IRSG was pleased to have Anne Forristall Luke, President and CEO, U.S. Tire Manufacturers Association (USTMA), serve as a panelist at the 2021 World Rubber Summit. Here she shares her perspective on opportunities and challenges in the U.S. tire manufacturing industry.
Q. The automotive industry is expected to face considerable challenges resulting from sizable and durable transformation in the mobility sector linked to decarbonization commitments and significant disruption in supply chain compounded by the aftermath of the COVID-19 pandemic. Tire companies are increasingly positioned as mobility solution providers, which comes with the responsibility of collaboration in design, technology and data sharing, assuring sustainability, circularity and resilience. What are the major challenges and/or trends shaping the U.S. tire industry in the current business environment?
A. In 2020, the collapse in travel for work, pleasure and shopping sharply drove down demand for virtually all goods and services associated with travel. As a result, spending on both new and used light vehicles fell by nearly a third, while spending on tires fared comparatively better, only falling 15 percent from February to April 2020, while total consumer spending slumped nearly 19 percent.
But 2021 has seen a rebounding trend from our member companies, most of whom reported strong earnings in the first half of 2021. Bridgestone credited progress in addressing the COVID-19 pandemic and carrying out vaccination programs as a source of the quicker-than-expected fiscal turnaround, while Goodyear recently reported that its volumes are close to pre-pandemic levels across several markets. Hankook Tire also reported marked improvements in operating income and sales, based in part on business recoveries in North America and Europe.
In August 2021, USTMA issued its biannual tire shipment forecast projecting total U.S. tire shipments of 336.1 million units in 2021, compared to 303.2 million units in 2020 and 332.7 million units in 2019. This was the first forecast to predict tire shipments exceeding 2019 levels since the start of the pandemic.
As our momentum accelerates coming out of a turbulent year, U.S. manufacturers are creating a future as mobility solution providers as they invest in EV companies and AV solutions, while increasing the use of sustainable materials in tire manufacturing.
Several key trends are currently shaping industry growth: …