Transcript Document

2011 Hot Topics
Rising Costs / Supply & Demand
Rising Materials Costs

2009 rubber consumption dropped to lowest level in years

Ensuing drought and floods across the globe have wiped out a
significant amount of rubber trees

Consumption will surpass production by 270,000 metric tons in 2011

Stockpiled Inventory levels will drop 12% to less than 60 days supply

Demand will outpace supply for at least two more years
Immaturity
5 – 10 years
Tapping Seasonally
10-20 years
Immaturity
5 – 10 years
Replanting
Breakdown of a Tire
Two-thirds of the worlds natural rubber production is used to manufacture tires.
Additives
7%
Carbon
Black (Oil)
24%
Rubber
47%
Steel
21%
Despite the advancements and
technology in tires the rubber is still
harvested in a very crude and
primitive manner.
Rising Materials Costs
% Variance
Jan 2009 vs Jan 2011
400%
350%
300%
250%
200%
150%
100%
50%
0%
CRUDE OIL
STEEL
RUBBER
MFR’s Price Increases
2010/2011 Combined Increases
40%
35%
30%
25%
20%
15%
10%
5%
0%
Michelin
Goodyear
Bridgestone
Continental
Yokohama
Market Rebound
US Market is Positioned for Growth
Should return to 2006 levels by 2012
Total Market, includes non RMA (Millions Units)
20
18
17.1
16.7
16.6
16
17.8
18.0
18.2
18.4
14.8
14.2
14
17.2
17.6
12.5
12
10
8
6.8
6
5.2
4.7
6.0
6.1
6.1
6.2
4.2
3.8
4
5.7
3.2
2.4
2
0
2006
2007
2008
2009
2010
2011
Replacement
2012
2013
2014
OEM
2015
2016
2017
Increased Demand
Factors Driving:
•Low retail and wholesale inventories
•US Manufacturing is increasing
•Rising freight volumes, Increased miles driven
•The oldest North American fleet on record
2011 will have more Demand and less Inventory than 2010
2010 vs 2011 beginning inventory
Increased OEM demand
Parked vehicles back in service
Increased miles
ADDITIONAL SUPPLY NEEDS
2.0 million units
2.0 Million units
1.0 million units
0.5 million units
5.5 million units
The Weak Dollar
NEGATIVE for…
POSITIVE for…
Importers
Exporters
Americans traveling
internationally
International travel to and
investment in America
The Weak Dollar
The 2011 Supply Plan
ENOUGH
TIRES
NONE
Thank You