Commercial

No more cannibalism

Fleets take their trucks out of park and buy new and retreaded tires

The average age of a Class 8 truck is 6.7 years. months of net orders,” he says. “With nearly 71,000 Th at is higher than the historical average, and orders booked, the fourth quarter was the best quarter the highest since ACT Research Co. (www. for Class 8 vehicles since the second quarter of 2006. actresearch.net) began tracking it in 1979. “The ramp-up in demand is consistent with the A dramatic reduction in the demand for freight in up-cycle we have been forecasting for over a year, and 2009 is partially responsible. Th at led to a decrease in confi rms production levels will increase signifi cantly North American commercial truck production, and in 2011.” a 51% decrease in OE truck tire shipments in 2009 Although truck tire pricing increased, not all the vs. 2008. announced price increases stuck, especially earlier in When fl eets needed new tires, they cannibalized the the year. An 11R24.5 drive tire, load range G, averaged empty trucks they had parked. Th e result was an 18% $389.16, which was up 1% compared to 2009 (MTD decrease in replacement truck tire shipments during calculates dealer pricing in December). the same time frame. Th e segment remains highly competitive. Th e Big Chart 17 Demand picked up last Th ree manufacturers account for 68.5% of the replace2010 REPLACEMENT year, however, and OE and ment truck tire market, but there are 18 brands with MEDIUM/HEAVY TRUCK TIRE BRAND SHARES* (Based on 15.2 million units) replacement tire shipments increased 28.5% and 19.7%, respectively. at least 1% market share (see Chart 17). Bridgestone Bandag Tire Solutions, Goodyear Tire & Rubber Co. and Michelin Retread Technologies Inc. Brand 2010 Ken Vieth, president and represent 93.5% of the domestic retreading market Goodyear 20.0% senior analyst at ACT Research, (see Chart 18). Michelin 19.5% says North American truck An estimated 14.3 million retreaded medium and Bridgestone 18.0% production could rise more than 50% in 2011. heavy truck tires were produced in 700 U.S. plants in 2010. Th at’s a 10% increase in production compared Firestone 7.5% “Th e industry closed 2010 to the previous year. Yokohama 7.0% with a string of three strong Th e top 100 retreaders in the U.S. accounted for Continental 4.0% General 3.5% Hankook 3.0% Chart 18 2010 U.S. MARKET SHARE, RETREADED TRUCK TIRES Double Coin 2.5% (based on 14.3 million units) Toyo 2.5% BFGoodrich 2.0% Hercules 2.0% Roadmaster 2.0% Dunlop 1.5% Bridgestone 42.5% Dynatrac 1.5% Goodyear 28.0% Gladiator 1.0% Kumho 1.0% Michelin 23.0% Sumitomo 1.0% Marangoni 4.0% Others 3.0% * Because numbers are rounded Others 2.5% to the nearest one-half percent, the total may not equal 100%. Brands must have at least 1% of the market in shipment numbers to be listed at 1%.

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Chart 19 2010 U.S. REPLACEMENT FARM TIRE MARKET SHARES REAR RADIAL (260,000 units) SMALL FARM (1.25 million units) Firestone 30.0% Firestone 30.0% Goodyear 30.0% Goodyear 20.0% BKT 15.5% Titan 16.0% Michelin 10.0% BKT 10.0% Titan 7.5% STA 6.0% Alliance 2.0% Co-op 5.0% Co-op 2.0% Alliance 3.0% Trelleborg 2.0% Carlisle 3.0% Others 1.0% Harvest King 3.0%

REAR BIAS (430,000 units) Trelleborg 2.0% Firestone 33.0% Others 2.0% BKT 21.0% Goodyear 20.0% Chart 20 Titan 16.0% U.S. OE REAR FARM TIRE Akuret Alliance 2.0% 2.0% MARKET SHARE (600,000 radial and bias units) Co-op 2.0% Firestone 42.1% Trelleborg 2.0% Goodyear 36.75% Harvest King 1.0% Titan 13.55% Others 1.0% Others 7.6% 12 million retreaded truck tires last year, or about 84% of total production, from 318 plants. They also accounted for 155,000 OTR tire retreads.

A lack of casings, particularly out of Japan, will be problematic in 2011, says Bob Majewski, president of the Tire Retread & Repair Information Bureau. He also runs Sumerel Tire Service Inc. in Newport, Ky., as president and COO. “We can sell more, but we cannot fi nd casings.”

As for the farm and OTR tire markets, shipments were up across the board. Replacement rear farm tire units were up 9.5% (18.1% radial, 4.8% bias). OE shipments were up 9.1% (12.5% radial, 8.2% bias).

Th e Firestone and Goodyear brands (Titan Tire Corp. owns the rights to Goodyear farm tires) remain the top two players, although Balkrishna Industries Ltd. (BKT) has moved up to number two in replacement rear bias market share (see Charts 19 and 20).

Overall OTR civilian tire shipments — replacement and OE combined — were up more than 10%, to 436,000 units. However, that’s still down from the high of 565,000 units in 2008. ■