Tire Sector Tired of the Pandemic
The COVID-19 pandemic has brought losses to many industries due to strict mobility restrictions. One of the sectors greatly affected by the outbreak was the tire industry as replacement tire sales decreased by around 20 percent in 2020, reports El Financiero. This has affected companies like Continental Tire, Bridgestone, Michelin and Pirelli, among others.
Mobility around leisure sites, parks, transportation services and workplaces has been reduced, while trips around supermarkets and residential areas have increased, as previously reported by MBN. Last year, due to the decrease in mobility during 2Q20, Mexico’s tire sector saw a large decrease in production and exports. In the first semester, around 7.3 million tires for both light and commercial vehicles were produced, which was 43.6 percent less of what was produced during the same period in 2019 reports Informador. Directors from the National Association of Tires and Renovation Plants (ANDELLAC) and tire production companies point to sanitary measures implemented in Mexico as the reason behind the reduction in sales, reports El Financiero. “The pandemic had a very strong impact all over the world, on all production sectors. The impact was reflected in the new vehicle market … people did not want to move around, which hurt [tire] replacements,” said José Luis de la Fuente, CEO of Continental Tire, in an interview with El Financiero.
Bridgestone, Michelin and Goodyear announced temporal production suspensions in Mexico at the end of March. In September 2020, Miguel Pacheco Ancona, CEO of Bridgestone, told el Informador that he was concerned about the replacement tire sector as it usually saw sales increase in times of instability.
While the tire sector saw an increase in sales during November and December 2020, which reported similar numbers to 2019, it was not enough to offset the losses from earlier in the year. “Good levels were seen in 4Q20, but when it comes to sales throughout the year, the industry suffered a significant drop. The automotive sector was closed for almost two months,” commented Pacheco to El Financiero. In 2021, the industry hopes to grow around 14 percent in domestic sales but De la Fuente remains concerned about the industry’s future considering the prolonged red-light status in the Mexico City metropolitan area.