'Look for a better 2007 than you had in 2006,' Ludwig says
"Most every week, some manufacturer announces plans to build a new tire plant in China, Eastern Europe or Russia," notes Saul Ludwig in the November installment of the "Ludwig Report" in Modern Tire Dealer magazine.
"By my calculations, that new capacity will exceed 100 million tires, or about a 10% increase in global supply. More plants will have to close both in North America and Europe. Imports will continue to gain share of our market.
"The good news is that as gasoline prices recede (now off at 20% from the peak), tire demand should improve. Look for a better 2007 than you had in 2006."
Ludwig is a managing director with KeyBanc Capital Markets, a division of McDonald Investments Inc. based in Cleveland, Ohio. Look for the full "Ludwig Report" in the November issue of Modern Tire Dealer magazine.