It's been a mixed bag for tire makers at the halfway point of 2019.
Some have experienced business as usual, like Bridgestone Americas Inc. Business in 2019 has met expectations so far for the North American subsidiary of the world's largest tire maker, Bridgestone Corp.
T.J. Higgins—president, integrated consumer tire group, U.S. and Canada, Bridgestone Americas Tire Operations—said the replacement tire market has shown strength as many newer vehicles are entering their first tire replacement, including vehicles with high-value-added tire fitments, such as run-flats and high-rim diameter tires.
Those importing from China, however, have a different view. Walter Weller, senior vice president at China Manufacturers Alliance L.L.C., the North American subsidiary of Double Coin Holdings Ltd., said antidumping/countervailing duties on TBR tires have caused great volatility for many tire makers, especially those based in China.
"We were already transitioning to other sources of supply so the tariffs/duties have not had much of an effect on us," Weller said. "We plan to continue to offer high quality tires at a reasonable price as we have in the past. We have a strong brand and fantastic customers who have committed to us and we to them. We are focusing on making sure we are able to supply our existing customers' needs going forward."
North America focus
Apollo Tyres Ltd. continues to make North America a top priority, according to a company spokesman. While the firm does not have a manufacturing presence in the region, it has not been impacted by the antidumping and countervailing duties as it gets its products for North America from its sites in the Netherlands and Hungary.
The firm does not have any immediate plans for establishing a manufacturing plant in North America. Right now it is focused on getting its plant in Hungary to a similar capacity utilization level as its other plants and bringing its new site in Andhra, India, online by the end of 2019.
BKT USA Inc. also is on track to build its first manufacturing plant in the U.S., according to Minoo Mehta, president of the U.S. subsidiary of India's Balkrishna Industries Ltd. The firm is still in the process of selecting a site.
Business-wise, BKT only deals in off-the-road tires. Mehta said that the ag industry has been hit in the Midwest because of severe weather conditions. Millions of acres have not been tilled this year. The deteriorating trade relationship with China has put severe pressure on exports of ag products.
Demand for BKT tires has increased substantially in the large OTR tire segment, Mehta said.
"The farm industry will be affected severely this year," he said. "Other segments will continue to be stable. The government will need to intervene to stop the bleeding for the farmers, and with it being close to election year, things should change for the better."
Titan International Inc. has intensified the rollout of its Goodyear R14 crossover tire designed for year-round use in various conditions. Paul Hawkins—senior vice president, aftermarket sales, North America—said the firm expected a stronger start to 2019, but factors in the North American ag market, including lower commodity prices, ongoing trade concerns and a delayed planting season, have all had an impact.
Shift to bigger vehicles
Kenda Tire USA Inc. has been improving the size of its offerings for the last few years in anticipation of original equipment manufacturer's shift to light trucks, CUVs and SUVs. Brandon Stotsenburg, vice president of automotive, said the LTR and CUV segments continue to show strength, and Kenda's new products have been thriving in these segments.
"Kenda continues to partner with the independent dealer as our primary channel for the aftermarket," Stotsenburg said. "We have added programs and products to enhance these offerings and more importantly, retailer margin opportunities."
Andrew Briggs, Yokohama Tire Corp.'s vice president of marketing and product management, said Yokohama also has been impacted by the shift to CUV/SUVs.
Even with ultra-high performance tires, performance remains the priority, which includes wet and dry grip. Briggs said the higher up in the category, the more important some of the more refined performance attributes, like noise and comfort, become.