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Paolo Ferrari Bridgestone Consumer Tire meeting 2020 vision

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Bridgestone Business Update: Mobility Solutions for the Future

Bridgestone Americas hosted its 2020 Consumer Tire Business Meeting Nov. 18 with a focus on reflecting on today’s tire market to create a better, more thriving relationship with dealers and consumers in the future.

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The theme of the meeting, “Today. Tomorrow. Together. We Thrive.” was touted throughout as Bridgestone executives remarked on economic challenges the industry has faced as a result of the coronavirus pandemic, which has accelerated its vision for the future.

“We selected this theme because we’re dedicated to your success whether we’re facing challenging times today or in the future,” said Brad Booth, vice president of sales, consumer replacement sales division, U.S. and Canada. “We plan to partner with you and your business today and tomorrow, and when we do this together, we will thrive.”

Bridgestone’s Vision for the Future

Paolo Ferrari, who joined Bridgestone Americas as its CEO in January, said the level of change that has taken place during the pandemic inspired Bridgestone to reshape its vision and strategy for the future.

“We need to be flexible and agile,” he said reflecting on the company’s response to the pandemic.

Ferrari described Bridgestone’s vision as melding existing tire services through its dealers with digital technologies to create a “tires as a service” model for customers with a focus on sustainability throughout the process. He said as technology becomes more accessible, a new mobility ecosystem will give rise to the connected fleet model. Bridgestone’s plan is to take advantage of the massive amount of data that are created and exchanged through a fleet’s digital platform to better inform R&D, create better-performing products, and overall, contribute to society, Ferrari said.

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This refocused vision brought about a massive change in the company’s “North Star Framework,” he said. This new “North Star Framework” includes building on Bridgestone’s foundation as a company that’s ultimate mission to serve society. Now, under Bridgestone 3.0, the company’s enhanced vision is to “provide social and customer value as a sustainable solutions company,” Ferrari said. As a sustainable solutions company, tire products will be at its core, however, the company will build on its product roadmap by incorporating data through tire sensors, predictive maintenance and fleets to create mobility solutions for consumers, such as a vehicle maintenance subscription.

SEE MORE: Bridgestone Rolls Out New Tires: Eyeing No. 1 Spot in UHP Segment

Industry Update

Riccardo Cichi Bridgestone Consumer Tire meeting
Riccardo Cichi, president and chief sales officer, Americas tire group, describes how the the rise of e-commerce has increased last-mile delivery vehicles.

Riccardo Cichi, president and chief sales officer, Americas tire group, updated dealers on the current industry landscape and what to expect into 2021.

“Q2 [2020] was one of the hardest quarters on record,” he remarked. “While our outlook remains challenging, we’re optimistic that the worst is behind us.”

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Cichi reviewed some of the industry trends Bridgestone has on its radar:

  • The company has seen a spike in its tires for last-mile delivery vehicles since the pandemic hit in mid-March. For the year, Bridgestone’s TBR business has been more resilient than other segments this year, decreasing about 5%. But with the growth of e-commerce during the pandemic, Cichi said the last-mile segment is set to outpace the overall market by 22% through 2022.
  • Although consumer replacement tire sales are down 10% for the industry, due significantly to a decrease in miles driven from 2019, higher-rim diameter tires remain strong. This is thanks to the premium, 18-in.+ tires that come OE on today’s CUVs and SUVs. Consumer replacement tire sales are expected to increase by 5% in 2021 and 2022, respectively, and growth in the high-rim diameter segment is expected to outpace overall market rebound as early as next year. Currently, 35% of vehicles in the replacement tire market are 18-in and up. By 2023, 43% of vehicles in the car parc are expected to fit into the high-rim diameter segment.

2021 Consumer Sales Outlook

Mariella Cielo, president, consumer replacement tire sales and marketing, said that Bridgestone will release three new products in 2021 as it continues to refine its product lineup to “reduce complexity and prioritize advanced technology.”

She remarked on how Bridgestone has been able to snag premium OE fitments and actively target the premium segment to yield better replacement tire rates.

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Cielo also highlighted a few changes for dealers that are coming in 2021.

  • For fleets, the company will retire its Firestone national account platform next year and migrate its fleet customers to its existing Bridgestone national account system. Cielo said this will help dealers interact with fleet customers easier and grow their fleet business. She said Bridgestone is dedicated to manufacturing 17.5- and 19.5-in. tires so that dealers have these sizes to serve last-mile delivery fleets.
  • The company will replace its TireNet system with TreadNet, a tire ordering system that will allow dealers and distributors to place orders and monitor supply easier. Cielo called it a “one-stop shop” for accounts payable, program tracking and the delivery receipt process.
  • It will also update its Tire Navigator tool to better show dealers which sizes and how many to stock based on previous sales and their region’s car parc. The tool will also be integrated into the new TreadNet system.
  • Cielo said the company will also be updating its TireConnect online tire ordering platform and add functions to make tire sales and sourcing more efficient.

In addition, Cielo mentioned that Bridgestone is evaluating the concept of a complete tire and vehicle maintenance subscription. For example, customers could pay a monthly fee and have tire replacement, tire rotation and brake replacement covered when needed through this subscription service.

OE Business Update

Shannon Quinn, president of consumer OE tires, said although new vehicle sales are predicted to be 15% below 2019 levels, the market should rebound in 2021 and 2022.

She said while the 18-in. and up segment is growing at the replacement level, expect to see growth in the 20-in and up segment, which is slated to make up 23% of OE fitments by 2025. Quinn said this shift is fueled by consumer preference for light trucks, CUVs and SUVs. She pointed to Bridgestone’s Alenza line as a popular OE fitment since it’s meant for these vehicle segments.

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Quinn shared that 78 new Bridgestone OE fitments came to market this year and that one in four vehicles on the road in the Americas today is equipped with a Bridgestone or Firestone tire.

“Our selection on these cars means more business for you right now,” she said. “Our great products, strong brands and high marketshare will position your business for success today, tomorrow and in the future.”

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