How are you managing the truck tire glut?

Mike Manges
Posted on November 13, 2008

When all of the numbers are tallied, 2008 will turn out to be a rough year for tire shipments, particularly in the medium truck tire category.

Overall tire shipments are expected to be down 4% this year versus 2007, according to the Rubber Manufacturers Association. While worrisome, that percentage pales in comparison to the 12% drop that's anticipated in the original equipment medium/wide-base/heavy on-highway commercial truck tire segment. And on the replacement side, shipments in this category are expected to decrease by nearly 600,000 units versus 2007 levels.

At commercial tire dealerships and warehouses, we're seeing major supply-demand imbalances. Fleets and owner-operators are trying to squeeze more out of their tires. Commercial tire dealers are sitting on loads of excess inventory.

Tire manufacturers have taken action to restore some degree of balance. Last month, Goodyear Tire & Rubber Co. revealed that truck tire production at its Danville, Va., and Topeka, Kan., plants will be temporarily idled. (The Danville plant can make 11,200 truck tires per day at full capacity, while Topeka can produce 5,500 units per day at capacity.)

In September, Bridgestone Firestone North American Tire LLC (BFNT) said it was cutting production levels at its U.S.-based passenger, light truck and truck/bus tire plants. No specifics were mentioned, but the company said curtailments will remain in place through the end of 2008. (For the record, BFNT's three medium truck tire plants in the U.S. have the capacity to produce a total of 15,200 units per day.)

If tire racks continue to groan under excess inventory, it's a safe bet that more reductions will take place in 2009. The key issue, however, is how you're dealing with it. What are you doing to manage your inventory levels? What methods are working for you? Or are you looking around your warehouse, asking "What am I going to do with all of this stuff?" Let me know! And maybe by sharing, you'll give a fellow dealer in another market something to chew on.

Mike Manges Editor
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