The replacement market of agricultural tyres

The ETRMA data about the sales of agricultural tyres (the replacement market) within the European market shows a 40% decrease in Q1 2023 when compared to the sales volumes of Q1 2022, after an overall 22% decrease in 2022 in comparison with the previous year. Italy, which is the third european market in terms of size, follows the same trend.

In this context we asked Agostino Provana, an expert within the agricultural field, what the future of this business sector will be and how the reseller’s job will change accordingly.

“First of all the ETRMA data which considers the European market is provided by European tyre producers which are more focussed on car, motorcycle and truck products; in addition to that, the data does not take into account the volumes of production outside Europe. The imports of agricultural tyres keep growing from China and India, which owns over 45% of all imports, with the gain of relevant market shares especially if we consider low-tier and mid-tier products.

Secondly, the market share data is related to the number of tyres sold, whereas if we analyse the turnover of the main agricultural tyre producers the situation changes. The growth of turnover and profits is double-digit, partly as a consequence of last year’s rise of prices in particular when considering premium products: these aspects have significantly contributed to improve the financial situation of tyre producers, which have been also focussed on optimizing both expenditure and transport costs. On the basis of these strong results the main European tyre producers keep investing in the agricultural market whereas the growth of Indian and Japanese tyre producers does not seem to stop: the Indian tyre producer BKT aims to become the major player within the agro-industrial segment through a growth of in-house production capabilities; the Japanese company Yokohama has recently acquired, after the acquisition of Alliance/Atg, the tyre producer Trelleborg Wheel System, mimicking the multi-brand model of Bridgestone, which relies on the strenght of its Firestone brand; if we take into account the newcomers we talk about the CEAT and Ascenso tyre producers, the Ascenso brand in particular is the result of previous business experiences in BKT and ATG and with its business activities in India aims to be a major player in the European region as well.

Thirdly, it is necessary to take into account important parameters such as the sizes of tyres, which influence  the business profitability in a marked way. If we consider the today’s needs of agro customers, they use tractors, agricultural machineries and tyres which are under a constant improvement in terms of performance, according to the various agricultural operations. The agricultural operations can be optimized in terms of field passages, whereas the road transfer use is on the rise causing, as a consequence, an increase of the “number of hours” of the machinery. In order to work efficiently the final customer searches for a product with performances in line with the type of agricultural operation, but also asks for a good product in terms of tyre durability (wear), durability over time (damages) and fuel consumption (Running Cost).

Today the tyre user can choose from a broad choice of brands, sizes and prices, and the medium-high tier tractors are today the most used tractors in terms of number of hours, with an average value of a set of 4  tractor tyres which ranges from 6.000 euros to 10.000 euros and more.

In conclusion we can say that today there is within the Italian replacement market a decrease in terms of number of tyres in favour of a range of tyres which presents a better performance, a better quality with a higher price. The role of the tyre reseller and the tractor dealer – in general, of who will sell the agricultural tyre – will be role of a products specialist, an expert who knows the product and gives the right answers to tyre users according to their needs. The tyre specialist becomes a consultant within a very complex sector in terms of sizes, brands and prices.

When we consider the tyre reseller and the final customer we do not simply consider the purchase of a tyre according to the cheapest price but also in terms of real value. This aspect will not only increase the overall value of the sales of the tyre reseller but will also give the opportunity to save money in terms of Running Cost.

According to this last point the Provana Group, a services holding company which offers specialized consultancy within the agricultural sector, is focussing on the organisation of training courses for the sales specialists of tyre resellers, wholesalers and tyre producers, through the analysis of topics such as the Hourly Cost and the Fuel Consumption ones, which are linked to the usage of tyres.

(translation of the article on the following website: – Link)

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