Off-the-road (OTR) tire dealers who are focusing their business mainly on large mining tires may be missing opportunities in the small OTR tire segments, Bruce Besancon told dealers at the Tire Industry Association (TIA) OTR Conference in Oahu last week.
“The big boom of mining just hasn’t been there in the past few years,” said Besancon, who is vice president of marketing for Alliance Tires Americas Inc.
“But there are other opportunities out there — growing opportunities — in small OTR, for rim sizes 25 inches and under. Dealers need to stay aware of those opportunities and set themselves up to cater to those customers.”
Demand is growing, especially for skid steers
Alliance provided a report of Besancon's presentation, in which he said an increasing focus on infrastructure improvements will drive demand for tires for skid steers, telehandlers, backhoes and small loaders. Skid steers are an especially bright spot because they have been adopted for so many uses.
“There are over 800,000 skid steers in the market today. Compare that with mining haul trucks, where there are approximately 14,000 out there globally. If we look at 28,500 tire dealerships across the U.S. and divide 800,000 skid steers equally among them, that’s almost 25 skid steers near every single dealership. And chances are those skid steer owners may not only need tires, but wheels to go with it,” said Besancon.
“Yes, the ultra-large trucks are a high dollar sales item, but you can make money on these smaller tires,” he adds. “You may be driving past five skid steers to go look at something bigger and not even notice them.”
Small tractors — the 40 hp and below category that fits hobby farmers, vineyards and small commercial farms — have been the bright spot in the agricultural equipment market for years, growing more than 11% in 2016 and coming in well over the tractor industry’s five-year average. And rental equipment is another ripe market for tires, according to Besancon.
“When you rent out a machine, what’s the first thing to get torn up?” he asks. “The tires.”
New skills to serve the small OTR market
Servicing the small OTR market is very different from managing big mining accounts, where maintenance and tire replacement tend to be planned in advance, Besancon said.
“Most small OTR purchases are made in response to an immediate need or emergency. It’s critical to have the tire available when the customer needs it. You also need to be able to service your tires — fitting and wheel replacement are important services to offer if you’re going to appeal to the small OTR customer.”
Besancon told dealers that tire manufacturers like Alliance have developed broad lines of small OTR tires specifically for tough conditions like mud, broken pavement, demolition sites, and highly abrasive surfaces. Understanding the options on the market and stocking popular sizes and tread patterns for local needs can help create great opportunities to up-sell.
“When a customer is looking for an OTR tire, chances are he’s just thinking of his tire as an inner tube on a wheel,” said Besancon. “He may not even know what he currently has on his machine. This is the perfect time to develop that consultative service-oriented relationship you want with your customers, to make sure he gets the tire that’s absolutely the best for his needs — severe service, foam-fill, special tread patterns, in a brand you know you can trust with your reputation.”
To build that relationship with customers and keep a wide range of options on-hand, Besancon suggests working with full-line suppliers. He said that Alliance’s brands — Alliance, Galaxy and Primex — include more than 2,000 SKUs in the OTR market, offering dealers a great opportunity to stock inventory or access tires to serve nearly any customer need.
“In the small OTR market, the dealer has 99% sway in what the customer buys,” Besancon says. “That’s just about the perfect opportunity for a tire dealer.”
For more information on Alliance tires, visit www.atgtire.com, call toll-free (800) 343-3276 or (781) 321-3910.
In other OTR conference news, TIA announced it will hold its first earthmover tire training class, hosted by Stellar Industries Inc., in June in Iowa.