How was it for the commercial tire industry? By all accounts, I'd say that it was better than expected.
The North American market remained quite healthy and robust. At the beginning of the year, the Rubber Manufacturers Association (RMA) projected that 5.6 million truck tires would be shipped to OE truck and trailer manufacturers.
However, in December the trade group raised its estimate 11 percent to 6.2 million units. On the replacement side, the original forecast was for 17.7 million units to be shipped, but that was increased in December by 2 percent to 18 million units. These numbers exceed 2014 shipments by 9.1 percent for OE tires and 3 percent for replacement tires.
Tire manufacturers were faced with relatively stable or decreasing raw materials costs. Natural rubber prices remained relatively stable and well below the rates of recent years. Benefitting the tire industry, oil continued to drop throughout the year and remained below $50 a barrel, so for the most part, tire manufacturers' production and transportation costs were stable and even lower than in 2014.
So profits should be greater.
Strong demand from the OE side kept product availability tight, preventing massive decreases in truck tire prices, which have come down a bit from their peak in 2012.
With these positive results, the major tire makers made a lot of strategic moves this year. Nashville, Tenn.-based Bridgestone Americas refreshed the Dayton brand with a new line of commercial truck tires. The new line consists of eight new Dayton patterns and includes three SmartWay-verified tires. The company also celebrated 25 years of producing tires at its Warren County, Tenn., plant, which cranks out 9,000 truck and bus tires daily.
Continental the Americas L.L.C. expanded its TrukFix emergency road service for commercial tire national account customers to include light mechanical and towing in addition to previously offered emergency tire services. Continental truck tires also were selected by Navistar Inc. as standard equipment for all of its vehicles for the next five years.
Goodyear opened six Commercial Tire & Service Centers (CTS), expanding the network to 194 outlets in 33 states, and began offering the CTS program to independent dealers in Canada, integrating them into one unified program across North America.
Michelin North America Inc. announced it will suspend operations at its earthmover plant in Starr, S.C., at year-end due to market conditions. The company also began ramping up its tagging program and adopted testing technology to confirm that every tag is functioning properly before being permanently embedded into the sidewall of a truck or bus tire during the manufacturing process. It also released a hosted RFID-based solution for monitoring tire pressure.
In October Yokohama Tire Corp. cut the ribbon on its $300 million truck and bus radial tire plant in West Point, Miss. When fully operational, it will employ nearly 500 people and produce 1 million TBR tires annually.
As the Mississippi plant comes online, the company will wind down its partnership in its GTY Tire Co. joint venture at Continental Tire's plant in Mt. Vernon, Ill. Yokohama also announced that its complete line of commercial truck tires can be equipped on any new Freightliner truck since they are now an option in Freightliner's Data Book.
Some offshore tire producers also made some strategic moves this year. Weihei, China-based Triangle Tire USA selected Franklin, Tenn., for its North American headquarters and hired industry veteran and former Alliance Tire Group executive Manny Cicero as its CEO. Triangle Tire is the 14th largest tire maker in the world and produces over 700 kinds of radial tires, including radial truck tires and OTR tires.
Falken Tire Corp., a Sumitomo Rubber Industries Ltd. brand, also set its sights on the medium truck tire market, forming a dedicated commercial division and expanding its commercial truck tire sales team.