SRNA: LT tire sales rebound in July

RANCHO CUCAMONGA, Calif. — Light truck tire sales were rebounding in the U.S. in July after suffering a slump earlier in the year.

For the first half of July, U.S. light truck tire volume (LT metric and flotation) increased 14%, compared with the year-ago period, after suffering a 45% plummet in April, according to Sumitomo Rubber North America Inc. (SRNA).

Passenger and commercial truck tire shipments also were recovering after being hit by the economic effects of the pandemic in April and May.

In the first half of July, passenger tires were down 5%, after plummeting 56% in April; medium truck tires edged up 3% compared with the year-ago period, according to SRNA executives, quoting U.S. Tire Manufacturers Association (USTMA) data.

SRNA executives were optimistic about the tire market going forward during their fifth SRNA COVID-19 Dealer Resource Forum, held online July 23.

In June, U.S. passenger tire volume was down 7%; light truck tire sales were flat; and medium truck tires were down 6%, according to USTMA data.

So while tire shipments began recovering from the pandemic slump in June, there was a big rebound in the first half of July, especially for light truck tires, according to Rick Brennan, SRNA's vice president of strategic planning.

The Canadian tire market, which experienced a harder hit than the U.S. during the pandemic, is on a slow recovery. Consumer products are surging again while commercial tires are still lagging behind, Mr. Brennan said.

For the first half of July, passenger tire volume was down 3.9%, light truck tires edged up 2%, but medium truck tire sales were down 21.9%.

SRNA is enjoying a rebound in sales as well, according to Matt Leeper, SRNA director of sales – consumer.

SRNA is "seeing strength across every channel we deal with," he said.

The regional wholesale channel has been the strongest; the car dealership channel is back to normal; and regional retailers seem to be recovering, he said, but larger corporate retailers still seem to be struggling.

He said SRNA sales in July are projected to surpass the same month in 2019, noting some sell-in promotions in June were effective.

In June, SRNA experienced a 2% market share increase as its Azenia Fk510 summer UHP tire sales nearly doubled the previously best month in June and its popular Falken Wildpeak A/T3W had a record month, Mr. Leeper said.

"Unfortunately our back orders, which we thought we'd get a handle on if there was a big downturn, have increased," Mr. Leeper said.

"We are constantly searching for increased capacity production on (Wildpeak A/T3W), but we are just not able to catch up on that. So we are looking at higher back orders today, basically back to January and February levels."

He noted that sales of tires by wholesalers to Falken Fanatic associate dealers hit a record level in the second quarter.

Meanwhile, commercial truck tires also are rebounding, according to Bob Klimm, SRNA director of sales - commercial.

He said Falken commercial tire sales had a record-breaking first quarter, "outperforming the market in January/February/March."

Then the pandemic caused sales to drop in April and May.

"The encouraging thing is in June we saw a nice recovery. … For the first half of July it looks like we're doing well, too. Overall in June we saw strong demand return. We are at a 5.5% increase over last June," he said.

"As far as the month of July, we're off to a very strong start. We're tracking to close out with a nice increase over last year and hit our budget number."

He said that while, according to USTMA data, TBR shipments for the first half of July increased 3.2%, "we're up 21.8%."

"In the first half we've outperformed the market five out of the first six months. The USTMA said a 9.8% drop (in TBR sales), we had a 5.2% increase. So this has allowed us to increase our market share by 0.4%," Mr. Klimm said.

The downside is back orders increased a bit in July but "we expect to bring it down fairly quickly as we increase production out of Buffalo (manufacturing plant in New York)," he said.