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The Open Road

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The Open Road

Even With Competition, Specialty Products, the Opportunities Are There

Everyone likes their freedom. The freedom to go where they want, to do what they want, to enjoy themselves how they want is inherent in humans.

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One thing that has always been a symbol of freedom is the motorcycle. Motorcycles can take us places in ways cars – or any other enclosed vehicle for that matter ®“ couldn’t. With a motorcycle, you’re completely exposed to the environment, to the air, the smells, the heat and the cold.

There is nothing like climbing on a two-wheeler and hitting the open road.

And, while they could never replace the motorcycle, all-terrain vehicles have grown a huge following all their own. In many respects, ATVs offer just as much as motorcycles. You’re still exposed to nature, and going places that conventional vehicles can’t.

Sure, the popularity of the motorcycle and ATV markets have ebbed and flowed. But they still offer something no other vehicle can. And now, they’re offering it to more people than ever.

"The popularity of the motorcycle/ATV market is near peak levels not seen since the early 1970s," says Scott Griffin, specialty tire manager at Maxxis. "Motorcycle and ATV sales have experienced double digit growth the last 12 years."

Yes, and our fascination with motorcycles and ATVs means there are a lot of tires to be replaced.

What’s Going On?

The market for motorcycles and ATVs is pretty much like the SUV market – booming. And loudly.

"2002 ended with approximately 1.6 million units sold in the U.S.," says Griffin about the two markets. "We anticipate the growth rate to slow this year, primarily due to current world events, war, oil prices, etc." However, Maxxis says it does anticipate the markets picking back up again next year.

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The motorcycle especially has seen a dramatic rise in popularity – and not just because Harley-Davidson is celebrating its 100th anniversary this year. "All segments of the motorcycle market have been in a growth mode," says Greg Reich, motorcycle tires sales manager for Continental Tire North America. "Despite everything going on with the economy and the war, ‘03 is off to a strong start for Continental and we’re optimistic about the future."

The racing of these vehicles, especially, has taken off, whether it’s supercross, sidecar or drag racing of motorcycles or desert and mud racing for ATVs. Naturally, there’s a pro circuit but amateur racing is huge in this country.

But whether racing or pleasure cruising, the motorcycle and ATV industries are absolutely off the hook in terms of popularity right now.

Getting Involved

Getting into either the motorcycle or ATV markets can be more difficult for tire dealers than, say, getting into the tuner market or selling custom wheels. A dealer doesn’t just wake up one morning and think "I’d like to sell ATV tires today."

Well, he might … but most of the time, the owners of motorcycles or ATVs take their machines back to the OE dealer for any kind of service – including tires.

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But of the two, it seems going the ATV route might be a little easier for dealers. And quality is one reason why.

"Getting into the ATV business is less complicated than the motorcycle market," says Griffin. "Light truck/passenger tire distributors have access to many different ATV tire brands. And, the average ATV owner is always looking for a more high quality tire than the tires that came standard on the machine.

"Selling a traction tire with a higher ply rating for increased puncture resistance is a popular choice. Most ATV customers buy tires once every four years and are willing to wait a few days for a special ordered tires that meet their needs."

"There’s an appreciable market for the enthusiast with unique and specific needs – mud, snow, motorsports," says Jeff Wilson, marketing manager for Firestone Agricultural Tires. "It’s a real opportunity for dealers to profit past the OE business."

While the ATV tire business tends to be geographic – tire dealers in New York City, for example, probably won’t see many ATVs ®“ "the key thing for the dealer is get involved," says Wilson, "and understand the market at the local level."

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Motorcycles, on the other hand, are much more prevalent across geographic regions. Just by sheer numbers, dealers can stumble into motorcycle tire business. But it’s the owners who tend to take their bikes back to the OE dealer.

Tiremakers know this, as well, because most sell a majority of their tires through motorcycle wholesale distributors. However, there are ways for tire dealers to garner two-wheel business.

Besides promoting your motorcycle and ATV tire business, the most important thing for a dealer to do is display their wares, says Reich. "If the tires are hidden in the back room, they can’t be seen. Customers like to touch and feel and see the different tread patterns."

Another way for dealers to get in the motorcycle or ATV market is through grassroots racing. This can really open doors for dealers – which often translates into retail dollars.

Simple advertising or sponsorships go a long way towards getting your name out and associate the dealership with these markets. Straight advertising can be expensive – especially on top of a regular ad schedule ®“ but sponsorships can offer a lot of value for the money.

There’s also time. A dealer and his employees working hand-in-hand with grassroots racers can build a trust that’s important. Team ownership is another option, but that’s usually more of an investment than many dealers can make.

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"I would recommend contacting a local race promoter and working on a sponsorship deal," says Griffin. "Every ATV owner also drives a truck, so the marketing dollars toward racing are beneficial two ways."

There is one thing that many industry experts recommend: pick a market and focus on it. "We don’t recommend going after both the motorcycle and ATV markets at the same time," Griffin says.

Because of what’s involved in entering and staying in either the motorcycle or ATV markets, it’s best for the dealer to choose one – either by geographic area, or by interest level, whether his or the market’s. A concentrated effort will lead to better results.

Technological Advancement

Just because a technology is new doesn’t mean it’s unique. Many of the new technologies that have been developed in other segments of the tire industry have application for motorcycle and/or ATV tires.

Run-flat technology is especially popular with ATV tires right now. So are application-specific tires, such as "mud only" or "trail only" units, or tires with raised outline white letter tires. Improved mileage and grip are also critical.

"Motorcycle tires are now being built with Kevlar and steel-belted race technology for the high performance street rider," says Maxxis’ Griffin. "Radial technology is appearing in the cruiser and touring markets offering a smoother and quieter ride."

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Continental, later this year, will introduce two new radial models with "high-impact steel belting" which it says will "offer dramatic increases in both grip and mileage."

Other companies, like Firestone Ag, understand there is a difference between OE and what customers want at replacement. "The technical issues that are demanded by OEMs and the unique preference characteristics in the aftermarket will drive our product development," Wilson says.

It’s the ATV run-flat or puncture-resistant technology that seems to have many in the industry talking. "These tires are gaining popularity, as are application-specific tires," says Griffin, "although the price/benefit target has not been met at this point."

Still puncture-resistance seems to be succeeding where run-flats haven’t because of one thing – price. "The most popular ATV tires are being offered with six-ply rating casings, which are almost puncture proof and are offered at competitive prices," Griffin says.

One place where the price of a run-flat ATV tire doesn’t matter is in war. As the U.S. military continues operations in Afghanistan, one of the vehicles it uses are ATVs, which are equipped with Goodyear Tracker P EMT run-flat tires.

"Obviously, the potential usage environment for ATVs is severe, so our ATV tires are developed to withstand some tough terrain," says Steve Yanacek, Goodyear’s manager of ATV OE sales. "But the Tracker P EMTs take ‘tough terrain’ to another level, and we’re pleased to see the tires doing their part to carry our troops through their challenging assignments."

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Are dealers going to be able to conquer these two markets the way motorcycles handle the open road and ATVs handle rocky hills? For a lot of dealers, the answer is no. It’s just not possible.

But for some, motorcycle and ATV tires are niches they can succeed in. The motorcycle and ATV markets can turn into nice profit centers for those dealers who can find a way to tame them.

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