Pirelli Tyre S.p.A. retained its status in 2013 as the largest tyre company in Central/South America, reporting $2.89 billion in sales throughout the region, a 5.2-percent gain over 2012.
Pirelli is narrowly ahead of Japan’s Bridgestone Corp., which generated an estimated $2.7 million to $2.8 billion in revenue from business throughout Latin America, and Goodyear, which reported sales of $2.06 billion.
These three global producers dominate the Latin America region, accounting for more than 80 percent of estimated tyre sales revenue there, according to Tire Business’ analysis of the major tyre makers’ financial statements and other available industry data.
These three also have the most widespread manufacturing base throughout Central and South America — Pirelli has six plants in three countries, Bridgestone five plants in four countries and Goodyear six in five — but other major tyre makers are stepping up their game as well. Bridgestone and Pirelli also have factories in Mexico.
Michelin, with an estimated $950 million in sales, operates three plants in Brazil and one in Mexico, after closing the two former Icollantas plants in Colombia last year. Its newest plant, for car tyres in Itatiaia, opened in 2011 alongside a high-performance tyre factory opened in 1999.
Continental A.G., with estimated sales of about $500 million, has new tyre plants in Brazil, Ecuador and Mexico and a growing tread rubber and retreading presence in Ecuador as well.
Fate S.a.i.c. of Argentina is the sole South American tyre maker to challenge for measurable market share, generating about $365 million in sales, putting it slightly ahead of Japan’s Sumitomo Rubber Industries Ltd.’s estimated $350 million in sales.
India’s JK Tyre Industries Ltd. and Findlay, Ohio-based Cooper Tire & Rubber Co. are players in the region by virtue of their acquisitions of Mexico’s Hulera Euzkadi S.A. (three factories) and Corporación de Occidente S.A. de C.V. (one plant), respectively, in the past decade. JK Tyre has the larger presence currently, at about $350 million in sales vs. $100 million to $150 million for Cooper.
Both companies’ sales footprints are limited primarily to Mexico, although both have stated on occasion that broadening sales throughout Latin America is part of their strategy. Cooper recently disclosed in an analysts’ briefing the company’s plans to leverage its position in Mexico for a broader presence throughout the region, where sales could expand exponentially to 4 million to 5 million tyres a year.
Sumitomo recently joined the manufacturer’s club in South America, commissioning production in October 2013 at its car and light truck tyre plant in Fazenda Rio Grande City, Brazil. Capacity there is listed as 5.3 million tyres annually.
The company is supporting its $345 million investment there with a sales company, Sumitomo Rubber Latin American Ltda., in Santiago, Chile, it established in 2009 to coordinate the sales of Dunlop- and Falken-brand replacement tyres in Central/South America.
Yokohama Rubber Co. Ltd. is just getting its feet wet in Latin America, starting in Mexico where it opened a sales subsidiary, Yokohama Tire Mexico S. de R.L. de C. in Silao, last year. Elsewhere it has signed exclusive import and distribution deals with key distributors in Argentina, Brazil and elsewhere.
Of the major tyre manufacturers participating in Latin America, the region is most critical strategically for Pirelli, which derives nearly 36 percent of its global sales from Central and South America.
In Brazil and Agentina, for example, Pirelli claims 20-percent aftermarket shares in both car and truck tyres in Brazil and 30 percent in Argentina, along with 40-percent market shares in the OE business in both countries.
Pirelli also has a presence in more sectors than its key competitors, supplying tyres in the consumer (car and light truck), commercial, motorcycle and agricultural tyre sectors.
In the consumer segment, it has a growing presence in the retailing sector, operating more than 130 outlets, including 29 acquired last summer. Pirelli’s Pneuac distribution subsidiary reports more than $500 million in revenue annually.
Goodyear’s business in Latin America is highly dependent on Brazil, the tyre maker said, as that nation accounted for 53 and 51 percent of the business unit’s sales in 2013 and 2012, respectively.
Akron, Ohio-based Goodyear racked up $2.06 billion in revenue in Latin America on the sale of 17.9 million units, drops of 1.1 and 0.9 percent, respectively.
Goodyear said it continues to invest in the region and introduce more new products to support the growth of premium tyres for its “well-established distribution network.”
The company is in the process of modernizing its factory in Americana, Brazil, to make more high-technology tyres.
In addition, Goodyear’s manufacturing presence in the region could grow soon, based on the company’s recent announcement it intends to build a $560 million consumer tyre factory somewhere in the Americas.
The size of the market varies according to the source. Continental A.G., for example, puts the replacement markets for consumer and commercial tyres at 63 million and 13.3 million units, respectively, whereas Michelin sees the consumer segment a bit larger at 70 million units and the commercial sector a bit smaller at 11 million units.
Group Michelin puts OE demand for consumer tyres at 22.6 million units and at 2.8 million units for commercial tyres.