While the North American market for years has been considered a mature market for the tire business, that doesn't mean there isn't plenty of opportunity there—particularly for firms currently holding a small market share.
That is just one of the reasons the U.S. continues to be a hot spot for tire manufacturing projects. Finland's Nokian Tyres became the latest to join the plant-building spree, announcing plans for a $360 million car and light truck tire factory in eastern Tennessee.
The tire maker expects the new factory will be a major part of its effort to double its business in North America over the next five years, which would take the company to more than $300 million in sales on the continent.
Like many of the other tire factories built or announced in recent years, Nokian's will concentrate on higher rim-diameter passenger, SUV and light truck tires.
These are products that can be made competitively in the U.S., given technology that makes labor costs less significant, along with lower shipping costs and more manageable logistics.
Nokian's project also follows in the footsteps of other foreign-based tire makers that are banking on having local production boost its fortunes in the U.S. or—in some cases—mitigate the impact of higher tariffs and antidumping duties.
Among those, Giti Tire is building its first factory in the U.S. in South Carolina, and China's Qingdao Sentury Tire Co. Ltd. last fall selected Georgia as the site of its initial factory on the continent.
And these likely won't be the last. Apollo Tyres Ltd., which several years ago lost out on acquiring Cooper Tire & Rubber Co., said at the recent opening of its plant in Hungary that it too would like to set up a U.S. factory in the next half-decade or so.
So while emerging markets may claim higher rates of growth, the sheer numbers in North America continue to be a lure to bring more production here.