Japan tire sales: September 2012 highest since 2007 for replacement tyres

by SR on November 9, 2012

Japan replacement tyre sales by year and month (million units)

Steady progress

Conclusion: October tyre sales indicate an excellent start to the winter (snow) tyre season in Japan, which is positive news for local tyre suppliers such as Bridgestone and Sumitomo Rubber. In this post on Bridgestone’s recent Q3 results I sounded a cautious note on the outlook for tyres as it seems to me that volume growth in the major markets will be limited in 2013. That remains a – the – prime concern, but here in the autumn of 2012 things are looking pretty good. The potential positive for tyre suppliers would be further declines in rubber prices.

Change in share price of Bridgestone and others year-to-date (%)

September in more detail

A month ago (see this post) we noted that replacement tyre sales were very strong in September 2012 but that tyres for new cars (OEM tyres) were very poor. Based on the latter observation we correctly predicted a weak month for auto production and exports in Japan. October 2012 was different in that both replacement and OEM tyre sales had a seasonally normal month.

Replacement tyre sales in October 2012 rose 9.5% year-on-year and rising 46.3% compared to the previous month. That may sound like a great month, but the median month-on-month increase for October since the year 2000 has been +48.1%, so this was not especially strong. (NB October and November are the two strongest months of the year.)

Month-on-month change in Japan replacement tire sales for the month of October 1999-2012

However, because of the very good sales performance in September, even this no-better-than-normal performance in October was enough to push absolute sales to 9.28 million units, the highest figure for any month since November 2007 (see chart at top of page). From January to October 2012 replacement tire sales have reached 55.63 million units, down 3% from the unusually robust year of 2011. This is shown in the chart below, in which you can see that the red line (2012 sales) has crept above the green line of 2008 sales and has closed the gap slightly to the blue line of 2011 sales.

Japan replacement tyre sales, cumulative year-to-date (million units)

OEM tyre sales in October 2012 fell by 14.5% year-on-year and rose 2.2% month-on-month to 3.85 million units. As mentioned earlier, this was an unremarkable performance in seasonal terms. Year-to-date, OEM tyre sales are up 21.5% to 41.38 million units. Total tyre sales in October came to 13.14 million units, up 1.2% YoY and up 29.9% MoM. Year-to-date, total tyre shipments in Japan are up 6.2% YoY. As you can see from the chart below, total sales for 2012 (the red line) are still some way behind the green line of 2008 but well ahead of the blue line of 2011.

Japan total tyre sales, cumulative year-to-date (million units)

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