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Domestic tire shipments

A $32.1 billion industry! Replacement tire sales set a record in the U.S.

By Bob Ulrich costs — are there any other kind? — will force tire manufacturers to announce multiple price increases. Passing them along

Two years ago, domestic replacement tire sales broke the to the consumer is another matt er. $30 billion mark for the fi rst time, fi nishing at $30.1 But take heart: On Sept. 26, those once mighty tariff s on billion. Last year, sales dropped more than $3 billion Chinese consumer tire imports will drop another fi ve perto $26.8 billion as the recession took its toll. centage points, to 29%. When they were fi rst implemented

Th e roller-coaster ride continued in 2010, with pent-up on Sept. 26, 2009, they added 35% to the existing 4% duty on demand and double-digit price increases resulting in record consumer tires. Th e world didn’t end then, and when the tariff replacement tire sales of $32.1 billion (see Chart 1). (hopefully) goes back to 4% on the same day in 2012, you will

Dr. Ken Mayland, president of ClearView Economics LLC, be able to conduct business as usual, with additional low-cost predicted the turnaround. tire options to boot! “I wouldn’t say (the tire industry) is bullet-proof, but people are holding Chart 1 2010 U.S. REPLACEMENT MTD’s 45th annual Facts Issue not only analyzes what happened in our industry in 2010, onto their cars longer... eventually, they TIRE SALES but also off ers some insight into what you can are going to need maintenance.” (a $32.1 billion industry) expect to see in 2011. We hope it will help you Consumer tires, defi ned as passenger and light truck tires, represented 81% of Passenger tires: $ 21 .8 billion run your businesses more profi tably. ■ total sales, or $26.1 billion. Both passenger ($21.8 billion) and light truck ($4.3 Light truck tires: $ 4.3 billion All fi gures in the 14-page Facts Section are Modern Tire Dealer fi gures unless otherwise noted. billion) tire sales also set records. Overall tire shipments are expected to rise again in 2011. So are tire prices, Truck tires: $ 5.1 billion Farm tires: $502 million as the need to meet rising raw material OTR tires $401 million

MADE IN CHINA

Clockwise from upper left: Sam’s Club is the largest warehouse membership club in the U.S. with more than 600 stores; replacement truck tire shipments rose nearly 20% last year; natural rubber costs reached $5,000 a ton on Jan. 1, 2011; there was a dramatic decrease in consumer tire imports made in China; Tire Kingdom Inc. is the second largest independent tire dealer chain in North America with 735 stores (Discount Tire Co. Inc. ended the year with almost 800); ATD has 86 distribution centers; Chairman and CEO Mauro Pessi says Pirell Tire North America “is not interested in bringing truck tires here.”