'Shifting Economy' Will Benefit OTR Tire Dealers

The health of the OTR tire market “doesn’t depend on perfect growth,” says Michael Bennett of the Automotive Training Institute.

"It depends on ongoing utilization of equipment and sustained industrial activity,” Bennett, MasterMind CEO program manager for the Automotive Training Institute, told attendees of this week’s Tire Industry Association OTR Tire Conference, which is taking place in Orlando, Fla.

"The U.S. economy is still growing. Consumers remain resilient. Indicators point to continued expansion across the next decade. The environment isn't flat. Its simply shifting.

"The next decade of OTR won’t be won by who sells the most tires, but by who owns uptime, data and cross-border capability and most specifically, those who can adapt across different market segments. The real question isn’t whether demand exists. The real question is ‘Who’s positioned to ultimately capture it?’”

In North America, the construction and mining segments remain the core drivers of OTR tire demand, Bennett told attendees.

"Ultimately, the aftermarket dominates the total market at 73.2%,” with the original equipment channel making up the difference, as OTR tire customers choose “to upgrade existing fleets rather than purchase new units because of high capital costs.”

According to Bennett, the OTR tire aftermarket is expected to expand at a compound annual growth rate of nearly 4.7% through 2030. “Major players ... are prioritizing aftermarket service points,” he said.

"When 70% of the revenue lives with the aftermarket, the winner will not be defined by unit sales but ultimately, as we move forward, by lifetime value. As it is in any service industry, it ultimately boils down to the quality of the relationships you have established with your customers."

The construction segment “is experiencing a period of cautious, modest growth, characterized by a shift toward data centers and advanced manufacturing. Public infrastructure is still on the docket,” but is a “little bit in flux as we move toward the end of the year. We expect to see between flat and low single-digit increases across the industry” in 2026.

"When we step back and take a look at construction across the U.S., activity is no larger surging the way it did coming out of the (COVID-19) pandemic, but it's also not collapsing. Industries and economies don't like big shifts and big change. If you have a big shift in growth, inevitably you’ll have a big correction. The good news in this industry is that it’s resettling.  

“Housing demand in the U.S. still exceeds long-term supply, which means activity stabilizes and eventually it will return.”

Investment in commercial construction projects will continue to generate "meaningful construction demand and therefore the need for the OTR tire industry behind that.”

The demand for data centers will continue to drive “a significant amount of (construction) growth” in the U.S. There are 3,000 new data centers under construction in the U.S., “adding to the more than 4,000 that are already in operation,” said Bennett, who revealed that Virginia has the largest concentration of data centers with 663 facilities, with Texas not far behind. "The forecast is for data center construction to increase by 29% in 2026. This is following last year, when it was around 33%."

Because data centers “require massive power” to operate, more power generation plants will be required. “In total, there are 668 power generation plants under construction in the U.S.” that together will bring more than 70,000 megawatts of additional capacity online, said Bennett.

Infrastructure activity, including road building and bridge repair, is expected to continue through much of 2026. But the 2021 Infrastructure Investment and Jobs Act, a $1.2 trillion federal statute that provides $550 billion in new, multi-year investments, will expire in October. Bennett said there are no signs “at this point that would indicate what the federal taste is for either renewing or (enacting) some sort of extension or replacement of the act.”

The most important structural shift in the construction segment is “the rental revolution,” Bennett told attendees. “The U.S. construction equipment rental market is growing to $159 billion this year and is expected to grow by 80% to over $264 billion by 2034.

"For OTR dealers and manufactures, this changes the game significantly because rental companies buy differently than contactors do. They’re more sophisticated buyers... because they wany long-term partnerships with their service providers, not transactional relationships. Selling tires to contractors is one thing. Contracting with a rental company for predictive maintenance, smart (tire performance) monitoring and guaranteed up time is another."

On the mining tire side, demand will remain robust in 2026 due to the growth of mine projects and the continued robust call for commodities, Bennett told attendees. "Globally, the industry is tracking more than 13,700 active projects toaling $1.5 trillion of new investment.”

China will lead the charge and is expected to invest around $137 billion in mining projects this year, with Canada investing $42.2 billion and the U.S. investing $40 billion in new projects over the next 10 months. Australia, with a planned investment of $28.1 billion, and India, which is expected to spend $17.1 billion on new mining projects, will round out the “top five.”

Coal will remain the most commonly mined commodity, with extraction in 2026 totaling slightly more than $98.1 billion. Copper ore will be the second most in-demand commodity, according to Bennett, followed by gold and silver ore, iron ore and lithium.

"New mining capacity means new OTR opportunities. This is on top of already-robust mining activity last year. Demand (for OTR tires) will remain high with this market in place."

Addressing OTR tire dealers, Bennett noted that “scale does matter” when servicing customers, who are increasingly expecting "one integrated partner with the scale and technology and cross-border border reach. For dealers this creates a stark choice: scale up or sell. Standing pat is not going to be a viable strategy when national players are expanding and customer expectations are rising."

Fortunately, “there are things that we know will happen. Equipment wears out. Replacement demand continues, regardless of whether construction projects start. You still have the opportunity to support ongoing projects. Infrastructure needs are real. Both the U.S. and Canada have under-invested in infrastructure for decades. Mining is strategic. Critical minerals aren’t optional. Technology will be accelerated.

"Your job is to position your business to capture the upside when the opportunity presents itself, while having enough resilience to weather the inevitable volatility. The companies that move first toward service, toward technology, toward scale won’t just survive the next decade. They will define it.”