Tyre manufacturing and its distribution or service shops around the globe have adjusted to a new way of business with safety precautions in the worksite and less foot traffic as efforts to stop the COVID-19 virus spread.
In other words, the tyre industry is now characterized as a volatile one, being closely linked to the production of automobiles but also other factors such as raw materials, their availability, and their unstable prices. The companies currently present in the industry have financial and production challenges, but they struggle with the strong wave of new competitors from Asia, respectively China. This field's importance is outlined by this industry's objectives, the latest generation of technologies used, and the realization of the production processes of the car tyres. Thus, the new technology and innovation play an essential role in the entire automotive industry forcing the companies to rethink business models.
Covid-19 has reduced traffic volume by nearly 40%
Impose of lockdown and social distance policies by several states worldwide; there has been a noticeable decrease in traffic volume in the months of 2020. The Auto Care Association report revealed that personal travel had been dropped by around 38–48% during the workweek. Similarly, commercial trucking travel has also declined by 20% around mid-March 2020.
In the US, Michigan has experienced the sharpest decline in the demand volume curve due to decreased personal travel by over 50%, while commercial trucking travel was reduced to less than 60%. Similar to the weakening of traffic volumes in the US, resulting in declining demand for tyres and tyre products. Moreover, the decline in overall wholesale business is mainly due to the decrease in consumers purchasing from local tyre retailers.
It is expected that the COVID-19 may change the face of the automotive tyre industry in the coming years – for better or for worse. However, there is always a silver lining.
