An Uphill Struggle?
Certain tyre industry players have suggested that the green shoots of recovery are already visible in the North American off-road and construction markets (see elsewhere in this feature for more on this) meaning recovery in some markets could begin as soon as this year. However, CECE (European Committee of Site Machinery Manufacturers Associations) figures show that the OE side of the business isn’t really expecting growth to return until 2011. According to the CECE, the machinery market peaked in 2007 with a record year, while 2008 – despite still being worth 30 billion euros across Europe – is characterised as “a crisis year.” Projections for 2009 suggest there will be a drop in orders of around 30 per cent on a European scale compared to the previous – some companies hit lows of 60 per cent in February 2009.
Now, you may be thinking that as far as the infrastructure/construction part of the OTR tyre business is concerned, much of the annual market volume is purchased through the replacement market. However, while these figures only relate directly to the original equipment part of the tyre business, the OEM business can also be seen as a barometer of confidence in the industry as a whole. After all, OEM sales are determined by general economic output and construction demand and if there is no construction work taking place, this will affect both OE and replacement tyre sales.