CTB - Is Goodyear Ready to Hit the Accelerator?
Goodyear tires have been a staple on U.S. cars, trucks and other vehicles since its founding in 1898. Today, they're on vehicles in almost every country, making Goodyear Tire and Rubber (NASDAQ: GT) one of the three largest tire manufacturers worldwide. But weak volumes, commodity costs, and competition have put the brakes on its growth.
Tire sales volumes have fallen industrywide in recent years due to a drop in global auto production. In the U.S., it fell from 12.2 million vehicles in 2016 to just under 11 million last year, and globally, new car production declined by 4% in 2018 alone. But sales of replacement tires -- up 3% this year -- have offset that. Roughly 75% of Goodyear's European and American sales are replacement tires, which generally have higher margins, which has helped strengthen its profitability. In Asia, the story for the company was different. Its sales in that region, and particularly in China and India, are more evenly split between replacement and new car tires, and both declined in 2018.
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