Class 3-5 Commercial Truck Tire Market Sees Steady Growth

Even though the economy has created a challenging landscape for many businesses and tire segments, the class 3-5 truck tire replacement market has remained steady. With moderate yet stable growth expected to continue in the coming years, it may be a good time to look at this market segment as a way to boost profits and expand your customer base.

These particular trucks – which weigh between 10,001 pounds and 19,500 pounds – range from small, local businesses like plumbers, carpenters and grocers to larger fleets of delivery trucks, much like those used by FedEx, UPS or DHL for residential or small business drop-offs.

Tracking Trends

The class 3-5 truck market itself has seen overall growth since 2005, especially class 4 trucks, according to Donn Kramer, marketing director of commercial tires for Goodyear Tire & Rubber Co. “It hasn’t gone down as much in this economic downturn as the class 6, 7 and 8 trucks have. The market has been more stable in the class 3 through 5 if you group them together, but primarily the class 4. Class 4 has shown some growth relative to the 19.5- and 17.5-inch tires.”

To compare, he estimates that sales of those typical class 4 tire sizes have grown roughly 5%, while sales of 16-inch tires, popular among class 3 trucks, have grown by only about 2%.

“That manifests itself in the delivery trucks – the FedEx, UPS and DHL companies – but also plumbers and local businesses, people who are taking those vehicles and turning them into a kind of virtual office where they’re using those vehicles to carry their complete inventory of tools,” Kramer says.

Sales of the trucks themselves, which can often indicate trends in replacement tire sales, have varied within each specific class. Class 3 truck sales are more cyclical, with sales decreasing 10% in 2006, then increasing by the same amount in 2007. This year’s numbers are expected to be lower again, with slight growth in 2009 and beyond, Kramer says.

Class 4 sales fluctuate far less than class 3, have continually increased and are expected to do so through 2012.

“Even in 2007 with the downturn in the commercial market, class 4 truck sales were up over 2006 numbers. It’s a pretty positive market,” he says.

Class 5 truck sales, though, have been relatively flat in recent years, with a decline in 2007 and a predicted further decline this year. New engine emissions regulations for low sulfur diesel that will come into effect in 2010 are expected to push new truck sales in 2009, according to Kramer.

One key part of small business’ budgets, the cost of fuel, could affect truck sales and, in turn, tire sales in this market segment, says Greg McDonald, engineering manager of national accounts/commercial products for Bridgestone Firestone North American Tire. “The people in business will always have to have that type of vehicle, the skilled people such as the plumbers, carpenters and construction crews. And if they can afford to put the fuel in them, then they’re not going to downsize the number of these trucks that they use.”

Another trend in recent years, as with other segments of the replacement tire market, is the drastic increase in sizes available. “There are many, many more sizes out there now than there were a few years ago,” says Keith Waddle, of Waddle’s Tire Service in Wyandot, Mich.

Waddle’s, which serves many customers with class 3-5 trucks, has seen sales in this segment steadily increase, he notes.

Pleasing Customers

For small businesses, delivery services and shipping companies, trucks are a necessary part of the job, but not something that receives a large amount of attention.

“They’re not tire-educated,” Kramer says. “The trucks are a necessary evil. Their revenue is dependent on another core piece of business so they don’t know much about trucks, the maintenance required or their components.”

The key to attracting and keeping these customers is expertise and an attractive maintenance program. “They need people with tire experience to manage their cradle-to-grave portfolio. A tire dealer could go to these customers with a cost effective tire service maintenance program and be quite successful, for those that do it well,” Kramer says. “The ultimate goal of such a program should be lowering the total cost of ownership for these companies. If you can lower their TCO and be in a position to demonstrate to them that your programs and processes are better than what they’d be able to do on their own, it would be a win-win for everybody.”

Both Waddle and McDonald agree that minimizing downtime is a major way to keep class 3-5 customers happy.

“Give them service as fast as possible and keep tires that they need stocked,” Waddle says. “It’s a hard market because you have to stock a lot and there’s not a lot of profit in having inventory sit in your shop. But these customers need the tires when they need them.”

“They want quality service and a quality product,” McDonald says. “But they don’t want to sit and wait; they don’t want to have a delivery made late or to miss an appointment. So it’s about promptness and availability and getting the work done as quickly as is feasible. That’s extremely important.”

He notes this particular segment is unique because of the range of tires needed, from a recreational vehicle-type tire up to all-steel commercial tires designed to be retreaded multiple times. “There’s an extremely broad range of tires for this group of vehicles that dealers need to make sure they inventory, or at least have quick access to. They can’t tell people that it will be two or three days before they can get a tire in.”

Another thing to keep in mind with these types of tires is the unusual sizes available and why certain vehicles require them.

For example, most 19.5-inch sizes are a little bit wider and lower to the ground than other tires, Kramer says. “These vehicles’ ergonomics are such that drivers are in and out of them on a regular basis, and they don’t want to be lifting things to higher platforms. They’re looking for tires that will carry the load but are ergonomically friendly to the user and for others that come into contact with the vehicle. Also, because of the vehicle height, you want the center of gravity closer to the ground.”

Sample Offerings

Kramer says Goodyear’s most popular tire for the class 3 segment is the ArmorMax 900 series, launched last December to meet the regulations established by the TREAD Act.

The four new load-range E tire models include Unisteel G949 RSA and G947 RSS all-position tires and Unisteel G933 RSD and G971 drive tires for class 3 vehicles. Constructed with steel-reinforced sidewalls and steel belts for durability and retreadability, the tires also provide long mileage to help drive down overall lifecycle costs and deliver value to fleets, according to Goodyear.

Beyond the ArmorMax, popular offerings include the G149 RSA and G622 RSD for class 4 and 5 trucks, Kramer says.

BFNAT’s Duravis line, introduced in 2007, includes the Duravis R250, a popular choice among class 3-5 vehicle owners, McDonald says. “This is a premium tire that’s going to deliver a lot of service for the customer.”

Designed with all-steel casings for long mileage, durablility and retreadability, the R250 is available in five sizes.

Some non-steel tire choices BFNAT offers this segment include the R500 and M773, also in the Duravis line, or the R273.

These tires offer the same high quality as the all-steel options but are not designed to be retreaded multiple times, McDonald says.