The world's major tire makers committed at least $8.6 billion in the past year toward new and expanded capacities and research capabilities, exceeding by about $600 million the total budgeted in 2012-13.
That amount of planned capital expenditures spending ranks as the fourth largest 12-month total that Tire Business, a sister publication of Rubber & Plastics News, has tracked over the past 21 years.
South Korean manufacturers Hankook Tire Co. Ltd. and Nexen Tire Corp. and India's Apollo Tyres Ltd. top the list of announcements this year with billion-dollar-plus commitments.
Hankook's $1.3 billion budget is for its car and light truck tire plant in Clarks-ville, Tenn., and a research and development center in South Korea. Nexen's spending of $1.1 billion is for a consumer tire factory it plans to build in the Slovak Republic, while Apollo has budgeted $1 billion for a plant in Eastern Europe and modernizations in India.
Possible locations for the European plant still are being evaluated, with sites in Hungary and the Slovak Republic reportedly at the top of the list.
The spending announced in the past year was spread fairly evenly among the three major continents, with $2.77 billion committed to projects in Asia, $2.4 billion for Europe and $2 billion for North America, where Hankook Tire, Giti Tire Group, Kumho Tire Co. Inc. and Trelleborg Wheel Systems have committed to building factories.
Goodyear is budgeting $500 million toward a new plant for the Americas, but the Akron-based tire maker has said repeatedly it won't make a final decision on location until late this year.
Latin America, site of extensive investments in the past few years, got $77 million in specific spending projects in the past 12 months.
Over the past year, tire makers announced 11 new tire plants that represent nearly 46 million units in new annual capacity for consumer tires and 4 million to 5 million for commercial tires to be brought on stream in the 2015-18 timeframe.
This is in addition to more than a dozen factories brought on stream in the past year that account for more than 50 million units a year of passenger/light truck tires and 5 million commercial/OTR units a year.
This contrasts with six announced plant closings by year-end 2015 representing about 10 million units of annual capacity for consumer tires and 4 million for commercial tires
In terms of capital spending during fiscal 2013, Michelin and Bridgestone Corp.'s Tire Division were by far the biggest spenders, investing $2.63 billion and $2.62 billion, respectively, into their tire businesses. Goodyear and Continental A.G. trailed at $1.17 billion and $1.06 billion, respectively.
On average, tire makers profiled here invested 8 percent of sales into capital improvements in 2013, up slightly from 7.7 percent in fiscal 2012.
Nexen Tire topped the list individually, investing 17.9 percent of sales in capital improvements, ahead of P.T. Gajah Tunngal at 15.2 percent and Maxxis International at 10.5 percent.
When it comes to research and development, Bridgestone and Michelin stand above the crowd in terms of pure spending on R&D and are among the leaders in terms of percentage of sales devoted to it.
On average, the 20 companies for which spending data were available devoted 2.4 percent of sales toward R&D, up measurably from the 1.7 percent average in fiscal 2012.
Michelin and Pirelli & C. S.p.A. both committed 3.2 percent of sales to R&D, ahead of Kumho Tire, Nexen Tire and Sumitomo Rubber Industries at 2.8 percent.
The major investments of the past 12 months, by company alphabetically, are: