Bridgestone Targets OE, Larger Sizes, and the ‘Boss’
New tire lines, increased marketing efforts and sales support for dealers, plus a “doubling down” on its consumer focus were the major highlights from the Bridgestone Consumer Tire Business Meeting held last month in Los Angeles. Roughly 200 dealers were in attendance.
Bridgestone used a “Tonight Show” format to send out its message to dealers, with John Baratta, president of U.S. and Canadian consumer replacement tire sales for the Consumer Tire Sales Division of Bridgestone Americas Tire Operations LLC (BATO) acting as the emcee.
Baratta told dealers about key developments that have been happening with the company. He said the company has increased its U.S. and Canadian OE sales by 45% since 2011.
“We will be OE on one in four vehicles in North America by 2020.” (Asked by Modern Tire Dealer for clarification on this point afterward, Baratta confirmed that the company wants a 25% unit market share.) MTD estimates the Bridgestone and Firestone brands combined had a 17.3% OE market share in 2015.
The intent behind this move, according to Baratta, is to help the company capture additional higher end, higher value tire sales. He also told dealers that since 2011, the number of light vehicles on the road has increased by 15.4 million vehicles.
Gordon Knapp, CEO and president of Bridgestone Americas Inc. since September, spoke to dealers about a number of industry issues he believes will be affecting the market. He said the industry has gone through five to six years of low prices for commodities and raw materials, which has led to overall price erosion.
He thinks this trend may be behind the industry, as materials “may have bottomed in the first quarter of 2016.” He pointed to natural rubber moving upward from $.40 to $.50 per pound in January to current prices of $.68 to $.70 per pound.
Knapp also spoke of competitors who “have raced to zero” when it comes to pricing. He does not believe the industry is helped when that happens. Knapp used the analogy of the current price of athletic shoes compared to tires as a prime example of the industry not being able to differentiate and capture higher prices for its products.
He also pointed out that in the next three to four years, there would be a significant increase in capacity in the U.S. and Mexico, “and this will also lead to pricing pressure in 2019-2020.”
As for Bridgestone, Knapp said that even though he is new in his position, dealers should not “expect any knee-jerk changes in our direction.” He wants to “double-down” on the company’s emphasis on “the Boss,” who he calls the ultimate consumer.
The company is targeting the high-rim diameter portion of the market (18 inches and above) as well as the run-flat segment, according to Knapp. He pointed to his company’s $300 million expansion at its Joliette, Quebec, plant over the next three years to double its high-rim diameter production. (See MTD online article dated Feb. 26, 2016, about the expansion). Knapp believes the demand for these tires will grow by 40% over the next four years. To back up this comment, Knapp said that in August, 62% of all new vehicle sales were SUVs, light trucks, and CUVs.
Bridgestone’s own consumer research shows that 80% of all consumers now go online to research tires before they buy. A key factor, however, is that 50% of the consumers decide where to get their tires mounted before they even choose a brand.
Knapp told dealers that Bridgestone’s approach to online sales is to have high visibility, but “we want you to participate in it.” He then spoke about the company’s online platform designed to drive traffic to tire dealerships.
Bridgestone will continue its marketing and promotions with the NHL, NFL, and the PGA in 2017, citing its successes with those programs in 2016. Philip Dobbs, chief marketing officer for BATO, showed gains that the Bridgestone and Firestone brands have made since 2012.
Dobbs said the company’s research showed an 8% increase in unaided awareness for the Bridgestone brand to roughly 25% from 2012-2016, with familiarity increasing 117% to about 25%. The Firestone brand grew 2% in unaided awareness among consumers to 47%. Its familiarity rating grew 107% to about 31%.
The company showcased its Tire Navigator, which it says brings new insights and data regarding inventory management to dealers that is not available elsewhere. The program is designed to increase a dealer’s inventory turns and overall sales by finding gaps in product assortments within specific trade areas.
Tire Connect is another tool Bridgestone showed to dealers. The company says its research shows 83% of consumers go online before they buy, with 1.2 billion searches each year. Bridgestone told dealers 9% of consumers buy tires online, and it believes that number will grow: 56% of the consumers surveyed by Bridgestone said they may buy online in the future.
Tire Connect is designed to drive consumers to retail dealers. Michael Fluck, BATO’s senior director of digital marketing and strategy, emphasized dealers would “get full credit” for the sale.
The company also announced its Side-by-Side point-of-sale kiosk that eliminates the counter from the selling process. The computer screen is designed to allow the salesperson to show the consumer tire comparisons and prices along with selling features.
Steve Charles, vice president of product development for Bridgestone Americas Inc., took a look at what may lay ahead for the industry in terms of products and product development cycles. He said Bridgestone is striving to reduce its current development cycle by 50%. The rationale is there are so many additional SKUs in the market today, and with new fitments coming, the company has to be able to move more rapidly.
Charles also told dealers the company believes tires in the future will weigh half as much as they do now, with ever increasing reductions in rolling resistance. He said tires will be taller and narrower with an increasing emphasis on sustainability. Bridgestone will continue to emphasize improvements in tread wear and ride with its run-flat tires.New products
The company announced it would be launching four Firestone tire lines during 2017. Erik Seidel, vice president of consumer sales in the U.S. and Canada for the Consumer Tire Sales Division of BATO, said the company was delivering on its promise from last year that it would upgrade 100% of its Firestone line in three years. The four new lines represent 56% of that total in just the first year.
- The Firestone All-Season tire will launch in March in select passenger sizes, with additional sizes coming on-stream in August. Baratta said the tire is “the lowest priced Firestone tire and will compete in the ‘good’ category.” The company calls the tire “a quality tire at a great value.” It will have a 65,000-mile limited tread wear warranty for all sizes except for CUV sizes, which will carry a 55,000-mile warranty. It will come in 49 sizes (32 passenger and 17 CUV) ranging from 185/65R14 to P255/55R20.
- The Firestone Transforce AT2 will launch in April to replace the Transforce AT line. The company said the tire outperforms its predecessor in all categories. It will be available in 16 sizes ranging from LT215/85R16 to LT275/65R20. Seidel said the tire will provide coverage for 95% of the light truck tire market.
- The Firestone Destination M/T2 is coming in July and will succeed the current Destination line. It features a new tread compound, three-ply sidewall construction, and more aggressive upper sidewall lugs. It will come in 29 sizes ranging from LT235/75R15 to 37x13.50R22.5LT. The tire is engineered for SUVs and pickup trucks.
- The Firestone Winterforce 2 and Winterforce 2 UV will launch in July. The tires are studdable and feature a 3-Peak Mountain Snowflake designation. They will provide a 14% increase in coverage from the previous Winterforce line and will come in 52 sizes, ranging from 185/65R14 to P275/65R18.
On the Bridgestone side, a new Dueler H/T 685 heavy-duty light truck tire line will launch in March. It will be fitted on the original equipment side and will replace several previous Dueler lines to simplify inventory for dealers on the replacement side. The tire will come in 17 sizes and offers coverage for 96% of the light truck tire market, said Seidel. The sizes range from LT215/85R16 to LT285/60R20 and will carry a 50,000-mile warranty.
Also during 2017, the company will expand its DriveGuard run-flat line with new sizes in the 17-inch to 20-inch range. The line will offer 67% coverage for passenger cars, added Seidel.
The Fuzion line is being expanded with a Fuzion A/T limited line in nine sizes designed to cover 50% of the market. It will start shipping in January with a 45,000-mile warranty. The Fuzion Touring line also will be available in two new sizes next year: 255/60R19 and 245/60R18. ■