No skidding: Construction recovery lifts sales of high-quality skid steer tires
The economy remains difficult and consumer confidence continues to waver, yet manufacturers are selling more skid steer tires. “Our company has experienced a slight increase in skid steer tire sales from 2011 through early 2012, with sales in the latter half of 2012 through early 2013 showing a steady and significant increase,” says Tom Van Ormer, director of purchasing for East Bay Tire Co.
“Fill rates have not been an issue for us as we’ve had little trouble securing product. Our biggest challenge has been keeping up with the sudden rise in demand from the predominately inert market.”
Tools and attachments enable skid steer loaders to be adapted for recycling, paving, excavation, demolition, mining, landscaping, farming, snow removal and many other applications. The variety of uses and users helps protect this segment from extreme swings in demand. The growth of the skid steer market, however, is tied to the health of the nation’s commercial and residential construction industries.
“Since the skid steer market dropped after 2008, it has started to rebound and inventory is plentiful. The housing market rebound will determine the sales for skid steers in the coming years,” says Mike Castaneda, vice president aftermarket sales, western region, for Greenball Corp.
Home builders began construction of more homes in March 2013, according to the U.S. Census Bureau. Builders broke ground on new homes at a seasonally adjusted rate of 1.04 million in March 2013, 7% higher than the previous month and almost 47% above the March 2012 rate. Although down 3.9% compared to February, building permits were 17.3% above March 2012 levels.
If the market continues to build for home builders, the demand for skid steer tires will continue to rise, too. Says Van Ormer, “With rental yards closing and construction down, customers turned to the least expensive tires they could get. Business is now slowly returning to these markets. Our specialty tire sales have improved as customers have come to appreciate and trust in the quality of our Dawg Pound Tire brand.”
Charlie Cohen of Bensenville, Ill.-based Industrial Tire Solutions says, “When the meltdown came, it (the market) went to cheapies. Now it’s starting to come back to where customers want better value. A more expensive tire gives you a lower cost per hour because it lasts longer.”
Lower the cost of ownership
Representing some of the most widely used equipment in construction and landscaping, skid steer loaders must work consistently under punishing conditions. The tires of these versatile machines take the brunt of moving earth, rubble, debris and garbage. Overall, the market trend continues to be customers seeking options which will boost their productivity, according to Adam Brown, product marketing manager, AG/construction for Carlisle Transportation Products.
“In terms of productivity there are several relevant factors for skid steer users,” he says. “Primary is tread wear and life of the tire as there is a direct cost associated with needing to replace worn-out tires. But there is also the hidden cost of lost productivity during the downtime in which the skid steer is out of service. From a manufacturer’s perspective, this means that we need to make tires that last as long as possible in order for the customer to avoid lost productivity during downtime. This leads into the need for greater communication about which tires are best suited for which application, since misapplication can lead to accelerated wear, increased cost through replacements, and more lost productivity.”
In other words, less expensive tires do not mean less cost to operate the machine. A tire with less tread depth and sidewall gauge may need to be replaced sooner than a more expensive and higher quality tire.
“In the skid steer market, the key driver is lower cost of ownership — not necessarily the lowest unit price per tire, but the tire that will deliver the best performance, least downtime and longest service for the investment,” says Seth Walters, vice president of marketing and supply chain for Alliance Tire Americas Inc. “As a result, we’re constantly pushing for increased ply ratings, deeper tread depths, and longer-wearing compounds.”
Van Ormer of East Bay Tire likewise reports a similar shift in demand. “In our experience, we’ve seen our customers move toward higher-end, better quality skid steers from manufacturers they know and trust. Our customers are tired of cheap, poor quality products from questionable manufacturers with no compounding knowledge making tires that wear quickly and have high failure rates.”
Quality versus price
As the market has improved, innovations in tread design and proven durability are having a stronger influence in buying decisions. “Newest trends are more application-specific tread designs, such as for snow and concrete, and longer life treads and compounds,” says Bill Haney, sales manager, North America, for Balkrishna Industries Ltd. (BKT). Order fulfillment is not an issue as fill rates for BKT are very high, he adds.
Van Ormer says Skid Dawg skid steer tires from the Dawg Pound tire line have a deeper, non-skid tread and unique tread pattern. “This tire provides an innovative tread design with deeper 32nds that delivers exceptional traction on both hard and loose dirt surfaces. For years, there have been few changes in the industry on skid steer designs,” says Van Ormer.
Demand is up for solid skid steer tires, which are being sold as tire/wheel combinations, according to Van Ormer. “This increase is driven by a specific need within waste and recycling industries. They’re looking for tires that wear better and won’t go flat or tear. Our Air Dawg solid skid steer tire, in traction and smooth treads, offers up to three times the wear of pneumatics and includes aperture holes for a smoother ride,” he says.
Michelin North America began selling a version of its Tweel non-pneumatic tire/wheel assembly to the skid steer industry last fall. The Tweel is a single unit replacing the pneumatic tire, wheel and valve assembly. It is comprised of a rigid hub, connected to a shear band by means of flexible, deformable polyurethane spokes and a tread band, all functioning as a single unit. Michelin says both dealer and end user reaction to the skid steer loader Tweel has been strong and positive. “We continue to be surprised and encouraged at the extent to which the innovation is generating excitement across many vehicle segments,” says Michelin spokesperson Mary Ann Kotlarich.
“Non-pneumatic tires focus on no downtime for flat repairs. But the market is still mostly bias ply construction,” says Greenball’s Castaneda. “Most dealers need a price point tire that offers a strong sidewall and long wearing tread and are not so much concerned with what the sidewall says.”
At Alliance, customers’ quest for better quality spurred growth of premium and specialty skid steer tires like the Hulk, Beefy Baby III and Muddy Buddy. “Those tires are optimized for specific environments and equipment, and they’re built to last, so the total cost of ownership is low over the long service life of the tire,” says Walters.
In response to high demand for its Galaxy skid steer tires from OEMs and the replacement market, Alliance increased capacity at its one-million-square-foot plant in India, which opened in 2009. “We’re able to keep up with growing demand on our brand-new production lines there, as well as test new tires as our global R&D team develops them. We have steadily built capacity in skid steer production since the fourth quarter of 2012 as part of our overall plant expansion from 50,000 tons to 90,000 tons per year,” says Walters.
Carlisle’s Brown emphasizes the importance of asking about application in order to make sure the most appropriate tire is selected. “For example, someone using the Ultra Guard LVT tire in a hard surface application will be delighted by the service life of the tire. But the same tire wouldn’t work well in an application where extreme traction is required, such as in dirt or muddy areas. A critical mistake could be simply going for the lowest price tire available, as that could be a more costly decision in the end.”
Cohen of Industrial Tire Solutions says he has not yet seen a tremendous gain this season in the Chicago metropolitan area. “If the economy comes back, the numbers will start to show it.”
His advice is to be aware of your marketplace and educate your customers. “Try to sell the right tread design and quality levels. Give your customers the full gamut of good, better and best in terms of price points. In terms of cost per hour, in most cases it’s better to put a higher quality tire on a skid steer machine.” ■
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