AKRON (Feb. 4, 2014) — Since the recent recession that started in 2009, the farm segment has been looked at as a high point for the tire industry, but even as unit sales continued to grow in 2013, reduced raw-materials costs led to a relatively flat year revenue-wise.
"Business was OK," said Maurice Taylor, chairman and CEO of Titan International Inc. "The pricing dropped quite a bit because raw materials dropped…. Natural rubber came down, so that always hits your margins until it stabilizes."
Despite a near 23-percent surge in sales to $497.5 million during the third quarter of 2013, Titan's net earnings plummeted 58.7 percent for the quarter. Results were similar for the first nine months of the year. The company said the sales boost was partially offset by a price/mix reduction resulting from reduced raw-materials costs.
Carl Casalbore, president of BKT-Tires (USA) Inc., agreed that reduced raw material costs had a negative impact on tire pricing in 2013.
"2013 wasn't exactly stupendous, but it was decent," Mr. Casalbore said. "Business was up a little — not much — from a unit perspective. From a cost or revenue perspective it was a little bit down. Prices definitely are coming down.
"Part of it is due to competition, part of it is raw materials and part of it is just the view of getting more market share," he continued. "All-in-all…it was a good year, a fair year. Could it have been better? Absolutely.
"Could it have been worse? Sure. But we were OK with it."