Replacement consumer tire volume in the U.S. dropped 63% in the first half of April, with light truck tires affected slightly less than passenger tire units.
And Rick Brennan, vice president of strategic planning at Sumitomo Rubber North America Inc., says the picture for the full month of April isn’t going to be much better.
“April is going to be a big drop. If we normally run 17 to 18 million (replacement tires) per month as a total industry, we’re going to see numbers around 10, or maybe 11 million if we’re lucky.
“But we’re going to see it come back in May as things start to open up. We already see some signs of life.”
Brennan delivered that kind of mix of good news and bad news to tire dealers during the tiremaker’s latest online dealer forum.
Here’s one of the reasons Brennan is optimistic.
Mileage data is improving. Even in April, when most states remained under lockdown or stay-at-home orders, traffic patterns were picking up. In mid-April Inrix Inc. showed miles driven was down 48%. A week later it was 41%, and the last week of April the projections were for a 35% drop in traffic. “Those numbers will improve the sell out of tires,” Brennan said.
In Canada, the market is facing a similar turbulent picture. Volumes were down across the board in Canada for the first three months, with the same notable exception as in the U.S. – medium truck tires. Both countries reported an uptick in late March. But those spikes fell into negative territory in April.
In the U.S., truck and bus radial tires were up 10% in March, but down 1% in the first half of April. In Canada, TBR was up 5.7% in March, and down a much more drastic 34.8% for the first two weeks of April.
Keep in mind, even with a decline of one-third in volume, TBR is easily outpacing the passenger and light truck replacement markets in Canada. According to Sumitomo’s estimates, Canada’s passenger tire volumes were down 60.4% and light truck volumes fell by 62.4% in the first half of April.
It can seem difficult to get past the whiplash of numbers like those. But Brennan says Sumitomo is trying to project for the full year. So the company looked at monthly miles driven reports and the number of tires that were shipped each month to build a correlation between the two figures. They also took into account miles driven by vehicle type and the vehicles that were in operation. Then, they used all of that data to look forward.
Market consumption is understandably going to take a nosedive now, in the midst of COVID-19. The good news is that the worst is over. (April is over.) By the end of the year, the worst case model shows a 19.6% decline in tires sold in the market. A slightly rosier picture has a 16.4% decline for the year.
To look at Sumitomo's report from last month: