RANCHO CUCAMONGA, Calif. — While the U.S. economy is still in a COVID-19 slump, the retail tire industry appears to have started rebounding in May, according to Sumitomo Rubber North America Inc. (SRNA).
"We see changes that happen every day, but overall things are starting to look up. They looked pretty bleak about a month ago, but now we're seeing a lot of states start to open up, and in Canada, some (provinces) opening up. So there are some signs of life…" Rick Brennan, SRNA's vice president of strategic planning, said during the tire company's third COVID-19 Dealer Resource Forum, held online May 19.
As many states ease stay-at-home restrictions, people appear to be driving more.
Passenger vehicle miles traveled in the U.S. plummeted 48% in March as stay-at-home orders were enacted, according to research firm INRIX Inc.
By the last week of April, vehicle miles were down 35%, and for the first two weeks of May, they were down 29% compared with the pre-pandemic average, Mr. Brennan noted.
"We expect it to be around 80% of normal mileage by the end of May. That makes sense because states are opening up, people are starting to go back to work at offices, much like we are here. And they're starting to move around more," he said.
However, the trucking industry is struggling. Even though commercial vehicle miles traveled was down 11% for the first half of May, the amount of freight those trucks were transporting decreased.
"So although we see the mileage improving (compared with April), the amount of freight they're carrying isn't enough to sustain all of these freight companies. So we're starting to see layoffs."
Overall the industry saw a 22% decline in freight delivery in April, nearing 2009 levels. SRNA said it expects the industry to slowly rebound in May as auto makers resume production at manufacturing plants.
Referring to U.S. Tire Manufacturers Association (USTMA) data, Mr. Brennan noted that consumer tire sales appear to be improving. Passenger/LT tire unit shipments fell 45% in April, but were down 34% in the first half of May.
Truck/bus tire units, however, were down 15% in April and declined 19% in the first half of May.
SRNA said it expects passenger and light truck tire shipments to improve through the end of May while commercial truck tires are expected to remain the same through the month.
As for Sumitomo, "we're experiencing a drop but we're far outpacing the industry because of back-order fill. We've receiving more orders than we expected at the beginning of the month. So our market share has grown by nearly 1% since the end of 2019," Mr. Brennan said, noting the increase was across the board and in all channels of distribution.
In the first half of May, Sumitomo's passenger/LT sales were flat, and TBR sales increased 6% — but the tire maker experienced a drop in total volume, he said.