The following is the latest in MTD's exclusive series of interviews with top truck tire executives about the impact of the COVID-19 crisis on business, plus their outlook on demand, shipments and other key factors during the second half of the year. Stay tuned to www.moderntiredealer.com for more coverage!
“Our current inventory levels remain strong and we expect our supply to remain at levels to meet market demands,” says Rob Williams, vice president of TBR sales, Hankook Tire America Corp. In this interview, Williams discusses the role Hankook’s global supply chain has played in ensuring consistent truck tire supply to U.S. dealers, plus other topics.
MTD: How did the COVID-19 pandemic and resulting government actions impact your commercial truck tire business in the United States and Canada?
Williams: Our dealers’ main focus has been keeping their fleet customers up and running during this time. With many of our dealers’ businesses being impacted, we felt the effects in April, regarding our sales. The safety of our team and customers is our main priority, so we have and will continue to follow all government regulations.
MTD: A number of tire manufacturers temporarily suspended production at their U.S.-based truck tire plants. It is expected that these shutdowns and/or production suspensions will have a dramatic impact on truck tire shipments for the rest of the year. Can you quantify expected shipment declines?
Williams: Fortunately, we have not had a slowdown in production nor our supply chain pipeline as we are able to source our products from our other plants across the globe. Our current inventory levels remain strong and we expect our supply to remain at levels to meet market demands. We will closely monitor our supply to ensure we can provide adequate fill rates to keep our fleet customers up and running.
MTD: New Class 8 truck orders and new trailer orders have dropped dramatically in recent months. What impact is this having on your OE business, if applicable? And how will the knock-on effect of low OE channel demand impact replacement tire sales?
Williams: As noted by U.S. Tire Manufacturers Association data, the OE TBR business has been greatly impacted, and as a result, we have seen a subsequent reduction in replacement demand, as well. We continue to focus on the needs of our current dealers and fleets and expect miles driven to rise in the near future.
MTD: When do you expect OE and replacement tire demand to bottom out and when will demand – in both channels – start to rebound? What are you doing to prepare for this?
Williams: OE demand reduction may have a transverse relation to replacement sales after a period of time. An example would be fleets keeping trucks longer. Thus, there would still be a demand for tires on these units as older units often (impose) more wear and tear on tires. With the uncertain future, our main goal is to work with our dealers to ensure we can provide the product at the right place to keep the fleets moving. We will continue to monitor our stock levels at each of our regional distribution centers throughout the U.S.
MTD: Truck tire dealers have played an instrumental role in keeping fleets up and running during the COVID-19 pandemic. What are you doing to support your dealers? What advice do you have for them during this challenging time?
Williams: Our dealers have done a phenomenal job keeping the fleets in the U.S. up and running. We continue to work with our dealers to keep adequate stock on hand, work with them on product specials, provide flexibility with credit terms, provide product training and immediately respond to their needs.
“I am confident our dealers will persevere as they recognize their efforts in keeping the U.S. rolling are having a positive impact on returning the economy back to normal,” he adds.