Market Data Book 2022: Tale of two tire markets

WASHINGTON — Much like the "Tale of Two Cities," the U.S. tire market in 2022 was a tale of two divergent trends, one quite positive, one rather disappointing.

On the positive side of the ledger, shipments, production and imports of medium truck/bus tires all grew by double-digits, with shipments and imports hitting record levels of 26.8 million and 23.6 million units, respectively, according to Tire Business' analysis of the latest industry data from a variety of sources, including the U.S. Tire Manufacturers Association (USTMA) and U.S. Department of Commerce.

The rise in shipments reflects robust trucking activity throughout the year. According to the American Trucking Associations, tonnage shipped by trucks last year was up 3.4%, the best annual gain since 2018 despite a "marked slowdown" toward year-end.

• The annual Tire Business Market Data Book is featured in the Feb. 27 print edition.

Domestic manufacturing, on the other hand, did not measure up. Production of truck/bus tires in the U.S. edged up roughly 25,000 units, or just 0.2%, to 13.5 million units, falling short of the industry peak set in 2019.

As a result, imports' share of U.S. replacement market truck/bus tire shipments rose again, to nearly 89% — although "captive" imports (those brought in by USTMA member companies from their off-shore affiliated companies) account for over 60% of imports, leaving the "true" import share at closer to one-third.

In the passenger tire sector, shipments and production both fell, by 4.6% and 5.4%, respectively, to 214.1 million and 100.7 million units, the USTMA data show. By contrast, imports rose 4.6% to a record 163.5 million units, and now represent over three-fourths of replacement passenger tire shipments, with "true" imports — those from offshore companies with no U.S. manufacturing presence — accounting for about 20% to 25% of shipments.

Light truck tire production edged up slightly over 2021, the USTMA data show, but aftermarket shipments dropped 3.7% to 37.2 million units, declining for the first time in four years. Imports rose 4.9% to gain market share again.

The disappointing full-year aftermarket passenger and light truck tire shipments report was driven in large part by a second-half slump, a shift in demand that the USTMA acknowledged in early December when it released its preliminary forecast for 2022.e inroads.

At that time, the USTMA cited a number of contributing factors, including inflation, higher interest rates, risk of recession, higher dealer inventories, lower vehicle sales and a reduction in vehicle miles traveled due to continued work-from-home status and high gas prices.

This combination of factors resulted in an anomaly the trade group said it's experienced only one other time in the past 30-plus years — replacement passenger and light truck tire shipments were higher in the first half of the year than in the latter half.

Similarly, the aftermarket slowed considerably in Canada, where replacement shipments slipped below those in 2021: passenger tires down 0.9%, light truck tires down 2.8%, and medium truck/bus tires off 0.2%.

After a couple of off years, original equipment tire shipments improved by double-digits across the board, reflecting the vehicle industry's ability to resolve most supply-chain-related issues that had impacted production the past two years:

• passenger, up 11.1% to 41.6 million units;
• light truck, up 11.4% to 6.3 million units; and
• medium truck/bus tires, up 10% to 6.5 million units.

As for OE market shares, there was little perceptible shift in shares. Goodyear (including Dunlop), Michelin (including BFGoodrich), Bridgestone (including Firestone) and Continental (including General) control more than three-fourths of OE passenger and light truck tire fitments with North American vehicle makers, although smaller brands such as Falken, Hankook, Kumho, Nexen, Pirelli and Toyo continue to make inroads.

One additional item to consider. The USTMA data don't take into account OE tires shipped into the U.S. mounted on imported vehicles. In 2022 vehicle makers imported 3.21 million cars, light trucks, van, SUV/CUVs, etc., which represent roughly 14.5 million tires, depending on how many were equipped with temporary spares or no spares at all.

Of the 3.21 million vehicles imported, 1.26 million came from Japan, 875,626 from South Korea and 964,139 from various European countries, according to data gleaned from Automotive News, a Tire Business sister publications.

The domestic vehicle industry's continual shift to SUVs/CUVs and pickup trucks is reflected in the mix of OE tire sizes, where — according to the USTMA data — nine of the top 10 sizes are 18-inch rim diameter and larger, including a 22-inch size (275/50R22) for the first time.

The top 10 sizes accounted for 35.6% of OE passenger tires shipments last year. The No. 1 size was 275/60R20.

At the same time, the OE industry's preference for speed-rated tires continued to rise last year. Fitments of H-, V- and Z-rated tires increased nearly three percentage points to 62.7% of all OE passenger tire fitments, the USTMA data show. (See page 18 for details.)

That preference for speed-rated tires carried over to the replacement market as well, where their penetration of replacement shipments exceeds 57%.

The shift to larger rim-diameter tires in the aftermarket also is evident, but not nearly to the extent that the OE sector has gone. There is one 20-inch and three 18-inch sizes among the top 10 replacement tire sizes but also still one 15-inch size, the USTMA data show.

Consumer vehicle sales (passenger, SUV/CUV, vans and light trucks) fell 7.9% in the U.S. last year to 13.9 million units and 8.5% in Canada to 1.51 million.

With very exceptions, sales of most individual models fell last year as well. Among the sectors that showed some growth were the light trucks/pickups and delivery vans, according to data gleaned from Automotive News.

Other nuggets to be gleaned from this year's Market Data Book include:

• Revenue generated per store by tire dealers rose 11% in 2021 over 2020, to $1.33 million, according to data from the Auto Care Association FactBook and U.S, Bureau of Labor Statistics.
• Revenue generated per store by general repair garages rose 8.5% to nearly $550,000.
• Automotive technicians' wages jumped 16 in 2021 over 2020 to $22.54 an hour, according to the Bureau of Labor Statistics.
• Revenue generated by the nations 20,000-plus tire dealers is expected to grow 6.5% annually through 2025 to reach $36.6 billion, according to the ACA.
• Discount Tire/America's Tire continues to be North America's largest tire retailer, with $6.4 billion in annual sales, leading Bridgestone Americas (Firestone Complete Car Care), Walmart Inc. and Icahn Automotive/Pep Boys.
• In terms of retail store networks, Walmart leads the pack with nearly 3,200 locations, ahead of Bridgestone Americas (2,243), Mavis Discount Tire (1,332) and Monro Inc. (1,291).
• The value of the North American tire market (wholesale level) jumped nearly 19% to $58.5 billion, according to Tire Business' preliminary calculations, with Michelin North American holding a slim margin over Bridgestone America, $11.5 billion to $11.4 billion, for bragging rights.
• The 10 largest tire makers collectively accounted for roughly 81% of the North American market.