From Tire Review
The commercial truck tire market rebounded strongly in 2010 – so strongly, in fact, that companies started to face fill rate problems. Dan King, Yokohama senior vice president of sales and marketing, recently addressed this issue and other industry challenges, as well as what the market might expect in 2011.
He said that the commercial tire industry weathered the storm, and for Yokohama, business increased in 2010.
“In 2009, there was a huge reduction in inventory levels almost across the board, including the tire industry, and the retail and consumer packaged goods. Fleets, for example, went so far as cannibalizing tires from their other trucks that were not in operation. Because of the recession, there was a lot of risk to carry inventory.
“However, in 2010, the economy began to turn around and trucks started to get back on the road,” he continued. “It was this pent-up demand that primarily contributed to a very successful year for Yokohama.”
King noted that actual vehicles on the road, miles being driven and freight being hauled are very good indicators of commercial tire sales and where the economy is going – and each shows signs of improvement moving into 2011.
In 2010, the biggest issue for the industry – Yokohama included – was fill rates.
“It started really in the middle of the year, and it’s been very difficult for us to reach our increasing demand,” he said. “It’s considered a good problem, but still a problem because we pride ourselves on having strong fill rates.”
King explained there are two ways to overcome a fill rate problem: “Taking the existing production globally and reallocating as much as you can to a particular country; or increasing capacity, which takes much longer. That’s an investment in the future. In 2011, we still expect to see some issues with supply, as will the entire industry.”
Yokohama will allocate more production from Japan, in addition to expanding production at other plants.
Another challenge the industry faces is the ever-rising cost of raw materials.
“Unfortunately, we do not see it letting up, especially through 2011,” King noted.
To keep up with changing demands of the industry, in 2011 Yokohama will introduce a new long-haul steer tire, the 101ZL, and a super-single tire. The company also is evaluating a new lower-positioned economy steer tire.
