AKRON (May 11, 2005) — Thanks to 38-percent growth in exports to the U.S. last year, China became the No. 1 source of imported truck tires tires in the U.S., eclipsing the long-time leader Japan by 400,000 units, 2.42 million units to 2.02 million.
Chinese tire makers also boosted their exports of passenger and light truck tires to the U.S. by double-digit percentages, underscoring China's importance in the global trade arena for tires.
Tires from all off-shore sources made measurable market share gains in all key categories last year, according to Tire Business' annual analysis of government and industry data.
Imports chalked up double-digit increases in the passenger and medium truck tire categories, outpacing overall replacement market growth in those categories, the analysis of data from the U.S. Department of Commerce and Rubber Manufacturers Association (RMA) shows.
In the light truck tire area, though, imports and replacement shipments both grew about the same, 5.4 and 5.5 percent, respectively.
At the same time, domestic production of passenger tires fell 2 percent and output of light truck and medium truck/bus tires grew 1.6 and 3.6 percent, respectively, accentuating the growth of imports even more.
The rapid growth of truck tires imported from China is buyoed by an increasing number of off-take manufacturing agreements involving U.S. tire companies.
Cooper Tire & Rubber Co., for example, has outsourced all its medium truck tire business to China and expects to import up to 350,000 truck tires a year from there in the coming years. In addition, Goodyear has shifted production of its Steelmark third-line truck tire to China, and private brand marketers like Del-Nat Tire Corp. have been steadily increasing their business in truck tires from Chinese sources.
Based on the raw numbers, though, medium truck tires made in China represented 14.8 percent of the U.S. replacement truck tire market in 2004, up three-and-a-half percentage points from 11.3 percent in 2003.
Overall, imported truck tires, including those from Canada and Mexico, accounted for 42.7 percent of the U.S. truck tire market (combined original equipment and replacement). Factoring out Canada and Mexico, “off-shore” imports accounted for 49.5 percent of the U.S. replacement market alone.
Among major countries exporting truck tires to the U.S., Japan, South Korea and India experienced declines in shipments, whereas Brazil and Mexico booked double-digit increases and shipments from Costa Rica jumped 10-fold to put that Central American nation into the top 10 countries of origin.
This year Malaysia may emerge among the leading countries of origin, as Continental A.G. has stated it intends to source up to 100,000 truck tires for the U.S. from its new subsidiary there, Continental Sime Tyres.
The average value of the medium truck/bus tire import improved 3.1 percent to $112.35 from $109, with a wide variance by country. Those from Canada carried the highest value at $158.18 a tire. The average value of a Chinese-made truck tire was $81.88, up measurably from $67.56 in 2003.
Imports of passenger tires jumped 13.7 percent last year, or 11.3 million units, to 93.3 million units, while U.S. production fell 2 percent, or 3.8 million units, to 184.6 million units. Imports from Canada, the U.S.'s largest trading partner, fell 4.7 percent, but shipments from South Korea, China, Germany and Chile all shot up markedly.
Overall imports accounted for 37 percent of the U.S. market (OE and replacement combined), up from 33.1 percent in 2003.
Factoring out shipments from Canada and Mexico, tires made outside of North America still represented more than a third of the U.S. replacement car tire market, the data show.
Taking the calculation one step further, the estimated “off-shore” import share—that is, tires from countries where the manufacturers are not part of or affiliated with U.S.-based tire makers—of the passenger tire aftermarket climbed to nearly 23 percent from about 20 percent a year ago and 17 percent in 2002.
The average reported value of an imported passenger tire was $33.26 last year, up 9.1 percent from $30.48 in 2003, according to the Commerce Department data. Among the major exporting countries, tires from Germany carried the highest value, $54.43, while those from Chile were valued at $14.87.
Despite relatively modest growth of only 5.4 percent, imports increased their share of the U.S. light truck tire supply, as domestic production grew just 1.6 percent. Imports of 20.7 million units represented 47.3 percent of the light truck tire market (OE and replacement combined).
Imports from Canada and Japan, by far the two largest trading partners in this category, fell by 1.7 and 1.1 percent respectively, while shipments from most other major trading partners grew by 20 percent or more. Imports of light truck tires have more than doubled in the past four years, to nearly 21 million units from 8.5 million in 2000.
The estimated off-shore import share of the LT tire replacement market improved about two percentage points to nearly 22 percent from about 15-16 percent in 2002.
The average value of an imported light truck tire was up 7.1 percent to $47.73 from $44.56 a year ago, while the range in values among the top 10 countries of origin was $22.60 from New Zealand to $68.62 from Germany.