Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/449261
MTD January 2015 By Bob Ulrich A lthough it is 6,000 miles away, the People's Republic of China is the center of the universe to the U.S. tire industry. In 2014, China exported a record 60.5 million passenger and light truck tires to the United States, representing one-quarter of all domestic replacement consumer tire shipments. Tat alone is enough to keep tire manufacturers, market- ers, retailers and the U.S. government focused on China and its low-cost radials. However, recent tarifs placed on Chinese consumer tire imports will change tier pricing in the U.S. throughout 2015 and beyond. And that will afect the consumer, too. To put China's infuence on the U.S. tire market into per- spective, Chinese exports are three times larger than the second largest exporter, Canada, and twice as large as our NAFTA partners combined, even though we share borders with Canada and Mexico. Plant capacity has something to do with the disparities. W hile Canada and Mexico host 12 consumer tire plants that can produce 46 million tires a year, there are some 80 companies in China that can produce more than 400 million passenger and light truck tires annually, according to the U.S. International Trade Commission (ITC). If you look at the list of consumer tire imports by country (see Chart 5 on page 32), the number of Chinese imports roughly equals imports from the next four largest countries: Canada, South Korea, Tailand and Indonesia. Based on the massive infux of Chinese tires over the last two years, the United Steelworkers (USW) union charged the Chinese government with subsidizing exports to the U.S., resulting in unfair trade. It fled a complaint with the ITC and U.S. Department of Commerce last June asking for countervailing and anti-dumping duties, also known as tarifs. Te charges were similar to those fled by the USW in 2009, which led to additional tarifs ranging from 35% to 25% over the next three years. (All Chinese passenger and light truck Facts section: Tire shipments Te hub of the wheel Like it or not, the U.S. tire industry revolves around China Chart 4 2014 REPLACEMENT PASSENGER TIRE MARKET (based on 206.6 million units) Chart 1 2014 U.S. REPLACEMENT TIRE SALES (a $37.4 billion industry) Passenger tires $24.8 billon Light truck tires $4.9 billion Truck tires $6.6 billion Farm tires $ 538 million OTR tires $ 580 million In 2013, U.S. replacement tire sales totaled $37.3 billion. Chart 3 U.S. UNITS SHIPPED 2010-2014 (in millions; imports included) PASSENGER TIRES Year Replacement OE 2014 206.6 46.0 2013 201.6 44.0 2012 192.0 40.5 2011 196.5 36.0 2010 198.7 34.6 LIGHT TRUCK TIRES 2014 28.8 4.8 2013 28.3 4.4 2012 28.3 4.2 2011 28.6 4.1 2010 28.0 3.5 MEDIUM/HEAVY TRUCK TIRES 2014 17.3 5.8 2013 15.7 5.0 2012 16.0 5.3 2011 17.0 4.9 2010 15.3 3.0 Chart 2 U.S. CONSUMER TIRE IMPORTS FROM CHINA (in millions of units) Year Units Yr./yr. change 2014 60.5 +17.9% 2013 51.3 +57.8% 2012 32.5 +25.0% 2011 26.0 - 16.1% 2010 31.0 - 27.9% Sources: MTD fgures, Rubber Manufacturers Association 30