Prices of special trailer (ST) tires are down by as much as 30% versus last year, an indirect outcome of U.S. tariffs on passenger tires from China.
“Pricing is considerably lower than a year ago from all of our suppliers,” says Tom Van Ormer, director of purchasing for East Bay Tire Co., a wholesaler, exporter and commercial dealer with 12 commercial outlets in California, Arizona and Hawaii.
“In some cases it is 30% lower and this is applicable with all grades of product: premium and the off-brand alike. They have all gone down considerably, and more off-brand products have entered the market as well.”
The experts Modern Tire Dealer consulted for this article agree that Chinese manufacturers who cannot ship passenger tires into the U.S. competitively entered the trailer tire market. Their presence has increased supply and pushed prices downward.
“Pricing on ST tires is lower this year than last. A lot of this can be attributed to the oversupply that is coming out of China,” says Randy Tsai, director of marketing and GBC Motorsports for Greenball Corp.
“As a result of the antidumping duties on PCR/LTR tires, there has been a change from the Chinese manufacturing base to include ST radial in their lineup, which they are aggressively pricing low,” says Tsai.
Carlstar Group LLC also reports pricing pressure. “The passenger car/light truck duties restricted the products that Chinese producers could supply to the U.S. We saw a focus of open capacity into the U.S. from multiple players,” says Kent Allen, marketing director of the Franklin, Tenn.-based manufacturer of specialty and commercial tires.
Doug Addis, territory sales manager for Maxxis International, says his company also sees the downward trajectory in the prices of ST tires.
“Pricing for China-produced ST has come down. That’s a product the China tire manufacturers can still ship into the U.S. without the tariff. Apparently they have all jumped on the ST bandwagon.”
Lower ST tire prices are not universal, however. “Pricing for mid-to-upper tier ST radial product has remained fairly consistent,” says Addis.
Greenball’s Tsai notes that decreased manufacturing costs of radial tires over the past several years have closed the significant price gap between bias and radial construction tires. “Recently we’ve seen radial ST tires come down to the same if not lower price than older bias tires.”
Prepare for a shift in sizes
One year ago, MTD reported a trend toward bigger and heavier ST tires increasingly available in all-steel radial construction to meet the towing needs of more powerful vehicles and larger campers. The movement toward higher load capacity tires is continuing in 2016.
“Larger sizing and the trend to heavier ply tires seems to have stabilized for now, but the larger sizes are still gaining in popularity,” says Addis.
“The 13- and 14-inch ST radial market continues to decline. Dealers need to be prepared for the shift in sizes and have the right product on the shelf. Many ST radial tire sales are made due to failures. Consumers are not always able to wait until the dealer gets their daily delivery from their suppliers. Dealers need to have product in stock,” says Addis.
Dealers can expect the trend for higher load-carrying capacities on trailer tires to “continue for some time,” according to Bill Dashiell, senior vice president of commercial products for TBC Corp.’s TBC Brands division.
“Trailer manufacturers are increasing the load ratings of the trailers, requiring tires to have a corresponding increase in load-carrying capacity. OEMs are starting to make this transition, slowly, and are even moving to the higher load capacities offered with all-steel ST tires.”
Consumers are also contributing to the trend. “There has also been a move by some consumers the past several years to move up a load rating from the OE size when purchasing replacement tires,” says Dashiell.
He suggests dealers boost the amount of all-steel ST tires in their inventories to accommodate the needs of manufacturers and consumers. “For tire dealers these subtle but growing trends mean that a few extra SKUs are probably going to need to be stocked to be prepared to meet customers’ ST tire demands,” says Dashiell.
Preparation includes reviewing stocking levels for all-steel ST tires, according to Dashiell. “All-steel tires can provide the consumer with improved performance and reduce the risk of tire overloading and or downtime, something that resonates with trailer owners.”
Greenball also expects the trend for both larger tires and heavier load capacities to continue. “This will add a few more SKUs that the dealer will either need to have access to or carry in stock,” says Tsai.
According to Allen, the trend for higher load capacity is positive for dealers because they can concentrate the inventory they carry on the higher load ratings. But tires with heavier load ratings require a heavier-duty wheel.
“Consumers feel more confident in having a higher load capacity tire which they feel is safer,” says Allen. The concern is that the other parts of the trailer cannot support the additional weight. “The wheels and the axles are not necessarily rated for higher loads,” says Allen.
“Our focus at Carlstar has been on safety and reliability of our products. We are focused on innovating our products to provide robust and safe products for the proper load,” says Allen.
“The industry as a whole needs to do a better job of educating the industry and consumers about safe practices surrounding trailer tires.”
Many of the issues with trailer tires are related to underinflation and overloading, according to Allen. “Expect to see more from Carlstar around safety and reliability in 2016 and beyond.”
Expect to sell more ST tires
Demand for ST tires has increased as their prices have dropped. An improving economy and lower gas prices also contribute to increasing ST tire sales.
Joe Ostrowski reports American Kenda Rubber Industrial Co. Ltd., which does business as Kenda USA, has seen more than a 10% increase in unit sales over 2015. He is sales manager for Kenda’s Americana Tire Division.
Greenball’s Tsai says his company believes the demand for ST tires will “steadily increase” in 2016.
“It has been reported that trailer sales have been on an increase the past two years. As a result we should start to see replacement sales pick up in 2016 and beyond,” he says.
Carlstar also predicts more trailer tire sales this year. “We think trailer tires sales units will continue to grow in 2016, especially with lower gas prices that should drive more recreational use. Our forecasts show single digit growth in the segment on a unit basis,” says Allen.
TBC expects a slight increase in demand. “Overall ST tire demand is expected to increase slightly in 2016 as the OE market remains strong with robust RV, toy hauler and utility trailer sales,” says Dashiell. “As the trailer population continues to grow, so has the replacement ST tire market. As long as the economy remains healthy we expect ST trailer tires sales to continue to grow.”
Maxxis has boosted its inventories of special trailer tires to prepare for increased demand, according to Addis. “With more stability in the economy the RV market is strong. Many more RV owners are back on the road and traveling longer distances,” he says.
“The demand for ST radials will be very strong in 2016 and likely for the next few years. Maxxis is geared up and we have brought in additional inventories to keep pace with our increasing demand.”
A look at the latest tires
Greenball is launching three ST lines this year aimed at specific segments of the market. The Tow-Master All-Steel Construction (ASC) is a full radial ST line targeting the premium end of the market, according to Tsai.
“Despite the overall trend of ST pricing going down and an overabundance of availability in the economy line, there exists a segment of the trailer market that is demanding a better ST tire than what is currently available,” he says.
Newer model tow vehicles feature engines with previously unheard of amounts of horsepower and torque figures. Combined with trailers getting larger and heavier in the categories for luxury travel, cargo, horse and commercial type trailers, the next generation of ST tires needs to outperform the standard ST tires of today for many specific applications, according to Tsai.
“Unfortunately in the current lowest price leader market, most dealers gravitate toward the cheapest available ST tire. But if dealers look at the prices of today’s 2500 and 3500 luxury pickups and some of the luxury and heavy-duty trailers, they would recognize there is a demand for a premium trouble-free trailer tire that currently hasn’t been available until now,” says Tsai.
Greenball is also introducing the Mirage ST Radial, an economy line of ST radial tires designed to compete with a majority of currently available low-priced ST radials.
“Our other ST radial lines have specific features and benefits built into them that provide additional value to the consumer who isn’t necessarily 100% price driven, but more value driven. The new Mirage ST Radial line is built for the price conscious buyer and for the economy market,” says Tsai.
The third new tire from Greenball is the Centennial Hiway Master, an economy line ST tire for small trailers, utility trailers, and other applications where a bias construction is more than adequate and price sensitivity is a major decision factor, according to the company.
Carlstar will also be introducing a premium Carlisle brand tire in 2016, the Radial Trail HD. Available in 15 sizes, the new tire’s features include a steel belt and spiral cap design to reduce the risk of tread separations, a high tensile belt package to increase impact resistance, and a proprietary tread contour and pattern that eliminates irregular wear conditions.
TBC has added a new size, ST235/80R16 LR-G, to its latest product, the Sailun S637T all-steel trailer tire.
TBC has also added four sizes to its Trailer King II ST program for the OE market including two higher load rated tires, ST175/80R13 LR-D and ST185/80R13 LR-D. The new sizes are ST145R12 LR-D and ST145R12 LR-E.
Kenda expects to complete the rollout of its new radial line of trailer tires, the KR35, in June, according to Ostrowski. The engineers at Kenda’s new technical center in Green, Ohio, contributed to the development of Kenda’s new tire.
Ostrowski says the tech center puts Kenda closer to its markets for trailer tires and gives the KR35 some economies over the line it replaces. “We’re building a great product for less money. The technology is getting better, design improvements, compounds, just everything. The new product line is all those good things rolled into one,” says Ostrowski. ■
