At the 2014 Goodyear Dealer Meeting in Nashville, Tenn., Goodyear shared its views of what is to come with attendees.
Goodyear said GDP grew 1.9% in 2013. Here's what the company expects from the economy in 2014:
* the addition of 2.4 million jobs;
* an increase in per capita income (after stalling in 2013);
* a modest upswing in home values;
* a 3% growth in consumer spending (which will out-pace inflation);
* a stable energy market, with a slight decrease in gasoline prices.
Goodyear added that medical care costs are the "wild card."
Tire industry drivers in 2013
In terms of the tire industry, Goodyear said the 7.6% increase in new vehicles sold in 2013 bodes well for tire dealers (low interest rates and loosened credit helped auto sales). Vehicle sales growth is expected to continue this year.
Original equipment manufacturers are introducing models and making over aging vehicle fleets. So new cars are needed -- and there are already 252 million registered vehicles in the United States. Luxury vehicles, CUVs and hybrids are growing faster than any other vehicle category, although pickup truck sales remain strong.
In 2013, there was an increase in miles driven for the fourth time in five years. Goodyear said that will continue.
Industry size/shipment trends (see chart)
Goodyear said sizes are trending upward. There is a similar trend in speed ratings. Also, original equipment sizes are feeding the aftermarket.
The performance tire segment continues to perform the best, and the all-terrain segment is "finally" beginning to rebound.
The recovering U.S. economy, the end of the 25% tariff on consumer tire imports from China and struggling global markets in China, Brazil, etc. equaled the "perfect storm" for imported tires, which grew significantly in 2013.
Goodyear says economic indicators are positive, and so are tire industry drivers. As a result, consumers are shaking off the recession and are starting to spend again.