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Replacement tire shipments rose 12%

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"In the first five months of 2010, manufacturers shipped 12% more consumer replacement tires to dealers and/or wholesalers than in the same five months of 2009, yet I estimate that retail sell-out may have increased about 3%," says Saul Ludwig in the latest installment of the "Ludwig Report" in Modern Tire Dealer magazine.

"So it appears that dealer inventories have been rebuilt.

"Looking to the rest of 2010," Luswig continues, "I see the following: a) raw material costs will stabilize, b) no additional price increases for tires, c) fill rates will improve from your supplier, d) manufacturers will run plants full to rebuild their inventories that are still too low, and e) retail sell-out will maintain the +3% pace."

Because of this, Ludwig has some advice for dealers: "Train your counter personnel to sell up by emphasizing quality, safety and overall performance."

Ludwig is a managing director with Northcoast Research Holdings LLC based in Cleveland, Ohio. He concentrates on the tire and chemical industries. Look for the full "Ludwig Report" in each issue of Modern Tire Dealer magazine.

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