Bridgestone's Cichi Provides In-Depth Market Overview
'There Are a Lot of Reasons to be Optimistic'
“Our industry continues to face some challenges, but there are a lot of reasons to be optimistic about the future,” according to Riccardo Cichi, president and chief sales officer, Bridgestone Americas Inc.
“The tire and transportation industries have been resilient and continue to grow,” Cichi told Bridgestone dealers during the company’s recent consumer and commercial tire conference.
Cichi covered “macro-conditions” that are impacting the North American tire industry. He also drilled down into the health of the consumer and commercial tire segments, as well as Bridgestone’s activities in both.
“While experts agree that consumer confidence is stronger than last year, recovery had slowed down slightly over the last several months,” he said.
“However, there are bright spots. The economy continues to be strong. As (COVID-19) vaccines became widely available, we began to see positive trends. The outlook remains optimistic.
“Retail sales are trending above pre-pandemic levels. Americans are flush with cash and are spending their dollars. In addition, the gross domestic product rose 6.2% annually in the second quarter and although it slowed slightly during the third quarter, we anticipate a solid outlook into 2022.
"All of these factors help us determine future demand trends. To thrive in this complex environment, we need to remain agile.”
Consumer tire report
“Unfortunately, external factors such as congested ports and labor shortages have presented significant headwinds,” said Cichi. “The semiconductor shortage has had a significant impact. The shortage was further complicated by COVID-19 resurgence in Asian markets. As a result, automakers have slashed their sales forecasts and output for 2021.”
However, original equipment vehicle manufacturers “are anticipating stability next year. We are increasing capacity and imports to support both you and our OEM customers as they work to meet pent-up demand.”
Cichi noted that “one out of every four consumer vehicles in North America is equipped with Bridgestone or Firestone tires. We are excited to launch 21 fitments this year across six different OEMs. And our OEM customers also are all-in on electric vehicles (EVs.)
“How soon will EVS be in your bays? Current estimates indicate 46% of all vehicle production in 2028 will be hybrid or all-electric vehicles. EVs require tires that are lighter and are engineered for higher torque. All of this makes tire performance more important than ever. Bridgestone EV tire sales are projected to be more than 20% by 2023. In fact, we have dedicated a quarter of our development resources to designing fitments for EVs.
“We (also) are seeing increased sales of UHP, all-terrain and highway light truck tires,” he noted. “This will positively impact the replacement market. High rim diameter tires account for 38% of all replacement tires this year.”
Commercial tire update
In the commercial truck tire segment, Cichi said that “2020 was expected to be down 20%, but actually closed the year at 35% lower. This year, demand is through the roof, with truck OEMS having a 13-month backlog of orders. Many truck OEMs are telling us that 2023 will be peak-recovery.”
Bridgestone Americas ended 2020 “slightly above prior-year” levels in the TBR segment, Cichi reported.
The company’s Bandag unit has been a bright spot in 2021. “For the first time in nearly 20 years, we see the retreading industry return to positive growth. We are excited to drive more retread sales. We see tremendous opportunity to scale and expand our Bandag business to reach more fleets.”
The rapidly evolving last-mile segment - which “has grown exponentially during the pandemic” - will provide plenty of opportunity for retreaders, he explained. “We are testing a model to grow retreading in the last-mile segment. We have increased our investment in last-mile, from growing our team to optimizing our product portfolio. We are doing this to drive more of these vehicles to your business.”
In the OTR segment, “the outlook for the mining and construction industries remains positive. Demand for ag tires also is very strong. Our ag tire team has been successful in growing share within premium product segments.”