Healy: Sellout Continues to Fluctuate

Our recent industry check-ins with tire dealers indicate that retail sellout trends were roughly down low single digits year-over-year in December 2025, signaling a decline from November results.

Independent dealers highlighted average sellout declines of 1.5% in December, coming in below a 1.7% increase in November and trends flat-to-slightly-up on average during the third quarter of 2024..

Looking more closely at volume for the month of December 2025 on a regional basis, the Southeast region was the lone region to see positive volumes. Other regions saw flat or negative volume trends, with the Northeast region seeing the weakest trends, down roughly 7.5% year-over-year.

We observed positive trends throughout this past summer, followed by strong performance in the fall, as retail sellout increased across September, October and November. December marked the first month of declines since May 2025, as the seasonal lift that benefited the fall months began to fade.

We also note that January 2026 had a positive comp, with retail sellout volumes slightly positive. Assuming cooperative weather conditions, we would not be surprised to see flat- to-slightly-up volumes.

Dealer commentary suggests that consumer demand for PLT replacement tires was down low-single digits year-over-year on a net basis compared to December 2024, with 54% of independent dealer contacts seeing negative demand trends during December, down from 15% seeing declines in November.

Consumer deferment and trade-down have been consistent themes over the past several months and we believe that we continue to see this soften as consumers start to think about winter weather. We do note that consumers continue to trade down to tier-two and tier-three tires and see a negative rate of replacement on a year-over-year basis for the first time since May 2025.

Looking at the best and worst performers in our survey from a mix point of view, independent dealers report that tier-three brands are again the most in-demand at the retail level.This marks the eighth out of the last 12 months where tier-three has been the most in-demand segment of the market.

We believe that many consumers in the market right now are looking for high-value tires at the lowest cost possible, as their budgets remain under pressure and broader macroeconomic pressures continue to weigh on sentiment.

Traditionally, there is a high level of volatility in our survey, but we have largely seen tier-three as a top performer in the current environment and we expect that to remain in the near to intermediate term. However, we expect tier-two to remain the top performer in the long-term as consumers balance price and quality.

A look at raws

In assessing what might be on the horizon for motivations of tire manufacturers relating to pricing and promotions, we pay close attention to the input costs of building of a typical tire. In doing so, we observe an environment were tire building costs from a pure raw material side of things is favorable for manufacturers.

We note the our assumed basket of raw materials to build a basic replacement tire fell 4.4% and 3.2% year-over-year during October 2025 and November 2025, respectively. These declines compared to a 4.5% year-over-year average decrease during the third quarter of 2025.

 In analyzing specific input costs, natural rubber costs fell 8.5% on a year-over-year basis in December as supplies increased. Oil prices fell an average of 18.1% year-over-year and 3.4% month-over-month in December 2025, driven by macro pressures potentially impacting consumption as well as higher global production.