Mr. Kramer also pointed out that the reported industry shipments are “sell-in” data — that is, industry to industry — and that “sell-out” shipments to consumers are growing at about 1 to 2 percent this year, with similar growth expected in 2015 as well.
Although Goodyear does not “prioritize sales at the low end of the market,” Mr. Kramer said, Chinese imports do affect the Akron-based tire maker's sales since the increased shipments occupied an “abnormal amount of physical inventory space” at the expense of some Goodyear's own mid-tier-branded products and because these shipments reduce customers' liquidity.
Faced with these “distorted” market conditions, Goodyear didn't vary from its stated strategy, Mr. Kramer said.
“…(W)e didn't chase unprofitable volume, and we're not in the business of making tires to sit in customers' warehouses for extended periods, and we didn't sell next year's tires at discounted prices today.”
By sticking with its strategy, he added, Goodyear was able to deliver record segment operating income of $210 million in the third quarter, the second straight quarter with an operating margin of more than 10 percent, and improved the price mix versus raw materials over that reported in the second quarter.
When asked, Mr. Kramer declined to speculate on what the imposition of elevated tariffs might to do to aftermarket pricing, saying only what happened in 2009-10 amid the tariffs then could be used a benchmark.