Sidewall damage. Looks like it has a small cut in front of it. You've hit something that's staked it, or someone has had a go at it. It could have been a manufacturing fault, but it looks like that cut may have something to do with it. Basically it's weakened it and the air is buldging out causing the bump. It'll be handling poorly because it's unbalanced I would suggest. Replace it. It might do nothing, or it might split, heat up and blow out causing you to end up somewhere you don't want to be. Officially I would call it unroadworthy as it is.
Guestimates from looking at the photos anyway. I could be wrong, but. Hope it helps.
|