2019 saw its share of activity on the mergers-and-acquisition front, with Monro Inc. and Bridgestone Americas/GCR Tires the key players in the retail and commercial sectors, respectively.
Monro added 102 retail locations throughout the country in a dozen separate deals, spending $100-plus million to acquire businesses with more than $120 million in annualized sales potential. The largest of these deals was the purchase of 40 Certified Tire & Service Centers retail locations and one distribution center in California in May 2019.
Bridgestone was equally active in terms of outlets that changed hands, except it was the seller, not the buyer.
Bridgestone divested 73 GCR commercial locations and a dozen Bandag-system retread plants in four transactions. As a result, Bridgestone has winnowed down the size of the GCR network to roughly 90 locations, down from 200-plus just a few years ago.
The M&A wave continued into 2020, with Mavis Tire Supply striking a deal to take over 112 National Tire & Battery locations in four major metro markets from TBC Corp. and the family shareholders of Les Schwab Tire disclosing plans to find a buyer for the business, considered the sixth largest dealership in the U.S.
North American market
On the sales side, the major tire companies generated mixed results, both in unit volume and dollar revenue.
Based on organic growth and the addition of revenue from the mid-2018 acquisition of off-road and industrial tire maker Camso Inc., Michelin North America Inc. took over as the largest tire maker in North America with an estimated $9.5 billion in sales.
Michelin moved ahead of Bridgestone Americas, which had been No. 1 in sales for the past five years. Goodyear remained No. 3 with tire-related sales in North America of $6.15 billion. Unit sales for Goodyear's Americas business unit were on par with 2018, although the company noted aftermarket sales were up 2% and OE sales were down 18%.
Other nuggets gleaned from the 2020 Market Data Book include:
• Demand for high-performance tires in the U.S. continues to increase in the replacement market, where shipments of tires H-rated and higher exceeded 100 million units for the first time and now represent 46.7% percent of aftermarket shipments, up 5.2% from 2018 and nearly a third versus 2015.
The OE share fell slightly, to 54.9% of overall shipments, the USTMA data revealed, and has now plateaued at the 55%-57% level for the past four years.
The shift at OE also is reflected in the breakdown of OE tire sizes, where the 10 most popular sizes now are all 17-, 18-, 19- or 20-inch rim diameter sizes. Together they account for nearly 33% of all OE shipments.
• Goodyear remained the No. 1 supplier of OE consumer tires last year, outfitting an estimated 24% percent of the 17 million cars, SUVs/CUVs and light trucks built in North America in 2018 with its Goodyear and Dunlop brands.
Michelin North America was No. 2 with its Michelin and BFGoodrich brands, ahead of Bridgestone Americas (Bridgestone and Firestone brands) and Continental Tire the Americas L.L.C. (Continental and General brands).
Increasingly the auto OEMs are spec'ing brands other than the traditional major brands, a trend reflected in the list of tire companies supplying the car makers, which now includes brands such as Cooper, Falken, Hankook, Kumho and Nexen.
Also making strides with OE manufacturers is Sumitomo Rubber North America, which now has responsibility for supplying both Dunlop and Falken-brand OE tires to the U.S. assembly plants of the Japanese car markers — Honda North America Inc., Mazda (North America) Inc., Nissan North America Inc., Subaru of America and Toyota Motor Mfg.
• South Carolina remains the No. 1 tire-producing state with estimated daily tire production capacity of roughly 133,000 units. Oklahoma holds the No. 2 spot at 88,000 units, ahead of North Carolina at 74,000.
With the opening last year of Nokian Tyre's plant in Dayton, Tenn., and the ramping up of capacity at Hankook Tire's factory in Clarksville, Tenn., the Volunteer state is poised to challenge the Tar Heel state in the coming years for that No. 3 spot.
• U.S. shipments of winter/traction tires rebounded slightly last year after a three-year skid, accounting for 2.1% all replacement car tire shipments. By contrast, winter tires represent more than 35% of aftermarket car tire shipments in Canada.
• Vehicle registrations in the U.S. increased 0.2% in 2018 (the most recent year for which data are available) to 17.6 million vehicles, including 11.7 million light trucks and 5.4 million cars.
In terms of vehicles in operation (VIO), ACA data show the number of cars registered throughout the U.S. fell 0.6% to 118.7 million while the number of light trucks registered grew 4.5% to 159.4 million.