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Tire sales drop in June (sigh), but there is hope

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According to Northcoast Research Holdings LLC research, demand trends for tires at the retail level slowed in June compared to the same period last year.

"While we were discouraged to see tire dealers report witnessing lower tire unit sales on a year-over-year basis in June -- especially following the positive data point a month earlier -- we would be remiss not to point out that volumes were negatively impacted by an unfavorable calendar shift this year," says Senior Vice President Nick Mitchell.

He expects tire sales to pick up, however. He adds that the strongest growth is being seen in the Tier I and III segments of the market.

And that bodes well for Goodyear Tire & Rubber Co.

"We are maintaining our 'Buy' rating on Goodyear as we believe the risk/reward ratio associated with shares remains attractive, as we expect a sustainable pick-up in replacement activity will occur in the near future," says Mitchell.

Each month, Northcoast Research publishes the results of its Tire Demand Index, which is a proprietary measure of end-market demand for tires in the United States. The Index is based on the responses of a survey of approximately 100 tire dealers each month.

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