Off Highway Tires
North American Tire & Retread Expo
New Orleans, Louisiana
April 16, 2015
Agenda
OHT Market Size and Breakdown
Some observations on main relevant sectors
Thoughts on what’s coming down the pike….
A Little Bit About Me…
Some OFF HIGHWAY TIRE
observations…
•
•
•
•
Great People
Cool Products, cool machines
End users appreciate value!
It’s a relationship business.
OHT Business Good Size
• Big enough to grow in and to make
money.
• Small enough to be involved and make an
impact.
OTR vs. OHT??
Segments of OHT Market
Agriculture Forestry
Mining /
Construction
Earthmover
8
Global OHT Tire Market ~$14B!
14
OHT Market
126
Other Markets
Above OHT market size excludes solid tire,
racing tires and aircraft tire.
Source: Annual reports; Global Tire Report from Rubbernews.com
Global OHT Market
OHT Market
14
OEM
29%
Aftermarket /
Replacement
71%
Above OHT market size excludes solid tire,
racing tires and aircraft tire.
Source: Annual reports; Global Tire Report from Rubbernews.com
Global OHT Market
OHT Market
14
ROW
34%
38%
Europe
28%
North America
Above OHT market size excludes solid tire,
racing tires and aircraft tire.
Source: Annual reports; Global Tire Report from Rubbernews.com
Global Market Breakdown
Mining/EM 23%
Forestry
- 3%
Construction
26%
Agriculture
- 47%
North American OHT Market
Forestry
5.3%
Construction 26.0%
Mining /EM 29.4%
Agriculture - 39.3%
Mining
Mining….
“It was the best of times….it
was the worst of times”
Charles Dickens, A Tale of
Two Cities
Mining….
•
•
•
•
Highly specialized
Very regionalized
Cost of failure very high
High cost to serve
Mining Pockets of Opportunity
• Underground mining
• Sand and Gravel
Agriculture
THEIKPSOIUPRTE
AG vs. Mining
Agriculture
• Also specialized and regional
• But not as much as mining
• Farms in every state….opportunities
unless you are an urban dealer
Farmers Very Tech Savvy
•
Farmers research
EVERYTHING
online before
buying
•
Make sure your
website is easy to
find and easy to
use.
GPS Guided Farming!
Heavy Users of Social Media
Productivity Driven….
Not Just Tractors….
Segment break-up of OHT market
Construction
Key OHT Segments
Agriculture
Forestry
Mining
Construction
Construction is Booming
• 2014 machinery sales up
8.7%
• 2015 forecasted to be even
higher 8.9%
• 2016-2019 looking strong
with CAGR of 4.5% or
higher
Growth is Across the Board
• 2015 Single Family Housing Forecasted to be up
15% over 2014
• Commercial Building also forecasted in the 15%
range
• Construction is EVERYWHERE….not just in
Southeast or West.
• Not just suburbs as in past. INFILL in cities, led by
millennials, driving urban construction
Construction Equipment
70% Of All OTR Tires 24”-25”
13.00-24
14.00-24
15.5-25
17.5-25
20.5-25
23.5-25
25.5-25
29.5-25
OTR Segment Offers Greatest
Short Term Opportunity
• You don’t have to be an OTR
dealer to participate.
• Any commercial dealer, with a lift
gate truck, can handle majority
of tire sizes used on
construction and industrial
machines
Go Where the Numbers Are….
• 800,000+ Skid Steers in the
USA alone
• 600,000 on tires
• 2.4 MILLION SS Tires in the
field right now
• Severe use. High scrub
rate. Wear out fast
• Limited sizes to inventory
10-16.5
12-16.5
Rental Companies Are
Hot…
Rentals Are Hot!
• Over 50% of 2014 new equipment purchased by rental
companies
•
Trend forecasted to be even higher 2015-2019
•
Driven by continuing uncertainty
•
Users increasingly deploying specialized equipment for
specialized jobs. More economical to rent than own
•
Uncertainty over long term Federal Highway Bill
So What?
• Do not ignore the rental fleets
• They are growing fast
• Get to know local people at rental company branch
locations
• United Rentals
• Sunbelt
• Cat Equipment
• Etc.
• They are everywhere. In all markets.
Where to Look….
Forestry
OHT…It’s a Dealer’s World.
• OTR Users Need Dealer Service and
Value their servicing dealer
• You offer what manufacturers do not:
• 24 Hour emergency service
• Inventory close at hand.
• Trained technicians/OSHA certified
• Data driven recommendations to help
lower production costs/reduce downtime
It’s All About Productivity &
Cost
• No one cares about tires except for those of us
in this room!
• Customers only care about lowering their
production costs and improving productivity
• If this could occur through some new, disruptive
technology, we’d be out of business
Good News…You are the
Critical Link!
• Right service partner is still the critical link in making
everything work
• Right tire recommendation
• Right service offerings
• You are in the driver’s seat. Customer appreciates
what you can do for him more than the brand of the
tire.
• You can recommend the right bundle of products and
services that you feel will help your customer best.
Majors De-Focused
• Pirelli spins off AG tire business to Trelleborg
• Goodyear spins off AG business to Titan
• Continental spins off OTR business in U.S. to Titan
• Conti spins off AG business in Europe to Mitas
It will be a buyer’s market
You Will Have Even More
Choices in the Future….
Emerging Players starting to challenge the global giants
Emerging players more sophisticated
Choose Wisely….