Covid-19 has totally changed the dynamics of the tire industry. The recovery from this pandemic will take time and for small ventures, survival is almost impossible at the moment. The current mission of the organizations is to get back on foot and recover from the losses. All the tire companies have been planning to get the full employment back and speed up the production as the world is getting back to normal and the demand will increase for tires.
Supply of Tires:
The supply of tires was decreased as the pandemic was on a height and this affected the transportation overall. As some of the plants were shut because there was no demand during the lockdown and the labor cost was not bearable. Bridgestone temporarily closed one of their plants and tire workers were sent home. In between the pandemic, Goodyear also was shutting down production in response to the Covid-19 outbreak in 2020.
Transportation costs of goods:
Transportation cost has been skyrocketing, which includes air, ground, and ocean. Most of the goods are transported in bulk through the ocean and the freight at the moment is almost 4x times up than the usual. Shortage of containers is also a main reason for the hike in the freight prices. Consumer has to bear the cost which initially increases the overall cost of the product.
Demand in the future:
The demand for tires is going to increase as more and more people are getting vaccinated on daily basis around the globe. Day by day more people will be active in the market and the demand for tires will automatically increase as the trade is started and transportation has been increased worldwide.
This is the best time for tire importers to import a batch of tires because according to the situation freight will only be climbing in the future.
