Performance tires past, present and future: MTD surveys reveal high dealer influence and more T-rated sales
Back in 1991, Modern Tire Dealer surveyed dealers on performance tire sales -- something the magazine has done regularly since 1982.
When we asked dealers to indicate what percentage of their total performance tire sales each size wheel diameter represented, 17-inch wheels were the largest size listed. Ten years later, the maximum size indicated reached 23 inches.
In 1991, survey respondents said 20% of their performance tires were mounted on light trucks. At that time, sport utility vehicles made up a small portion of total light truck sales. Today, 36% of performance tires are sold for light trucks. Of that total, half goes to SUVs.
The light truck segment keeps evolving. In future surveys, you may see terms such as "crossover" vehicles (a cross between a sports sedan, sport station wagon, a minivan and an SUV) and "urban adventure" vehicles (a vehicle that combines sports coupe performance with the ruggedness of a next-generation SUV).
These "segment buster" vehicles already have been described in ShowTalk 2002, a newsletter for the recently held North American International Auto Show 2002 in Detroit, Mich. Many of them were on display at this year's show. Others include the Chrysler Pacifica from DaimlerChrysler's Chrysler Group, which is "not quite a station wagon, not quite an SUV," and the Vision GST (Grand Sports Tourer) from Mercedes-Benz (in photo), called a "luxury wagon hybrid." Then there's the Acura RD-X concept car -- an SUV specifically designed to drive like a sports coupe.
What kinds of tires will go on these future vehicles? Products include 22-inch tires on the Vision GST, over-sized run-flat tires, and different-sized tires front-to-back (such as the Chevrolet SSR with 19-inch Goodyear tires on the front, 20-inch on the rear).
What vehicles make it into production, and what tires will go on them, are being discussed in the present. Some will undoubtedly have performance tires as standard equipment.
Here are some interesting findings on performance tire sales in 2001, compared with the survey of performance tire sales from 10 years ago -- and a few interesting facts from our 1982 effort.
Performance traffic increases
Dealers reported that 25% of their total tire sales in 2001 came from performance tires. Almost half of the dealers (49%) said their unit volume was higher than the previous year (up by an average of 15%). Thirty-five percent said their sales were the same, and only 16% reported sales were lower than year 2000 (by an average of 19%).
Tires with higher speed ratings are selling better, too. While S-rated tires made up almost half of the sales in 1991, they are down to 31% of sales, with T-rated sales trending upward.
Prices did not keep pace with inflation. S-, T- and H-rated tire prices only increased moderately compared with 10 years ago, and prices for V- and Z-rated tires actually decreased, Z-rated by as much as $20 per tire.
It is interesting to note that the average selling price for a performance tire in 1981 was $105.62, while the 2001 survey's average price was $106.76.
However, prices for a performance tire in 1981 ranged from $27 to $250 and up, so there was obviously some confusion as to the definition of a performance tire at that time.
Wheel sizes continue to increase, as noted in the following chart. Ten years ago, there were no performance tires listed in excess of 17 inches. The latest survey found they make up 11% of total performance tire sales.
And, of course, the smaller sizes that were popular in 1991 (13- through 15-inch), are now less popular than the larger sizes.
In 2001, 18- through 20-inch sizes has a 7% share of the dealers' sales with 21- through 23-inch sizes holding 4%. Sixteen inch tires were the most popular, with 29% of sales.
In the 1982 survey, 50- and 55-series tires only made up 6% of total high performance tire sales. Twenty-seven percent of sales were 60 series, and a whopping 67% were 70 series!
Imported and domestic passenger cars made up 80% of the vehicle type dealers shod with performance tires in 1991. Today, that segment makes up 64% of the total, with light trucks and SUVs pulling in 36% of performance tire sales.
Aging baby boomers are making an impact on performance tire purchases. When asked, "What is the percentage by age group of performance tire buyers at your dealership?" the results were 16-24 years old, 23%, 25-34 years old, 35%, 35-49 years old, 27%, and 50 or older, 15%.
Males still dominate performance tire purchases. In 1991, dealers reported that 72.4% of the purchasers were male; that percentage increased to 77% last year.
Not surprisingly, the summer months of May through September proved the best for performance tires sales for dealers nationwide, with December and January the worst for selling performance tires.
Tire dealers once again proved that they have a big influence on the purchase of performance tire brands. Only 30% of 2001 survey respondents said their customers specified a brand and ended up buying that brand, while 34% of customers specified a brand, but changed their minds thanks to the dealers' input. The other 36% of performance tire customers did not specify a brand and purchased their tires based solely on dealers' recommendations.
When asked, "What specifically can be done by tire manufacturers to help you sell more performance tires?" the surveyed dealers chose territory exclusivity as the most important factor by a wide margin. An adequate supply of tires and sizes was the next most important, followed by better point-of-sale material, lower manufacturer's cost to the dealer, and more education, training and seminars.
National advertising was seen as very important by only 29% of the responding dealers, with local advertising seen as very important by only 26%.
Referrals (word-of-mouth advertising) were by far the most successful type of advertising for participating tire dealers, with 75% saying they are very successful in attracting high performance tire customers. Next successful was point-of-sale items. National advertising and car enthusiast magazine ads were seen as very successful by about one-third of the respondents, followed by newspaper and local cable television ads. Direct mail was only seen as very successful by 4% of the dealers.
Referrals and effective point-of-sale displays were also the two most successful parts of the advertising puzzle in 1992, dealers reported.
Three-quarters of the dealers in 2001 stocked high performance tires (H-rated 96%, V-rated 75% and Z-rated 64%). Eighty-four percent of dealers rely on rapid delivery of high performance tires. Of those, 78% get them from the distributor; 38% get them from the manufacturer; 16% get them via mail order.
When considering adding a specific brand of performance tire, 26% of the 2002 survey respondents said competition from "speed shops" or "mail order houses" was an important factor, 36% said it was important, 24% said this competition was only slightly important, and 14% said it was not at all important.
As for the most important characteristics of a performance tire, braking, handling and wet traction were seen as the most important characteristics by dealers responding to the 2001 survey, while handling, traction and wear grabbed the top three spots in 1991.