The U.S. passenger, light truck and commercial replacement tire segments have had the strongest recovery of all segments a year into the COVID-19 pandemic.
Consumer demand is increasing. More people are getting vaccinated, more pandemic safety protocols are being eased — which means more people are going out — and vehicle miles driven are increasing. Plus, a third round of stimulus checks has given consumers extra funds to spend.
Wholesalers and tire dealers — many who kept a lean inventory last year — are trying to stock up to meet the demand.
Alexis Garcin, chairman and president of Michelin North America Inc., told Tire Business last week that keeping up with demand is "like hitting a moving target," because as soon as the company meets the demand, it grows .
"The inventories across the entire chain are pretty low, and I think we are all in the same situation that we are trying to replenish inventory as fast as possible, because demand is getting higher everyday," he said.
Goodyear Chairman, President and CEO Rich Kramer said his company would use excess original equipment volume — which was down 6% in the first quarter — to help replenish the replacement market.
Mr. Kramer said Goodyear's U.S. consumer replacement volume grew 17% in the quarter — 11% total in North America — over the same period in 2020.
"I'm especially pleased with the premium high-margin segments, where we grew significantly — more than the market, which itself was up double digits," Mr. Kramer said.
There still are many hurdles. Tire prices are going to rise, as evidenced by another round of price increases recently announced by tire makers. Some are raising prices for the third time this year. And more are on the horizon.
Supply will be touch-and-go at least until the second half of the year. The supply chain is a mess, particularly at ports, and it's hampering recovery in the OE market.
In addition, a shortage of chips, now in its fifth month, continues to hamper the auto industry. Because of this, some auto makers are leaving technology out of new vehicles, such as navigation systems and blind-spot monitors. Millions of vehicle sales will be lost this year, experts say, because of the problem.
Yet, myriad other issues related to the pandemic are slowing recovery around the globe.
We remain optimistic.
The industry tightened its belt during 2020, and it was ugly for a while. But there were bright spots throughout the year, just ask anyone selling tires for trailers, tractors, recreational vehicles or all-terrain/ultra-terrain vehicles.
Many believe demand in those segments will continue through 2021 as people look to partake in outside recreational activities.
As we report in this issue, tire brands continue to grow. As new brands enter the market, others are adding sizes and/or entering new markets.
Tire sales are going to be as hot as the summer sun in the second and third quarters.
While it will take years to recover from the pandemic's impact, there is a feeling that the consumers are ready to get back to normal.