New winter tyre law leads to possible shortage in Quebec

By Miles Moore, Crain staff

Washington, DC-A new law in Quebec mandating a full set of winter tyres on all passenger vehicles and taxis may lead to spot shortages of snow tyres in the province-and possibly elsewhere in North America-this winter, though tyre makers said they are doing everything they can to ensure a steady supply.

From 15th Dec., motorists in Quebec who don't put four winter tyres on their cars or sport-utility vehicles and keep them on their vehicles until March 15 will face fines of C$200 to C$300 (Euro 130 to 200).

The mandate applies to vehicles registered or rented within the province, though the Societe de l'Assurance Automobile du Quebec may issue temporary exemption certificates for vehicles that are just purchased, moved from one point to another for the purpose of sale, or used to enter or leave Quebec.

According to Transports Quebec, the provincial transportation department, 38 percent of winter accidents involve at least one vehicle equipped with all-season tyres instead of snow tyres, making all-season tyres overrepresented in winter accidents.

When loss of control is a factor, all-season tyres are even more at fault, the agency said.

News reports out of Quebec have suggested that winter tyres could be in short supply for Quebec residents who wait until December to buy them.

With snow tyre demand increasing more than 30 percent within the province, the possibility of a shortage exists, according to Normand Latremouille, winter category manager for Michelin Canada.

“The whole industry had to react to a huge increase in demand,” Latremouille said. Because of this, Michelin increased both its forecasts and production for winter tyres for the 2008-09 winter season, he said.

Winter tyre supply should be just about right through all the North American markets Michelin serves, according to Latremouille. But in Quebec motorists could have a problem finding all the 19- and 20-inch tyres they need.

“The final text of the (Quebec) law has not been published,” he said.

“We expect the law will say that if the exact size of tyre is not available, a waiver might be available, but we don't know.”

Fortunately, motorists who can't find the right size have an alternative. “Depending on the width of the sidewall, you can go down an inch or two in the size of the tyre,” Latremouille said. “With a 19-inch tyre, you can go down to an 18-inch or even 17-inch tyre without affecting performance. Your tyre dealer can help you find an appropriate tyre.”

The Quebec market is a very important question for Nokian Tyres PLC, the Finnish firm that is the world's leading purveyor of winter tyres, according to Bernie Del Duca, president of Nashville-based Nokian Tyres Inc., Nokian's North American subsidiary.

“We've been wondering how big the market's going to be,” Del Duca said. “The question is, 'What's an adequate supply of winter tyres this year?'”

Canadian experts have been estimating the Quebec market will need from 4 million to 6 million tyres this year, according to Del Duca.

Nokian has a wholly owned distributor, University Wholesalers Inc. in Colchester, Vt., that supplies Quebec. “We have tyres bulging out of the walls there,” Del Duca told European Rubber Journal. “That puts us in a fail-safe position for the Quebec market.”

But Nokian might not be able to supply other parts of North America to the same extent, he said.

“Colorado and New England are the core of our U.S. business,” Del Duca said. “They're the two areas we make sure we supply.” But Midwestern states such as Ohio and Illinois might see shortages, he added.

Quebec is also a tough question for Yokohama Tire (Canada) Inc., according to Marketing Communications Manager Brad Sherwin. But the tyre marketer feels it is on top of the situation.

“We have done everything we can to anticipate a very strong season in Quebec,” Sherwin said. “If someone else has a shortfall, that means opportunity for us.”

Yokohama has no concerns about its ability to supply winter tyres to other areas of North America, according to Sherwin.

“When dealers request our tyres, they place an order,” he said. “We will meet their orders. This shouldn't be an issue for dealers in other areas.”

Goodyear also is building more winter tyres this year, according to Anne Johnson, the company's category manager for winter tyres. Like the other tyre makers contacted by European Rubber Journal, Goodyear is making winter tyres later than usual for the upcoming season.

“Our customers have ordered significantly more tyres during our early order period, so we added more production to accommodate those early orders, along with the anticipated fill-in requirements,” Ms. Johnson said.

As in any season, some winter tyre sizes might be in short supply, while others may have excess supply, according to Ms. Johnson.

“Winter tyres hit the replacement market much sooner than all other categories because they need their first set during the first season, not three years from now,” she said.

“We don't expect any one region to experience a shortage vs. another. We spend considerable time reviewing each SKU, and if we anticipate a shortage we try to substitute with an alternative SKU, or allocate where necessary.”

From Tire Business (A Crain publication)