ERJ staff report (TB)
By Bruce Davis, Tire Business Staff
Washington, DC -- The value of tyre imports into the American market jumped 22 percent last year, despite flat demand in unit deliveries, according to US Department of Commerce figures.
Passenger, light truck and medium truck/bus tyre imports climbed to more than $10.5 billion in value, the agency's figures show. Canada and China remained the largest trading partners last year in terms of dollar value at $1.93 billion and $1.82 billion, respectively.
While car and light truck tyre imports stagnated last year, medium truck/bus tyre imports surged 16.5 percent over 2010, eclipsing the 10 million unit threshold for the first time.
The import trends parallelled the growth-or lack thereof, depending on the category-in the US aftermarket last year. According to the Rubber Manufacturers Association, the US passenger replacement market shrank 2.2 percent in 2011 to 195 million units and the light truck tyre aftermarket was flat at 28.5 million units.
Aftermarket demand for medium/-heavy truck tyres, on the other hand, grew 4.4 percent to 16.5 million units. As a result, imports now account for about 62 percent of the US replacement truck tyre market, with China alone making up 29.5 percent, according to an analysis of the market using RMA and Commerce Department data.
The US trade deficit for passenger, light and medium truck tyres rose 5.8 percent to $6.18 billion in 2011. The value of imports increased in each category, resulting in 18-percent higher average import values for passenger and light truck tyres of $56.43 and $82.76, respectively, and a 21.8-percent higher average truck tyre value of $197.44, the Commerce Department data show.
Car tyre imports last year edged up less than 0.1 percent to 120.5 million units, with China still at the top of the table despite shipping 16.6-percent fewer units to the US last year.
Imports from China since the imposition of elevated tariffs in 2009 fell more than 40 percent. Despite that drop, China still accounts for nearly one in five imported passenger tyres. The tariffs on Chinese consumer tyres -currently at 29 percent-are scheduled to revert to 4 percent in September. To date the Obama administration has not indicated publicly any inclination to extend them.
Recently, Cooper Tire & Rubber Co. chairman Roy Armes said he expects the tariffs to expire as scheduled, which will cause some downward pricing pressure but probably not as great as the industry believed a year ago.
Armes, speaking to financial analysts covering the firm's first quarter financial results, said he doesn't expect a lot of Cooper's customers to â€œbe running out and wanting to shift immediatelyâ€ to tyres imported from China.
The big gainers in the car tyre segment last year were: Germany, up 37.1 percent; Mexico, up 27.4 percent; Thailand, up 19.3 percent; and Indonesia, up 12 percent. Exports from Mexico to the US probably will keep rising in the coming years as Pirelli Tyre S.p.A.'s plant there comes on stream this year and ramps up.
Japan's exports of car tyres to the US slipped 17.2 percent last year, reflecting in part the disruption to production caused by the 11 March 2011, earthquake and tsunami along the Pacific coast of Japan's main island.
Light truck tyre imports inched up 0.2 percent last year to 20.6 million, with Canada the No. 1 source, accounting for more than 42 percent of the segment's imports. Imports continue to account for more than 70 percent of shipments in the sector, with one-third of the tyres imported from Canada and Mexico.
Despite exporting 23.4-percent fewer tyres to the US last year than in 2010, China remained No. 2 on the list ahead of South Korea and Japan. Mexico nearly tripled its shipments of light truck tyres to the US, with Thailand (up 73 percent) and Indonesia (up 43.9 percent) also making inroads.
China accounts for nearly half of medium truck/bus tyre imports, although the average import value of a Chinese truck/bus tyre is $30 lower than the average for the sector.
Imports of truck tyres from Thailand were up 44.7 percent to 1.56 million units, putting that nation ahead of Canada and Japan for the first time in the category. Together, China, Thailand, Canada and Japan represent nearly 90 percent of truck/bus tyre imports.
The US tyre industry actually boosted exports last year in all three categories, though the bulk of the exports went to Canada and Mexico. The US even maintains a trade surplus with Mexico in light and medium truck tyres.
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