One clear tire trend this year among most manufacturers is the short supply in the marketplace. Tire manufacturers did a good job cutting back in the depths of the recession, and now that sales have increased, inventory is in short supply and many tires are on back order. “It's a good problem to have” acknowledged one manufacturer we spoke with, but it would be better if they could meet demand. Consumer Reports sees this winter buying season as a challenging one with many popular tires simply unavailable. And we’ll probably have to a pay premium just to get the crumbs.
The short supplies have caught manufacturers off guard as the economy started to pick up. But what brought this on? What happened to make this situation so acute?
Manufacturers reacted to the recession by cutting back on production, which meant shuttering production lines or, worst case, whole factories. Then they had to rewrite contracts on raw materials to adjust for the smaller volume of tires being built.
A Chinese Tariff, enacted in 2009, left some manufacturers a choice of selling tires at prices consumers would shun or delaying production and moving to another low-cost country.
European manufacturers have had to rethink production of many tires to meet compliance of REACH (Registration, Evaluation, Authorization, and Restriction of Chemical substances) by making tires more environmentally friendly.
Demand for replacement tires is creeping up as consumers hold onto their cars longer.
And finally, given the variety of sizes and model variations, it’s nearly impossible for dealers to stock the right product in anticipation of consumer demands.