Run-Flat Growth Slow Amid Cost, Performance and Acceptance Issues
It seems like it was a long time ago when we first heard that run-flat tires would take over the industry.
Drivers saw the added safety potential and never again wanted to change a flat in a driving rainstorm. Because run-flats meant no spare tires, carmakers wanted that space back for passengers, storage or other features. And tiremakers, wanting to clean up their burgeoning SKUs, calculated the cost benefit of converting to run-flat production.
Run-flats would rule the tire universe, according to tiremakers. Most vividly, former Goodyear chairman Sam Gibara even boasted in 2000 that run-flats would represent 75% of that company’s tire sales®ƒby 2003.
J.D. Power & Associate studies consistently said that 80% of consumers desired run-flats over all other automotive safety features. New run-flat technologies emerged, some older ones were given new life, and acronyms and names like PAX, SSR and EMT became common parlance.
As if those factors weren’t enough of an incentive, massive tire recalls earlier this decade had experts predicting that consumers and OEMs would flock to run-flat technology by the millions.
All signs pointed clearly to a technology shift unlike any this industry had experienced.
Yes, it seems like eons have passed, but it has only been a handful of years. Yet, despite predictions and proselytizing and planning ®“ and even praying – run-flat tires remain just a blip on the marketshare tables, restricted primarily to OE fitments on expensive luxury vehicles. Replacement market sales are nearly invisible, both globally and in North America.
It’s a Slow Train Comin’
So what caused the "Run-Flat Express" to slow to a crawl? Can it ever get up to speed again? More importantly for dealers, who will surely face technical and capital cost challenges in dealing with run-flats, just where is this market segment headed?
"We don’t necessarily expect to see consumers ‘flock’ to purchase run-flats in the aftermarket," says Hank Hara, executive vice president of Bridgestone/Firestone North American Tire (BFNAT). "Price will continue to be a variable, not dissimilar to where anti-lock brake systems were 10-15 years ago. Now, most new vehicles come with ABS as a standard feature. We expect a similar evolution with run-flats as they become mainstream through OE fitments.
"What will it take? We believe target cost containment and enhanced performance, as well as customer satisfaction, are factors that need to be addressed for the aftermarket future," he says.
Bill Hopkins, Goodyear vice president of global products marketing, says OEMs will continue to drive the market for run-flat tires. "While the new TPMS regulations might increase the aftermarket demand for run-flat tires in the future, I don’t think it will ever be our primary market for these tires.
"When we work with an OEM to equip a vehicle with run-flat tires, we do a lot of work to optimize the tire for that specific vehicle," Hopkins says. "Consumers who purchase run-flats for an existing car don’t get that same degree of comfort because the tire isn’t optimized for the vehicle, and they’d need to purchase a low-pressure monitoring system, which is a significant additional cost."
"Consumers will buy in mass only when the cost and functionality of run-flats become comparable to the existing standard tires," Hisao Suzuki, executive director and president of Yokohama Rubber Co.’s tire group, says tellingly.
Performance Issues
Functionality, rather on-road performance, has been an issue for run-flat tires in the replacement market. Complaints about ride harshness, wet traction, treadwear and road noise have been the most common consumer issues with current generation run-flats.
"Ride harness is a trade off, but due to the limited volume of sales of this tire at this time in the aftermarket, we aren’t making this our top priority to address," says BFNAT’s Hara. "As the interest in advanced run-flat technologies rises at the OE level, we’ll begin to move these technologies into the aftermarket."
"New materials and composite technology has enabled significant improvements in the ride and performance of run-flat tires," Hopkins says. "The newer tires can be less stiff because they are less sensitive to the heat build-up inherent in an under-inflated tire. That means they provide a more comfortable ride than their predecessors, without compromising run-flat capabilities."
Cost, too, has been an over-riding factor slowing both OE and replacement market run-flat growth. A quick check on the Internet shows there is still a massive disparity in pricing between standard and run-flat tires.
A standard P245/45Y17 major brand UHP sells for $179 per unit, while the same brand/same size tire as a run-flat commands $274 per unit. A standard P275/40Z18 is $238 per tire, yet its run-flat brother sells for $339.
Add to that the cost of a necessary TPMS ®“ direct systems range from $169 at the bottom of the scale to well over $400 ®“ and you can see why your customers aren’t clamoring for run-flats. Weighing the cost/benefit ®“ most people will say they haven’t dealt with a flat tire in years ®“ converting to run-flats appears impractical for today’s consumers.
Tomorrow never knows, however.
Which Will Win?
BFNAT’s Hara says worldwide Bridgestone Corp. sold just 200,000 run-flats last year. Goodyear’s Hopkins claims 300,000 Goodyear EMTs were sold globally in 2002, and says 700,000 will be sold this year. Yokohama has no OE run-flat deals as yet, it says. Counting in all the other players ®“ including Pirelli, Michelin, Continental and the others ®“ global run-flat sales in 2002 probably barely passed 1.5 million units.
Over that last few years, various technology and marketing alliances have been formed between tiremakers. Three years ago, Goodyear and Michelin created a joint venture to expand development of Michelin’s PAX system and Goodyear’s EMT. Pirelli and others have also signed on to aid development of PAX, which requires special wheels.
Continental and Yokohama formed alliances with Bridgestone to advance run-flats that did not require special wheels or handling. Others have joined or created other alliances. All have been hedge betting as to which way the OE wind will blow.
"Our own forecast indicates that the three different methodologies will find their own suitable domain by the tire size and types of vehicles," says Yokohama’s Suzuki. "The reinforced sidewall method has an edge for sports cars with low profile tires, while a support ring method will be more suitable for vehicles with taller section height, such as SUVs. PAX system will be adopted only with successful joint development projects between OEMs and tiremakers because of the need for the special wheels."
"We believe the run-flat system that will win in the long run is the one which is easiest for the consumer, and ultimately one that would attach to a conventional tire and wheel system," Hara says.
Goodyear’s Hopkins, though, says his company is pleased with its alliance with Michelin. "Our companies have learned a lot from each other, and we think the industry will benefit from our cooperation in developing technologies that are optimized for specific applications.
"We believe both systems will have a place on future vehicles. The stiffened-side wall design will likely be the standard for passenger vehicles, while a supported system is more likely to be used on heavier vehicles such as light trucks and SUVs," Hopkins says.
Other technologies, such as self-sealing tires, which have been around for years, and still-developing polyurethane tire technology, which is receiving greater R&D attention, are also part of the run-flat carousel.
Walls to Break Down
So where does it all go in the future? Tiremakers say the push has to come on the OE side, and point to TREAD Act-mandated TPMSs and recent non-luxury car run-flat fitments on the Mini Cooper and Toyota Sienna minivan as vanguards for expansive run-flat growth.
"OEMs recognize the safety benefits, design options and weight savings that are inherent with run-flat tires," says Hopkins, "but some have to make changes in certain vehicles in which the spare is considered part of the crash-absorption system. There is also the issue of making consumers comfortable about driving a vehicle without a spare tire; we need to help ease that leap of faith.
"It will take some time before run-flat tires become the dominant system, although we do expect to see a very significant increase over the next 5-15 years," he says. "The implementation of TPMSs on all passenger vehicles will be a major factor. Also, as tire companies adopt common standards and tires mature to the extent that all inflated tire performance parameters are maintained ®“ with the added bonus of security ®“ then we’ll see a significant adoption of run-flats."
"We believe the key success factors for run-flats at OE are weight, ride comfort and cost being similar to equivalent regular construction tires," says Yokohama’s Suzuki. "The factors impeding replacement market sales are cost, the special attention required to mount/dismount the tires, and the potential need for special wheels. There will be growth for run-flat business if and when those technical hurdles are overcome."
Tiremakers have been decidedly less boastful about the future of run-flats, now realizing just how stout the technical, price and acceptance walls are that they must break down before this technology becomes wide spread.
And while run-flats remain a "good idea whose time has come," time will only tell what a good idea consumers really think they are.
