North America Agricultural Tires Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

North America Agricultural Tires Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The North America Agricultural Tires Market was valued at USD 937.27 Million in 2021 and is projected to grow to USD 1282.09 Million by 2027, registering a CAGR of 5.36% in terms of revenue during the forecast period.

The COVID-19 pandemic bought the economic slow down in the United States as construction, agriculture, and other sector were hit badly owing to the supply chain disruptions and shortages in labor and supplies lead to a down in the sector and reflected in the GDP with a drop rate of 32.9%. Even though the market as a whole is doing well, demand is heavily influenced by the region's economic turmoil, which always has an impact on farmers' income and purchases of farm equipment. However, sales of farming equipment experienced a decline in 2020 due to the COVID-19 pandemic, which had a significant impact on the automotive and agriculture tire markets. North America is recovering from the pandemic and witnessing stable economic growth in 2021. The rise in manufacturing activities across the region is also creating lucrative opportunities for the market during the forecast period.

Over the medium term, The technology advancement in the agriculture activities, improvement in the agriculture vehicles and equipment’s are rising the agriculture sectors, the increasing demand for agricultural products is increasing due to the rising standard of living, consumption, and foreign exports. The growth in demand for agricultural products is propelling the market growth for agricultural tires in North America.

The North American region exhibits a significant growth rate in farm mechanization. This factor is propelled by decreasing workforce in the agriculture sector in the United States Of America and Canada. The farm mechanization trend is increasing the agricultural yield as more tractors, and combine harvesters are being put into use.

Improvements are being made in traction and material technology due to the increasing demand for heavy-duty agricultural tires. The exploration of new farming terrains and change in the design of farming equipment is leading to rising demand for the strong rubber compound. Steel flex walls are currently being used in compound rubber tires, trailer tires, forestry tires, etc. to provide lower ground compaction.

The aforementioned technological advancements and innovations are propelling the growth of the agricultural tire market in North America.

Key Market TrendsGrowing demand for tractors across the region

The increasing need for operational efficiency and the rise in labor costs are expected to boost the demand for agricultural tractors. Growing demand for compact tractors among small farms and a rise in technological advancements, such as integrating telematics with agricultural tractors, are likely to remain major growth factors during the forecast period.

Labor shortages across the region are promoting manufacturers to introduce new technologies. New technologies like telematics and driverless tractors are some of the latest technological advancements which likely to drive demand in the future. Such an increase in technological advancement will increase the demand for tractors which in turn is likely to witness major growth in the agricultural tire market during the forecast period.

Many agricultural tire manufacturers are investing in technological developments that are giving a boost to traction properties and tire life. In Canada, the sales of high-technology tires are expected to increase during the forecast period owing to the launch of the CAP program and huge USD 3 Billion Investment by the Territorial, Provincial, And Federal governments. For instance, Low Sidewall Technology reduces road loping arising due to tire swaying which subsequently reduces soil compaction and power hopping. This provides high efficiency to farmers while maintaining the soil quality.

• In 2019, Michelin launched RoadBib, a heavy-duty tractor tire exhibiting 52 block design instead of lugged tire design which prevents soil crushing, reduces plant damage, and provides comfort. The RoadBib tire increases the fuel efficiency by 5%, tire life by 25%, and provides 20% more rubber contact with the ground thereby increasing traction.

The government has introduced new strategies to produce and consume locally to bridge the supply chain gaps and address the labor shortage in the agriculture sector. To assist smaller players, the governments have implemented a few comprehensive tax reforms. For instance,

• In 2020, the Canadian government has introduced the 'Canadian Agricultural Loans Act,' which offers farmers a loan of up to USD 500 thousand when purchasing land or a tractor. It may also be used to repair buildings.

The Agricultural Tires Market is also affected by the emission norms and regulations and manufacturers are now producing intelligent tires for hybrid and electric agriculture equipment.

United States Of America to Exhibit High Growth Rate

In terms of country, the United States dominated the market in terms of revenue during the forecast period. The rise in sales of agricultural vehicles across the region is likely to witness major growth in the agricultural tire market.

Owing to the aforementioned factors, farmers in the United States Of America invested less in farm equipment and agriculture machinery parts and components such as tires. However, the agriculture sector showed signs of recovery after the pandemic, and agricultural equipment sales witnessed 330 thousand units in 2021 which is 3% more compared to 2020. Such an increase in sales of agricultural equipment across North America is anticipated to propel the demand for tires during the forecast period.

Several tire manufacturers across the region are expanding their manufacturing facilities which are likely to create a lucrative opportunity for market growth. For instance,

• In October 2020, Continental Tire the Americas LLC expanded its American headquarters. The expansion will include a new 88,000-square-foot building at the headquarters campus, which serves as the base of Continental's North, Central, and South American operations.

Additionally, the agriculture sector of Canada is one of the strong driver as it is playing a key role in the contribution for the market growth. Agriculture sector has shown tremendous growth owing to increase in the agriculture activities over the past few years. Despite of all challenges faced due to pandemic the export performance of Canada was positive. Moreover, agriculture sector is going to show significant growth in the year 2021 with the expected yearly growth of 6.8% by USD 17.6 billion claimed by the Canadian agriculture associations.

Growth in the sectors is going to boost up the sales of the agriculture vehicle which simultaneously is also going to rise the demand of the wheels from OEM as well as more usage of the old vehicles will also create the demand for the aftermarket as Canadian farmers purchase over USD 2 billion worth of machines and implements annually, which includes an average of 19,000 tractors.

Owing to the above-mentioned factor are going to rise the sales and use of the agricultural vehicles, and which furthermore are going to rise the demand of the tires in the region.

Competitive Landscape

The North America Agriculture Tires Market is dominated by several key players including Continental AG, Bridgestone Corporation, Trelleborg AB, Michelin North America Inc., and many others. The players in the market are adopting the strategy of expansion through innovations with major investments being made in material and design technology development.

• In August 2022, Bridgestone invested an amount of USD 550 Million for an expansion of radial tire manufacturing plant across the United States.
• In December 2021, Trelleborg AB announced its plan to increase its production output from North American agriculture tire facilities to cater to the growing demand, as the company generates 18% of the total global wheels sales from the North American market.

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