According to an upcoming report on the global tire markets, Bridgestone just slipped by Michelin to become the number 1 manufacter of tires, worldwide.(This is taking into account all categories. ) The report summary, available by clicking here, states that Goodyear still holds at number 3, but the distance between its sales and Michelin have widened, mainly because of what the report calls “shrink in the North American Market”.
The financial crisis has made an impact this year, most notably, the current crisis in the automotive industry. It doesn’t take a rocket scientist to predict that lower production of cars means less OE tires. This could possibly be offset by the Replacement Tire market. Speaking from the viewpoint of someone who has replaced the tires on two separate vehicles within the past month, it is probable that things won’t be quite as dismal when the numbers are run at the end of ‘09. The percentages will shift, but things could even out.
The most interesting figures out of the summary state that the top 10 tire manufacturers have less than a 40% share in China. They make up nearly 73% of the market worldwide. I’m sure price is somewhat of a factor, but it possibly has something to do with the 577 tire companies located in China. Not retailers. Manufacturers. The major problem that the Chinese have is getting a foot in the door where OE is concerned, as their share is mainly relegated to the RT market. While that’s ok, there’s nothing like the (until now, virtually) guaranteed business from car and truck manufacturers.
What I did not find in this report(probably because it is written by someone from China) is a focus on the Indian market. The $3000 “Nano ” from Tata Motors has taken off. It’s backordered. The success has been so great, that Suzuki India is producing a vehicle to compete with it. Sure, the go-cart sized tires won’t put huge profits in the pockets of tire manufacturers right away, but should Indians decide to motorize en-masse, it could be a decently profitable niche market. In addition, the Nano could serve as a gateway drug to larger, more expensive automobiles with standard size tires. The 200,000 pre-ordered Nano’s will need 800,000 tires, so somebody should go in and start bidding. View the Time Magazine report on the Nano.
Well, that’s all I have for now. If you want to read the summary of the report, click here. The entire report is $2000, should you have the curiosity and spare cash to buy it.
We’ll be back next time, with the latest news affecting the mining and tire industries. Until then, I’ll be…
Signing off…
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