Passenger vehicle miles driven have made a steady comeback from the pit of late March and early April, and Rick Brennan, vice president of strategic planning for Sumitomo Rubber North America Inc., says the data shows passenger travel has recovered 90% of what was lost three months ago.
The data from last week shows miles driven is only down 7% compared to the first week of March. That’s a vast improvement to previous conditions. At the worst of it, there were days that passenger travel nationally was around 40% of the pre-COVID-19 normal.
But as it’s the start of summer, passenger travel in June typically ticks 16% higher than miles driven in March. Brennan shared the latest figures during SRNA’s latest, and likely last, online dealer forum on June 17. The company has used the monthly sessions to give dealers an overview of what was happening in the market nationally, and how COVID-19 was affecting SRNA’s business.
Knowing that June traffic usually increases by 16%, Brennan said, “We’re still down about 20% in mileage, but it varies a lot state by state.” California traffic is down 20%; Florida and Connecticut are down 19%, Vermont is down 18% and Washington is down 13%, he said.
But some states are seeing more traffic than they did on March 1, Brennan said. These states are on the upside of passenger traffic: Wyoming is up 37%; Montana is 22% higher; South Dakota is up 21%, Idaho is up 12%, and South Carolina is 8% higher.
Conditions in the trucking market are improving, but it hasn’t yet translated to an improvement in the truck tire market, Brennan said. “Trucking has been lagging about 45 to 60 days behind the mileage impact of consumers.”
He said line haul business is down 3% and local fleets are off by 2%.
“The challenge is there’s less freight moving around. It’s having an impact on the freight rates. But we only see that impacting us for another 60 days, because over the long run we see freight experiencing some large increases as we go forward. We expect the freight rates in 2021 to be much higher than they are now even though we are having a downturn at the present time.”
More traffic means more tire sales, and Brennan says the replacement tire market is improving, but it’s still down. Even though each segment is still performing below normal, there was a noticeable rebound across for passenger and light truck tires in May.
Passenger tire shipments were down 35%, compared to -56% in April. Light truck was down 25%, compared to 45% in the previous month. Combined, the PLT market was down 33%, an improvement over the 55% drop in April.
The lagging effect for truck and bus radial tires is noticeable here. Remember in March TBR actually grew 10%, while all the passenger segments dropped. In April TBR was down 15%, and in May that number worsened to -27%.
“In June we expect to see these numbers quite improved,” Brennan said.
A state-by-state analysis
One new element of the June dealer forum was a look at the impact of COVID-19 on specific states and tire segments. The company combined results from April and May and compared those figures to 2019.
There’s one state that actually reported better business in both PLT and medium truck for March/April 2020 than the same period in 2019.
Oregon.
In PLT, tire manufacturers shipped 18% more tires to Oregon in April/May 2020 than in 2019. In medium truck, Oregon was 42% higher than the previous year.
Tire dealers were quick to ask why Oregon was such a boom. Darren Thomas, senior vice president of sales and marketing for SRNA, said the company was just beginning to receive the detailed data that would provide some answers, and would share that with those dealers when it was available.
In PLT, the average drop over April and May was 44%.
Here’s a look at the 11 states who recorded the lowest impact. Note, Oregon is the only state that recorded a gain.
Oregon +18%
Montana -12%
South Dakota -16%
New Hampshire -27%
Idaho -31%
North Dakota -30%
Utah -32%
Arkansas -32%
Mississippi -33%
Washington -34%
Alaska – 34%
And here’s the 10 regions that fared the worst in PLT shipments in April/May 2020:
Washington, D.C. -80%
New Jersey -67%
Massachusetts -66%
Delaware -65%
South Carolina -64%
New York -56%
Illinois -56%
Kansas -55%
Pennsylvania -52%
Michigan -51%
Medium truck market
In the medium truck tire category, Oregon was the leader of four states that took in more shipments during the same April/May period than in 2019.
Here’s a look at the states that showed the lowest impact from COVID-19:
Oregon +42%
Hawaii +19%
Alaska +4%
Maine +1%
Idaho -2%
Colorado -3%
Arizona -3%
North Carolina -6%
Washington -8%
Here’s a look at the nine states that have suffered the greatest affect in TBR shipments:
South Carolina -54%
Maryland -49%
New York -44%
Wisconsin -38%
Connecticut -37%
North Dakota -36%
Vermont -36%
Michigan -36%
New Jersey -33%
