Facts section: domestic tire shipments
A tire EXPLOSION! Pent-up demand coupled with a deliberate reduction in supply created the perfect storm
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omestic tire shipments were down dramatically in 2009 as the effects of the recession lingered and lack of demand prompted tire manufacturers to ramp down production and jettison inventory. According to Rubber Manufacturers Association (RMA) and MTD data, U.S. consumer tire plants ran at close to 65% capacity in 2009. In 2010, however, those same tire producers were caught off-guard when pent-up demand resulted in increased spending on tires (see Chart 2) and vehicles. They ramped up production — some even announced investments in capacity — and increased imports. But they couldn’t keep up, which resulted in backorder problems. As for retail tire dealers, 47.3% reported their unit sales were up by an average of 11% through the first nine months of 2010, according to MTD’s exclusive “State-of-the-Industry Survey.” When asked to predict their unit sales for the year, the respondents were more optimistic: 52.3% said they would be up for the year. Wholesale distributors fared even better: 68.3% said their unit sales were up by an average of 13%. And 71.8% believed their sales would be up at year’s end. In December, the RMA predicted passenger, light truck and truck tire shipments in the U.S. would collectively be up more than 9% in 2010 vs. 2009. Leading the way were OE passenger tire shipments, which the RMA estimated would be up 44%, a year-over-year gain of 11 million tires. The anticipated jump in shipments is the result of an increase in domestic vehicle production, plus consumers taking advantage of incentive programs and low interest rates. Overall replacement tire shipments
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also experienced significant growth in 2010 “as a result of increases in vehicle miles traveled, stable energy prices, longer vehicle life and overall positive domestic economic conditions for both the consumer and commercial sectors,” according to the RMA. The 5% increase in replacement passenger tire units was spurred by non-Chinese imports. “The imposition of a three-year Chinese import tariff in September 2009 decreased Chinese imports, but effectively increased imports from other Pacific Rim countries such that nonRMA imports are forecast to increase nearly 6% in 2010.” (The RMA will release its preliminary numbers, which sometimes vary dramatically from its forecast, in February.) The RMA’s Tire Market Analysis Committee sees some improvements in the replacement and OE categories in 2011, although the increases will vary. The growth in replacement passenger tire shipments “will be tempered, as continued economic uncertainties for the consumer will result in a less than 2% increase, or nearly 3 million units.” Replacement light truck tire shipments may be flat “in keeping with commercial economic forecasts.” After a 19.2% increase in 2009 vs. 2008, replacement truck tire shipments, which include wide-base and heavy truck tires, will increase another 3.8% in 2011. OE passenger tire shipments will be up this year because of a projected 6% increase in vehicle sales. Little or no growth is anticipated for OE light truck tire shipments because “no increase is anticipated in domestic vehicle production” in this segment. The OE truck tire sector is expected to continue to rebound in 2011, perhaps by 750,000 units. ■
Chart 2 UNITS SHIPPED: 2001-2010 (in millions) PASSENGER TIRES Year
Replacement
OE
2010
198.7
34.6
2009
184.0
25.0
2008
195.0
39.0
2007
205.0
48.0
2006
199.1
49.0
2005
205.8
53.0
2004
199.4
53.0
2003
194.0
54.6
2002
190.5
57.5
2001
192.0
54.0
LIGHT TRUCK TIRES 2010
27.6
3.4
2009
26.0
2.6
2008
30.0
3.0
2007
35.7
4.9
2006
35.0
5.2
2005
36.6
7.0
2004
36.5
7.9
2003
34.5
8.1
2002
34.0
8.4
2001
32.0
6.3
MEDIUM/HEAVY TRUCK TIRES 2010
15.2
2.7
2009
12.7
2.1
2008
15.5
4.3
2007
16.7
5.0
2006
17.6
7.1
2005
17.8
6.6
2004
16.5
5.8
2003
15.8
4.3
2002
15.0
3.9
2001
13.8
3.6
MTD January 2011 4/26/11 11:04:48 AM
