Industry Snapshot
After years of intense price wars, consolidation, and layoffs, the tire and inner tube industry was highly concentrated. From a value of $80 billion worldwide in 2004 the industry plummeted to less than half that value in 2008. Bridgestone, Michelin, and Goodyear were the top three firms, controlling about two-thirds of the global market in the middle of the first decade of the 2000s. The capital-intensive nature of the industry lends itself to such patterns. While raw material prices were relatively stable and assured, since most manufacturers maintained their own rubber plantations, mostly in Southeast Asia, the cost of manufacturing operations was particularly high, making it difficult for smaller firms to generate economies of scale.