Tire Industry Continues to Surge in U.S. and Canada

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Researched by Industrial Info Resources (Sugar Land, Texas)--The tire industry, like most other industries, tends to run in cycles. Currently, several factors are creating a favorable climate: the boom in the automotive and agricultural industries; the recovering economy; and the proximity of many tire companies to areas with strong demand, which reduces costs for logistics, shipping and inventory.

Industrial Info is currently tracking $3.12 billion in active and unconfirmed tire-related capital projects in the U.S. and Canada.

Click on the image at right for a graph detailing the top states and provinces for tire manufacturing, by number of projects and total investment values.

The majority of the capital investment is in the U.S. Southeast region, with six active projects that carry a total investment value of $1.9 billion. The U.S. Mid-Atlantic region follows with five projects worth $828 million; the Great Lakes region has four worth $327 million; and Atlantic Canada has one project worth $73 million.

Grassroot projects represent more than half of the total investment, worth a total of $1.7 billion, while expansion projects represent $1.5 billion in capital investment. It is noteworthy that all the grassroot investment is from foreign companies setting up manufacturing facilities in the U.S.

The largest capital investment, $800 million, is by Hankook Tires (Seoul, South Korea) for a two-phase grassroot plant in Clarksville, Tennessee. Pre-construction has started for the 1.5 million-square-foot Phase I; it is expected to begin production by 2016, with an annual output of 5.5 million car and light-truck tires.

Giti Tires (Singapore) is making a $560 million investment in a 1.8 million-square-foot plant in Richburg, South Carolina. Construction commenced in February 2015, with completion estimated for early 2017.

These are the first U.S. plants for both Hankook Tires and Giti Tires.

Looking at the statistics by state, South Carolina leads the race with a total investment value of $820 million. Tennessee and Georgia come in at a close second and third with investments totaling $800 million and $784 million, respectively.

The U.S. Automotive Industry is experiencing momentum, with double-digit percentage sales for each of the Detroit car makers. The industry started strong this year, with a nearly 14% increase in January sales, and the outlook for 2015 auto sales remains optimistic.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.