Manufacturing cars and trucks has never been more difficult than it is right now as all the major brands are scrambling to address a slew of challenges including environmental issues, workforce issues and a revolutionary shift to electrification, just to name a few. Add to that the almost impossible challenge of safely navigating a global pandemic, and it seems miraculous that new vehicles are being built at all.

But the challenges are far worse than even all of that would suggest. The industry is now suffering from supply shortages and the most recent semiconductor shortage once again proved too great a hurdle for many manufacturers to solve and plants have once again been shut down. Before that issue can be fully sorted out, another shortage representing a potentially even greater, farther reaching disruption may be coming next: a shortage of rubber.

“Rubber is harvested off of a rubber tree, so it’s like any agricultural product — it’s susceptible to the weather,” said University of Michigan-Flint economics professor Chris Douglas. “So rubber is grown in warm, tropical climates like Thailand, and apparently there’s been flooding there. There’s some leaf disease there, which is disrupting the harvesting and growing of rubber.”

He added that COVID-19 also has also seriously disrupted the supply chain of rubber and that China’s strategy for dealing with the issue may now be creating a problem for the rest of the world as well. Remember that today, China represents the largest automotive marketplace in the world – by a wide margin and to put that into perspective for you, more Buicks are sold in China than in the United States of America.

“The Chinese economy shuts down (due to COVID), and the demand dries up. No one buys rubber because the factories are shut down,” Douglas said. “Well, their economy reopens before the U.S. economy does, so they try to make up for all that lost production by re-upping their stockpile of rubber.”

Douglas went on to say that is translating into a supply shortage for North America which could mean higher prices ahead and warned not to be surprised if your next set of tires cost considerably more than the last set.

“The problem is, tires aren’t cheap even in normal economic times. So if you take a $1,000 set of tires and change that to a $3,000 set of tires, that’s a real problem,” Douglas said.

Given all of the factors involved, a rubber shortage could last several years. Consider this: if rubber trees are being wiped out by flooding and disease, things may not return to normal until the weather stabilizes and a new crop of trees are fully matured – and it takes roughly seven years for a rubber tree to mature.

“It’s efficient when things are working well. You don’t have to have these big stockpiles of inventory. You don’t have to have warehouses full of chips, warehouses full of tires,” Douglas said. “But if that supply chain is disrupted, we’ve got a problem if you don’t have inventory to draw down.”

If you are nearing the point where you will need a new set of tires on your vehicle or were considering new winter tires this fall, now, before a potential price increase, may be the best time to make that investment.

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