AKRON—The tight truck tire supply and demand situation of the past year can be summed in a few statistics: Record replacement shipments of 13.7 million units, a 7.7-percent increase over 1997; record original equipment shipments of 5.97 million units, a 19.7-percent jump over 1997; and record export shipments of 2.23 million units, a 14.9-percent increase over 1997, according to Rubber Manufacturers Association data.
Countering these record demand levels was a 2.6-percent rise in U.S. production, to 14.3 million units, leaving a demand deficit of more than 7.5 million units. In addition, estimated retread production was up only about 2 percent over 1997, to 17.8 million units, as upheaval at several major retreaders offset record production by others, according to Retreadonomics 1999, the latest annual survey of the retreading industry.
Into this breach rode the imports (see chart above)—8.44 million of them, an all-time record—for a 63.8-percent jump over 1997, according to U.S. Department of Commerce data.
If one assumes the majority of imports are destined for the replacement market, then imported truck tires accounted for more than 50 percent of new truck tire replacement sales.
However, a glance at the table of top import sources reveals that the major domestic manufacturers—Goodyear, Bridgestone/Firestone and Michelin—account for up to half of the truck tires imported last year, putting the ``true import'' share—i.e., for companies without a North American production base—closer to one-third.
All of the major producers have stepped up efforts in the past few years to utilize their global resources to a greater extent. This development is reflected in the changing faces in the league of import sources.
Somewhat surprisingly, the United Kingdom jumped to third among nations exporting truck tires to the U.S., up from sixth in 1997 and ninth in 1996, on a quadrupling of shipments.
The increase is less surprising, however, when Michelin's moves in Northern Ireland are considered. Michelin decided in early 1998 to dedicate its plant in Ballymena to production for North America, and spent about $20 million throughout 1998 to expand radial truck tire output there 30 percent, to nearly 1 million units a year.
Other significant leaps in import numbers—from Germany (up 321 percent) or Brazil (up 298 percent), for example—can be attributed to ``captive imports'' from one or more of the majors, or Continental General Tire.
Imports from Japan leapt 61.1 percent, to 2.68 million units, and Bridgestone alone accounted for a sizable portion of the increase. Company officials told dealers earlier this year Bridgestone/Firestone imported 800,000 more truck tires last year vs. 1997.
Earlier, Bridgestone said the bulk of a 2,700-unit-per-day capacity increase at its Amagi, Japan, plant was destined for export to North America.
In addition, Bridgestone/Firestone has nearly completed an $80-million expansion of its Warren County, Tenn., plant, where the company is increasing truck tire capacity 20 percent, to about 6,600 units per day, or nearly 400,000 new units of annnual capacity.
As for imports from countries where the domestic makers have no presence, South Korea headed the list. The country, home of Hankook Tire Co. Ltd. and Kumho & Co. Ltd., more than doubled exports to the U.S. to more than 871,000 units.
Other countries in this category are China (imports up 64.4 percent) and India (up 20.7 percent), although producers in each of these nations still emphasize bias-ply over radial for export. Chinese imports were only 21-percent radial, while those from India were only 15 percent radial.
The import situation could change this year, however, as new capacity at several plants in the U.S. and Canada comes on stream.
Among the projects due for completion this year are:
Up to 450,000 additional units at Conti-General's Mount Vernon, Ill., plant—a 25-percent increase and part of a $25 million-plus plant upgrade;
As much as 400,000 new units of output at Michelin's Waterville, Nova Scotia, plant—a 50-plus percent jump over the previous capacity and part of a $47-million modernization project;
Goodyear has two expansion projects in the works affecting medium truck tires—adding about 800 units per day of light and medium truck tire output at its Topeka, Kan., plant, and a $113 million, five-year modernization of its Danville, Va., plant to increase capacity there by as much as 800,000 units annually.