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Commercial Tires
November 19, 2004

All the Right Moves: Secrets to Success in Growing Commercial LT Tire Market

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Mary Aichlmayr,author

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Commercial light truck tire buyers are everywhere – if you know where to look. They are plumbing, HVAC or electrical contractors, construction companies and pick-up-and-delivery companies. They are regional/local delivery companies, public utilities, municipalities and many small, service-oriented outfits. Some don’t work for a company – they’re self-employed.

Their specific lines of work may differ, but they all drive similar vehicles: pickup trucks, vans and utility trucks – in short, workhorse vehicles – which, of course, require workhorse tires.

The so-called “workhorse tires” they need are commonly within the 16- to 19.5-inch wheel diameter category.

No Frills
As you may expect, these customers are not as concerned with noise and ride comfort as SUV and regular pickup owners might be, at least according to Doug Addis, automotive sales manager at Suwanee, Ga.-based Maxxis International. “Tires are the last things they want to think about,” he says. They want to keep their costs down and profits up.

“They are looking for quality at a good price,” says Ken Harris, part owner of Harris Tire, a Southeast regional distributor for Sure Tire. “They want a tire that holds up under hard stress and gets good mileage under frequent runs.”

Some of these customers drive frequently through the city, stumbling over potholes and sometimes hitting curbs. Some ride on rough, muddy construction sites; others drive on the highway.

To cover all possible commercial applications, tire dealers should stock primarily three tread designs in commercial LT tires, according to Steve Buck, vice president and general manager at Hercules Tire & Rubber Co. “They should stock a rib, an all-season and a traction tire,” he says, adding, “It’s the dealers’ responsibility to learn where their customers’ trucks go and what they do so that they can recommend the right tire for that application.”

A new, aggressive, all-season tread design – the Terra Trac AT – will soon be added to Hercules’ Terra Trac line of commercial LT tires. And, Maxxis is developing a traction-type tire as a companion to its UE-168 commercial highway tire, which should be available in late 2005, according to Addis.

Tap the Opportunity
These tire companies wouldn’t be pursuing new developments if demand wasn’t there. But there’s other evidence this segment of the light truck tire market is growing. “No question the 16- to 19.5-inch market continues to grow,” states Addis. “Particularly in 17- and 18-inch LT sizes and up.”

Jack Laurent, truck tire sales manager at the Cooper Tire & Rubber Co., has seen this trend, as well. “The 8R19.5 used to be the tire of choice for these customers, but that is going by the wayside in favor of the low-profile 225/70R19.5,” he says. Dewey Beach, director of product management at Cooper Tire, adds that the industry is moving towards 70-series tires in many cases because a lower aspect ratio tends to offer more handling stability and load carrying capacity, which, for commercial customers, means more profit.

Cooper Tire offers tires in 8R19.5, but this size is on the downtick, says Beach. “In the low-profile, larger sizes, we offer the CXMT 320 in sizes 225/70R19.5 and 245/70R19.5,” he says.

Maxxis, too, wants a piece of the action. So, to cash in on some of the demand for larger sizes, Maxxis is currently developing a new 19.5-inch commercial tire, slated to be available by the third quarter of next year. This size will be new territory for Maxxis; the tire company currently offers an assortment of 16- and 17-inch commercial LT tires.

Brian Sheehey, truck and bus radial specialist at Hankook Tire America, says this market has been neglected lately but is gaining attention.

“There is more opportunity now with consolidation and maintenance outsourcing,” he explains. “Increasingly, companies don’t have the space or capital for their own maintenance programs, and by leasing vehicles, downtime is reduced.”

Logistics companies, too, are choosing fuel-efficient, smaller trucks to move freight, especially when they’re not carrying full loads. “Regional delivery is very big right now,” says Sheehey.

Like Laurent and Beach, Sheehey also sees low-profile 225s, 245s and 19.5-inch-diameter tires becoming more popular. Sheehey says Hankook is testing a new commercial LT tire to replace its AH06 19.5-inch steer tire and plans to have it on the market in 2005.

A Service Trio
The best way to attract and keep commercial light truck tire customers, according to Sheehey, is to focus on a trio of services that includes quality product, education and mechanical service.

As far as quality product is concerned, a tire dealer would be wise to stock durable tires with heavy plies, tough casings and sufficient load carrying capacities. And, instead of steel-fabric tires, “this industry is requiring steel-steel tires for durability,” says Laurent.

Tough casings are important in terms of retreadability. “Dealers should educate contractors on the benefits of retreading,” says Laurent. “While larger fleets are well tuned to retreading, smaller operations may not be.” Consequently, dealers should consider offering this option.

Education is an important piece of the commercial light truck tire service trio. “These tires are a different animal than other light truck or SUV tires,” says Addis. “The vehicles are used sometimes as self-contained warehouses. They are heavily loaded, and a lot of miles are logged on difficult terrain,” he says. The dealer has to understand the specific load capacity, terrain and mileage needs of each individual customer.

“Some of these customers drive smaller pickups and vans with 14- and 15-inch tires, but they load them up,” says Addis. “A dealer needs to educate them on load capacity and make sure they use a heavier ply tire. Fleet owners are dependent on correct tire recommendations from the dealer for the application. The dealer has a big responsibility.”

“Education is not something you charge for, but it pays dividends as a value added for the customer,” adds Sheehey. “The fleet manager and dealer should work together to make an informed decision. Successful companies select a product rather than just buy it.”

Quality and education are important, but service is absolutely paramount, according to Beach of Cooper Tire. “In pickup and delivery operations, especially, customers are hitting curbs and potholes, which could lead to more frequent alignment inspections,” he says. “A dealer should have a good alignment shop and educate the customer on how regular alignments can extend tire life.”

Both Sheehey and Addis say dealers should focus on tire life-cycle cost with these customers. And that means providing value-added mechanical services, including: on- and off-the-road service; regular vehicle maintenance; on-site inflation checks; regularly scheduled inspections; and even scrap analysis and mileage tracking. What dealers offer depends on their capabilities and how far they want to go with these customers.

At the least, though, dealers serious about this market should offer pre-established service programs, in which commercial customers drop off their vehicles periodically for basic scheduled services, like oil changes, according to Buck. “If a dealer offers to look at the vehicle every 30 to 60 days, he can track tire wear, too, and make recommendations,” Buck says.

Harris recommends dealers offer extended road hazard or mileage warranties. “These customers are interested in profit just like any other business,” he says. Simple value-added services like air and wear checks can save them money and build your relationship.

“A dealer doesn’t necessarily need a service truck, but it would be a definite plus,” adds Buck. “And, if service can be done on Saturday or during off-hours, the customer wouldn’t tie up a vehicle that could be out making money.”

It’s all about reducing downtime – keeping vehicles and profits moving. To really succeed in this segment, a dealer needs to become a consultant, says Sheehey.

“Dealers are the experts when it comes to tires and equipment,” adds Beach. “With these customers, it’s truly an ongoing, business-to-business relationship.”

And, it doesn’t hurt to be proactive in this business. “It’s important for dealers to solicit these customers,” says Buck. “Find out who they are and ask for the business. Make a presentation to a fleet owner or contractor. We see this business as viable and growing, but it doesn’t just walk in the door.”

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