While tire sales have remained relatively flat in the U.S. in recent years, there is no slowdown among tire manufacturers looking to grow and expand their operations globally.
The tire industry seems ripe for growth and change as vehicle sales rise worldwide, particularly in emerging markets, and tire companies position themselves for the anticipated upheaval resulting from the advent of autonomous vehicles, electric cars and trucks and expanded ride sharing among consumers.
Tire Business' annual Global Tire Report, published in this issue, provides a recap of the industry movements over the past year. The changes from mid-2017 to mid-2018 in tire manufacturing are substantial, particularly in the pecking order of the largest companies.
As a whole, tire makers over the past 12 months committed more than $7.5 billion toward building new plants and adding capacity worldwide. Altogether these expenditures will result in additional manufacturing capacity for 82 million passenger/light truck tires and 7.5 million truck/bus tires. It's the second straight year investments in new production capacity topped 80 million units for passenger and light truck tires and 7 million for truck and bus tires.
This aggressive investment is starting to impact the who's who of the industry.
Group Michelin's plan to buy OTR/industrial tire and wheel producer Camso Ltd. for $1.45 billion, for example, would move the French tire maker into a position to challenge Bridgestone Corp. as the world's largest tire manufacturer.
Consistent investments by Continental A.G. in its tire unit over the past few years has the German tire maker inching closer to third-ranked Goodyear in the passenger/light truck tire sector. In fact, London-based Astutus Research maintains Continental has pulled even with Goodyear in terms of manufacturing capacity for consumer tires.
Sumitomo Rubber Industries Ltd., meanwhile, has moved ahead of Pirelli & C.S.p.A. as the world's fifth largest tire maker and Japan's Toyo Tire & Rubber Co. Ltd. has moved ahead of Cooper Tire & Rubber Co. as the world's 12th largest tire maker.
All this has happened in the past year.
The jockeying among competitors is likely to continue unabated, as suggested by actions of China's third largest tire manufacturer, Shandong Linglong Tire Co. Ltd. In the past year alone, Linglong jumped three spots to No. 17 in the world tire maker rankings.
And the company is poised to move higher, following the news it intends to build a second overseas plant, in Serbia, and a fourth factory in China, committing nearly $1.7 billion to those projects.
How such moves play out remains to be seen, but there's little question the industry is seeing increased investment and competition at all levels.
Couple this with the disruption posed by growth in ride-sharing and electric and autonomous vehicles, and it makes the staid old tire business look more like a growth industry.