Michael Hutt is the Group Marketing Manager of Kit Loong Commercial Group in Malaysia. He has years of experience in the retreading and new tyre industry.
How is Tyre Supply Going to Change in Next Few Months?
It’s well known that supply chains worldwide are in a difficult position.
Tyre Industry in a Post-Pandemic Future
We’re hopefully seeing some light at the end of the tunnel with shipping prices starting to fall.
Estimates show the 2021 global tyre output at 40–45 million pieces lower than 2020. The OE (Original Equipment) market is hit by the lower production value of new trucks. The aftermarket sales sector is struggling with constant price rises, leaving fleet operators to look for cheaper products. However, due to natural material price rises, even a ‘cheap’ product is no longer affordable and the supply is still limited, thanks in part to China’s frequent lockdowns, alongside which the demand in China has a significant effect. The irony is that for some businesses, post-pandemic issues became worse than during-pandemic issues and the tyre industry feels like one of those sectors.
Luckily, during the pandemic trucks had to keep rolling. They were feeding the nation and ensuring essential supplies were in the right places. Buses still ran to ferry those unfortunate enough to have to travel during lockdowns. So, tyres and the support around them (such as breakdown services) still needed to operate. For the tyre industry, this was a boost we might have taken a little bit of for advantage. In March this year, Michelin reported a drop in truck and bus (TBR) OEM sales by up to 36 per cent from the same period in 2021. This shows 2021, even during the lockdown, sales were strong. In June this year, there was also a boost in the replacement tyre market but this was due to fleets buying before a predicted rise in prices in July. This resulted in a significant slowdown in sales......
Are you enjoying reading this article. Click here to read more..