Report Overview

Rapid urbanization and industrialization driving construction and mining activities are expected to spur the demand for off the road tires. This growth trend, in turn, is projected to drive South Africa Off the Road (OTR) Tire Market at a significant growth rate during the forecast period between 2022 and 2028.

South Africa Off the Road (OTR) Tire Market - Industry Trends & Forecast Report, 2028

South Africa Off the Road (OTR) Tire Market is expected to expand at a CAGR of 6.5% between 2022 and 2028 (forecast period). Increased government investments in urban development, surging infrastructure construction activities, as well as the introduction of new truck tires, are expected to drive the growth of South Africa off the road tire market. In addition, rising demand for radial tires in the agriculture industry, rising government subsidies for farm equipment, and increased investment in new radial tire plants are expected to boost the market growth.

South Africa Off the Road (OTR) Tire Market - Overview

In the coming years, the South Africa OTR tire market is expected witness growth opportunities, due to several trade agreements that have helped the country establish itself as an innovative tire production center. Furthermore, in 2021, South Africa announced the APDP (Automotive Production and Development Program) to enhance and sustain its tire manufacturing capabilities and units. South Africa seeks to enhance its automotive sector with this plan by creating an atmosphere that allows vehicle makers to raise production volumes on a vast scale.

The continuously increasing vehicle sales and fleet size, as well as the fast-developing tire export business, are projected to drive market expansion. Furthermore, the growing popularity of Chinese and budget tires in South Africa has resulted in the availability of a wide selection of OTR tires for vehicle owners. Improving economic conditions and a growing customer preference for vehicle ownership are expected to boost market growth in the coming years.

The country’s expanding automotive industry is driving the growth of South Africa OTR tire market. 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.

Growth Drivers

Increasing construction and mining activities driving demand for OTR tires

With the growing number of construction projects in South Africa, the demand for heavy-duty trucks is fast increasing, necessitating the use of more durable OTR tires to gain better grip, apply weight and pressure, and function on shifting terrain. In addition, South Africa is one of the world’s largest countries in the mining sector. The government of South Africa is heavily investing in further strengthening mining activities, which is another key factor boosting demand for earth moving vehicles. This, in turn, is expected to spur the demand for OTR tires in South Africa.

Restraints

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 workforce 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.

Segmental Coverage

South Africa Off the Road Tire Market - By Vehicle Type

South Africa OTR tire market by vehicle type is segmented into Earthmoving & Construction Equipment, Agricultural Vehicle, and Material Handling Vehicle. The Earthmoving & Construction Equipment segment is further categorized into Excavator, Backhoe Loaders, Crawler Loaders, Bulldozers, Motor Graders, Dump Trucks, and Others.

The Agricultural Vehicle segment consists of Tractors, Combined Harvester, Farm Trucks, and Other sub-segments. The Material Handling Vehicle segment is further divided into Cranes, Forklifts, Tippers, and Others.

Among the vehicle type segment, the Earthmoving & Construction Equipment segment holds the highest market share in the South Africa OTR tire market. It is also expected to maintain its dominance in the market by vehicle type during the forecast period. Major growth factor for the Earthmoving & Construction Equipment segment is the increasing demand for OTR tires from heavy vehicles utilized in various activities of thriving construction and mining industries in South Africa.

Competitive Landscape

South Africa off the road tire market is highly competitive with the presence of many global companies. Major players in the 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, 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.

Scope of the Report

By Vehicle Type

• Earthmoving & Construction Equipment

1. Excavator

2. Backhoe Loaders

3. Crawler Loaders

4. Bulldozers

5. Motor Graders

6. Dump Trucks

7. Others

• Agricultural Vehicle

1. Tractors

2. Combined Harvester

3. Farm Trucks

4. Others

• Material Handling Vehicle

1. Cranes

2. Forklifts

3. Tippers

4. Others

By Season

• All Season

• Summer

• Winter

By Price Category

• Budget

• Economy

• Premium

By Rim Diameter

• 20”-25”

• 26”-35”

• 36”–48”

• Above 48”

By Sales Channel

• Exclusive Stores

• Authorized Dealers or Distributors

• Others