Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/630954
47 www.moderntiredealer.com production of all tires fell dramatically because of a severe rubber shortage. Te U.S. government rationed tires to ensure there was enough rubber for military and vital civilian purposes. Te natural rubber shortage did have a positive lasting efect on our industry: It accelerated eforts to develop synthetic rubber. When external forces raise demand for rubber, as they did during the Korean Confict in the early 1950s and the Arab Oil Embargo in 1973-74, tire prices naturally rise, which can lead to a decrease in shipments. Te oil embargo also fed into a recession which lasted into 1975. Trending seems to indicate the tire industry, especially the replacement segment, weathers recessions well. At the height of the Great Recession in 2009, replacement passenger tire shipments dropped only 11%. And while vehicle owners held of buying tires, they still needed to keep up with automotive services. At the same time, new vehicle sales fell dramatically, and OE shipments decreased 51% as a result. Both segments were afected negatively by the 1979 oil crisis, which was caused by decreased oil output in the wake of the Iranian Revolution. During the peak of the recession that followed, the nationwide unemployment rate was 10.8%, the highest since the Great Depression. 0 50 100 150 200 250 300 OE REPLACEMENT 2015 2008 2000 1987 1981 1973 1970 The Great Recession Arab Oil Embargo Black Monday Chart 2 U.S. PASSENGER TIRE SHIPMENTS 1929-2015