Aug 25, 2023
In a recent turn of events, the tire import scene in the United States has taken a hit, experiencing a second consecutive quarter of significant declines. The numbers don't lie - let's dive into the details.
The tire import landscape is currently facing a tough stretch, with double-digit decreases in both the three- and six-month periods leading up to June 30. The commercial truck and bus tire sector seem to have borne the brunt of this downturn. This drop is a clear reflection of the lower sell-in demand that has characterized 2023 thus far.
In particular, the import of medium truck/bus tires, which had previously surged to record levels in 2021 and 2022, plummeted by a staggering 41% in the second quarter alone. This trend has persisted over the past six months, with a substantial 25% decrease, amounting to 8.43 million units, according to the Commerce Department's latest data.
But it's not just commercial truck and bus tires that are facing this import slump. Passenger and light truck tires are also witnessing double-digit declines, echoing the ripple effects throughout the wholesale sector. This phenomenon can be traced back to the surplus inventories that were built up during the supply chain crisis of 2022.
Tire imports for passenger vehicles dipped by 12.3% in the last quarter, translating to 40.7 million units, and a corresponding 11.6% decline in the six-month period, totaling 76.4 million units. Light truck tires followed a similar trajectory, experiencing a 26.3% and 24.5% decrease in the quarter and half-year respectively, amounting to 7.53 million units and 14.4 million units.
These import downturns seem to have impacted the tire supply chain across the board. Thailand remains the leading source of imported tires across all major categories, closely trailed by Mexico in the passenger tire category, Canada in light truck tires, and Japan in medium truck/bus tires.
Interestingly, only Vietnam and Cambodia have managed to show improvements in the passenger tire sector, a testament to their resilience. Vietnam's imports surged by 17.7%, while Cambodia, which shipped zero units a year ago, sent over 1.06 million units this year.
On the flip side, Indonesia faced the most significant drop, witnessing a 40.5% decline in the quarter and a 29.8% decrease over the past six months. Manufacturers from Indonesia, including P.T. Elangperdana Tyre Industry, P.T. Gajah Tunggal, and P.T. Multistrada, are among the major exporters to the U.S.
The U.S. Tire Manufacturers Association (USTMA) recently revised its shipment forecast, reflecting the ongoing challenges faced by the tire industry. This comes alongside a downward trend that is projected to continue.
The landscape for tire imports has undeniably shifted. While some nations buck the trend and show growth, the overarching theme seems to be one of decline. As the market adjusts to this new normal, the tire industry's players will undoubtedly be strategizing to navigate these uncharted waters.