A 186-page final report from the International Trade Commission following its vote to impose tariffs on off-the-road tires from India and Sri Lanka provides insight into the OTR tire market. One takeaway: there are four things more important than price.
In questionnaires the government asked OTR tire purchasers (including tire dealers as well as original equipment manufacturers) to consider each brand’s quality and rank it by tiers. Several brands are listed in two tiers, while Bridgestone-Firestone Corp. of North America (BFNA) and Titan-brand tires won spots in all three tier categories.
The numbers in parenthesis represent how many purchasers placed a brand in that particular tier. Some brands in Tier 3 were listed by purchasers as Tier 4 or Tier 5 products, but the ITC staff used the most prevalent tiering system and included them in the third tier category.
Michelin (23), BFNA (22), Goodyear (11), Titan (5) and Trelleborg (2).
Titan (11), BKT (10), Yokohama (8), Alliance (8), Mitas (7), BFNA (6), Goodyear (5), Trelleborg (5), Michelin (2), CEAT (2), Continental (2), Maxam (2), Petlas (2) and Specialty Tires (2).
Alliance (5), Camso (4), Titan (4), BKT (3), Double Coin (3), BFNA (2), Carlstar, (2) and Samson (2).
Imports win on price
Purchasers compared OTR tires produced in the U.S. against those made in Sri Lanka, India and other countries not subject to this particular tariff investigation. They provided a country-by-country comparison on 17 factors ranging from availability, delivery time and discounts offered to price, reliability of supply and technical support and customer service.
Thirty-two of those purchasers compared OTR tires from the U.S. with like product from India and “reported that they were comparable in most factors,” but that U.S.-produced tires were superior in regards to delivery time, a “very important” factor in their purchasing decisions, and branding, a “somewhat important” factor in their purchasing decisions.
On price, 16 purchasers said U.S. OTR tires were inferior (more expensive) compared to tires from India; 17 purchasers said U.S. OTR tires were inferior compared to tires from Sri Lanka.
The domestic OTR tire producers also lost the price score when compared to producers in other countries outside of India and Sri Lanka.
Four things more important than price
In considering those same 17 factors, purchasers ranked four items as more important than price when making a purchase decision. Here’s what was rated as “very important” by more than half of the responding purchasers:
Reliability of supply (52 purchasers)
Availability and product consistency (51 purchasers)
Quality meets industry standards (49 purchasers)
Delivery time (44 purchasers)
Price was “very important” to 37 purchasers — and it tied with technical support and customer service.