South Africa Off the Road Tire Market
South Africa Off the Road Tire (OTR) Market Set to Grow at a CAGR of 6.5% during 2022–2028
Published | 01 October 2022
South Africa off the road (OTR) tire market is flourishing due to the growing automobile industry, an increasing need for OTR tires from the country’s thriving mining industry, and rapid industrialization and urbanization.
BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, forecasts South Africa Off the Road (OTR) Tire Market size to grow at a CAGR of 6.5% during the forecast period between 2022 and 2028. The developing automobile industry, an increasing need for tires from the country’s mining industry, and rapid industrialization and urbanization, rising affluence, and the penetration of affordable Chinese tires in the country are major growth factors for South Africa OTR tire market.
South Africa Tire Market – Trends and Forecast
The growth of South Africa OTR tire market is being driven by the country's expanding automotive industry. The automobile industry is one of the most important industries in the South African economy, generating roughly 4.9% of the country's GDP, according to Naamsa, South Africa's automotive business council. Vehicle production accounts for 2.8%, while automobile retailing accounts for 2.1%. South African car and automotive component exports totaled USD 11.02 billion in 2011, accounting for 13.9% of overall exports.
Automobile sales in South Africa are increasing significantly. According to Naamsa, domestic new vehicle sales increased by 6.6%, moving to 41,588 units in November 2021, up from 39,015 vehicles sold in November 2020. Furthermore, overall automotive exports increased by 8.09% from the same time in 2020, reaching 273,838 units in November 2021. The country's rising automotive industry, as well as sales and exports of automobiles, has resulted in increased demand for tires, which is propelling the South Africa OTR tire market forward.
As the country's mining industry expands, so does the demand for new and efficient equipment. The mining industry's demand for OTR tires is also steadily increasing. For example, in 2019, one of the world's largest mining contractors operating in one of South Africa's largest coal mines chose Magna Tyres' 40.00R57 Magna MA04+C Giant tires for Cat 793D rigid dump trucks. Other factors driving South Africa OTR tire market growth include the demand for specially designed tires that can withstand harsh conditions in mines by reducing heat buildup inside the tire, lowering fuel consumption, increasing efficiency, optimizing operator comfort, and extending service life.
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Challenge: Increasing prices of raw materials
The availability and costs of various raw materials, including rubber and crude oil, to produce OTR tires are highly dependent on various external factors, such as environment vagaries and geopolitical tensions. Consequently, there is a high volatility in the prices of raw materials. This, in turn, would affect the operating margin of OTR tire manufacturers. Hence, increasing volatility in raw materials could affect the growth of South Africa OTR tire market.
Impact of COVID-19 on South Africa Off the Road Tire Market
COVID-19 pandemic had affected South Africa OTR tire market in a short term, as new vehicle production and sales decreased in 2020. Furthermore, because of the travel and business restrictions, people restricted their driving, delaying maintenance, and tire replacement appointments. Tire importers experienced problems importing tires due to low demand, issues obtaining raw materials, cash constraints, and a manpower shortage. Furthermore, tire producers were forced to close factories or operate at reduced capacity. Despite the market's reopening by the end of 2020 and vaccination campaigns pointing to a quick recovery, the appearance of COVID variations, hampered the recovery. With relaxations in COVID-related restrictions and the resumption of various industrial operations including in the mining sector, the demand for OTR tires is expected to reach the pre-COVID level. Hence, South Africa OTR market is expected to grow during the post-COVID period.
Prominent players in South Africa OTR tire market include Bridgestone Corporation, Continental AG, The Good Year Tire & Rubber Company, Apollo Tyres Ltd., Pirelli & C S.p.A., Hankook Tire & Technology Co. Ltd., Auto & Truck Tyres Ltd., Bandag Southern Africa (Pty) Ltd., Dunlop Tyres SA, Continental Aktiengesellschaft, Compagnie Générale des Établissements Michelin, The Yokohama Rubber Co., Ltd., Sumitomo Rubber Industries, Ltd., Toyo Tire & Rubber Company, Hangzhou Zhongce Rubber Co. Ltd., Triangle Tyre Co. Ltd, and CEAT Limited. These companies follow various strategies including mergers and acquisitions, partnerships, licensing agreements, joint ventures, and collaborations to expand their reach in the market.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of South Africa Off the Road Tire Market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in South Africa Off the Road Tire Market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.
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