Big Sales for Big Tires?

Big Sales for Big Tires?
OTR tire market has a strong potential in Canada.

Prospects are good for the OTR market in Canada, as long as you provide the products and services today’s OTR customers demand.

OTR tire sales track with resource industries like energy and mining, forestry and agriculture. When these sectors grow their need for tires increases too. So how are these industries doing, and what do we know about the future of the OTR market here in Canada?

According to Statistics Canada, housing starts were up 4.8 percent for 2018 (second quarter) over the same quarter in 2017. Housing completions over the same period were up 9 percent. New houses mean increased construction activity to deliver expanded infrastructure and additional waste collection.

Housing construction, in turn, drives demand for forest products, and each of those new homes requires energy for heating. All of this activity runs on rubber tires and creates growth in the OTR market in Canada.

“There’s certainly strong potential for the off the road (OTR) business in Canada, particularly in areas such as mining, municipalities, waste, and general and green construction,” says Ray McElroy, Manager, Pneumatic Segment Manager at Trelleborg. “Growth in these areas is translating into increases within the overall OTR segment. Right now, we are witnessing rising sales that are aligned with construction as well as a positive outlook from tire companies.”

Career opportunities in OTR

This trend is aligned with the forecast of strong Canadian growth for this segment, shared at the 2018 OTR conference. “We see a business opportunity with the construction, waste management and municipality channels.” McElroy adds. “As further evidence of this potential, we have witnessed many career opportunities within OTR for positions such as management, technical and service roles.”

Elaine Forsyth, co-owner of OK Tire in Spruce Grove Alberta, says she has noticed an increase in a more positive outlook, as well as increased spending from her customers, compared with the previous two years. Customers are going back to work, and securing new contracts.

Although there was quite a big buzz about the Trans Mountain Pipeline, which would have directly impacted OTR customers in western Canada, the recent turn of events with the pipeline will certainly change things, but it’s still too early to tell the full effect.

Managing costs

Fleet OTR tire users demand suppliers manage the total cost of tires and rims, part of which is the ability to predict tire life and provide analysis that helps customers control the lifetime cost of tires. The opportunity for OTR tire dealers is in meeting their customers’ needs with a combination of industry-specific tire products, along with on-site and off-site services that bring costs down and increase vehicle up-time.

For those dealers who have figured out how to package products and services with an entire cost of tire ownership view in mind, the OTR tire market is looking cautiously optimistic.

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