Before we share our thoughts on what the annual Market Data Book — published in the Feb. 27 edition — tells us about the tire industry, we want you to know our aim here is to give you enough data to make up your own mind.
It seems odd to say, but it can be hard to trust data these days.
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First off, it's not the data's fault. Data are pure, raw and unapologetically straight-forward. The problem with data most often is a human one, because someone can find data to support just about any point.
For instance, sales of SUVs like the Honda CRV (-34.1%), Nissan Rouge (-34.7%) and Subaru Outback (-26.3%) saw a big decline in 2022 compared with 2021. Does that mean the auto industry is dead? No.
While industry sales were down 7.9% overall in the U.S., we don't think it was a lack of demand — if the used car market is any indicator. The wake of the pandemic, namely supply shortages and disruptions, has held the auto industry back. The lack of new vehicles has pushed the average vehicle age past 12 years, which is great for the replacement market. We sense this year will be much kinder to the industry.
In the tire industry, the game was paused briefly at the start of the pandemic and then roared back ushering in a record sales year in 2021. Tire makers we've interviewed often referred to 2022 as a bit of a "hangover" year. The sales mega boost had ended and the market was settling into its new normal — one of growth, though muted by comparison.
"I wouldn't say it's leveling off, but the growth is returning to pre-pandemic levels," Michael Graber, Toyo Tire USA president and CEO, told Tire Business at SEMA last year. "Generally, we expect 2% to 3% growth in each of our segments year-over-year instead of the double-digit growth we were seeing in 2020 and 2021."
Of course, we haven't mentioned the elephant in the room. The Russian invasion of Ukraine — and the energy crisis caused by it. Inflation and a possible recession are also reasons you'll find many tire makers showing caution this year.
Overall though, we feel the tire industry remains in good condition. Investment groups, like Greatwater 360, continue to see auto repair and tire service as a strong investment.
This year old challenges remain and new challenges will certainly come, but this is an industry built to handle bumpy roads.
