USTMA study uncovers post-pandemic trends

WASHINGTON—Newly released data from a study that was a long time in the making shows the tire industry fared better than the overall economy during the economic depths of the COVID-19 pandemic.

The U.S. Tire Manufacturers Association reports spending on tires fell 15 percent from February to April 2020. While the drop is substantial, the figure compares favorably with the overall spending decline of 19 percent, the trade group said.

USTMA officials started examining the idea of a study back in 2019 as they looked for information to help guide decisions for the next decade. But before the exact parameters of the research were nailed down, the pandemic hit and caused a re-evaluation of the scope, according to Anne Forristall Luke, CEO of USTMA.

The time horizon was reduced to five years due to the volatile nature of the economy during COVID-19 and research was expanded to include the impacts of the pandemic, she explained.

USTMA decided to undertake the research, conducted by economic and public policy consulting firm Keybridge L.L.C., to collect data and help prepare messaging regarding the industry's important issues for after the 2020 elections.

"We started out for our members and our association to have a clear and data-supported vision of the forward-looking trends that are impacting our industry," Luke said. "We really wanted a strong narrative backed by data to shape our conversations with those policy makers."

The study helps show the tire industry's importance as well as helps explain society's shifting views on mobility. Information will be helpful not only in Washington, but also around the country on the state level, Luke said.

The study highlights how digitization is transforming the tire industry and provides information about the sector's focus on environmental sustainability, particularly how the trade group is prioritizing climate change, Luke said.

The information will be helpful as tire manufacturers look to have their voices heard on both the state and federal levels.

"We really want to be a partner in these discussions that are going to be impacting manufacturing in general, but also specifically the automotive supply chain," she said.

While the study helps USTMA identify priorities, the work also is "demonstrating the economic impact of the industry and the things that we do both in the short term to help the country recover and in the long term to support the prosperity of the industry," Luke said.

One unexpected trend that emerged from the study regards millennials' changing views on transportation brought on by COVID-19, she said. That generation is showing an increased demand for personal vehicles and a willingness to move to the suburbs from both urban and rural settings.

"Early on during the pandemic, millennials were adopting more classic Gen-X behavior, including a growing affinity for suburban living where driving rates are higher, after facing restricted mobility due to lockdowns," a fact sheet published by USTMA said. "At the same time, the dramatic drop seen in commuting patterns, greater reliance on e-commerce and demand for last-mile delivery services, will remain significant factors in shaping mobility."

The trade group is not releasing the study itself, Luke said, due to the inclusion of proprietary information. There also are some findings that already are becoming outdated as the country recovers.

Word of USTMA's latest economic work comes as President Biden pushes for a massive infrastructure improvement spending package.

"There is a natural connection between priorities of the tire manufacturing industry and revitalizing infrastructure. The safety and sustainability of the life cycle of our products depends on having safe bridges and roads to travel, and even exploring how recycled tires can help create longer-lasting roads," Luke said in a separate statement.

The tire industry has shown signs of recovery in recent months. These include what Luke called "better than expected results" for 2020 tire shipments.

With a growing expectation for the federal government to address climate change, USTMA said the study also demonstrates the tire industry's commitment to environmental stewardship during the life cycle of a tire.

Opportunities for what the group calls continuous improvement in this area include manufacturing tires with low rolling resistance to improve fuel economy and reduce carbon dioxide emissions. USTMA estimates use of low rolling resistance tires would save 1 billion to 2 billion gallons of fuel each year.

Another opportunity involves the development of "tire materials with lower carbon footprints, like silica derived from rice husks to improve rolling efficiency, while maximizing safety, performance, handling,and durability," the group said.

The study also points out that the industry primarily powers facilities with natural gas, which emits lower greenhouse gases compared with other manufacturing sectors.