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$ 25.0 billion
Light truck
There was an earthquake, then a tsu- the previous year (see Chart 1). $ 5.1 billion
tires:
nami in Japan that not only slowed tire A 2.1% increase in light truck tire Truck tires: $ 7.2 billion
production but also led to a vehicle parts shipments and a 13% increase in truck
Farm tires: $593 million
shortage. Massive flooding in Thailand in tire shipments helped increase sales (see
October also limited imports, although Chart 2; for Canadian shipments, which OTR tires $553 million
the country still increased its consumer trended similarly, see Chart 3 on page In 2010, U.S. replacement tire
tire exports to the U.S. by more than 23% 26). But skyrocketing prices were the key. sales totaled $32.1 billion.
(see Chart 5 on page 26). Passenger tire prices were up an average
Say “goodbye” to 2011, a year when of 15% last year, while light truck tire
the flickering economy combined with prices were up 16%. Medium truck tire Chart 2
U.S. UNITS SHIPPED
Mother Nature to give retailers one heck pricing rose 24%.
2007-2011 (in millions)
of a roller coaster ride. Still, many of the According to tire and chemical indus-
30,000 independent tire dealers adapted tries analyst Saul Ludwig, they had to go PASSENGER TIRES
and fared well where it counted: their up because the estimated raw material cost Year Replacement OE
bottom lines. per tire increased an average of 26.6%!
2011 198.0 36.0
Modern Tire Dealer’s exclusive “State- And the final total doesn’t include
of-the-Industry Survey” is conducted on retreading; truck tire retreading alone 2010 198.7 34.6
a quarterly basis. After the first quarter, accounted for $3.8 billion in 2011. 2009 184.0 25.0
45% of the independent tire retailers and
2008 195.0 39.0
61.2% of the independent tire wholesalers What about shipments in 2012?
said unit sales were up. Ludwig, a managing director at North- 2007 205.0 48.0
After the first half, those numbers coast Research Holdings LLC, predicts LIGHT TRUCK TIRES
dropped to 40.2% and 52%, respectively, growth in consumer tire shipments in 2011 28.6 4.1
as demand plummeted. However, thanks 2012 (Ludwig’s shipment numbers for
to price hikes, many more dealers were 2011 and estimates for 2012 appear on 2010 28.0 3.5
up in dollar sales year over year. And page 21). There will be slight growth in 2009 26.0 2.6
with drivers holding on to their vehicles replacement passenger and light truck 2008 30.0 3.0
longer, necessary automotive service tire shipments, 1% and 1.4%, respectively.
work helped the bottom line profitability Growth in original equipment ship- 2007 35.7 4.9
of many retail dealers. ments will be more significant. He projects MEDIUM/HEAVY TRUCK TIRES
Nine months into the year, inventories OE passenger tire shipments will increase 2011 17.3 4.7
were full, demand had leveled off and 5.7%, to 37 million units, while LT ship-
wholesaler distributors in particular were ments will grow 4.9%, to 4.1 million units. 2010 15.3 3.0
suffering. Dealers seemed split between After a 4.4% increase in 2011, according 2009 12.7 2.1
optimism and pessimism. to Ludwig, medium truck tire shipments 2008 15.5 4.3
When asked, “How do you project will remain at 16.5 million units this year.
your full-year tire sales in units to be?” At OE, they will grow by 10.3%. 2007 16.7 5.0
All figures in the 13-page Facts Section are Modern Tire Dealer figures unless otherwise noted. For all market share charts:
Because numbers are rounded to the nearest one-half percent, the total may not equal 100%.
Chart 5
U.S. CONSUMER TIRE IMPORTS BY COUNTRY
2011 Rank/ % change vs.
country 2010 rank 2010
1. China 1 -11.9%
2. S. Korea 3 +4.6%
3. Canada 2 +1.5%
4. Japan 4 -9.2%
5. Indonesia 5 +15.1%
6. Mexico 7 +35.3%
7. Thailand 6 +23.3%
8. Taiwan 9 +8.7%
9. Brazil 8 -26.0%
10. Germany 10 +28.0%
The top 10 countries account for 90.6% of all
consumer tire imports in the U.S. Sources: U.S. government, MTD figures
$82 billion
WORLD LEADERS IN NEW TIRE SALES
(fiscal year 2011; in billions
of U.S. dollars)
Company 2011 2010
in tires! 1. Bridgestone
Corp.
2. Groupe
$31.2
$28.3
$27.0
$22.2
That’s just the Michelin
3. Goodyear Tire $22.3 $18.4
top 3 tire makers & Rubber Co.
4. Continental AG $11.9 $9.3
5. Pirelli & C. SpA $7.8 $6.3
$5.9
$5.7
$5.8
$4.7
$4.5
Rubber Co.1
But when ranking the tire compa- revenue of $4 billion in 2011. If so,
9. Cooper Tire & $4.0 $3.4
nies that manufacture those brands, Hangzhou Zhongce Rubber may Rubber Co.
three stand out because of their have reached number 11 on the list.
size. That is why Bridgestone Corp., 10. Cheng Shin $3.9 $3.1
Rubber Ind. Co.
Groupe Michelin and Goodyear Tire Tire pricing: no more ‘4 for $99’ Ltd.2
& Rubber Co. are often referred to Skyrocketing tire prices were a
as the Big Three. big reason all the global players’ 11. Kumho Tire Co. $3.4 $3.0
Inc.
Together, they account for nearly signifcantly increased sales in 2011.
$82 billion tires sold, more than Here were the average tire prices 12. Toyo Tire & $3.0 $2.4
the next nine manufacturers, at (see sidebar) in 2011: Rubber Co. Ltd.3
$53 billion, combined (see Chart U.S./CANADIAN LEADERS
12). They also are the Big Three in Passenger: $126.16. IN NEW TIRE SALES
North America, especially in the Light truck: $179.15. (fiscal year 2011; in billions
of U.S. dollars)
U.S. and Canada. Truck: $416.18.
Perhaps notably missing from Company 2011 2010
the list of top 12 manufacturers is The good, better, best advertised 1. Bridgestone $11.1 $9.6
Hangzhou Zhongce Rubber Co. tire prices for size P225/60R16 Firestone
Ltd. Based in Hangzhou, China, the in 2010 were $65.99, $94.65 and 2. Goodyear $9.3 $7.7
company produces the Goodride $136.36, respectively. ■ 3. Michelin North $8.5 $6.7
America
4. Cooper Tire $2.7 $2.3
‘$155 a tire? I wish!’ 5. Continental Tire $2.6 $2.0
Pricing hurts deep in the heart of Texas the Americas
Average tire prices in 2011 took into account both the amount of the 6. Yokohama Tire $1.5 $1.1
Corp.1
increases and the time they became effective.
For example, Michelin implemented its first consumer tire price 7. Sumitomo $1.3 $1.1
increase of 2011 on Feb 1. It was up to 8%. A second increase up to Rubber Industries4
8.5% went into effect on May 1. 8. HankookTire $1.2 $1.0
On October 3, a third increase raised prices up to 9%. At their most America Corp.
liberal, the price increases totaled 25.5%. So a Michelin passenger or 9. ToyoTire Holdings $1.0 $.84
light truck tire may have cost 25.5% more at the end of the year than it of Americas Inc.3
did at the beginning of the year. 10. Kumho Tire $.81 $.73
The average pricing for the year, however, would have been much U.S.A. Inc.
less, even if all the price increases stuck completely. 11. Pirelli Tire North $.61 $.49
It’s also a nationwide average. When I wrote in an editorial last year America
that the average price of a replacement LT tire was $155 in 2010, a Yokohama’s fiscal 2011 was nine months long
1
Independent tire
dealers dominate
They own 61% of the retail market
and even more when they wholesale
Chart 13 Chart 14
U.S. CONSUMER TIRE RETAIL MARKET SHARE CONSUMER TIRE DISTRIBUTION CHANNEL
(based on retail sales) MARKET SHARE
Distribution channel 2011 2010 Initial channel 2011 2009 2007 2005
Independent tire dealers 61.0% 60.0% Independent tire 77.0% 75.0% 74.0% 74.0%
dealers
Mass merchandisers 14.0% 14.5%
Tire company 8.0% 8.5% 8.5% 8.0%
Warehouse clubs 8.5% 9.5%
stores
Tire company-owned 7.5% 7.0% Miscellaneous* 15.0% 16.5% 17.5% 18.0%
stores
* “Miscellaneous” includes mass merchandisers,
Auto dealerships 6.5% 6.0% warehouse clubs, car dealers, auto parts chains and oil
companies/service stations.
Miscellaneous outlets 2.5% 3.0%
Capacity
Wilson City, N.C., 1974 x x x 33.1 0.0 0.0 0.0 33.1
Aiken County, S.C., 1999 x x x 17.3 7.7 0.0 0.0 25.0
Joliette, Quebec, 1966 x x 9.3 7.2 0.0 0.0 16.5
T
Total: 0.0 0.0 0.0 41.0 41.0
ire capacity, not produc-
tion, in North America Continental Tire the Americas LLC
totaled 307.5 million Mount Vernon, Ill., 1973 x x x 28.0 3.0 5.0 0.0 36.0
tires at 51 plants as of Jan. 1, 2012. Total: 28.0 3.0 5.0 0.0 36.0
That’s down 3.2% compared to Cooper Tire & Rubber Co.
12 months ago. (The total does Findlay, Ohio, 1917 x 7.0 16.0 0.0 0.0 23.0
not include race or aviation tires.) Texarkana, Ark., 1964 x 24.0 8.0 0.0 0.0 32.0
U.S. capacity is 246.7 million
Tupelo, Miss., 1984/1960 x x 42.0 0.0 0.0 0.0 42.0
tires, a 4.5% decrease over last
year and 80.2% of total North Total: 73.0 24.0 0.0 0.0 97.0
American capacity. The majority Goodyear Tire & Rubber Co.
of the decrease can be attributed Buffalo, N.Y., 1923 x 4.3 5.4 1.75 4.55 16.0
to the closing of Goodyear’s Union Danville, Va., 1966 x x 0.0 0.0 10.0 0.0 10.0
City, Tenn., plant last July. (Titan Fayetteville, N.C., 1969 x x 30.5 10.5 0.0 0.0 41.0
International Inc. purchased the Gadsden, Ala., 1928 x x 15.0 12.0 0.0 0.0 27.0
facility last November, and plans
Lawton, Okla., 1978 x x x 70.0 0.0 0.0 0.0 70.0
to utilize it as a mixing plant for
farm and OTR tire production.) Topeka, Kan., 1945 x x 0.0 1.0 5.5 1.6 8.1
There are 36 tire manufacturing Medicine Hat, Alberta, 1960 x x 14.0 0.0 0.0 0.0 14.0
facilities in the U.S., down from 48 Napanee, Ontario, 1990 x x x 19.0 0.0 0.0 0.0 19.0
plants in 2001. Less than half of Total: 152.8 28.9 17.25 6.15 205.1
them are unionized (see Chart 19). GTY (General/Yokohama)
Canadian tire plant capacity is Mount Vernon, Ill., 1988 x x x 0.0 0.0 3.9 0.0 3.9
27.7 million tires, a slight year-to-
Total: 0.0 0.0 3.9 0.0 3.9
year decrease. In contrast, Mexican
plant capacity entered 2012 at 33 Michelin North America Inc.
million tires, 4.6% higher than it Ardmore, Okla., 1969 x x x 40.5 3.5 0.0 0.0 44.0
was a year ago. The opening of Dothan, Ala., 1979 x x 1.0 4.0 0.0 0.0 5.0
Pirelli Tire North America Inc.’s Fort Wayne, Ind., 1961 21.0 9.5 0.0 0.0 30.5
plant in Guanajuato, Mexico, added Greenville, S.C., 1975 x x 28.0 0.0 0.0 0.0 28.0
4,000 tires a day to the country’s Greenville, S.C. (C3M), 1997 x x x 7.0 0.0 0.0 0.0 7.0
capacity.
Lexington, S.C., 1981 x x 19.0 0.0 0.0 0.0 19.0
Premium consumer, truck
and OTR tire capacity in North Lexington, S.C., 1998 x x 0.0 0.0 0.0 0.09 0.09
America is expected to increase Spartanburg, S.C., 1978 x x 0.0 0.0 7.0 0.0 7.0
significantly in the near future. Tuscaloosa, Ala., 1945 x 23.0 7.0 0.0 0.0 30.0
www.moderntiredealer.com 41
Facts section: Commercial
Everyone scrambles
for usable truck tires
More than 32 million new and
retreaded truck tires weren’t enough
Chart 22 Chart 23
2011 U.S. REPLACEMENT FARM TIRE MARKET SHARES 2011 U.S. OE REAR FARM
TIRE MARKET SHARE
REAR RADIAL (293,000 units) SMALL FARM (1.37 million units) (653,000 radial and bias units)
Goodyear 29.0% Firestone 28.5% Firestone 41.1%
Firestone 27.0% Goodyear 19.0%
Goodyear 36.3%
BKT 19.5% BKT 15.5%
Michelin 10.5% Titan 15.5% Titan 13.9%
Titan 7.0% Am. Farmer 6.0% Others 8.7%
Alliance 3.0% Harvest King 4.5%
Trelleborg 2.5% Alliance 3.0% distribution network, according to Clif
Armstrong, director of marketing for
Others 1.5% Carlisle 3.0%
Continental commercial vehicle tires.
REAR BIAS (480,000 units) Trelleborg 2.0% With the addition of a major player in
BKT 31.0% Akuret 1.0% the retread market and the demand for
Firestone 26.0% Others 2.0% retreads increasing, will there be a new
Goodyear 18.0% retread event in the U.S.? According to
retreader with a 28% market share, fol- TRIB Managing Director David Stevens,
Titan 13.0%
lowed by Michelin (which includes the the possibility exists.
Harvest King 2.5% Oliver brand) at 23%. Marangoni Tread At the TRIB (Tire Retread & Repair
Alliance 2.0% N.A. Inc. is fourth with 4% of the market. Information Bureau) fall membership
American Continental, which introduced its meeting in Las Vegas, Nev., on Oct. 31,
Farmer 2.0% ContiTread retread products in 2009, 2011, Stevens said a recent membership
Trelleborg 2.0% signed its first licensee in the U.S. last survey revealed that 65% of the respon-
Akuret 1.5% September: King Tire Service Inc. in dents favored a retread conference tied
Bluefield, W.Va. The tire manufacturer to another trade show. “We just need to
Others 2.0%
is looking to expand its ContiTread find the right venue.” ■