On the heels of stronger revenues and profits in the first quarter this year, Goodyear Tire & Rubber Co. believes commercial tire demand will increase significantly as 2011 progresses, putting pressure on the industry’s production capabilities.

Goodyear’s sales in the first quarter totaled $5.4 billion, up 27% from the same period in 2010 – a quarterly record for the company – with tire unit volumes totaling 46.8 million, up almost 7% from last year. Goodyear noted first quarter sales reflect a $219 million increase in volume, along with the benefits of stronger price/mix improvements, which drove revenue per tire up 15% over the first quarter of 2010, excluding the impact of foreign currency translation.

Goodyear's first quarter net income topped $103 million (42 cents per share), compared with a net loss of $47 million (19 cents per share) in the first quarter last year.

In North America, Goodyear posted a 30% increase in sales to $2.3 billion in the first quarter this year – a record number – over the same period in 2010; sales that reflect a 13% increase in tire unit volume and improved price/mix, which drove a 12% increase in revenue per tire, excluding the impact of foreign currency translation. Original equipment unit volume increased 8%, while replacement tire shipments increased 14.5%, the company noted.

Goodyear noted, however, that the price of raw materials is rapidly increasing, rising by $120 million in the first quarter this year, though nearly offset by improved price/mix of $116 million.

That could pose issues as the company expects tire demand to keep rising throughout 2011, especially in the commercial sector, and now expects that its unit volumes will increase at the higher end of the previously announced range of 3 to 5%.

In North America, commercial tire replacement demand is expected to jump between 6 and 10%, while commercial original equipment tire demand is predicted to spike between 40 and 50%. That compares to consumer replacement tire demand increasing between 2 and 4%, with consumer original equipment tire demand climbing between 5 and 10%, the company said.