"Almost every tire dealer I speak with comments about poor fill rates from their supplier," says analyst Saul Ludwig in the latest installment of the Ludwig Report in Modern Tire Dealer magazine. Why is this happening? Here’s some food for thought.
"Between 2004 and 2007, seven North American tire plants have closed, the total number of tire sizes/speed ratings have increased by 21% and there has been a 56% increase in 17-inch and above rim sizes," Ludwig says. "Combined, capacity was reduced and complexity was increased. Those changes required new investment in molds and building machines.
"As all manufacturers are working hard to do better, you should expect modest improvement in fill rates through 2008."
Ludwig is a managing director with KeyBanc Capital Markets Inc. based in Cleveland, Ohio. Look for the full "Ludwig Report" in the next issue of Modern Tire Dealer magazine.
