Truck Tire Market Report: Bridgestone is Gearing Up for Demand Rebound, Says Ripani
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!
Long-haul, last-mile and waste haul fleet activity will help drive a resurgence in replacement truck tire demand, says Chris Ripani, president of truck, bus and retread tires, U.S. and Canada, Bridgestone Americas Tire Operations.
In this exclusive interview, Ripani discusses what truck tire shipments will look like later in the year, what Bridgestone is doing to prepare for a rebound in demand and more. “The market will continue to be very dynamic as we transition into the recovery phase of this crisis,” he says.
MTD: How did the COVID-19 pandemic and resulting government actions impact your commercial truck tire business in the United States and Canada?
Ripani: There has been an overall decline across all tire categories and segments due to the global pandemic. However, our commercial tire business – and retreads in particular – have been less impacted by the COVID-19 crisis as fleet customers continue to play a critical role in keeping essential goods and services moving during this time. As many states take steps to reopen, we are optimistic that we have reached the bottom of this crisis and are focused now on taking necessary steps to position Bridgestone and our commercial customers for a strong, post-crisis recovery.
MTD: A number of tire manufacturers, including Bridgestone, temporarily suspended production at their truck tire plants. (Editor’s note: Bridgestone’s truck tire plants reopened in April.) 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?
Ripani: We know that shipments will be down for the year and the overall level of recovery will be dependent upon the safe and effective reopening of businesses at the market level. Our supply chain and product pipeline remain strong and we don’t anticipate any disruption to our ability to meet fleet customers’ needs, now or in the future. Ensuring our customers have access to the products they need is a top priority, along with keeping our teammates and customers safe.
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?
Ripani: Entering 2020, we expected OEM production to be down slightly, in line with normal industry trends. COVID-19 has certainly created further downward demand in response to OE manufacturer output. Many Commercial OEMs shut down production in April, and we will see a gradual resumption of production.
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?
Ripani: Certainly, it is difficult to assign a timeline for this recovery. This is an unprecedented situation, and, as we’ve all seen, this crisis is very fluid. That said, as many states begin to take steps to reopen, we are optimistic that we have reached the bottom of this crisis and that our business – and our customers’ businesses – will begin to rebound. We anticipate recovery will happen sooner for the commercial TBR replacement segment than for the OE business, as segments like last-mile delivery, long-haul, and waste have remained operational during this crisis, as enablers of essential services.
We have taken various difficult, but necessary measures to ensure Bridgestone is prepared for the future, including furloughing staff across our retail stores, manufacturing plants and corporate offices, as well as reducing spend and implementing executive leadership pay reductions. We are laser-focused on ensuring Bridgestone emerges from this crisis with a lean and strategic operating model that is fit for the future. Throughout this crisis, we have continued to accelerate our efforts to deliver solutions that make mobility more efficient for fleet customers. Our commercial plants are up and running to ensure our dealers and fleets continue to have access to the products they need throughout the remainder of 2020 and beyond. We feel optimistic that better days are ahead.
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?
Ripani: There are several things we have done to provide additional support for our dealers during this time. For example, we developed a COVID-19 playbook to help dealers navigate this crisis. The playbook outlines a variety of resources available to small business owners, including information on how to seek financial support. We have continued to refine and enhance our on-demand and virtual learning programs during this time and are getting good response from our dealers. Even though our sales teams are not visiting in-person, the lines of communication remain open. Our customers know that we are here to support them, now more than ever.
“Our best advice for dealers is to stay the course and remain focused on meeting the needs of their customers,” notes Ripani. “When dealers focus on what their fleet customers need, that will always guide them in the right direction.”