Tyres are important components of a vehicle or machine for making it mobile. When we think about tyres, the first thing coming into our minds is a vehicle. Automobile is the largest user of tyres. However, speciality tyres are being used in off-the-road (OTR) segment which comprises construction equipment, mining equipment, material handling equipment, and agricultural equipment. OTR segment is expected to grow at faster pace due to the new life in the current construction, material handling and mining markets. The prospects of OTR tyres are expected to be better as the various industry segments are on growth path.
Growth in the construction and material handling equipment market has pushed the prospects of small and medium range OTR tyres. Construction equipment such as backhoe loaders, skid steer loaders and wheel loaders and materials handling equipment such as mobile cranes, port cranes, reach stackers, pallet trucks, telehandlers and aerial work platforms require various sizes and diameters of tyres. Large size tyres are being used in mining applications, for dump trucks, large wheel loaders, and underground mining equipment drive the growth for bigger size OTR tyres in the coming years. In construction equipment, backhoe loaders are the major demand drivers for tyres. In mining, dump trucks offer major opportunity for OTRs where there is good demand coming in.
In spite of the government doing a lot to improve the industry growth and infrastructure development, there are certain measures that may act against the sentiments of OTR tyres. One challenge in OTR tyres seems to be the anomalies in GST rate for tyres. The government has reduced the GST rate for construction equipment from 28 to 18 per cent, but the tyres still fall under 28 per cent, as the largest share of tyres fall under the passenger vehicle category. Major OTR tyre players are of the view all the tyres that go into OTR applications should be included in the 18 per cent slab of GST. Thus, the customer can find it value for money and will have to shell out less.
Excon 2017 was a great show in terms of number of participants and area of display in indoor and outdoor. The largest number of participants was component manufacturers. Component companies contributed to the largest category in equipment section. The show was rich in technology innovations with the display of pumps, valves and drives, etc, with Internet of Things (IoT) features. The industry is upbeat this year considering the amount of development works emerging in the New Year and following years.