Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/244093
Facts section: Tire shipments expansion in 2014 as higher wear rates and improving utilization trends point to likely improving replacement demand." Vehicle miles driven were at a pace to close in on the 3 trillion mark before severe winter weather struck many parts of the U.S. in December. However, that led to more winter tires being sold, which more than ofset any loss in sales due to the reduction in miles driven. Lower fuel costs were partially responsible for the 11-month increase in miles driven, which were the most since 2008. According to the American Automobile Association (AAA), gasoline prices were down in 2013 compared to the previous year. "As a result of increased domestic oil production and lower demand... the national average price of gasoline should peak at $3.60 to $3.80 per gallon barring any signifcant unanticipated events," said the AAA before the fnal statistics were in. "Tat compares to a peak of $3.94 a gallon in 2012." Drivers paid an average of $3.49 per gallon of gas at the pumps in 2013. Tey paid a record average of $3.60 a gallon in 2012. "Our hope is that prices will continue to fall as cars grow increasingly fuel efcient and refneries expand production to take advantage of the recent boom in North American crude oil," says Avery Ash, a AAA spokesman. Mintel Group Ltd. expects modest growth in the replacement consumer tire industry over the next fve years. Te market research company estimates sales will increase to $33.5 billion by 2017, a 12.1% increase. Tat is in-line with our estimate of $29.4 billion passenger and light truck tire sales for 2013 (see Chart 1 on page 26). "However," according to Mintel, "at an infation-adjusted basis, sales will only increase to $30.8 billion, a 3.3% increase." Dr. Ken Mayland, president of ClearView Economics LLC, says the immediate future for replacement tire sales looks bright. For example, North American light vehicle manufacturing, which fnished the year at close to 16.3 million units (13.4 million in the U.S. and Canada), has not maxed out yet. Also, the average age of passenger cars and light trucks in the U.S. is 11.4 years and 11.3 years, respectively, according to Polk, a division of IHS Inc. Because tires are a "necessary purchase," tire retailers can't help but beneft as a result. Mayland adds that because the price of labor in China has been escalating, tire dealers "are in a beter position to underwrite tires (for the consumer) with beter quality." In the frst full year since the 25% tarif on passenger and light truck tires imported from China expired, a record 170 million consumer tires were imported into the U.S. China accounted for 30% of that total, or 51.2 million units (see Chart 4). Tat, too, is a record, more than 10% higher than the 46.5 million Chinese imports from 2008 — the year before the tarif frst went into efect. Canada surpassed South Korea as the second most popular consumer tire import partner of the U.S. (see Chart 5). South Korea had fnished runner-up to China the last two years. But the biggest leap in the top 10 rankings was by Indonesia, which fnished ffh and was close to passing Mexico for fourth place. Mexico also jumped two spots, helped by increased production at Pirelli Tire LLC's two-year-old plant in Silao, Guanajuato, Mexico. Domestic truck tire imports were down 8.5%, to 9.7 million units, last year versus the year before, when 10.6 million units were imported. China again led the way as the top importer, accounting for 65% of the total, or 6.3 million units (see Chart 6). 28 Chart 4 U.S. CONSUMER TIRE IMPORTS FROM CHINA (In millions of units) Year Units 2013 51.2 Yr./yr. change +57.5% 2012 32.5 +25.0% 2011 26.0 -16.1% 2010 31.0 -27.9% 2009 43.0 -7.5% Sources: U.S. government, MTD fgures Chart 5 U.S. CONSUMER TIRE IMPORTS BY COUNTRY 2013 rank/ country 2012 rank % change vs. 2012 1. China 1 +57.5% 2. Canada 3 -0.4% 3. S. Korea 2 -14.0% 4. Mexico 6 +0.8% 5. Indonesia 7 +10.0% 6. Thailand 4 -3.0% 7. Japan 5 -1.4% 8. Taiwan 8 +26.2% 9. Chile 9 +31.7% 10. Germany 11 +5.5% The top 10 countries account for 90.2% of all consumer tire imports in the U.S. Sources: U.S. government, MTD fgures Chart 6 2013 U.S. TRUCK TIRE IMPORTS FROM CHINA (Based on 6.3 million units) 500,000 bias 7.9% 5.8 million radial 92.1% Sources: U.S. government, MTD fgures MTD January 2014