Down to Business: BFNAT Commercial Dealers Learn of Upcoming Threats, Opportunities - Tire Review Magazine

Down to Business: BFNAT Commercial Dealers Learn of Upcoming Threats, Opportunities

BFNAT Commercial Dealers Learn of Upcoming Threats, Opportunities

Since its inception eight years ago, Bridgestone/Firestone North American Tire’s (BFNAT) annual Bizcon commercial dealer conference has always been about the dealer. With educational seminars, a mini trade fair and group presentations, Bizcon in the past has been carefully framed to deliver knowledge and build deeper relationships with BFNAT dealers.

This year’s Bizcon, held in Chicago this past April, was no different. But there were a few added twists. Themed “Commitment,” Bizcon focused on mutual growth and profitability ®“ tiremaker and dealer ®“ in the face of ever increasing raw material costs, commercial market potential and new threats from gray market tires brought on by overseas currency fluctuations.

Singh Ahluwalia, BFNAT’s president of commercial tires, opened the two-day event with a review of the company’s market position. Ahluwalia noted that BFNAT’s 2003 truck tire sales were up 104% vs. 2002, keeping pace with the industry, but that its OE marketshare position had declined “slightly.”

“But we see signs of opportunity,” he said. Driven by a rebound in truck shipments and fleet rationalizations over the past year, ®we are optimistic about the economy and trucking,® said Ahluwalia.

Gray marketing of commercial tires and “third and fourth tier brands,” though, pose a threat, Ahluwalia said, to both BFNAT and to dealers. Unnamed dealers are taking advantage of currency fluctuations to import Bridgestone and Firestone tires purchased overseas and sell them to other dealers at prices lower than those a buyer could get from BFNAT. These tires, Ahluwalia warned, are not covered under any warranty.

Low-cost offshore brands, he said, “are a huge threat to retreaders.” Dealers, Ahluwalia said, ®have to demonstrate higher value to fleets to offset a ‘lowest price’ mindset.®

Mark Emkes, BFNAT chairman and CEO, who became chairman and CEO of Bridgestone Americas Holding as of Apr. 1, urged dealers to sell at higher prices. BFNAT, he said, suffered a $100 million increase in raw material costs in 2003 and expects further increases this year. Yet tire prices, Emkes, said, have not kept pace with those costs.

Between 1982 and 2002, according to the U.S. Bureau of Labor Statistics, BFNAT officials noted, the average price of a medium truck radial actually dropped 2.6%. Meanwhile, the price of an average Class 8 tractor increased, from $35,000 to more than $115,000 in the same 20-year period.

In addition, the 300-plus dealers in attendance heard presentations by Bill Graves, president and CEO of the American Trucking Associations (ATA); Bob Costello, ATA’s chief economist; and Gary Petty, president and CEO of the National Private Truck Council, who outlined high-growth opportunities dealers can enjoy by servicing private fleets.

Private fleets, Petty noted, represent 40% of the trucking industry, 82% of all medium/heavy trucks on the road, 53% of all truck miles traveled and 50% of all new Class 8 tractors sold. By 2020, he projected, private fleets will grow by 24% to 28%.

BFNAT also used Bizcon to launch three new medium truck radials: the Bridgestone R195F trailer tire, the Bridgestone R287 steer radial and the Bridgestone M726 EL drive tire.

The R195F, BFNAT said, resists scrub and curbing damage with sidewall protector plies. The R287 steer radial features help prevent edge and “wavy” rib wear, shoulder tearing, and stress cracking in the grooves, while delivering longer original life with a fuel-efficient 16/32.5-inch tread depth, BFNAT said.

The M726 EL (extra life) features a deep, 32/32.5-inch tread and special tread compounding to further enhance original life, BFNAT said. The tire also features stiff tread blocks that resist heel/toe wear, a solid shoulder rib to combat irregular wear and computer designed, buttressed tread blocks that enhance wet- and soft-surface traction, the company said.

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