Tire Demand Is Up in September, Says Industry Analyst

Oct. 18, 2016

Consumer demand for replacement tires was up in September on a year-over-year basis, according to the Northcoast Research Tire Demand Index.

Nick Mitchell, senior vice president of research for Northcoast Research Holdings LLC, says Tier I brands were at the top of the consumer preference list during a strong September, with Tier III brands second, but only marginally stronger than the Tier II category.

"The data suggests that sell-out trends outpaced sell-in trends, which should aid recent destocking efforts after the industry became slightly over-inventoried in 1Q 16. Good inventory management should also support price/mix trends."

Volume trends in the period benefited from a partial release of pent-up demand in the previously sluggish Northeast and Midwest, as the two regions reported the greatest expansion in volume growth during the month, he says.

"The positive demand trends apparent from our work in August indicate that intermediate-term sell-out trends in the market remain healthy. We remain encouraged by the fact that the index has been flat or in expansionary territory for 33 of the prior 36 months. These findings give us confidence that the domestic replacement market is in the midst of a volume recovery cycle."

The Northcoast Research Tire Demand Index (TDI) is a proprietary measure designed to gauge the strength of end-market demand (i.e., at retail) for replacement tires in the U.S.