In a declining market severely impacted by the coronavirus pandemic, tires from China and Russia gain share amongst European Union PCLT imports

Data from Eurostat and HMRC compiled by Astutus Research shows that passenger car and light truck (PCLT) tire imports into Europe* declined by 20% in the first eight months of 2020, a reduction of over 20 million units.

For the first time, China accounted for more than half of all PCLT tires entering the region.

In relative terms, Russia was the best performing of the major import sources, with volumes declining by just 2%. The weakness of the Russian ruble aided its cost competitiveness.

Korean imports fell by 35%, in part resulting from Nexen’s substitution of imports with local production as it ramps up supply from its plant in the Czech Republic.

Tire trade will be further disrupted by the second wave of Covid-19 infections currently impacting numerous Europe countries. Additionally, the United States government is currently considering duties on PCLT tire imports from certain countries which, if enacted, could have a secondary impact on European sourcing in 2021.

In the first eight months of 2019, the then 28 nations of the European Union imported 105 million passenger car and light truck (PCLT) tires from outside the region. With the coronavirus pandemic having a major impact on tire demand and, to varying degrees disrupting production, the EU-27 and the United Kingdom together imported 21 million fewer tires in the corresponding period of 2020, a reduction of 20%.

Each month of 2020 has seen a year-on-year decline in PCLT tire imports, with a near 50% reduction in May and a fall of 45% in June. Declines in July and August were sequentially smaller, and by the final month for which official statistics are available, the reduction was just 12%.

Whilst there has been a reduction in the volume of PCLT tire imports to Europe from each of the leading source countries, there are significant differences in relative performance. The share of PCLT tires from China increased despite unit volumes falling by 15.6%. For the first time, China accounted for more than half of total PCLT tire volumes imported into the region.

Russia significantly outperformed, with imports to Europe declining by just 2%. The country became the fourth largest source, surpassing Serbia. Several manufacturers now export tires from their plants in Russia, led by Nokian and Pirelli and aided by the relative weakness of the Russian ruble.

By contrast imports from South Korea and the ASEAN region have declined significantly more sharply than the market. Korea has seen a 35% reduction in PCLT tire units in the first eight months of 2020, falling to third place behind Turkey. Imports from Korea were impacted by the ramp-up of production at Nexen’s new plant in the Czech Republic which has allowed it to substitute some imports with locally sourced tires. Imports from the ASEAN countries declined by 31% compared with 2019 although, within this total, volumes from Thailand and Vietnam fell more sharply whilst the Philippines, Indonesia, and Malaysia performed better.

Numerous European nations have imposed restrictions on their citizen’s activity and movement as part of their efforts to combat a second wave of Covid-19; this is now expected to delay the recovery of tire demand in the fourth quarter. The global trade in PCLT tires could be further disrupted in 2021 if the United States Department of Commerce decides to impose duties on subject tires from Thailand, South Korea, Vietnam, and Taiwan. The US imported 85 million PCLT tires from these countries in 2019; manufacturers and importers would likely adjust their sourcing patterns in such an eventuality, with a secondary impact on the European market.

*Data for 2019 refers to the 28 nations of the European Union. For 2020 we maintain the same scope, that is EU-27 plus the United Kingdom.