Asia is the only real growth area for the world tire industry in the near future, according to Dennis Byrne, professor emeritus of economics at the University of Akron.
Mr. Byrne, who spoke at the 29th annual Clemson University Tire Industry Conference at Hilton Head Island, said “the only real game in town at the moment is in China and perhaps India.”
While domestic tire production has rebounded somewhat since the recession of 2008, shipments in 2012 were stagnant, according to Mr. Byrne.
"The industry is continuing to contract from production levels of five to 10 years ago, and I don't see that stopping."
International trade in both tires and vehicles is the major reason for this, he said, noting that about one-fourth of the vehicles and tires sold in the U.S. are imported. Some of the stagnancy in production figures can be traced to other factors, such as the radialization of the tire industry.
In Asia, Japan and South Korea have slow growth, though the aftereffects of the March 2011 earthquake/tsunami in Japan may still explain some of the stagnancy there, according to Mr. Byrne.
"China is now the largest producer in the world," he said. "But China decided it was growing too quickly, and clamped down on growth."
"India seems finally to be on the path where they want to be. It's not yet a major producer, but it will be."
Every area of the world faces at least some obstacles to growth, Mr. Byrne said. Even China faces problems, including environmental issues, rising wages which make Chinese products less competitive against products made elsewhere, and a lack of skilled labor.
Source: tirebusiness.com
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