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ATD Almost There, But Chinese Tiremakers Face New Problem


As Maxwell Smart would have said, “Missed it by that much.”

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Fourteen places. That’s how close American Tire Distributors was to making the Fortune 500 list. The tire distribution giant logged in at 514 on the annual list, not quite on the big board, but well ahead of the days when it couldn’t even hit the Fortune 1000.

There was a nice story about it in the Charlotte Observer late last week, in which we learned a few things about ATD:

• Net sales for the fiscal year ending January 2015 were $5.03 billion. That’s more than double the $2.17 billion net sales posted for fiscal year ending January 2010.

• If ATD were a tiremaker, its 2015 sales would have placed it ninth on the Tire Review list of the 25 largest global tire producers.

• ATD has 4,800 total U.S. and Canada employees. The Huntersville, N.C., headquarters houses 474 employees.

• ATD’s share of the U.S. replacement consumer tire market in 2014 was about 14%, up from just 1% in 1996.

• Last year, its share of the Canadian replacement consumer tire market was about 25%.

• And as you may know, ATD has its roots in the J.H. Heafner Co., founded in Lincolnton in 1935.

Happy 80th anniversary ATD! Now get back to work….14 places don’t just happen, you know.

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Even as China’s tire producers are still trying to sort out the fallout from the new round of antidumping and countervailing duties on its exports of consumer tires to the U.S., they face another problem that could lead to a hastened shakeout of that country’s tire industry.


Come July, reports say that China’s tiremakers face significant production cost increases thanks to new rubber standards adopted by the PRC government.

Beijing has determined a new standard for what is called “compound rubber,” a trick product Chinese makers created to avoid import tariffs on pure natural rubber. Compound rubber is NR with some carbon black mixed in, which allegedly doesn’t harm rubber earmarked for tires, but creates a rubber product that skirts added tariffs.

In December 2014, the Chinese government said it would change the formula for the compound, capping the amount of natural rubber allowed at 88%. This could limit its use significantly, Reuters reported.


Tiremakers are fighting the change, but most analysts feel the government will stay the course.

The new U.S. duties have already had the effect of pushing some Chinese tiremakers to the brink of bankruptcy and causing concern over a potential drop in NR demand, which will have international supply and cost implications. Now they may have to import natural rubber and pay duties of $242 per ton, additional pressure that may result in vacated tire plants.

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