High commercial tyre demand to continue in North America, says Yokohama’s Phillips

Looking back on 2011 and forward to the coming year, Rick Phillips, Yokohama Tire Corporation’s director of commercial sales, states that the tyre maker expects the strong demand it has experienced in the North American market this year to continue. “Demand has continued to outweigh supply so we have literally sold everything that we are able to build,” he commented. “As an industry, we will go into 2012 with very little beginning inventory, much like we did in 2011…we see the demand continuing to be greater than supply, at least through next summer. Despite reports on the economy being on the brink of another recession, the trucking industry remains strong.” Phillips believes that high levels of demand, particularly within the OEM segment, may lead to further pressure upon the replacement market.

While Phillips expresses frustration that demand outweighing supply meant Yokohama Tire was not able to fully meet its customers’ expectations in 2011, he opines that the tyre maker performed strongly given the circumstances the year delivered: “The tsunami just presented another set of issues that we had to manage through. We actually recovered quite well and the impact was less than what it could have been given the severity of the situation.”

Outlining other challenges the sector faced in 2011, Phillips states “costs have been a huge factor. Although raw materials have fluctuated of late, they have increased dramatically over the last two years.” He also notes that transportation, insurance, labour and related expenses have also risen, making price rises necessary. “Although costs are probably not going to rise at the rates seen by tyre manufacturers this year, they are likely to continue to escalate,” the director of commercial sales adds.

On the topic of meeting demand, Phillips also states that Yokohama is “actively looking at a number of options all over the globe to expand production.” Although he names no potential locations for a new Yokohama tyre factory, he comments that building a facility in the US is possible.