The US Farm Tire Market Report: 2015 Edition - New Report by Koncept Analytics

View Report Details The US Farm Tire Market ----------------------------------------------------2015

View Report Details Executive Summary Agricultural/farm tires are a sub-segment of specialty tires and are used for various farm vehicles such as tractors, combines, sprayers, trailers and harvesters. Global OE demand ended the year down sharply in mature markets, due to the extensive replacement sales of farm machinery in recent years, falling grain prices and the reduction in agricultural tax incentives in the US. In 2014, the replacement market in Europe was stable whereas the North American replacement market was significantly lower than previous year.

The US farm tire market has two segments, replacement (RT) and original equipment (OE) farm tires, and is further categorized into radial bias and small farm types. The replacement segment accounts for the maximum share of the total US farm tire market. Apart from number of companies engaged in the manufacturing of farm tires, Firestone enjoys a clear leadership in both the segments i.e. OE and RT. Other major players operating in the US farm tire industry include Goodyear, Michelin, Titan, BKT and Trelleborg.

The current report provides an overview of the US farm tire market. It discusses market size, segments, key trends and challenges associated with industry. The factors affecting the industry are US farm income, increase in tire imports from China and export of USmade farm equipment. The competitive aspects of the market are also highlighted and major players in the US farm tire market, Bridgestone, Michelin, Trelleborg and Titan, are being profiled with their key financials and business strategies.

By combining SPSS Inc.’s data integration and analysis capabilities with our relevant findings, we have predicted the future growth of the industry. We employed various significant variables that have an impact on this industry and created regression models with SPSS Base to determine the future direction of the industry. Before deploying the regression model, the relationship between several independent or predictor variables and the dependent variable was analyzed using standard SPSS output, including charts, tables and tests.

The world tire market has been driven by the emerging markets as the developed market growth has reached at saturation point.

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Since the economic and financial crisis started in 2008, strong players in mature markets have mechanically lost market share, when strong players in Asia have gained market share.

Asia, excluding India, makes up …% of market share in 2013 immediately followed by Europe and North America with …% and …% of market share respectively.

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In 2013, the global tire market declined by…% year-on year to US$... billion as a result of decrease in price, consequence of lower raw material prices, despite volume growth and due to negative currency translation effect affecting mostly Japanese tire companies. As of 2014 the global tire market was valued at US$... billion.

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The competition in the global tire market has become intense over the years. The Big 3 accounted for only …% of the market in 2013. The mid-size players have stabilized their market share at …% in 2013. Similarly, small Asian tire companies have been growing rapidly accounting for …% of the market share in 2013.

Global Tire Market Volume by Region (2013)

Asia (Excluding India)

Europe

North America

South America

Other

Global Tire Market Share by Company (2013)

US$ Billion

Global Tire Market (1998-2014)

1998 2000 2002 2004 2006 2008 2010 2012 2013 2014

Bridgestone Mid Size European Chinese Tiremakers Others

Michelin Mid Size Japanese Indian Tiremakers

Goodyear Mid Size Korean Russian Tiremakers

The US government has focused on China and its low-cost radials. However, recent tariffs placed on Chinese consumer tire imports will change tier pricing in the US throughout 2015.

The US Replacement Tire Sales by Type (2014)

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Passenger tires accounted for the largest share of replacement tire market with US$... billion in 2014. Truck tires represented the second largest category with US$... billion followed by light truck tires, off the road (OTR) tires and farm tires with value of US$... billion.

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The total US tire shipments, combining replacement and OE tire shipments, increased from nearly … million units in 2013 to … million units in 2014. Replacement and OE passenger tire shipments were up …% and …%, respectively. Light truck tire shipments — LT sizing, not P-metric light truck — were up …% and …%, respectively. The growth in the truck tire segment, which includes wide base and heavy truck tires as well as medium truck tires, was particularly robust in 2014.

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The US replacement tire shipments were up …% across the board in 2014 versus 2013, excluding farm and OTR tires. Total replacement tire sales in the US remained stable at US$... billion in 2014 compared to US$... billion in 2013.

30 25 US$ Billion

20 15 10

5 0 Passenger tires LT tires

Truck tires Farm tires

OTR tires

The US Total Tire Shipments (2010-2014)

The US Replacement Tire Sales (2010-2014)

39 38 37 36 35 34 33 32 31 30 29

315 310 305 M illion Units

US$ Billion

300 295 290 285 280 275 270 2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

It is estimated 3% of the tires sold in the US i.e. more than 7 million tires were being sold to consumers over the internet.

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A total farm tire shipment in the US has been showing a fluctuating nature from 2011 onwards. The farm tire shipments decreased from … million units in 2013 to … million units in 2014. Both farm tire categories, OE and replacement, showed up similar patterns, particularly replacement farm tire market, due to significant weather changes over the years.

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There is a direct correlation between the replacement market and OE sales. A farmer who will keep a machine one season is obviously not very interested in investing in a wider combine tire to manage wet conditions or triples over duals to manage the load imposed by a planter. If farmers keep equipment longer, the tire is no longer simply black and round. It turns into a piece of valueadding equipment that can increase the productivity of the machine as much as a larger planter or header. All of these aspects coming together will give the replacement tire market momentum moving into 2015 that is declining from 2011 onwards from US$... million to US$... million in 2014.

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In 2014, replacement market accounted for ..% of farm tire market whereas OE farm tires accounted for only ..% of the market.

Million Units

The US Farm Tire Shipments (2010-2014)

2010

2011

2012

2013

2014

The US Farm Tire Market Share by Segments (2014)

US$ Million

The US Replacement Farm Tire Sales (2010-2014)

Original Equipment Tires

2010

2011

2012

2013

2014

Replacement Tires

Firestone had the largest rear (both radial and bias) OE farm tire market share in 2014.

The US Farm Tire Shipments Forecast (2013-2018F)

Million Units

The US Rear Farm Tire Market Share by Company (2014)

Trelleborg

Others

2018F

Alliance

2017F

Michelin

2016F

Titan

2015F

Goodyear

2014

Firestone

2013

BKT

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The rear replacement farm tire market share leader is BKT Tires USA Inc. making up …% of the market share immediately followed by Firestone brand with …% share in 2014. Goodyear, Titan, and Michelin had …%, …%, and …% share respectively.

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Most of the tire manufacturers are exposed to price fluctuations of key commodities, which consist primarily of steel and rubber. As a raw material intensive industry, tire manufacturer margins are highly correlated to the price movements of raw materials. Natural rubber (NR), the key raw material, constitutes around 40% to 45% of total raw material costs. Over the last 10 years, raw materials (in % of revenues) have peaked in 2011. This is particularly true for natural rubber which peaked at USD 4.5/kg. Over the last 3 years, raw materials (in % of revenues) have decreased from 40% to 35%. This is attributable to natural rubber which estimated price has dropped by 60% reaching now USD 1.8/kg in 2014. Synthetic rubber price has decreased from peak price of USD 3.4/Kg in 2011 to estimated price of USD 2.6/Kg.

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The US farm tire shipments are forecasted to decrease from … million units in 2014 to … million units by 2018. Both farm tire categories i.e.

OE and replacement farm tires shipments were down in 2014 compared to 2013. A decrease of …% is forecasted from 2014 to … million units in 2015. This decreasing trend in US farm tire shipments is due to continuous decrease in US net farm income, exports of US-made farm equipment and overall sales of farm machinery.

Note: Market attractiveness is inverse of penetration. Low penetration means high attractiveness and vice-versa

Contact Us:Details View Report These are abridged and sanitized sample pages from the comprehensive report on the “ US Farm Tire Market ”. To know more about this report or for any customized research requirement, please contact the following:

Koncept Analytics

Vikas Gupta BD Manager

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