It has said, however, that producing 20 million more will require about $750 million worth of capital expansions and upgrades worldwide, including a $210 million expansion of the Pulandian plant in China, a $135 million investment at the Lawton, Okla., and Fayetteville, N.C., factories and a new $200 million facility in San Luis Potosi, Mexico.
"If you look at it from 50,000 feet, a lot of this focus on 17-inch and above rim diameter is being driven by original equipment manufacturers, the car companies, who have for the last several years been increasing the rim diameter of the tires they put on new cars, new pickups trucks, new SUVs," said Keith Price, Goodyear's director of national media relations.
And once those original tires get three to four years on them, replacements are needed, which, Mr. Price said, "drives the replacement market to that same movement on 17-inch and above."
Auto makers are making the switch to larger rim sizes largely because consumers like how they look, according to tire industry veteran Nat Leonard, president of Smithers Rapra and Smithers Pira, which provides tire and materials testing services and market data reports.
A larger diameter wheel is another way to make a vehicle look distinctive and can be especially appealing to buyers who aspire to own higher-end cars.
Still, larger rim-diameter tires are increasingly popular on less expensive vehicles as well.
Mr. Price said the larger rim segment falls under Goodyear's "high value-added" category and provides attributes such as lower rolling resistance and better wet traction.
"When you are talking about high-value-added tires, everybody in the industry sort of described them differently, so we have settled on the size as the factor to describe the tires," Mr. Price said.
And 17 inches just happens to be where the rubber meets the road — at least for now. The demand for tires with rims 17 inches or greater is growing at 18 percent a year, he said, compared with 3-percent overall growth in consumer tires.
Given that Goodyear tires are used on more factory rollouts than any other brand, Mr. Price said, a major focus moving forward is ensuring its original equipment tires are on the "right vehicles" so that owners are "pleased with their tire performance and choose to replace them with what is on the car already."
The company also is scaling down production of its smaller rim product lines. The first evidence of that came last October, when it announced plans to close a car and light truck tire plant in Philippsburg, Germany, by year-end 2017. That plant, Mr. Price said, mainly produced tires smaller than 17 inches.
"As those tire sizes age in the life cycle, demand gets lower, there are more people who can supply it and pricing and margins on it will go down. That is why we are focused on the larger, more in-demand portions of the market," he said.
___________________________________
Judy Stringer is a reporter with Crain's Akron Business, a sister publication of Tire Business.
