Has HP tire demand peaked? Answer depends on perspective

WASHINGTON — Has demand for high-performance tires in the U.S. peaked?

Depending on how one looks at the data: Yes. And No.

If H-rated tires are included in the mix, then data shows that demand has plateaued at both the OE and replacement market levels.

If one considers the ultra-high-performance (UHP) segment — V-rated and higher — then the answer is less clear, with shipments of those tires continuing to increase, albeit at a slower pace than in years past, according to Tire Business' analysis of U.S. Tire Manufacturers Association and other available data.

In 2020, aftermarket shipments of high-performance tires (those with speed ratings of H or higher) fell 11.5 percent from 2019 but still topped 100 million units for a second straight year, according to USTMA data.

The dip in demand for high-performance tires was slightly more severe than that for replacement market passenger tire shipments overall (down 8.6 percent), dropping the performance share of the aftermarket to 49.4 percent from 51 percent in 2019, the USTMA data shows.

Shipments declined by double-digits in all three high-performance categories (H, V and Z speed ratings), according to Tire Business' analysis of the available data.

The decline lends weight to observations by a number of tire companies that aftermarket demand last year skewed more heavily to non-Tier 1 brands during the economic downturn.

Looking ahead, one also must consider the fundamental question of just what constitutes a "performance" tire. The growing acceptance and emergence of electric vehicles (EVs) is creating an entirely new class of tires that draw on classic "performance" tire characteristics while also delivering lower rolling resistance and additional carrying capacity.

Roughly every other high-performance tire sold in the U.S. aftermarket the past few years was produced outside of the U.S., according to Tire Business' analysis of the data.

That's not to say, however, that foreign brands dominate the sector. At least three-fourths of the imported performance tires (those 17 inches in rim diameter or larger) were from countries where U.S.-based tire companies have operations as well.

According to a comparison of USTMA and Department of Commerce data, 56.4 percent of the 100.6 million high-performance units were imported, the highest concentration ever, with shipments from Thailand, South Korea and Mexico accounting for half of the imports in this category.

Other key countries in this analysis include Indonesia and Taiwan, both with more than 3 million larger rim-diameter units shipped to the U.S.

On the OE side of the ledger, shipments of high-performance tires slipped 13.5 percent to 22.4 million units, but the penetration of such tires in the OE sector increased to 60.2 percent from 56 percent as OE car tire shipments overall slid 19.2 percent. That reflects a drop in car, SUV/CUV and light truck production of 18.9 percent.

The shift at OE also is reflected in the breakdown of OE tire sizes, where the 10 most popular sizes now are all 17-, 18-, 19- or 20-inch rim diameter sizes—including three new 20-inch sizes, accounting for nearly 36 percent of all OE shipments.

Six of the 10 most popular replacement tire sizes are 50-, 55- or 60-series, the USTMA data show, and seven are 17-, 18- or 20-inch rim diameters.

During 2020, the number of accepted sizes grew by five low-profile dimensions, according to the Tire & Rim Association: 195/60R17; 235/60R19; 195/50R19; 295/55R20; and 235/50R21. The new sizes expand the list of accepted sizes to 370.