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June 04, 2001 02:00 AM

China a big gainer in the tire import merry-go-round

Bruce Davis
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    AKRON-``They'' represent one of every five passenger car tires and every second truck tire sold in the U.S. aftermarket.

    ``They'' are tires built in plants outside North America. Tires imported from offshore have become an integral and growing part of the U.S. marketplace.

    Last year, when U.S. tire shipments hit record levels, imports of tires showed a mixed performance, with passenger tire imports up and light and medium truck tires down-the latter for the first time in recent memory, according to U.S. Department of Commerce data.

    Looking at the market by country of origin, China was the big gainer last year, showing double-digit increases in exports to the U.S. in all three categories.

    Imports of passenger car tires from China jumped 18.5 percent in 2000 to push China ahead of Mexico as the fifth largest foreign source of car tires. In medium truck/bus tires, 53.2-percent growth of imports from China, to 1.6 million units, pushed that country to No. 2 among countries exporting to the U.S.

    Overall, imports of passenger tires last year increased by 10.9 percent over 1999, to a record 74.5 million units, according to the Commerce Department data. By comparison, U.S. replacement market shipments grew by 3.6 percent last year, according to data from the Rubber Manufacturers Association.

    By contrast, imports of light and medium truck tires declined from 1999, by 3.1 and 4.2 percent, respectively. These are the first year-to-year drops in several years.

    Of the major sources of imported passenger tires, Brazil and Indonesia showed declines and two others, Japan and Mexico, showed only minor growth.

    Among ``off-shore'' importers-that is, companies with no manufacturing presence in North America-firms representing tire makers in South Korea, China and Taiwan showed measurable gains last year. Passenger tire imports from Korea rose 10.7 percent to 8.6 million units, from China 18.5 percent to 4.1 million units and from Taiwan 21.4 percent to 1.8 million units.

    The bulk of Chinese imports are handled by two companies: China Manufacturers Alliance L.L.C. in Valencia, Calif., and China Industrial Manufacturing Group Inc. in Randolph, N.J. In addition, there is a growing number of Chinese factories attempting to market their wares directly to U.S. dealers.

    Korea, of course, is represented by the two major manufacturers there, Hankook Tire Manufacturing Co. and Kumho Industrial Co. Ltd., and their lesser-known smaller compatriot, Nexen Tire Corp.

    Overall, imports represented 25.8 percent of total passenger tire shipments last year, up from 23.9 percent in 1999. If imports from Canada and Mexico are factored out, the share is 14.7 percent.

    In light truck tires, imports take a much smaller share-18.5 percent of total shipments, with Canada and Mexico accounting for more than a third of import shipments.

    Imports have their greatest impact in the medium truck and bus tires area, accounting for 46 percent of total U.S. shipments, according to the data. Canada and Mexico account for only 13.5 percent of medium truck tire imports.

    The effect of Mexico will be noticeably less this year and in coming years, as both Michelin North America Inc. and Goodyear have closed capacities in Mexico in the past year.

    If shipments from Canada and Mexico are factored out, then the effect of ``offshore'' shipments is thus: 43 percent of the U.S. replacement market for car tires; 7 percent of light truck tire replacement shipments; and 47 percent of medium truck/bus tires.

    Overall, Tire Business has identified at least 56 offshore manufacturer flag and associate brands available to U.S. dealers. Overall, TB estimates there are more than 270 distinct tire brands being marketed in the U.S. and Canada, with 30 or more brands being taken out of circulation for various reasons in the past two years.

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