moderntiredealer.com

Next Article

Focus on Dealers

By Mike Manges

Numbers game

A LOOK AT SOME KEY STATS REVEALS MAJOR CHANGES IN THE U.S. TIRE INDUSTRY

“Change is the law of life.” President John F. Kennedy spoke these words nearly 60 years ago, while delivering a speech in Germany. You could argue that change also is the law of the tire industry.

At the moment, you are holding MTD’s 2023 Facts Issue, our comprehensive look at the domestic tire industry — from shipments, imports, margins, manufacturing and pricing to market share, sales, distribution and more.

In light of that, I thought it would be interesting to look at some industry facts and figures that have changed over the last 20 years, using the 2023 MTD Facts Issue and the 2003 MTD Facts Issue as reference guides.

Tire sizing. In 2002, 14- and 15-inch passenger tires dominated, with the number-one size in the U.S. replacement channel, 235/75R15, accounting for nearly 7% of the overall replacement passenger tire market, which totaled 190.5 million units. In 2022, only one 15-inch tire made the top 10 — which also includes one 20-inch size, an 18-inch size, five 17-inch sizes and two 16-inch sizes — with 225/65R17 being the most prevalent replacement passenger tire size. (Slightly more than 216 million replacement passenger tire units shipped in 2022, according to MTD estimates. That’s a 12.5% increase from 2002 totals.) Don’t expect to see a reversal in current tire sizing trends. It’s true that as long as there are 20-year-old Honda Civics on the road, there will be a need for 15- and 16-inch inch tires. But it’s onward and upward from here.

Pricing. Tire diameters aren’t the only things that have gone up. Look at retail tire pricing. In 2002, the average retail price for a major brand 195/75R14 passenger tire was $62.72. Not exactly apples to apples, but in 2022, the average retail price for a major brand 195/65R15 tire was $129.76. Twenty years ago, the average price of a major brand LT235/85R16 tire — the most popular replacement light truck tire size in the U.S. at the time — was $101.08. Last year’s most popular light truck tire size was LT265/70R17. A major brand light truck tire in that dimension, on average, sold for $269.46.

World leaders in new tire sales. Another intriguing thing I discovered during my research is that the top five world leaders in tire sales, in descending order — Michelin Group, Bridgestone Corp., Goodyear Tire & Rubber Co., Continental AG and Sumitomo Rubber Industries Ltd. — have maintained their relative positions, 2002 through 2022, although, of course, their respective sales have multiplied since. (For example, we estimate that Michelin’s sales will total $27.7 billion in 2022 versus $14 billion some two decades ago. Bridgestone’s sales jumped from $13.9 billion in 2002 to $22.8 billion in 2022.) However, there have been significant changes in this area. The eighth largest tire manufacturer in 2002 — Cooper Tire & Rubber Co. — was delisted from the stock exchange when it was acquired by Goodyear. And three companies that were not on the list in 2002 — Zhongce Rubber Group Co. Ltd., Cheng Shin Rubber Ind. Co. Ltd. and Giti Tire Pte Ltd. — now appear.

Market share and brands. Each year as part of the Facts Issue, MTD examines market share by brand in three key product segments — replacement passenger, replacement light truck and replacement medium truck. Several brands that populated our replacement passenger tire market share rankings two decades ago — Cordovan, Cornell, Delta, Laramie, National and Sears and Sigma — no longer show up on the list. (Sears for good reason as Sears Auto Centers shuttered its doors last year after a long, slow decline. In 2002, however, the Sears brand had 4% passenger tire market share.) How many of today’s market share leaders will be around 20 years from now? Check back in 2043!

Retreading. The number of active retread plants in the U.S. has been shrinking for a long time. In 1982, there were around 3,350 domestic medium truck tire retread plants, according to MTD estimates. By 2002, that number had fallen to 1,065 plants. It’s now believed there are around 640 active truck tire retread shops throughout the country. What hasn’t declined is the efficiency of retreaders. An estimated 15.6 million medium truck tire retreads were produced in 2002 — roughly equal to the same number of truck tire retreads that were manufactured in the U.S. last year. Take a bow, retreaders! All told, you’re achieving the same aggregate output while operating out of 425 fewer plants. (And I’m sure better machinery, tread rubber stock, processes and casings have helped.)

I strongly encourage you to spend some time with MTD’s hotoff-the-press Facts Issue. Our hope is that this will be your reference guide and that you will turn to it throughout the year. Meanwhile, we’ll continue to track those numbers that matter — as well as future changes that will impact your business. ■