light truck $5.2 billion strength in numbers · according to brightline marketing, men decide which...
TRANSCRIPT
MTD January 2018
Tire dealersare anythingbut averageProfiling them revealsstrength in numbers
W ould you consider your business model average? Probably not. But you can learn a lot about your busi-
ness when you benchmark your profile against the average dealer.
That’s what our annual Facts Issue is all about. It is full of information that will help you compare your numbers with the rest of the U.S. Take pricing, for example. On pages 38 and 40, we break down average advertised pricing for a number of popular sizes. One size in particular, 265/70R17, lists the national average by region, tire type (winter), price point (good, better, best) and online pricing.
Here’s how we define the “average” independent tire dealer. He or she:
• handles an average of 13.3 tire brands;• employs five technicians per store;• averages seven service bays per store;• derives 46% of sales from automotive service.
Over the course of 2017, 25% of you either added or dropped one or more brands, which is a strong indication of not only your independence, but also the availability of profitable tire brands.
How strong is the independent tire dealer channel in the U.S.? As a group it controls 245,000 service bays and employs almost 175,000 techs, half of whom are ASE-certified. It also performs $25 billion worth of automotive service annually.
Independent tire dealers represent 61.5% of the passenger tires sold directly to the consumer. That totals 127 million tires; the next largest tire retail group, mass merchandisers, accounts for direct sales of 24 million tires.
When you take wholesaling into account, and give credit to the dealer selling to the retailer who then sells the tire to the consumer, independents dominate even more.
And these numbers are not the result of large dealers skewing the data. Close to 60% of the 29,000 independent tire dealers in the U.S. are single-store owners, more than enough to keep the figures statistically relevant.
So enjoy MTD’s analysis of the 2017 domestic tire industry, and find out how successful you really are! — Bob Ulrich
2018 Facts Section: Overview
GENDER ANALYSIS OF THE TIRE BUYING PROCESSAccording to BrightLine Marketing, men decide which brand to purchase and retailer to frequent more often than women when buying tires.
Source: BrightLine Marketing LLC (www.brightlinemarketing.com)
0 10 20 30 40 50 60 70
59.5
59.5
40.5
40.5
60.3
39.7
60.4
39.6
38.7
61.3
FemaleMale
2013
2014
2015
2016
2017
Passenger $25.4 billion
Light truck $5.2 billion
Truck $6.8 billion
Farm $535 million
OTR $1.7 billion
2017 U.S. REPLACEMENT TIRE SALES(a $39.6 billion industry)
All figures in this 13-page Facts Section are Modern Tire Dealer figures unless otherwise noted.
28
MTD January 2018
A milestone yearPassenger and truck tire shipments set records in 2017 The domestic tire industry reached two mile-stones in 2017. Replacement passenger tire shipments totaled 208.3 million units, the most ever. And replacement truck tire ship-ments totaled 19.2 million units, also a record high. (According to U.S. Tire Manufacturers Association preliminary figures, the totals will be 209.4 million and 19.4 million, respec-
tively.) Replacement light truck tire shipments reached their high-water mark last year.
The record passenger tire shipment number was especially surprising given the 35.6% drop in consumer tire imports from China. There also was a 20.5% drop in truck tire imports from China.
Original equipment shipments were down,
up and up. Passenger units were down close to 5%, perhaps due in part to the disappearing spare. The American Automobile Association says 28% of the 2017 model-year vehicles came without spare tires. Temporary spares also are not counted in the shipments.
In contrast, light truck units were up 10%, and truck tire shipments were up 7.5%.
Tire company 2017 2016
Bridgestone Corp. $26.2 $25.4
Groupe Michelin $23.4 $22.0
Goodyear Tire & Rubber Co. $14.6 $14.7
Continental AG $12.6 $11.9
Sumitomo Rubber Industries Ltd. $6.3 $6.0
Pirelli & Cie SpA $6.1 $6.7
Hankook Tire Co. $6.1 $5.7
Yokohama Rubber Co. $4.5 $4.4
Cheng Shin Rubber Ind. Co. Ltd.2 $3.7 $3.6
Giti Tire Pte. Ltd. $3.2 $3.1
Toyo Tire & Rubber Co. $2.8 $2.8
Cooper Tire & Rubber Co. $2.8 $2.9
Kumho Tire Co. Inc. $2.5 $2.5
Footnotes1 Figures are based on yearly average exchange rates.2 A subsidiary of Cheng Shin Rubber Ind. Co. Ltd. does business as Maxxis International.
WORLD LEADERS IN NEW TIRE SALES(fiscal year 2017; in billions of U.S. dollars1)
U.S. CONSUMER TIRE IMPORTS FROM CHINA(in millions of units)
Year Units Yr./yr. change
2017 12.3 -35.6%
2016 19.0 -37.0%
2015 30.2 -50.0%
2014 60.5 +17.9%
2013 51.3 +57.8%
2012 32.5 +25.0%
2011 26.0 -16.1%
2010 31.0 -27.9%
2009 43.0 -7.5%
2008 46.5 +14.8%
2007 40.5 +50.0%
2006 27.0 +28.0%
2005 21.0 +44.0%
The largest consumer tire exporter to the U.S. is Thailand at 33.8 million units.Sources: U.S. government, MTD
2018 Facts Section: Tire shipments
0
50
100
150
200
250
OEReplacement
Passenger tires Light truck tires Medium/heavy truck tires
20142015201620170
5
10
15
20
25
30
35
20142015201620170
5
10
15
20
5.446.7 49.0 49.0 46.3
4.9 4.6 4.8
6.35.35.7
18.018.419.2
17.329.0
31.430.8208.3 207.7 206.6205.9 28.8
5.8
2014201520162017
U.S. REPLACEMENT AND OE TIRE UNITS SHIPPED, 2014-2017(in millions; imports included)
30
MTD January 2018
Brand 2017
Goodyear 12.0%
Michelin 9.5%
Bridgestone 7.5%
Firestone 7.5%
Cooper 5.0%
BFGoodrich 4.5%
Hankook 4.5%
Continental 4.0%
Yokohama 4.0%
Falken 3.5%
General 3.0%
Kumho 3.0%
Toyo 3.0%
Multi-Mile 2.5%
Nexen 2.5%
Pirelli 2.5%
Primewell 2.0%
Sumitomo 2.0%
Uniroyal 2.0%
Dunlop 1.5%
GT Radial 1.5%
Hercules 1.5%
Nitto 1.5%
Sailun 1.5%
Big O 1.0%
Cordovan 1.0%
Kelly 1.0%
Mastercraft 1.0%
Sigma 1.0%
Others 5.5%
BRANDS LISTED BY THE MTD 100 DEALERS, 2009-2017
Brand 2009 2011 2013 2015 2017Michelin 74 85 82 81 88Goodyear 74 77 71 68 72BFGoodrich 61 72 71 72 79Dunlop 52 52 47 42 45Bridgestone 51 66 61 60 63Firestone 46 55 57 53 58Continental 45 56 57 63 67The MTD 100 represented 4,921 outlets in 2009, and 6,257 in 2017. Of all the brands, Cooper made the biggest jump from 2009 to 2017: from 31 dealers to 54.
Rank by numberof dealers
Dealers/outlets
2016ranking
1. Michelin 88/5,381 12. BFGoodrich 79/5,142 23. Goodyear 72/4,898 34. Continental 67/4,119 45. Bridgestone 63/4,552 56. Firestone 58/2,902 77. Yokohama 57/4,484 68. Cooper 54/3,920 99. General 54/3,758 810. Uniroyal 53/2,818 1011. Hankook 47/4,477 1112. Dunlop 45/4,247 1213. Kelly 42/2,256 1314. Pirelli 40/4,379 1415. Toyo 36/3,149 1516. Kumho 30/2,759 1617. Nexen 24/1,669 1718. Falken 23/2,889 1819. Mastercraft 21/1,231 N/R20. Nitto 20/2,255 19
2017 BRANDS LISTED BY THE MTD 100(Total outlets: 6,257)
2018 Facts Section: Market share
Brand 2017
Goodyear 11.0%
BFGoodrich 8.5%
Michelin 7.5%
Bridgestone 7.0%
Firestone 7.0%
Cooper 5.5%
General 5.5%
Hankook 4.5%
Toyo 4.5%
Yokohama 4.5%
Multi-Mile 4.0%
Kumho 2.5%
Pirelli 2.5%
Falken 2.0%
Hercules 2.0%
Maxxis 2.0%
Uniroyal 2.0%
Continental 1.5%
Cordovan 1.5%
Dunlop 1.5%
Eldorado 1.5%
Kelly 1.5%
Mastercraft 1.5%
Nexen 1.5%
Big O 1.0%
GT Radial 1.0%
Others 5.0%
2017 U.S. REPLACEMENTPASSENGER TIREBRAND SHARES(based on 208.3 million units) 2017 U.S.
REPLACEMENTLT TRUCK TIREBRAND SHARES(based on 30.8 million units)
Because numbers are rounded to the nearest one-half percent, the total may not equal 100%. Brands must have at least 1% of the market in ship-ment numbers to be listed at 1%.
Anchor brands lose some shareTier 2 and Tier 3 brands (and Tier 4?) pick up the slackAnalyst Nick Mitchell follows more than just results from publicly traded tire and automo-tive companies for Northcoast Research Holdings LLC. He also tracks tire pricing and demand by tier. When asked how the tire tiers fared against each other last year,
Mitchell said Tier 2 and Tier 3
brands outperformed Tier 1 brands through the first 10 months of the year based on unit growth. We agree, and the market share changes in the charts below compared to 2016 reflect that.
Modern Tire Dealer divides the market into four tiers because we feel there are often more than three price points in the marketplace. We define Tier 1 tires as the
three anchor brands: Michelin, Bridgestone and Goodyear. Upper- and middle-market brands like Continental, Pirelli, Hankook, Yokohama, Toyo, Falken, Kumho, Dunlop, Cooper, Firestone, BFGoodrich and General fall into the Tier 2 category. Value brands, such as private brands, are Tier 3 tires. And low-cost radials — in general many of the imports from China — are Tier 4 brands.
32
33www.moderntiredealer.com
BMWPirelli 33%Continental 27%Bridgestone 25%Dunlop 10%Michelin 5%CHRYSLER/FIAT (FCA)Goodyear 42%Michelin 15%Firestone 10%Bridgestone 7%Continental 6%Kumho 4%Yokohama 4%BFGoodrich 3%General 3%Pirelli 3%Falken 1%Hankook 1%Nexen 1%FORDMichelin 24%Goodyear 24%Continental 20%Hankook 9%Pirelli 8%General 7%BFGoodrich 4%Bridgestone 2%Cooper 1%Toyo 1%
2017 OE U.S./CANADIAN CONSUMER TIRE BRAND SHARES (excluding imports)
GENERAL MOTORSGoodyear 35%Michelin 20%Bridgestone 17%Firestone 13%Continental 8%Hankook 3%General 2%Pirelli 2%HONDAMichelin 25%Goodyear 25%Bridgestone 17%Continental 17%Hankook 8%Yokohama 5%Firestone 3%MERCEDESContinental 31%Pirelli 26%Bridgestone 15%Michelin 11%Dunlop 9%Goodyear 8%
HYUNDAI/KIAHankook 40%Kumho 40%Continental 10%Nexen 10%NISSANContinental 30%Michelin 29%Goodyear 20%BFGoodrich 5%Bridgestone 5%Toyo 5%Hankook 2%Dunlop 1%Falken 1%General 1%Kumho 1%SUBARUBridgestone 60%Continental 30%Goodyear 10%
2017 U.S./CANADIAN OE CONSUMER TIRE MARKET SHARE(excluding imported vehicles)
OEM 2016 2017
Ford 18.6% 20.4%
GM 21.0% 19.3%
Toyota 13.6% 13.8%
FCA 14.5% 12.2%
Honda 11.7% 12.2%
Nissan 6.9% 6.9%
Others* 13.7% 15.2%
*Hyundai/Kia was the seventh highest at 5.3%.
2017 U.S./CANADIAN LIGHT VEHICLE MARKET SHARE (based on production)
TESLAContinental 45%Goodyear 30%Michelin 20%Pirelli 5%TOYOTABridgestone 27%Michelin 24%Goodyear 12%Dunlop 8%Continental 7%BFGoodrich 6%Toyo 5%Yokohama 5%Firestone 3%General 3%VOLKSWAGENContinental 55%Hankook 30%Bridgestone 14%
Falken 1%
0 5 10 15 20 25
Others
Toyo
Dunlop
Yokohama
BFGoodrich
General
Kumho
Pirelli
Firestone
Hankook
Bridgestone
Continental
Michelin
Goodyear 23.7%
19.7%
15.1%
13.5%
6.0%
4.5%
4.0%
2.7%
2.7%
2.4%
1.8%
1.7%
1.2%
1.0%
“Others” refers to Nexen, Falken and Cooper.
MTD January 2018
WAREHOUSE CLUB U.S. STORE COUNTThe number of warehouse clubs in the U.S. has grown from 1,331 to 1,399 in the last three years. That’s a growth rate of 5.1%, led by Costco Wholesale.
Warehouse club 2017 2016 2015
Sam’s Club 660 660 655
Costco Wholesale Corp. 518 506 470
BJ’s Warehouse Club Inc. 221 214 206
The only three brands sold by all three warehouse clubs are Michelin, BFGoodrich and Bridgestone.
U.S. CONSUMER TIRE RETAIL MARKET SHARE
Distribution channel 2017 2015 2013
Independent tire dealers 61.5% 60.5% 60.5%
Mass merchandisers 11.5% 13.0% 14.0%
Warehouse clubs 9.0% 9.0% 8.5%
Auto dealerships 9.0% 8.0% 7.5%
Tire company-owned stores 6.5% 7.5% 7.5%
Miscellaneous outlets 2.5% 2.0% 2.0%
Suddenly, they are No. 2Michelin and SCOA form NTW tire wholesale venture What spurred Michelin North America Inc. to buy 50% of TBC Corp. from Sumitomo Corporation of Americas (SCOA)? Michelin Chairman and President Scott Clark says the resulting joint venture “is about increasing our service capabilities and increasing our scale so that we can be a better supplier to both independent dealers and to provide secondary supply to our direct customers.”
By combining Michelin’s more than 85 Tire Centers LLC (TCi) distribution centers with
TBC’s 59 Carroll Tire distribution centers, Michelin and SCOA created the second largest tire wholesaler in the U.S. in terms of market share behind American Tire Dis-tributors Inc. (ATD).
The new entity will be called National Tire Wholesale, or NTW. Erik Olsen, CEO and president of TBC Corp., says in addition to raising the company’s level of service to its new and existing customers, the new NTW “enables us to be a full-service provider
to fleets across the United States” with the help of TBC’s portfolio of retail stores, franchisees and tire brands.
How much the joint venture will change the landscape of wholesale tire distribution is unclear. TCi was already a TBC Brands customer, and Carroll Tire sold Michelin’s three main consumer tire lines. ATD also sells Michelin, BFGoodrich and Uniroyal tires.
For more information on the joint venture, see page 8.
Initial channel 2017 2015 2013
Independent tire dealers 79.0% 78.0% 77.0%
Tire company stores 7.0% 8.0% 8.0%
Miscellaneous 14.0% 14.0% 15.0%
“Miscellaneous” includes mass merchandisers, warehouse clubs, car dealers, auto parts chains, muffler shops and oil companies/service stations.
CONSUMER TIRE DISTRIBUTION CHANNEL MARKET SHARE
2018 Facts Section: Distribution
U.S. NEW-CAR FRANCHISES
2017 16,812
2016 16,708
2015 16,545
2014 16,396
2013 17,700
2012 17,635
2011 17,700
2010 18,460
2009 20,010
2008 20,770
2007 21,200
2006 21,495
2005 21,640
Source: National Automobile Dealers Association
COMPANY-OWNED STORES IN THE U.S.
0
500
1000
1500
2000
2500
Nokian/Vianor 81
Goodyear 600
Bridgestone 2,200
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34
MTD January 2018
Internet vs. brick-and-mortar16.7 million tires were sold online in 2017Selling tires online is a growing trend, with more online-only players making names for themselves each year. The relative new-comers compete against not only brick-and-mortar retailers, but also each other, and cannibalize sales from leading online tire companies like the Tire Rack Inc. and Discount Tire Direct.
Their growth, at least compared to buying consumer goods online like books, apparel and electronics, is limited because tires need to be installed, something that requires
a trip to an established retail location. That changes the whole dynamic of wanting to purchase online.
However, that doesn’t mean the growth isn’t significant.
In 2016, 6% of the replacement consumer tires in the U.S. were sold online. That num-ber rose to 7%, or 16.7 million tires, in 2017.
In order to understand what motivates people who buy tires online, Modern Tire Dealer surveyed two specific groups of consumers.
The first group was made up of people who had bought tires online; the second group — a much smaller sample size — was made up of people who had bought tires at physical retail locations.
With 79% of the respondents to MTD’s Online Sales Research Study of Consumers having purchased tires online in the last 18 months, we had the statistical validity to determine what drives their attitudes, behavior and expectations regarding online tire sales. — Bob Ulrich
2018 Facts Section: Online tire sales
0 10 20 30 40 50 60
Extremely di�cult
Very di�cult
Moderately di�cult
Slightly di�cult
Not di�cult 60%
22%
13%
2%
2%0 10 20 30 40 50 60 70 80
Other
Bought same brand I had
No trustworthy retailers
Did not want to visit store
Easier to buy online
Knew what tires I wanted
Previously purchased tires online
Online has best price 61%
50%
37%
36%
11%
10%
7%
1%
No 4%
Yes 96%
0 20 40 60 80 100
Di�erent retailer
Tire manufacturer
Online retailer
Installer 94.5%
2.8%
2.2%
0.5%
ONLINE TIRE SALES: EASE OF BUYINGWhen asked, “On a scale of 1 to 5, where 1 is ‘Not at all difficult’ and 5 is ‘Extremely difficult,’ how difficult was it to find tires and make the purchase?” respondents answered as follows.
ONLINE TIRE SALES: REPEAT CUSTOMERSWhen asked,“Would you buy tires online again?” the online pur-chasers overwhelmingly responded, “Yes.”
Source: MTD’s 2017 Online Sales Research Study of Consumers
Source: MTD’s 2017 Online Sales Research Study of Consumers
ONLINE TIRE SALES: PRICINGWhen asked, “Why did you choose to buy tires online?” respon-dents said price was a big factor.
One of the explanations for “Other” included, “The tires for my car had to be ordered online.” Source: MTD’s 2017 Online Sales Research Study of Consumers
ANALYSIS: TIRE SELLER VS. INSTALLERAlmost 95% of the respondents to the mid-year 2017 BrightLine Tire Survey purchased their new tires from the tire installer.
Source: BrightLine Marketing LLC (www.brightlinemarketing.com)
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36
MTD January 2018
High-value-addedThe need for larger, more profitable tires is not going awayTire manufacturers continue to see high-value-added (HVA) tires as the way to in-creased profitability. They are generally defined as 17-inch and larger tires (Michelin North America Inc. says 18-inch and larger), which takes them out of broad-line sizing. But they are more than just a tire size. They are, as Pirelli Tire North America Inc. ex-ecutives have said for years, premium and prestige tires because they fit on higher-end
vehicles. They may cost more, but their return on investment is greater, a win-win for manufacturers and the dealers who sell their brands.
When Goodyear Tire & Rubber Co. intro-duced its Assurance WeatherReady last year, it described it as a premium all-season HVA tire. Chairman, CEO and President Rich Kramer said the trend has been driven by OEM demands.
The chart on page 40, “Available sizes by rim diameter,” shows how popular larger sizes have become. According to the Tire & Rim Association, there are 65 18-inch sizes, more than any other rim diameter.
A year ago, tire industry analyst Nick Mitchell estimated the U.S. market would require “approximately four new tire plants” to meet the need for an additional 19.1 million HVA tires. That is happening.
2018 Facts Section: Pricing and sizing
NEW P-METRIC AND LT TIRE SIZES/SKUS IN 2018(not counting temporary spares or additional rim contours added to existing LT sizes)
P235/50R20 P285/55R20 XL P275/60R20 XL
LT205/80R16 LRE LT275/80R17 LRD/E LT305/50R20 LRE
LT255/80R17 LRC LT245/75R17 LRD LT295/75R17 LRC
LT275/70R17 LRD LT265/60R18 LRD LT325/50R20 LRF
LT315/45R22 LRF 37x11.50R18LT LRD/E 33x10.50R17LT LRD
33x10.50R18LT LRD 35x11.50R17LT LRC 37x13.50R20LT LRF
Source: Tire & Rim Association
2017 AVERAGE ADVERTISED TIRE PRICES(in the U.S.)
Size Major brand Low-cost Overall
205/55R16 $135.39 $74.34 $121.51
215/60R16 $125.32 $76.49 $110.32
215/55R17 $150.95 $82.47 $132.53
235/75R15 $136.68 $98.32 $121.55
275/65R18 $229.39 $178.91 $216.48
LT225/75R16 $169.65 $119.38 $151.11
LT245/75R16 $179.29 $123.79 $160.13
LT245/75R17 $215.36 $148.32 $194.45
31x10.50R15 $186.59 $131.64 $166.30
Source: Tire Intelligence LLC (www.tire-intelligence.com)
2017 ADVERTISED PRICING BREAKDOWN, 215/55R17
Speed Major Low Cost Radial
Overall
V-rated $155.81 $83.38 $136.50
H-rated $148.96 $96.55 $142.27
T-rated $137.07 $104.62 $127.99
Source: Tire Intelligence LLC(www.tire-intelligence.com)
1. Goodyear Wrangler ATS, size 265/70R17
Website May December
econrads.com $153.00 $146.48
goodyear.com $179.00 $159.00
justtires.com $173.99 $156.99
onlinetires.com $141.55 $111.99
simpletire.com $169.99 $118.99
tirebuyer.com $156.99 $129.99
tirecrawler.com $140.00 $140.00
tires.com $147.00 $136.59
tiresetc.com $138.00 $106.90
2. Hankook Dynapro ATM RF10, size 235/75R15
Website May December
dunntire.com $109.80 $111.98
lowtireprice.com $99.00 $101.00
mavistire.com $119.99 $122.99
onlinetires.com $96.86 $91.68
samsclub.com $99.22 $99.23
simpletire.com $108.99 $92.97
tirerack.com $99.25 $99.00
townfair.com $117.00 $111.00
walmart.com $95.00 $94.35
Not all the websites were set up for selling online. For example, dunntire.com offers up a quote and then requires the customer to schedule an appointment - with no money changing hands online.Source: The Fitment Group (www.fitmentgroup.com)
2017 ONLINE TIRE PRICINGOnline tire pricing varies greatly depending on the website. The Fitment Group collected these adver-tised prices on two specific tire lines. Advertised web pricing was collected during the weeks of May 14 and Dec. 24, 2017.
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38
MTD January 2018
2018 Facts Section: Pricing and sizing
PRICE POINT BREAKDOWN OF SIZE 265/70R17 BY REGIONThe most popular OE size on the F-150 is 265/70R17, which was the second most popular OE size in 2016.
Region OPP Value Better Best Winter Average
East North Central $124.78 $178.94 $188.32 $212.47 $173.98 $175.70
East South Central $130.62 $183.85 $188.80 $215.36 $170.62 $177.85
Middle Atlantic $125.94 $162.25 $192.17 $210.79 $170.18 $172.27
Mountain $131.16 $190.11 $178.34 $200.42 $167.70 $173.55
New England $141.40 $164.14 $212.32 $213.29 $192.38 $184.70
Pacific $131.25 $173.41 $175.13 $200.77 $166.76 $169.46
South Atlantic $126.06 $179.01 $183.30 $205.77 $146.89 $166.20
West North Central $128.33 $187.21 $178.35 $203.27 $166.97 $172.88
West South Central $126.38 $181.19 $177.91 $201.91 $165.97 $170.67
Nationwide $135.30 $156.92 $184.59 $206.02 $181.62 $172.89
Average $130.12 $175.70 $185.92 $207.01 $172.15 $174.18
Source: The Fitment Group (www.fitmentgroup.com)
MOST POPULAR DOMESTIC OE PASSENGER AND LT TIRE SIZES
2016 OE P-metric/metric
Size % of total
P215/55R17 4.0%
P265/70R17 3.5%
225/65R17 2.9%
P275/65R18 2.8%
215/55R17 2.4%
2015 OE P-metric/metric
Size % of total
P215/55R17 4.1%
P265/70R17 3.4%
P215/60R16 3.2%
225/65R17 2.8%
215/55R17 2.8%
2014 OE P-metric/metric
Size % of total
P215/55R17 5.0%
P215/60R16 3.4%
215/55R17 2.7%
P265/70R17 2.7%
P275/65R18 2.6%
2013 OE P-metric/metric
Size % of total
P215/55R17 6.1%
P265/70R17 4.0%
P275/55R20 3.2%
P275/65R18 3.1%
P215/60R16 3.1%
2016 OE light truck (LT)
Size % of total
LT245/75R17 15.9%
LT225/75R16 9.7%
235/65R16 8.8%
LT265/70R18 8.6%
LT265/60R20 7.8%
2015 OE light truck (LT)
Size % of total
LT245/75R17 18.6%
LT225/75R16 9.8%
LT265/70R18 9.7%
LT275/70R18 7.9%
LT245/75R16 7.6%
2014 OE light truck (LT)
Size % of total
LT245/75R17 21.7%
LT245/75R16 12.0%
LT225/75R16 11.4%
LT265/70R18 10.3%
LT275/65R18 7.8%
2013 OE light truck (LT)
Size % of total
LT245/75R17 21.9%
LT245/75R16 14.0%
LT225/75R16 11.3%
LT265/70R17 8.9%
LT265/75R18 8.1%
P-metric/metric: The sixth most popular OE P-metric/metric size, P205/65R16, was not in the USTMA’s top 10 list in 2015. Neither was the eighth most popular: 275/55R20. Light truck: LT245/75R17 has been the No. 1 OE size for the last six years. It is only the fifth most popular replacement size, however.
Source: U.S. Tire Manufac-turers Association (USTMA)
TOP U.S. REPLACEMENT PASSENGER TIRE SIZES, 2017
1. 205/55R16 6. 265/70R17
2. 215/60R16 7. 225/60R16
3. 225/65R17 8. 225/50R17
4. 215/55R17 9. 275/55R20
5. 195/65R15 10. 245/75R16
TOP U.S. REPLACEMENT LT TIRE SIZES, 2017
1. LT245/75R16 6. LT235/85R16
2. LT265/70R17 7. LT275/70R18
3. LT265/75R16 8. LT285/70R17
4. LT225/75R16 9. LT285/75R16
5. LT245/75R17 10. LT235/80R17
AVAILABLE SIZES BY RIM DIAMETER
0 10 20 30 40 50 60 70 80
26-inch
24-inch
23-inch
22-inch
21-inch
20-inch
19-inch
18-inch
17-inch
16-inch
15-inch
14-inch
13-inch
12-inch 1
13
26
55
61
59
65
27
31
1
7
2
6
1
Source: Tire & Rim Association
40
MTD January 2018
Demand and supplyDomestic truck tire production will increase in futureFor all of you commercial truck tire deal-ers and manufacturers, remember the first quarter of 2017? No? I’m guessing that is the result of selective memory. It was pretty slow, and that is an understatement.
Market demand eventually picked up, resulting in a record high of 19.2 million replacement truck tires shipped in the U.S.
That’s Modern Tire Dealer’s number. The U.S. Tire Manufacturers Association (USTMA) predicts domestic replacement truck tire shipments will finish 2017 at 19.4 million units, a 4.3% increase over its then-record 18.6 million units shipped in 2016.
The turnaround in 2017 may have started last February when the International Trade Commission voted against imposing tariffs on truck and bus tires manufactured in China
and imported into the U.S. The result was an instant increase in low-cost imports from China, which, despite the high demand, directly led to a 1.4% decrease in retreaded truck tires.
Together, however, new and retreaded truck tires topped the 33 million mark do-mestically.
Overseas players are taking notice. The Dec. 19, 2017, announcement by Triangle Tyre Co. Ltd. to build a new consumer tire plant in Edgecombe County, N.C., will lead to two plants built in two phases. The first will produce consumer tires.
The second, to be completed by 2023, will be a truck tire plant, to be built next to the first facility.
The company’s plan for phase two is not
surprising. In March of last year, Triangle Tire USA hired Rick Phillips away from Yokohama Tire Corp. to be its vice president of sales. Phillips was instrumental in the building of Yokohama’s new commercial truck tire plant in West Point, Miss.
When Hankook Tire America Corp. held the grand opening of its consumer tire plant in Clarksville, Tenn., in October, future medium truck tire production was mentioned to me as a possibility by more than one Hankook employee (although Hankook Tire Co. Ltd. CEO Seung Hwa Suh said the company is not looking beyond the first two phases, which center on consumer tire production).
USTMA also estimates domestic original equipment truck tire shipments will be up 8% this year. — Bob Ulrich
U.S. RETREADING, 2017
Truck tire units 19.2 million
Retreaded truck tires 14.3 million
Sales (with casings) $2.9 billion
Average retread cost $205.91
Average pre-cure price $205.65
Average mold cure price $210.22
Average casing price $57.24
% precure units 94%
Average sales margin 18.9%
No. of plants, truck tires 645
No. of plants, OTR tires 18
U.S. TRUCK TIRE IMPORTS FROM CHINA(in millions of units)
Year Units Yr./year
2017 6.2 -20.5%
2016 7.8 -17.0%
2015 9.4 +14.6%
2014 8.2 +30.1%
2013 6.3 +0.1%
2012 6.3 +13.5%
2011 5.5 +37.5%
Sources: U.S. government, Modern Tire Dealer
2018 Facts Section: Commercial
2017 U.S. MARKET SHARERETREADED TRUCK TIRES(based on 14.3 million units)
Bridgestone (Bandag) 44.0%
Goodyear 23.5%
Michelin/Oliver 22.0%
Marangoni 5.0%
Continental 2.0%
Others 3.5%
Brand 2017
Michelin 15.0%
Bridgestone 15.0%
Goodyear 10.5%
Yokohama 8.5%
Firestone 7.5%
Continental 6.0%
Double Coin 3.5%
Hankook 3.5%
Roadmaster 3.0%
Hercules 2.5%
Sailun 2.5%
Dayton 2.0%
BFGoodrich 2.0%
2017 U.S. REPLACEMENT MEDIUM/HEAVY TRUCK TIRE BRAND SHARES(based on 19.2 million units)
Brand 2017
General 2.0%
Toyo 2.0%
Dynatrac 2.0%
Aeolus 1.5%
Dynacargo 1.5%
Sumitomo 1.5%
Duraturn 1.0%
Gladiator 1.0%
Kelly 1.0%
Kumho 1.0%
Samson 1.0%
Westlake 1.0%
Others 5.0%
All brands listed own at least 1% of the market.
42
MTD January 2018
Firestone 28.0%
BKT 23.5%
Michelin 17.0%
Goodyear 14.0%
Alliance 7.0%
Titan 5.0%
Trelleborg 2.0%
Mitas 1.5%
Harvest King 1.0%
Others 1.0%
Total 100%
BKT 38.0%
Firestone 24.0%
Alliance 11.0%
Goodyear 7.0%
Harvest King 6.0%
Titan 4.5%
Carlisle 3.0%
Trelleborg 2.5%
American Farmer 1.0%
Others 3.0%
Total: 100.0%
Firestone 22.0%
BKT 19.0%
Goodyear 15.5%
Titan 13.5%
Carlisle 12.5%
Harvest King 9.0%
Alliance 3.0%
Trelleborg 2.5%
American Farmer 1.0%
Others 2.0%
Total: 100.0%
RADIAL REAR REPLACEMENT2017 shipments: 315,600
BIAS REAR REPLACEMENT2017 shipments: 450,000
SMALL FARM REPLACEMENT2017 shipments: 1.2 million
2018 Facts Section: Commercial
Retail passenger 24.8%
Retail light truck 24.6%
Commercial light truck 20.5%
Medium truck 16.8%Heavy truck 15.7%
Wholesale passenger
11.7%Wholesale truck 10.4%
AVERAGE 2017 INDEPENDENT TIRE DEALER TIRE SALES PROFIT MARGINS
REPLACEMENTREAR FARMTIRE SHIPMENTS(radial vs. bias)
Year Radial %
2007 27.7%
2008 28.1%
2009 34.9%
2010 37.7%
2011 37.9%
2012 37.5%
2013 39.7%
2014 39.9%
2015 39.0%
2016 39.2%
2017 41.2%
®
44
MTD January 2018
62 plants,with moreto comeGet ready for Nokian, Wanli and Triangle Yearly tire capacity, not production, in North America totaled 334.8 million tires at 62 plants as of Jan. 1, 2018. That’s up 4.9% compared to 2017, when capacity was 319.1 million tires. (The total does not include race or aviation tires.)
In the United States, annual capacity increased by more than 12 million tires to 269.2 million units, a 4.9% increase. Mexican plant capacity was also up, from 37.2 million to 39.8 million units, or 7%. Canadian capacity was up slightly more than 1%.
Two new plants helped with additional production in the U.S. Giti Tire (USA) Ltd.’s consumer tire plant in Richburg, S.C., began producing tires last year.
Giti is investing $560 million in the Giti
2018 Facts Section: Plant capacitiesNORTH AMERICAN PLANT CAPACITIES as of Jan. 1, 2018 (in thousands of units)
Plant location/Year constructed
Non-union ISO QS
Passenger per day:
Light truck per day:
Truck per day:
Others per day: Total
Bridgestone Americas Inc.Aiken, S.C., 2013 x 0.0 0.0 0.0 0.03 0.03La Vergne, Tenn., 1972 x x 0.0 0.0 6.2 0.0 6.2Warren County, Tenn., 1990 x x 0.0 0.0 9.0 0.0 9.0Bloomington, Ill., 1965 x x 0.0 0.0 0.0 0.29 0.29Des Moines, Iowa, 1945 x x 0.0 0.0 0.0 4.57 4.57Wilson City, N.C., 1974 x x x 35.0 0.0 0.0 0.0 35.0Aiken, S.C., 1999 x x x 25.5 10.2 0.0 0.0 35.7Joliette, Quebec, 1966 x x 10.3 7.3 0.0 0.0 17.6Monterrey, Mexico, 2007 x 8.0 0.0 0.0 0.0 8.0Cuernavaca, Mexico, 1980 x x 11.0 4.4 0.0 0.0 15.4Total: 89.8 21.9 15.2 4.89 131.79American Industrial Partners (formerly Carlisle Tire & Wheel Co.)Jackson, Tenn., 2009 x 0.0 0.0 0.0 26.0 26.0Clinton, Tenn. (Dico), 1974 x x 0.0 0.0 0.0 15.0 15.0Total: 0.0 0.0 0.0 41.0 41.0Continental Tire the Americas LLCSumter, S.C., 2013 x 9.5 3.1 0.0 0.0 12.6Mount Vernon, Ill., 1973 x x x 29.0 4.0 8.0 0.0 41.0Mount Vernon, Ill., 1988 x x x 0.0 0.0 3.9 0.0 3.9Total: 38.5 7.1 11.9 0.0 57.5Cooper Tire & Rubber Co.Findlay, Ohio, 1917 x 7.0 16.0 0.0 0.0 23.0Texarkana, Ark., 1964 x 24.0 8.0 0.0 0.0 32.0Tupelo, Miss., 1984/1960 x x 42.0 0.0 0.0 0.0 42.0Total: 73.0 24.0 0.0 0.0 97.0Giti Tire (USA) Ltd. Richburg, S.C., 2017 x 1.0 0.0 0.0 0.0 1.0Goodyear Tire & Rubber Co.Danville, Va., 1966 x x 0.0 0.0 11.0 2.0 13.0Fayetteville, N.C., 1969 x x 31.0 10.5 0.0 0.0 41.5Gadsden, Ala., 1928 x x 14.5 11.5 0.0 0.0 26.0Lawton, Okla., 1978 x x x 64.5 0.0 0.0 0.0 64.5Topeka, Kan., 1945 x x 0.0 0.5 5.5 0.1 6.1Medicine Hat, Alberta, 1960 x x 0.0 0.0 0.0 13.0 13.0Napanee, Ontario, 1990 x x x 19.0 0.0 0.0 0.0 19.0San Luis Potosi, Mexico, 2017 x 2.0 0.0 0.0 0.0 2.0Total: 131.0 22.5 16.5 15.1 185.1Hankook Tire America Corp.Clarksville, Tenn., 2016 x 7.5 2.5 0.0 0.0 10.0Kumho Tire Co. Inc.Macon, Ga., 2015 x 11.0 0.0 0.0 0.0 11.0Michelin North America Inc.Ardmore, Okla., 1969 x x x 40.5 3.5 0.0 0.0 44.0Dothan, Ala., 1979 x x 1.2 4.3 0.0 0.0 5.5Fort Wayne, Ind., 1961 21.0 9.5 0.0 0.0 30.5Greenville, S.C., 1975 x x 28.0 0.0 0.0 0.0 28.0Greenville, S.C. (C3M), 1997 x x x 7.0 0.0 0.0 0.0 7.0Greenville, S.C. (Tweel), 2014 x 0.0 0.0 0.0 0.07 0.07Lexington, S.C., 1981 x x 19.0 5.0 0.0 0.0 24.0
At full capacity, the new Giti Tire (USA) consumer tire plant will pro-duce 5 million tires annually.
46
47www.moderntiredealer.com
Manufacturing (USA) Ltd. facility, which will produce not only the Dextero brand (specifically the DHT2 and Touring DTR1) for Wal-Mart Stores Inc., but also the Giti brand — not to be confused with the GT Radial brand — for the North American market.
The Giti brand, the global flagship brand for the Giti Tire Group, will be introduced in the U.S. later this year. The GT Radial brand, which has been sold through U.S. independent dealers for many years, also will be produced at the plant. The Giti brand will be sold through multiple channels, including independent dealers.
At full capacity, the plant will be able to produce 5 million tires a year.
The other plant, Goodyear Tire & Rub-ber Co.’s manufacturing facility in San Luis Potosi, Mexico, builds 2,000 tires a day. At full capacity, it will produce more than 16,000 tires a day, or 6 million annually, for North America and Latin America.
Also in 2017, three overseas tire manu-facturers announced plans to build tire plants in the U.S. over the next few years. Last June, Wanli Tire Corp. Ltd. said it will invest $400 million in a consumer tire plant in Orangeburg County, S.C. When completed, the facility will be able to produce 6 million tires annually.
In September, Hille Korhonen, the CEO and president of Nokian Tyres plc, said the company plans to begin produc-ing consumer tires at its Dayton, Tenn., manufacturing facility by 2020. By 2022, the $360 million plant will have a yearly production capacity of 4 million tires.
And in December, Triangle Tyre Co. Ltd. announced it would build a consumer and commercial tire plant in Edgecombe County, N.C., at a cost of $580 million.
Plant location/Year constructed
Non-union ISO QS
Passenger per day:
Light truck per day:
Truck per day:
Others per day: Total
Lexington, S.C., 1998 x x 0.0 0.0 0.0 0.1 0.1Spartanburg, S.C., 1978 x x 0.0 0.0 7.0 0.0 7.0Starr, S.C., 2013 x 0.0 0.0 0.0 0.01 0.01Tuscaloosa, Ala., 1945 x 23.0 7.0 0.0 0.0 30.0Bridgewater, Nova Scotia, Canada, 1971 x x 11.0 3.0 0.0 0.0 14.0Granton, Nova Scotia, 1971 x x 2.0 0.0 0.0 0.0 2.0Waterville, Nova Scotia, 1982 x x 0.0 0.0 4.5 0.5 5.0Queretaro, Mexico, 2002 x 6.0 0.0 0.0 0.0 6.0Total: 158.7 32.3 11.5 0.68 203.18Pirelli Tire North America Inc.Rome, Ga., (MIRS), 2002 x x 1.2 0.5 0.0 0.0 1.7Guanajuato, Mexico, 2011 x 12.0 4.0 0.0 0.0 16.0Total: 13.2 4.5 0.0 0.0 17.7Specialty Tires of America Inc.Indiana, Pa., 1915 x 0.92 0.18 0.05 2.35 3.5Unicoi, Tenn., 1997 x 0.3 0.5 0.05 .25 1.1Total: 1.22 0.68 0.1 2.6 4.6Sumitomo Rubber USA LLC (Sumitomo Rubber North America Inc.)Tonawanda, N.Y., 1923 x 4.0 3.0 2.3 5.0 14.3Titan Tire Corp.Bryan, Ohio, 1967 x x 0.0 0.0 0.0 0.33 0.33Des Moines, Iowa, 1943 x 0.0 0.0 0.0 11.25 11.25Freeport, Ill., 1964 x x 0.0 0.0 0.0 8.1 8.1Total: 0.0 0.0 0.0 19.68 19.68Toyo Tire North America Manufacturing Inc.White, Ga., 2005 x x 21.5 10.0 0.0 0.0 31.5Trelleborg Wheel SystemsSpartanburg, S.C., 2015 x 0.0 0.0 0.0 0.07 0.07Charles City, Iowa, 2012 0.0 0.0 0.0 0.5 0.5Total: 0.0 0.0 0.0 0.57 0.57Yokohama Tire Corp.West Point, Miss., 2015 x x x 0.0 0.0 2.9 0.0 2.9Salem, Va., 1968 25.7 1.1 0.0 0.0 26.8Total: 25.7 1.1 2.9 0.0 29.7Grupo Carso/Euzkadi (Continental AG)San Luis Potosi, Mexico 15.0 5.0 0.0 0.0 20.0JK Tyre & Industries (formerly CIA Hulera Tornel)Mexico City, Mexico 0.0 1.0 1.0 0.14 2.14Tultitlan, Mexico 7.0 1.5 0.5 0.0 9.0Tacuba, Mexico 8.0 2.5 0.0 0.0 10.5Total: 15.0 5.0 1.5 0.14 21.64Corporacion de Occidente SA de CV (Cooper Tire)Guadalajara, Mexico, 2005 x x x 10.0 7.2 2.8 0.0 20.0
U.S. totals: 494.82 110.88 55.9 76.02 737.62
Canadian totals: 42.3 10.3 4.5 13.5 70.5
Mexican totals: 79.0 25.6 4.3 0.14 109.04
TOTAL: 616.12 146.78 64.7 89.66 917.26
PLANT UNIONIZATION BREAKDOWN
0
5
10
15
20
25
30
35
40 Non-union 37
Union 25
MTD January 2018
SALES FROM AUTOMOTIVE SERVICE(as a % of total tire dealer sales)
ADVERTISED OIL CHANGE PRICES: 2017-2006Some 93% of tire dealers offer oil and lube service.
2017 $19.68 2011 $20.55
2016 $19.54 2010 $20.16
2015 $19.27 2009 $19.83
2014 $20.47 2008 $18.99
2013 $21.63 2007 $16.98
2012 $21.65 2006 $16.11
After increasing 34% between 2006 and 2012, the cost of a standard oil change steadily decreased until 2016.Source: Modern Tire Dealer statistics
Source: Modern Tire Dealer 2017 Automotive Service Survey
Automotive service surveyWhat a difference 10 years makesHow much have sales and profits gener-ated by automotive services changed in the last 10 years? Very little, according to Modern Tire Dealer research. MTD’s 2017 Automotive Service Survey shows on aver-age, automotive service at independent tire dealerships generates 46% of total sales and 45% of total earnings. Ten years ago,
our survey figures were 47% and 44%, re-spectively.
With the exception of mounting and bal-ancing, which they overwhelmingly offer as part of the tire-buying experience, deal-ers expanded their service offerings in all categories surveyed over the last decade. The biggest increase was in tire pressure
monitoring system (TPMS) service, with 95% of dealers offering the service versus 41% in 2007. In 2017, 83% of dealers provided engine repair/diagnostic/tune-up services, up from 58% in 2007. Cooling system service gained 16 points, with 85% of dealers of-fering the service compared to 69% in the 2007 survey. ■
AUTO SERVICES OFFERED BY DEALERS: 2017 VERSUS 2007The average number of service bays per outlet is 7 and technicians per outlet is 5.
2018 Facts Section: Automotive services
Automotive service 46%
Tires 54%
0 20 40 60 80 1002007
2017
73%
59%
86%
80%
96%
84%
91%
78%
97%
93%
91%
82%
85%
69%
83%
58%
61%
57%
96%97%
93%
86%
95%
80%
95%
41%TPMS
Shocks/struts
Oil/lubrication
Mounting/balancing
Exhaust systems
Diagnostics/engine repair
Cooling system
Chassis/suspension
Brakes
Bearings/seals
Batteries/electrical
Alignment
Air conditioning
These categories were not included in the 2007 survey: chemicals (injection cleaners, detergents, etc), 67%; electronic diagnosis, 81%; ignition and spark, 85%; and visibility (wipers), 94%.Sources: Modern Tire Dealer 2017 and 2007 Automotive Service Surveys
48