Southeast Asia Off the Road (OTR) Tire Market Research Report: Forecast (2024-2030)

Market Insights & Analysis: Southeast Asia Off the Road (OTR) Tire Market (2024-30):

The Southeast Asia Off the Road (OTR) Tire Market size is estimated to grow at a CAGR of around 4.3% during the forecast period, i.e., 2024-30. The market growth reflects the surging focus of government bodies in Southeast Asian countries on infrastructure development, creating demand for OTR tires in construction equipment. The region's robust industrialization and infrastructure development projects, especially in countries like Indonesia, Thailand, and Vietnam, necessitate heavy machinery and construction equipment, thereby increasing the demand for OTR tires. The increase in construction is driving up demand for vehicles such as excavators, bulldozers, and so on, raising demand for OTR tires. Furthermore, governments are implementing favorable regulations to encourage international investments and leading manufacturers to construct OTR tire production plants to meet rising end-user demand, fueling market growth & expansion.

Furthermore, the strategic location of Southeast Asian countries along major shipping routes makes investing in port infrastructure crucial for facilitating global trade. As a result, several countries, like Thailand, Vietnam, Singapore, etc., have been investing in expanding and modernizing their ports to accommodate larger vessels and increase cargo-handling capacity. For instance,

• In 2022, Thailand’s Laem Chabang Deep Seaport invested about USD 927 million to expand the port capacity of about 18 million twenty-foot equivalents (TEU) per year.

This growing infrastructure in the development of the trade & logistics sector of the region is contributing to the demand for material handling equipment, as it is required in port operations for handling containers, heavy cargo, and logistics activities. Heavy machinery such as forklifts, excavators, etc. rely heavily on OTR tires, generating their demand and ultimately driving the growth of the Southeast Asia OTR Tire Market.

Moreover, the establishment of new mining projects in countries such as Thailand, Indonesia, etc., is further driving up demand for heavy mining vehicles. The rising need for minerals and metals is fueling mining exploration activities in Southeast Asian countries, resulting in increased demand for large off-road vehicles. Moreover, the surging investments in the mining sector are further boosting mining activities in the region. For instance,

• In 2023, according to the Ministry of Energy and Mineral Resources, Indonesia booked around USD 30.3 billion of investment in the energy and mining sectors.

Heavy mining equipment relies on OTR tires to navigate undulating terrain and mining areas, which causes frequent damage to OTR tires. With frequent wear and tear, the demand for replacement tires rises, ultimately driving the growth of the Southeast Asia OTR Tire Market.

Southeast Asia Off the Road (OTR) Tire Market Driver:

Surging Residential & Public Infrastructure Projects to Boost OTR Tire Demand – Southeast Asian nations are experiencing population growth due to the arrival of expatriates in the country. This is resulting in the housing crisis within the region & uplifting the demand for the accommodation facilities. Therefore, the governments of these countries are primarily focusing on building residential complexes & apartment units. These construction activities elevate the demand for OTR vehicles & tires, driving the market growth. Additionally, to improve the quality of living for the inhabitants, the government is increasingly putting efforts such as Thailand 4.0 and the One-Road Initiative, which prioritize infrastructure development, have resulted in a surge in construction projects across the region. For instance,

• In 2023, the Indonesian government planned about 49 projects, including 33 PPP and 16 non-PPP projects, for residential and commercial infrastructure development in the country.

With increased construction and infrastructure development activities, the need for construction vehicles such as road rollers, bulldozers, and other machinery that runs on OTR tires is surging significantly. Owing to the tough and rough terrain on these construction sites, the OTR tires suffer frequent wear and tear and exterior damage, necessitating tire changes. As a result, with the increase in construction, demand for OTR tire replacements increases, consequently boosting the size & volume of the Southeast Asia OTR Tire Market.

Southeast Asia Off the Road (OTR) Tire Market Opportunity:

Implementation of Government Initiatives Towards Agriculture Activities Support Market Growth – The Southeast Asian nations are one of the major producers of various crops and other agricultural products. These nations export their agricultural products to other neighbouring countries, contributing the economic growth. Therefore, to stimulate economic development within the region, the official governing authorities are laying various initiatives to promote agricultural production. Additionally, the ministries are focusing on ensuring food security within the region. As a result, they have been providing substantial funds to modernize agricultural infrastructure to increase productivity and enhance crop yields.

Moreover, governments across the region are implementing multifaceted policies to bolster agricultural productivity, ensure food sovereignty, and uplift rural livelihoods. For instance,

• In 2022, the Thailand government launched various digital transformation plans in the agriculture sector, focusing on big data and smart agriculture.

With the rising agriculture sector, the demand for agriculture machinery and vehicles is expected to soar, which heavily relies on OTR tires. With the surging agriculture activities, the tires would suffer from deterioration due to undulated agricultural lands, creating a demand for OTR tire replacement and providing opportunities for the various market players in the region.

Southeast Asia Off the Road (OTR) Tire Market Challenge:

High Competition from Retreaded OTR Tries to Impede Market Growth & Development – The increasing awareness of environmental concerns and regulations regarding tire disposal and waste among Southeast Asian countries such as Thailand, Malaysia, etc. has surged the production of retreaded tires in the region. Moreover, the presence of retreaded tire manufacturers such as Lean Wah Tyre Retreads, Indra Machinery, etc. providing a vast variety of OTR tires to consumers further boosts the growth of retreaded tires in the region. Additionally, the cost of the retreaded OTR tires is comparatively less than the original OTR tires manufactured by market players like Bridgestone & Michelin. Therefore, the end-users with financial constraints are inclined towards low-priced tires, impeding the market growth.

Further, end-users are increasingly seeking conveniently accessible options. Therefore, there is a growing preference among end users to use retreaded tires for their OTR vehicles, negatively impacting the industry's growth & development.

Southeast Asia Off the Road (OTR) Tire Market Trend:

Notable Escalation in Renewable Energy Projects Changing Market Dynamics – Southeast Asian countries have been dependent upon fossil fuels to generate electricity. These nations procure the fuel from other neighboring countries. However, the disruption in the supply chain due to the political strains between nations, like Iran-Israel, and Russia-Ukraine, is creating energy insecurity in the region. As a result, the governing authorities in the countries are increasingly focusing on enhancing their renewable energy projects. The official authorities are setting ambitious energy targets & policies and offering attractive incentives to attract investment and stimulate growth within the energy sector. For instance,

• In 2023, the Board of Investments (BOI) Philippines announced the launch of about 16 renewable energy projects in the country with huge investments.

This rising fund allocation in the energy sector is resulting in the construction of several renewable energy projects, like solar plants and wind power plants in countries such as the Philippines, Singapore, etc., is rising. With the surging renewable energy projects, there is an increasing need for heavy machinery and equipment with OTR tires to support construction, installation, and maintenance activities. This uptick in green energy projects drives significant demand for OTR tires, as specialized vehicles and equipment utilized in these projects require durable tires capable of navigating diverse terrains and challenging environments, serving as a major trend in the market.

Southeast Asia Off the Road (OTR) Tire Market (2024-30): Segmentation Analysis

Southeast Asia Off the Road (OTR) Tire Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the regional level. According to the analysis, the market has been further classified as:

Based on End Users

• Construction
• Industrial
• Mining
• Agriculture
• Ports

The ports segment holds a major market share and is anticipated to maintain similar momentum during the forecast period due to increased investments in port expansion and an increase in cargo traffic. Trade between Southeast Asia and other nations expanded dramatically in historical years owing to an increase in trade agreements between Southeast Asia and countries such as Canada, the United States, the European Union, etc. Southeast Asia's rise as a key player in world trade has increased the need for the port's expansion to handle the enormous volume of shipments transported and received, fueling the overall port expansion projects.

Additionally, ongoing port modernization initiatives across countries like Singapore, Malaysia, Indonesia, and Thailand, coupled with investments in port expansion projects, amplify the demand for OTR tires tailored for port machinery. Moreover, the advent of mega-container ships and the consequent need for larger, more efficient port facilities intensify the requirement for durable and high-performance OTR tires.

Based on Sales Channel:

• Direct Sales
• Online
• Multi Brand Stores
• Exclusive Stores

Sales through multi-brand stores and exclusive outlets have been steadily increasing, as people prefer to buy tires from these stores since they offer a diverse selection of options from brands such as Goodyear, Bridgestone, and others at a single point of sale. As a result, multi-brand stores' ability to provide a greater selection and price comparison between different tire manufacturers and variants will continue to enhance tire sales. Furthermore, users frequently value the option to compare costs and features across various OTR tire companies. Multi-brand stores make this comparison easier, allowing customers to make informed judgments based on aspects including pricing, quality, and tire features. Therefore, this sales channel captures the largest share of the Southeast Asia Off the Road (OTR) Tire Market.

Southeast Asia Off the Road (OTR) Tire Market (2024-30): Regional Projections

Geographically, the Southeast Asia Off the Road (OTR) Tire Market expands across:

• Malaysia
• Indonesia
• Singapore
• Cambodia
• Vietnam
• Thailand
• Philippines
• Rest of Southeast Asia

Geographically, the Indonesia holds a notable share in the Southeast Asia Off the Road (OTR) Tire market. The government of the country is easing the corporate tax laws, creating a favorable business environment in the country. This is facilitating the foreign companies to set up commercial offices in the country. As a result, there is a surge in the demand for commercial real estate buildings. Therefore, to cater to the growing demand, the developers & construction contractors in the country are increasingly building commercial offices. These surging construction activities are accentuating the demand for construction vehicles, consequently uplifting the demand for OTR tires in Indonesia. Additionally, to elevate economic growth, the governing authorities in the country encouraged the establishment of local industries. This is leading to the rising construction of industrial units in the country, expanding the usage of OTR vehicles & OTR tires. Moreover, the government's initiatives to enhance transportation networks are further fueling the demand for OTR tires. For instance,

• In 2022, the Indonesian government invested about USD 992 million in the construction of a 76 km tolled highway project in the country.

With the surging construction activities in different sectors comprising residential, commercial & industrial, the demand for OTR tires would continue to rise, augmenting market growth & development in the country.

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