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!
Demand for truck tires could begin to pick up during the third quarter, says Manny Cicero, CEO of Triangle Tire USA. In this interview, Cicero provides an update on Triangle’s truck tire business in North America, the company’s supply position and more.
MTD: How did the COVID-19 pandemic and resulting government actions impact your commercial truck tire business in the United States and Canada?
Cicero: Our commercial truck tire business was first severely impacted by the sudden imposition of countervailing duties in early-2019. The impact of COVID-19 on the overall trucking industry just worsened the situation. We are getting tremendous feedback from dealers and end users on our TBR product quality, but the duties and tariffs make it very challenging to compete in this segment.
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?
Cicero: We actually have not seen a dramatic decline in our truck tire business year-over-year, largely due to the negative impact in 2019 on overall volume. This year is holding steady and we do not expect further declines the remainder of the year.
MTD: New Class 8 truck orders and new trailer orders have dropped dramatically in recent months. What effect 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?
Cicero: We are not a supplier to U.S. truck OEMs, so the OE sales impact is zero. The larger impact is the effect this has on pricing as tires destined for OE become available to the replacement channel.
MTD: When do you expect OE and replacement tire demand to bottom out and when will demand – in both channels – start to rebound?
Cicero: Impossible to predict. If the U.S. follows same lag period as China, then demand should start picking up late-Q3/Q4 2020. But there are too many variables to give an accurate forecast. Our factories have been running at near full capacity since mid-February after our people in China were quarantined soon after the COVID-19 outbreak there. We are well- situated to supply the U.S. market.
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?
Cicero: The primary support we are giving our dealers is making our products available to them when they need them. By keeping inventory both in China and in the U.S., we are able to ship containers very quickly to the U.S. And for those customers who need product quicker, we keep inventory in our Tennessee warehouse.
Cicero says that commercial tire dealers “are closest to the end user and they know what it takes to keep them running. If they continue to service their customers through this challenging time, then we will all come out of this just fine.”