maintenance of tractor tires are likely to raise the demand for replacement tires. Further, high cost of original tires is expected to attract consumers towards tire replacement.

The replacement tires segment is estimated to hold the largest market share in terms of revenue in the global agricultural tractor tires market. Higher number of tractors in use as opposed to the ones registered is likely to contribute further to the market growth in the replacement tires segment. Growing demand for tractors in emerging economies, improved accessibility to modern agricultural methods and Government encouragement towards adoption of tractors are some factors further expected to boost the demand for agricultural tractor tires.

Use of tractors with high horsepower:

Increasing use of tractors with high horsepower (HP) is expected to be an important driver of the global agricultural tractor tires market. The choice of horsepower of a tractor depends directly on topography of land, weather conditions, and quality of soil, crop patterns and availability of irrigated land. Tractors with high HP are usually used while farming on soil with hard conditions and harvesting purposes. Demand for these advanced tractors has seen a steady rise especially in European countries due to its developed geography. Further, agrarian economies in Latin America such as Brazil and Argentina are also opting for advanced tractors for their agricultural activities.

Multiple benefits associated with heavy tractors such as durability, high productivity, less reliance on manpower and enhanced yield is leading to a rise in demand for tractors with high HP. These tractors require technologically advanced tires with additional features and capabilities. This is further expected to boost the market for customized tires as well. Companies are investing in research on development of tires for specific soil type and weather conditions to improve performance of their tractors. Availability of customized tires is likely to attract farmers in developed countries to prefer them to normal tires.

Along with developed economies, emerging economies in Asia such as India and China have also shown significant growth in terms of demand for advanced tractors with high HP. Growing initiatives by the Government to boost productivity and subsidies provided for purchase of agricultural equipment are some factors likely to boost the demand for advanced agricultural tires in the regions.

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