Retail

20 hot stories from the SEMA Show

Mike Manges and Bob Ulrich
Posted on December 21, 2009

Exhibitors and attendees who participated in the 2009 Specialty Equipment Market Association (SEMA) Show report that the event exceeded initial expectations.

Despite the absence of several tire company exhibitors from the trade show floor — an issue that is being actively addressed by both SEMA and the Tire Industry Association the 2009 SEMA Show delivered in terms of bringing buyers and sellers together in an environment that many described as being much more conducive to commerce than previous editions.

Numerous tire manufacturers and marketers used the Tires, Wheels & Equipment Section of the show as a forum to introduce new products.

Many tire equipment, computer, garage equipment and tire repair companies did the same.
Independent tire dealers and distributors of all shapes and sizes also made the investment to attend the event, including representatives from some of the largest independent tire store chains

in the country like Discount Tire Co. Inc., Tire Kingdom Inc., Les Schwab Tire Centers, Monro Muffler Brake Inc., Somerset Tire Service Inc. and others.

Tire dealer program groups were well-represented, too. Also noteworthy was the high number of Chinese tire companies on the trade show floor.

Perhaps the hottest topic of conversation among tire manufacturers, marketers, distributors and dealers during the 2009 SEMA Show was the White House’s decision to place tariffs on Chinese consumer tire imports.

Several top-level executives revealed to MTD how their companies are adjusting to the many complicated changes that have resulted from the controversial action.

This special, first-hand report, “20 hot stories from the SEMA Show,” brings you their stories, as well as the scoop on new products and programs that were unveiled during last month’s Las Vegas, Nev.-based event

TIA to present 'green symposium' in 2010

Green” won’t be just a buzzword at the Tire Industry Association (TIA) in 2010. The association plans to hold an environmental “symposium” next year that will feature seminars discussing how members can lessen their impact on the environment, from minimizing greenhouse gas emissions to properly getting rid of used oil and old batteries. Another symposium will follow in 2011.

“We’re looking at a whole series of issues,” says TIA Executive Vice President Roy Littlefield. “What we bring together in those symposiums hopefully we can bring around to state (tire dealer) association meetings.”

To facilitate its plans to go green, TIA has formed an Environmental Advisory Council, a new group within its board.

Another big initiative for TIA will be the formation of a task force “that will focus on what we can do as an association to provide the commercial side of the industry with what it’s looking for,” says new TIA President Wayne Croswell. “We’re trying to figure out what it is they need” as far as education goes.

In related news, Croswell and Littlefield revealed that TIA will not be part of the 2010 Tire & Maintenance Council commercial trucking show, ending a several year long partnership. - M.M.

Pessi focuses on Pirelli's strengths

Mauro Pessi is back with Pirelli after a two-year stint at Brembo SpA, and he says it feels like he never left.

Pessi, the new CEO and president of Pirelli Tire North America (PTNA), started with Pirelli & C. SpA in 1991 in the tire sector. From 1998 to 2000, he was vice president of marketing for Pirelli’s United States-based subsidiary.

He returned to Pirelli just as additional tariffs were being imposed on Chinese consumer tire imports. Pirelli manufactured P4 and P5 touring tires in its year-old China factory, which represented 20% of the company’s shipments in the U.S.

Pessi says 50% of that volume will be transferred to Pirelli’s manufacturing base in Brazil.

Production of the other 50% will stay in China, partially offset by the company’s recent 10% price increase.

Pessi’s goals are consistent with the company’s strengths:

• to sell solely through independent tire dealers;

• to stick with the Pirelli brand. “We don’t want to be the entry-level line for any dealer.”

He wants to increase market share — but not more than necessary. “If I could reach 4%, max 5%, I think we will have accomplished our goal in the United States, but that is far from where we are now.”

Pessi adds that he wants to grow PTNA in a “sustainable way,” build cash and profits for the company, and “manage the brand in a profitable way.” - B.U.

Hankook Optimizes line-up with new tire

Like many tire manufacturers with production facilities in China, Hankook Tire Co. — as well as its U.S. subsidiary, Hankook Tire America Corp. — had to make some adjustments after tariffs were levied on Chinese-made tires. One of the results? A new tire, the Optimo H724, which replaces “the primarily China-built product, the Optimo H714, which we were bringing here,” says Bill Bainbridge, Hankook director of brand communications.

Hankook prominently displayed the Optimo H724 at this year’s SEMA Show. “We’ve made a number of significant changes, so it’s not a re-do” of the H714, he notes. “It’s a new product.”

The H724 comes with a 70,000-mile warranty. “We also have made changes in the carcass construction, which allows it to be a lighter product.” The tire, which is slotted at the “good” level within Hankook’s good-better-best strategy, will hit dealer inventories during the first quarter of 2010.

When times are tough, “more people look for value,” says Bainbridge. “But value doesn’t mean the cheapest tire.” - M.M.

Wild in the country: Falken targets LT

Dealers didn’t think of Falken as having all-terrain light truck tires,” says Mark Richter, Falken Tire Corp.’s senior manager of dealer marketing. The company believes the recent introduction of two new light truck tires will change that perception. Both products, the High Country A/T and the WildPeak A/T, were on display at the 2009 SEMA Show.

The High Country was officially introduced this past summer, and its size line-up — 34 in all, including “a ton of OE sizes” — was recently finalized, says Richter.

The tire is “for your core pickups and SUVs. It doesn’t have a lot of the extra-spicy inch-up sizes,” but its design is much more aggressive than what’s typically seen on pickups and SUVs straight from the factory, he says. “It has very square shoulders. It fills up the wheel wells. Falken has never had this before.”

The WildPeak A/T fits 15-inch through 20-inch wheel diameters. Its size line-up includes “many plus-sized applications.”

Also on Falken’s “never-had” list is the new Sincera Touring SN211, an entry-level, T-rated touring tire that the company is promoting as a “staple for your average, high-volume sedans like the Honda Accord or Toyota Camry.” - M.M.

SURE Tire shores up supply in wake of tariffs

Being the president of a private brand tire company that sources a lot of its products from Chinese suppliers, you would think SURE Tire Co.’s Pat McLaughlin would be on pins and needles due to the recent Chinese tariff decision. Far from it.

Not only has SURE not reduced the number of tires it’s ordering from China, the company has stepped up the number of tires and lines it’s sourcing from Deestone Ltd., a Thailand-based tiremaker that has been supplying the private brander with products since 2008.

Deestone, which has two plants in its native country, is building a new passenger and ultra-high performance tire line that SURE will bring to the U.S. during the first quarter of 2010. “We will be adding 50 SKUs,” including some light truck tires, says McLaughlin.

Altogether, SURE plans to bring in more than half a million Deestone-manufactured units next year. That number also will encompass nine new sizes for SURE’s Cascade line, explains McLaughlin, who adds that SURE maintains “good relationships with our Chinese suppliers.” As for the tariffs, “everyone will have to learn to live with them,” he says matter-of-factly. - M.M.

Tariffs change Double Coin's plans

Double Coin Holdings Ltd. sells medium truck and OTR tires in the United States through its China Manufacturers Alliance LLC (CMA) subsidiary. Are Double Coin passenger and light truck tires far behind?

No, according to Chun Chen Yue, Double Coin’s general manager. Increased tariffs on Chinese consumer tire imports have forced the company to alter its timetable for producing consumer tires in China and exporting them to the U.S. Yun says it will take “around two years.”

He describes the tariffs as a “lose-lose” situation. “It’s really hurting the Chinese tire industry, and brings trouble to consumers in the U.S.”

He adds that Double Coin executives are “having discussions” as to where in China to produce the tires. Possibilities include existing Double Coin plants in Rugao and near Shanghai, or a new plant.

“Everything depends on the cost,” says CMA President Mike Yang.

CMA and Double Coin faced a similar situation when Chinese OTR tires were hit with antidumping duties in 2008. CMA Vice President Walt Weller says OTR shipments have fallen since then, but is not sure if the added cost is at least partially responsible.

“It’s hard to measure the impact. It has probably thinned our margins a little bit.” - B.U.

Full speed ahead says Kenda's Yang

Despite the 35% import tariffs on consumer tires made in China, American Kenda Rubber Industrial Co. Ltd. plans to increase its passenger and light truck tire offerings.

At the SEMA Show, the company, which does business as Kenda USA Corp., showcased its new Wild Trek A/T. Featuring a symmetrical, five-rib tread pattern, the all-terrain light truck and SUV tire is available in eight P-metric and seven LT sizes.

Kenda is positioning the Wild Trek A/T between its Klever H/P highway tire and soon-to-be-introduced Wild Trek M/T mud-terrain tire.

Kenda Rubber Industrial Co. Ltd. operates three plants in China (four if you count the company’s joint venture plant with Cooper Tire & Rubber Co.) and one each in Vietnam and its native Taiwan, says Kenda USA President Jimmy Yang. Kenda probably will offset some of the added import duties by increasing prices.

Expanding capacity at its Taiwan plant is another option, he says. “The infrastructure is already there.” Moving production from China to its existing plants is “part of the discussion.”

In the interim, Kenda will continue to bring in consumer tires from China.

“Our original goal, for Kenda to grow radial passenger and light truck tire market share (in the U.S.), remains the same.” - B.U.

Hercules goes touring with new mid-range tire

It’s been years since we’ve come out with a new touring line,” says Joshua Simpson, vice president of marketing for Hercules Tire & Rubber Co.

Hercules introduced a new touring tire, the Roadtour 655, during last month’s SEMA Show. The tire is available in more than 20 sizes, ranging from 14 inches to 16 inches, including seven 16-inch configurations.

Available in three different speed ratings (H, T and V), the Roadtour 655 contains, among other features, a computer-optimized tread design and Hercules’ LRR (Low Rolling Resistance) Tread

Compounding, which makes it the most fuel efficient tire in the company’s passenger tire line-up, says Simpson.

“Touring remains a strong category, and within the segment, you still have premium, mid-range and economy range products.” Hercules is positioning the Roadtour 655 as a mid-range tire.
For a while, there was a trend for consumers to gravitate toward the economy level, he explains, “but the mid-range is where we feel we can get the biggest bang for our buck.”

Also on display at the 2009 SEMA Show were the Raptis HR1 and the Raptis VR1.
The VR1 is available in six sizes, ranging from 195/60R15 to 225/50R17, while the HR1 is available in three sizes: 205/65R15, 215/60R16 and 225/60R16. - M.M.

Atturo offers affordable alternative

Atturo Tire Corp. is promoting its new AZ800 line to SUV, sport truck and crossover vehicle owners with the slogan, “Performance within reach.”

The ultra-high performance tire is both “an affordable plus-size option and affordable OE replacement option” for vehicles like the Porsche Cayenne, says Michael Mathis, co-owner of Atturo Tire with his brother, Don.

Manufactured by Federal Tire Corp. in Taiwan and modeled after the Federal Couragia line, the private brand tire is “Obama-tax free,” according to Mathis. It competes against similar Kumho, Hankook, Nexen and Falken brand products.

“Our dealers have a real opportunity to keep the price where they want to,” he says.

The 15-size line ranges from 255/45VR20 XL to 305/35VR24 XL; 14 are extra-load sizes.

“One of the things we’ve done is focus on some unique fitments, with staggered sizes,” says Mathis. For example, the AZ800 is available in size 275/40R20 106W XL for the front axle and 315/35R20 106W for the rear axle.

Two additional sizes, 255/50WR19 (front) and 285/45WR19 (rear), will be available in February 2010. Atturo will add two 22-inch sizes in March.

“We hope to both expand the AZ800 line with new sizes, and to add models for UHP tires in 17- to 20-inch sizes and performance-oriented snow tires.” - B.U.

What's next for Nexen?

Shortly after the tariffs on Chinese tire imports went into effect, Nexen Tire Corp. announced it would begin building a new tire plant, its second in South Korea, late next year.

The two events are not related, according to John Aben, senior vice president of sales and marketing for Nexen Tire America Corp. “That would be a ridiculous reason to build a plant.”

Even before the new tariffs were imposed, very few of the tires made in China were exported to the U.S. “We won’t be bringing any in now.”

Nexen produces nearly 17 million consumer tires annually, and “a pretty good share of it” is targeted for the U.S., says Aben. “I’m constantly fighting for more. I wish the plant was open now!

“Nexen wants to stay extremely flexible in the marketplace, which is extremely volatile,” he says.

“It’s difficult to put together a concrete plan.

“If the market shifts, we want to stay flexible so we can move with it.”

Nexen also introduced two tires during the SEMA Show. One was a maximum performance tire (N9000), the other a UHP tire (N8000).

“We’re at the next stage where we want to start marketing the brands,” says Aben. “That’s what our dealers want.” - B.U.

Key trend: TPMS tool proliferation

Two years after the National Highway Traffic Safety Administration mandated a tire pressure monitoring system (TPMS) on every new light vehicle, TPMS aftermarket tools and sensors are still flooding the market.

And for good reason. According to Schrader International, more than 120 different replacement sensor SKUs are required to service vehicles equipped with tire pressure monitoring systems.
chrader displayed its EZ-Sensor, a programmable TPMS sensor designed to interface with the TPMS already installed in the vehicle, at last month’s SEMA Show.

The sensors can be programmed using a variety of tools already available in the marketplace, including the Schrader 21230 Diagnostic Tool, the Wheelrite TECH400 Plus from Bartec USA LLC, and SPX’s OTC Tire Pressure Monitor Kit.

Orange Electronic Co. Ltd. also displayed its OPSS (Orange Programmable Sensor System) during the SEMA Show. It is designed specifically for vehicles that require OBD activation.

Orange also has developed a TPMS that integrates the Garmon brand global positioning system (GPS) into the sensor.

The company is working on licensing its TPMS to other navigation system manufacturers as a value-added service.

31 Inc. recently added brand name sensors (Ford, Beru, Lear, Pacific, Siemens, TRW and Schrader) to its TPMS parts catalog.

Seetron Inc.’s TP2 series includes a TPMS for commercial vehicles (TP2-CV1) and front truck and bus axles (TP2-TBF).

Bartec promoted www.whytpms.com, a new Web site that provides answers to questions about TPMS to both repair technicians and vehicle owners.

Finally, TIA has updated its TPMS Relearn Chart to include all 2009 and some 2010 model year domestic and imported vehicles. The charts include NAPA sensor and service pack numbers. - B.U.

Vogue broadens product range, audience

How does a small private brand tire company that caters to a niche audience cope with the worst recession to hit the U.S. in 80 years? Simple, says Greg Hathcock, president of Vogue Tyre & Rubber Co.: by offering new products and expanding its scope.

“We’re working on a new sidewall design,” which should be available by spring, he reports.

“We also are looking at new speed ratings for our products. We have two Vs right now; we’ll soon have a third one,” which will help broaden Vogue’s appeal to owners of import vehicles.

Imports, particularly Japanese models, will be a big growth area for Vogue, says Hathcock. (“We’ve always been heavily domestic.”) The biggest challenge will be “determining how many SKUs we go after because we have to sell them in other channels as well.”

Even as the recession continues, “I don’t think the propensity for customizing cars is going to change,” he adds. Vogue is known for taking the long-view. The company is celebrating its 95th anniversary this year. - M.M.

Radical departure: an all-season Nokian?

For years, Nokian Tyres Inc. has preached “winter tires for winter driving and summer tires for summer driving.” In a radical departure from that mantra, the Finland-based company has introduced a new all-season passenger tire, the Nokian eNTYRE, designed specifically for the North American market.

“Our dealers asked for it,” said Nokian President Bernie Del Duca after the tire’s unveiling during SEMA week. “I can’t emphasize enough — our first mandate is ‘buy winter’” if the consumer is driving in a wintry area. “But we were missing a second fitment” for customers in warm weather regions, he admits. “Our dealers said, ‘We have to have this.’”

The eNTYRE, which will be available by March, will come in 26 T-, H- and V-rated sizes to fit rims ranging from 15 inches to 17 inches in diameter.

In development for several years, the tire contains several features, including 3D sipes to ensure better handling, four hand-polished grooves for wet handling, “driving safety indicators” molded into the tread that let drivers know when the tread has dropped to unsafe levels, and other elements.

A birch leaf insignia on the tire’s sidewall indicates “the complete absence of toxic chemicals.” - M.M.

Chinese CEO reacts to tariff decision

The decision to apply tariffs to Chinese-made passenger and light truck tires has at least one top-level Chinese tire company executive scratching his head. “It’s beyond our imagination,” says Ding Yu Hua, chairman of Triangle Tyre Co. Ltd., one of China’s largest tire producers. (Hua says his company builds 30 million units each year.) “President Obama should not have approved this tariff... the total number of (Chinese tire imports) isn’t that much.”

Most Chinese-made consumer tires fill an important niche at the entry level, “while U.S.-made tires are mainly premium-level,” he says.

“Other countries will increase their exports to the U.S. market so you don’t solve the existing problems of the U.S. tire industry,” a direct shot at the United Steelworkers union’s claim that tariffs will restore lost American tire manufacturing jobs.

Despite the tariffs, Hua says his company does not expect to lay off workers. “Because we have a worldwide range of products, we can change our focus. We can focus more on the domestic market,” as well as other countries. - M.M.

Vredestein discusses life under Apollo

After several years under the ownership of Russian tiremaker Amtel, Vredestein is happy to now march under the banner of India’s Apollo Tyres Ltd., says Vredestein CEO Rob Oudshoorn.
Apollo’s acquisition of Vredestein Banden B.V., which took place this past May, will lead to various synergies, he said, including the sharing of technology and the coordination of sales and marketing efforts.

“We are moving to a global approach within the Apollo group.

“Apollo will become a global brand,” which may entail Apollo tires being sold in the U.S. some day.
“The questions are ‘When will Apollo have the production range for the U.S. and when will it have the production capacity?” says Marc Luyten, director of corporate marketing and sales for Vredestein.

In the meantime, Vredestein plans to continue on its present course in North America. (The company ships nearly 100,000 units from its factory in the Netherlands to the U.S. each year.)

“We’re not going for big volumes of the Vredestein brand,” says Oudshoorn. “We’re interested in the mix.

“We are aiming for the top spot in quality and price. We are more concerned with the positioning of the tire and sell-in vs. sell-out than volume. We’re not interested in competing with the mainstream.” - M.M.

SEMA Show gives torquing its due

A vehicle’s performance often comes down to proper wheel torque. Without it, the tire and wheel package is in danger of coming apart.

Torque was a hot topic at the SEMA Show. The latest issue of TIA’s house publication, which was distributed at the event, even featured “A Discussion about Torque.”

Team Torque Inc., a first-time exhibitor, promoted its torque tool calibration and repair service. It provides service options for torque wrenches, screwdrivers, power and pulse tools, testers, transducers and multipliers.

In addition, a new 1/2-inch torque wrench tester was introduced at the show by AME International LLC. According to AME President Keith Jarman, the TorqCheck does not need calibration. It also was designed to mount easily on a wall in the service area.

“It’s cost-effective for a tire dealer to literally check the accuracy of torque wrenches on a daily basis.”

The tool measures torque up to 180 foot-pounds within plus or minus 2% accuracy. “It works on a needle-gauge principle, so it’s easy to use,” says Jarman. “As long as the needle ends up at zero, you know (the torque wrench) is accurate.”

AME has exclusive, worldwide marketing rights to the TorqCheck, which is manufactured offshore. - B.U.

Korea's Daewoo sees opening in U.S.

Starting early next year, another South Korean tire company will be doing business in the United States when Daewoo International Corp. brings its passenger car and radial medium truck and bus tires to these shores.

“We’re planning to ship around $5 million to the U.S.” in 2010, says Daewoo official Seong Moo Lee.

“We’re trying to position ourselves under Hankook, Nexen and Kumho, but over Chinese brands.”
While Triangle Tyre Co. Ltd. and other Chinese manufacturers build Daewoo’s products, “we own the molds and plates, and we have our own patterns. Even though the tires are made in China, they are designed in South Korea.”

The Seoul-based company is targeting U.S. retailers by offering exclusive sales territories.

“That way we can develop a retailer into a wholesaler later on.” - M.M.

ASA partners with Activant

ASA TireMaster business management software has a new feature: a comprehensive, Web-based auto parts catalog from Activant Solutions Inc.

The Activant Integrated Service Estimator (ISE) is a “sourcing and estimating solution” designed to not only produce faster and more accurate repair estimates, but also source parts from a larger network of suppliers, say ASA Tire Systems officials. It includes the Activant PartExpert database of 7.9 million parts covering close to148.5 million applications.

All parts, labor and pricing information generated in the Activant ISE solution is automatically transferred into TireMaster estimates, work orders and invoices in real time, says Dean Rascoe, ASA director of sales. This integration enables the service writer to eliminate common errors and help optimize work flow.

Features of the ISE solution include the Activant Cover-to-Cover eCatalog module, which contains the following:

• millions of detailed product images, specifications and an original equipment cross-reference list;

• the LaborExpert aftermarket flat rate labor guide; and

• the EZWrite database of popular repair and maintenance services pre-mapped to parts and labor requirements.

ASA also is looking at integrating the Activant ISE into its TreadX software.

The integration will take place “very soon,” according to Rascoe. “It is a high priority item for ASA.” - B.U.

Creative juices flow at Nitto

Nitto Tire U.S.A. Inc. has formed a unique relationship with the largest wholesale tire distributor in the country, American Tire Distributors Inc. (ATD). It also has developed a Web site capable of making a difference with its dealers.

ATD has exclusive rights to distribute two Nitto brands in the United States: the NT850 and Winter SN2.

The NT850 is a premium broad-line tire designed for SUVs (19 sizes) and CUVs (six sizes). The Winter SN2 is available in 29 sizes.

(Ron Sinclair, senior vice president of marketing for ATD, says the company has no other exclusive distribution deals with Nitto in the works. “We’re always in discussions with manufacturers for opportunities, but there is nothing else at this time.”)

Nitto’s Web site will be launched in the first quarter of 2010. Nitto Marketing Director Stephen Leu says the “digital solution” gives dealers — especially those without Web sites — the opportunity to run their businesses more profitably and efficiently.

For a monthly fee of an estimated $22, dealers will have access to features such as mobile-based advertising, a service reminder system and an interactive training module.

“We’ll pay for the first year,” says Leu. “That’s how much we believe in the program.”
Nitto does not have an associate dealer program. “We’re trying to connect with the dealers through this,” he adds.

Nitto shares capacity with Toyo Tire Holdings of Americas Inc. at Toyo’s manufacturing plant in White, Ga. According to Leu, some “relocation of capacity” has increased Nitto’s percentage a little. - B.U.

20-20 Group vision

Norm Gaither and Stu Zurcher started their first 20 Group under the Dealer Strategic Planning Inc. (DSP) umbrella in early 2008. Twenty months later, DSP has three 20 Groups, each meeting three times a year. A fourth group is being formed.

“By June, we expect to have five full groups,” says Gaither. A 20 Group for commercial dealers also is in the planning stages.

Mike Sawyer, owner of Sawyer Tire Inc. in Bolivar, Mo., joined the first group to help him grow his six-store chain into 10 stores — the same reason he attended the SEMA Show. “We went in hoping to get industry benchmarks,” adds Karen Brasher, the dealership’s operations manager.

According to Sawyer, 20 Group rules require each dealer to present a money- or time-saving idea at each meeting. To date, he has been exposed to more than 100 ideas.

“The benefit from that has been huge,” says Sawyer, who estimates he has implemented at least 20 of the ideas. One idea led him to make his billboard advertisements less wordy.

Gaither provides financial guidance, while Zurcher facilitates executive discussions. Pat Brown, vice president of marketing, presents marketing and social networking advice to members.

“If you join a 20 Group, and you participate, I don’t care where you are on the financial scale,” says Gaither, “we’re going to add 2% to your bottom line.” - B.U.

Related Topics: 20 Groups, AME International, ASA, Atturo Tire, Double Coin, Falken, Hankook Tire, Hercules, Kenda USA, Nexen, Nitto, Nokian, Pirelli, SEMA Show, SURE Tire, Team Torque, TIA, TPMS, Triangle Tyre, Vogue, Vredestein

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