Statistically speaking, 2020 will be the "asterisk" year—or the proverbial bump in the road—in terms of tracking industrial progress.
As the COVID-19 pandemic swept across the globe and economies ground to a halt in response, economic forecasts turned bleak almost overnight.
A year later, in hindsight, some sectors—the tire industry among them—fared remarkably well, considering what might have been.
As would have been expected, tire makers by and large suffered sales declines last year. Tire-related revenue by the Top 75 tire makers globally fell 8.2 percent in 2020 from 2019 to an estimated $159 billion, the lowest sum since 2016.
Among the leading 25 companies that Rubber News tracks, 20 reported drops in revenue last year, including a dozen with double-digit declines. Collectively, the drop was 11 percent.
While earnings fell pretty much across the board around the globe, the drop was not as precipitous as one might have imagined.
The average operating income/sales revenue margin among 25 leading tire makers last year was 7.7 percent, down nearly three points from fiscal 2019. That's a manageable decline considering the dire financial projections most companies issued after the first half of the year.
Two of the 25 companies tracked for this report showed operating losses last year, but that was offset by seven others that recorded improved income for the year.
After factoring all the disruption into the equation, the league of top tire makers remained relatively stable, with but a few notable exceptions.
Michelin retained the top spot on the Rubber News Top 75 with fiscal 2020 tire-related revenue of $22.9 billion, staying comfortably ahead of No. 2 Bridgestone Corp. Both companies reported tire business-related sales declines of roughly 15 percent during fiscal 2020.
Goodyear, Continental A.G. and Sumitomo Rubber Industries Ltd. retained the third through fifth positions on the Top 75, ahead of Hankook Tire & Technology Co. Ltd., which moved past Pirelli & C. S.p.A. for the No. 6 slot in large part due to limiting the sales drop to single digits, while Pirelli suffered a 19 percent decline in sales.
Yokohama Rubber Co. Ltd. retained its No. 8 position, while China's Zhongce Rubber Group Co. Ltd. slipped into the No. 9 spot ahead of Taiwan's Cheng Shin Rubber Industry Co. Ltd./Maxxis International.
There was no significant merger/acquisition activity among the leading tire makers in 2020, but that changed earlier this year with Goodyear's takeover of Cooper Tire & Rubber Co.
The companies' combined revenue should approach or exceed $17 billion in fiscal 2021, based on the seven months of Cooper's business that will be incorporated into Goodyear's financials this year. Goodyear's $2.5 billion cash-and-stock deal for Findlay, Ohio-based Cooper closed June 7.
The deal won't change Goodyear's No. 3 standing in the Global Top 75 rankings, but it will put Goodyear on more equal footing in North America with its major rivals Bridgestone and Michelin, with each generating more than $9 billion in revenue in the region.
For the annual Top 75 ranking, Rubber News rates the tire makers on their revenue from the sale of tires they have manufactured in order to achieve a more equitable apples-to-apples comparison.
Excluded are items such as third-party sales of steel cord, synthetic rubber or carbon black, as well as estimates for non-tire items such as auto-service-related revenue at company-owned retail stores.
Bridgestone, Michelin, Goodyear and Continental, for example, report hundreds of millions or even billions of dollars in revenue from their respective captive retail networks, which generate measurable shares of their revenue from automotive-service-related activities and sales of tire brands other than their own.