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!
What’s the forecast for original equipment truck tire demand? “We anticipate that OE will not start to come back until year-end,” says Walt Weller, senior vice president, China Manufacturers Alliance LLC (CMA), owner of the Double Coin truck tire brand.
In this interview, Weller discusses the impact of COVID-19 on CMA’s commercial tire business, overall truck tire demand and other topics. “We have prepared by making sure our warehouses have ample supply so when it does come back, we are positioned to support our customers.”
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?
Weller: We anticipate that OE will not start to come back until year-end. We have prepared by making sure our warehouses have ample supply so when it does come back, we are positioned to support our customers.
MTD: How have the COVID-19 pandemic and resulting government actions impacted your commercial truck tire business in the United States and Canada?
Weller: It definitely had an impact, but not as much as on the consumer side. Trucking and the commercial tire business were deemed essential, so there was some business being done.
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 an impact on truck tire shipments for the rest of the year. Can you quantify expected shipment declines?
Weller: It is hard to quantify the impact from plant shutdowns at this stage. It could be as much as 25% below prior 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? And how will the knock-on effect of low OE channel demand impact replacement tire sales?
Weller: OE business is down. This, combined with plant shutdowns, may present some supply problems, especially with second-tier manufacturer brands, as manufacturers focus on their tier-one brands.
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?
Weller: The best way to support our dealers is to have inventory available when they need it. Dealers are working as best they can out of existing inventories, which is understandable, but when they need tires for their customers, we will be ready to ship them. Our warehouses are open and following the COVID-19 protocols and our customer service team is working remotely to process their orders quickly and efficiently.
Weller’s advice for dealers? “Stay healthy and be safe! Think of your employees and remember that things will improve faster than people think.”