The US farm tire market has two segments, replacement (RT) and original equipment. For more mail: vikas@konceptanalytics.com

1. The US Farm Tire Market
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2015
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2. 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 US-
made 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.
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3. The world tire market has been driven by the emerging markets as the developed market growth has
reached at saturation point.
• 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.
•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.
•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 Share by Company (2013)Global Tire Market (1998-2014)
Global Tire Market Volume by Region (2013)
1998 2000 2002 2004 2006 2008 2010 2012 2013 2014
US$Billion
Bridgestone Michelin
Goodyear Mid Size European
Mid Size Japanese Mid Size Korean
Chinese Tiremakers Indian Tiremakers
Russian Tiremakers Others
Asia (Excluding India) Europe North America South America Other

4. 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.
• 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$...
billion.
•The total US tire shipments, combining replacement and OE tire
shipments, increased from nearly … million units in 2013 to …
million units in 2014. Replacement and OE passenger tire
shipments were up …% and …%, respectively. Light truck tire
shipments — LT sizing, not P-metric light truck — were up …%
and …%, respectively. The growth in the truck tire segment, which
includes wide base and heavy truck tires as well as medium truck
tires, was particularly robust in 2014.
• The US replacement tire shipments were up …% across the
board in 2014 versus 2013, excluding farm and OTR tires. Total
replacement tire sales in the US remained stable at US$... billion in
2014 compared to US$... billion in 2013.
The US Replacement Tire Sales (2010-2014)The US Total Tire Shipments (2010-2014)
The US Replacement Tire Sales by Type (2014)
270
275
280
285
290
295
300
305
310
315
2010 2011 2012 2013 2014
MillionUnits
29
30
31
32
33
34
35
36
37
38
39
2010 2011 2012 2013 2014
US$Billion
0
5
10
15
20
25
30
Passenger tires LT tires Truck tires Farm tires OTR tires
US$Billion

5. 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.
•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.
•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 value-adding 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.
•In 2014, replacement market accounted for ..% of farm tire market
whereas OE farm tires accounted for only ..% of the market.
The US Farm Tire Market Share by Segments (2014)The US Replacement Farm Tire Sales (2010-2014)
The US Farm Tire Shipments (2010-2014)
2010 2011 2012 2013 2014
US$Million
2010 2011 2012 2013 2014
MillionUnits
Original Equipment Tires Replacement Tires

6. Firestone had the largest rear (both radial and bias) OE farm tire market share in 2014.
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.
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.
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
The US Rear Farm Tire Market Share by Company (2014)
2013
2014
2015F
2016F
2017F
2018F
MillionUnits
The US Farm Tire Shipments Forecast (2013-2018F)
BKT Firestone Goodyear Titan Michelin Alliance Trelleborg Others

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Vikas Gupta
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