7 Things to Know About the 2020 Tire Market
Tire demand around the world was “severely depressed” during the first six months of 2020 - that’s how the Michelin Group put it. And as the industry tries to turn things around in the second half of the year, I thought it would be good to review Michelin’s current take on things.
The tiremaker gives an up-close look at the market each month, and also provides an overview in each of its quarterly financial reports.
Here’s a look at a few facts gleaned from Michelin’s latest data.
- Worldwide, in the first six months of 2020, the combined original equipment and replacement passenger and light truck tire markets shrunk by 24%.
- The global truck tire market declined 18%.
- The only PLT market reporting positive numbers in June was China. The country’s original equipment business is up 11%, while the replacement market is up 3%. It’s the third straight month of growth and recovery for China’s replacement tire market and rebound from COVID-19.
- On the flip side, the situation in South America is dire. In June its OE consumer market plummeted 63% — and that’s the best the OE market has looked since March. Replacement tires fell 49% in June; South America’s replacement market was last in positive territory in February.
- Globally, the OE PLT tire market dropped 34% in the first half of the year. The replacement tire business fared slightly better - and was down 21%.
- The OE PLT tire market took a real beating in the second quarter as the virus spread and automakers shut down production in the U.S. and Europe. Demand dropped by 62% in Europe in the second quarter, but Michelin notes the low point came in April — a 94% drop. In North America, OE orders fell 70% in the quarter, and the real whopper was in April — with a 99% decline.
- In the midst of the overall decline, North American consumers “shifted to more entry-level tires,” Michelin said.