Ultra-high performance tire sales: Still growing year by year
Neither snow, nor rain, nor tariffs, nor gloom of a recession will keep UHP tire shipments from increasing. It’s not exactly the Postman’s Creed, but it does indicate how strong the replacement ultra-high performance tire segment has been in the United States, particularly in the last five years.
Despite sometimes harsh economic conditions and the domino effect they have on consumer buying habits, UHP tire shipments have grown nearly 50% since 2009. Every year is a good one for UHP tire sales.
Last year, a record 33.5 million replacement UHP tires were shipped. And all signs point to that trend continuing in 2014.
The Rubber Manufacturers Association (RMA) estimates replacement passenger tire shipments will rise by two million units in 2014 vs. 2013. If the number of UHP tires as a percent of total shipments remains the same (see Chart No. 1), the number of UHP tires will increase by more than 300,000 units.
Modern Tire Dealer estimates the percentage will increase slightly based on the evolution of tire technology (which may one day make every tire a UHP tire) and the increased use of UHP tires by vehicle manufacturers (a UHP tire OE on a Honda Accord?!). We predict another 3% increase in 2014 (see Chart No. 2).
Another sign that shipments will rise is the cautious optimism of domestic independent tire dealers. Our exclusive state-of-the-industry report for the first-half of the year shows continued signs of improvement among both retailers and wholesalers in terms of both units and dollar sales. This same tone holds true for full-year projections by both groups. (As for profitability, retailers are more optimistic than wholesalers.)
The definition of “high performance” was a much broader category in the past because it included UHP tire shipments.
However, the strength of the UHP segment has made the high performance segment more specific. It is defined more or less as H-rated tires with aspect ratios 70 series or lower.
In 2013, there were 34 million replacement high performance tires shipped in the U.S. From 2009 to 2013, shipments increased nearly 15%. Since 1994, high performance tire shipments have increased 136%.
According to MTD statistics, the best months for selling high performance tires and wheels are May, June, July and August, with an honorable mention for April.
“The UHP and HP markets in the U.S. will continue to grow, especially the all-season portion,” says David Shelton, director of marketing for Giti Tire (USA) Ltd. “Original equipment vehicle manufacturers are driving this shift toward higher performance tires and higher performance capability to meet consumer desires.
“H is the new T. Newer vehicles, previously equipped with S- or T-rated tires, are now being equipped with H-rated tires. The shift may be via a complete in-line shift, or by step-up trim level packages within the vehicle line.
“V is the new H. Vehicle lines which were equipped with H-rated tires are now using V, and those that were V-rated are now coming with Z-rated (W- or Y-rated) tires.
“This trend has been growing for more than three years, so dealers should be prepared,” says Shelton. “Even light trucks and SUVs have seen a movement to higher speed ratings than predecessor lines.” ■