Key notes: 3 points on sustainability, auto market from Clemson tire conference

GREENVILLE, S.C.—The Clemson University Global Tire Industry Conference returned April 18-20. It just had a new look about it.

The conference, for the first time, was the held in Greenville. And while the venue may have changed, the core of the conference—insights and perspectives on tire industry issues—remained.

During the second day of the event, speakers tackled a range of topics including sustainability, synthetic rubber market outlooks, leadership and product development.

Here's a look at just 3 key points from day two, those regarding sustainability and the auto industry's expected return to normal.

Protecting the planet is just the start.

When it comes to sustainability—and tire makers' commitment to it—the plan is to go far beyond reducing carbon footprints and protecting natural resources.

Environmental strides are critical to the equation, but they just one part of the equation.

"I hope you remember that sustainability is about more than environmental advancement," Tracey Norberg, senior vice president and general council for the U.S. Tire Manufacturers Association said April 19. "It is about business—economic stability—as well. And it is about safety. I hope you take away that when someone says 'sustainability' to you, it is more than that environmental slice."

For the tire industry, sustainability is about building the kind of responsible industry that can simultaneously address environmental, social and economic issues. And for the USTMA and its member companies, that effort is built around a six-pillar vision.

• Improving longevity and the performance of tires.
• Achieving zero workplace injuries.
• Increasing the use of sustainable materials.
• Reducing greenhouse gas emissions throughout the tires' lifecycles.
• Committing to understanding the products' impact.
• Working to ensure scrap tires enter sustainable end-use markets.

When it comes to sustainability, there are plenty of drivers. And, yes, government regulations are among them.

But that shouldn't be the primary driver.

Sustainability, Norberg contends, is and should be proactive. Because when the tire industry makes sustainability a priority, it is in a better position to not only achieve success, it can define its own successes.

"We don't need to wait for government to tell us what to do and have something unreasonable," Norberg said.

"As an industry our challenge and our opportunity is to switch that paradigm, and say we are not waiting for government to regulate or mandate sustainability. Instead, we are going go define sustainability in a way that is good for business."

Achieving that aim, she said, is not on tire makers alone. It requires buy-in and input from the entire industry—manufacturers, suppliers and beyond. It will take working together to not only set aggressive and achievable targets, but deliver on the guiding vision.

"We are in charge of our own destinies here," Norberg said. "We need to look at: 'How do make our own businesses sustainable?' "

It's no secret light vehicle production bottomed out in 2020. But when will it return to or surpass its peak?

Bill Hyde has some idea. During his presentation, he set the stage for synthetic rubber market trends by examining how the auto industry could impact demand. And to do that, he focused in on light vehicle production.

"It is always interesting for those not close to the automotive sector, they might not know that the automotive production peaked in 2017, not 2019 before the pandemic," said Hyde who serves as vice president of olefins and elastomers for Chemical Market Analytics.

In 2018 and 2019, auto production slumped a bit. It just never could get back to that peak.

"The expectation was that, in 2020, we would start to return to the trend line," Hyde said. "Well, we didn't."

And for that, you can thank COVID-19. Auto production in 2020 halted, supply chains upended and, well, the rest is history.

Since then, though, the automotive industry has made a steady rebound. And that should continue in the years ahead. Globally, Hyde said, auto production is expected to grow and ultimately return to those pre-pandemic levels by 2025 or so.

So, not ideal, he said. But the industry is moving forward.

What is more concerning is the country-by-country production level projections.

"If you look at that on a country-by-country basis, it is much, much worse than that," Hyde added, pointing to Oxford Economic figures that extrapolate out through 2030. "Europe basically never gets back to the 2017 peak. ... Northeast Asia outside of China, really never gets back to the prepandemic peak."

Mainland China is expected to lead the global rebound.

And North America will follow in its footsteps, likely surpassing that 17 million unit production mark sometime in the next two or three years.