Operating in North America, the world's largest tire market, it may be tempting for you, the independent tire dealer, to pay scant attention to what's taking place in the industry worldwide. But the fact is, your suppliers view the entire world as their marketplace and they are doing whatever it takes to achieve dominance in that arena.
What these companies do globally ultimately will impact dealers in their local places of business. Resources may be diverted from North America to emerging markets as companies stretch precious dollars to position themselves there.
Our annual Global Tire Report, in this issue, illustrates the tremendous efforts the world's largest tire makers are undertaking to extend their presence.
Consider the following facts from that report:
The 11 largest tire manufacturers control more than 81 percent of the world market;
During the last 12 months alone, tire makers have earmarked $2.9 billion for expansion.
Asia/Pacific, the fastest growing vehicle market worldwide, will get about half the expansion funding;
Bridgestone, Sumitomo, Toyo and Yokohama are all building plant capacity in Asia/Pacific outside of Japan;
In the past year, Group Michelin has revealed plant projects in China, France and Sweden, is broadening its presence in Australia and New Zealand, has purchased Polish tire marker Stomil Olsztyn, and budgeted up to $900 million for North American expansions;
Goodyear, with tire capacity in each of the world's major growth markets, devoted $616 million to expansions in 1995 and has budgeted a like amount for 1996;
Cooper Tire & Rubber Co., which earned the highest net profit on each sales dollar among the global giants in 1995, budgeted the largest percentage of its sales (13 percent or $194.9 million) for expansion in 1995; and
Five Chinese firms have emerged on the top-50 list.
It's clear the tire industry is undergoing dynamic and rapid change. Dealers sell products in a local setting, but they're dealing with suppliers operating in a global marketplace.