Our View: Glimmer of hope for tire industry

Group Michelin retained its spot as the top tire maker in the world, in terms of revenue generated by the sale of tires sold in 2020. The company also was No. 1 on our list last year, when it eclipsed Bridgestone, who had held the top spot for more than a decade.

Of course, 2020 — the COVID-19 pandemic — was a whole other beast. Tire Business Special Projects Reporter Bruce Davis summed it up perfectly in the Global Tire Report when he called 2020 an "asterisk" year.

• This story originally ran in the Aug. 30, 2021, print edition of Tire Business. Subscribers may download the digital edition here.

Almost every company in our Top 75 rankings experienced a decrease in sales compared with 2019. Michelin, for example, held on to the top spot, but the French tire maker saw tire-sales revenue dip by more than $3 billion year-over-year.

Tire-related revenue by the Top 75 tire makers globally fell 8.2% in 2020 from 2019 to an estimated $159 billion, the lowest sum since 2016.

Among the leading 25 companies in our rankings, 20 reported drops in revenue last year, including a dozen with double-digit declines. Collectively, the drop was 11%.

Comparatively, 2020 was a bad year. One has to wonder what a future generation will think looking back on the numbers years from now. Will they understand the true impact the pandemic played in terms of consumer demand? Looking at the last year-and-a-half, demand was all over the place.

Of course, those in the industry know that it could have been much worse.

That's why this year's ranking needs an asterisk. The tire industry deserves a blue ribbon for facing adversity and a standing ovation. At the very least, everyone in the industry should receive a "pandemic" participation trophy.

The numbers are down, but demand likely will remain strong as supply chain problems are corrected. In fact, despite shipping woes and elevated duties in Asia, imports saw a dramatic boost in the second quarter of this year.

In passenger tires, the jump was nearly 74%, a stark contrast to the first quarter, when imports essentially were unchanged from the first three months of 2020.

Light- and medium-truck tire shipments from overseas through June increased 51.2% and 41.5%, respectively. Shipping could yield record import levels this year.

Another gauge of the industry's health is looking at investments and expansions in the tire industry. Tire makers around the globe committed nearly $7 billion over the past year toward new factories and capacity expansions; more than three-fourths of which is earmarked for projects throughout Asia.

The total is roughly $2 billion greater than the amount tracked by Tire Business during the August 2019-August 2020 period and includes investments for three greenfield tire factories.

Combined, the new factories and expansions represent over 58 million units of annual production capacity — 53.5 million passenger and 6.5 million truck/bus tires — as well as more than 100,000 metric tons of new capacity for farm, industrial and OTR tires.

And while we would like to see investment projects happening in the U.S., we'll take what we can get. It wouldn't surprise us if some of those stalled projects in North America get revived, particularly if demand continues to soar.

It was a rough year, but we are optimistic about the future of the industry.