UHP tires: Tire manufacturers wave the flagship
Domestic tire manufacturers may not like producing low-cost radials anymore, but they love competing in the ultra-high performance tire market. The same can be said of tire marketers representing foreign tire makers, who know a profitable segment when they see it.
“The UHP market is extremely important to all tire makers for a number of reasons,” says Rick Brennan, vice president of marketing for Kumho Tire U.S.A. Inc. “The evolution of vehicles has made the traditional UHP defined tire (V rated and above) a broad market tire.
“The Camry, Accord and Sonata, the largest selling cars in the U.S., all have at least one fitment that is ‘V’ speed rated. This makes higher speed-rated tires very common in today’s marketplace, and it increases the number of tires sold in this segment.
“As we look to the future, the number of tires coming OE with higher speed ratings will increase as small engine cars get higher horsepower due to advances in technology,” says Brennan. “The number of UHP defined tires in the marketplace using the traditional definition will continue to grow, making UHP a very important segment now and in the future.
“If we narrow the UHP definition to tires with higher cornering power and greater dry and wet grip, the segment still remains very important as a source of profit and creation of new technology. People still savor their cars, and many enthusiasts still strive for the perfect winding road to put a grin on their face. This segment separates tires from a technology standpoint and lets us all show what we’ve got.”
In order to find out the importance of the UHP market to global tire manufacturers, we just came out and asked them about it. We also wanted to get a feel for how special the United States market is, at least compared to the global market. Finally, we wondered what is new on the horizon.
For this article, our focus is on tire manufacturers. The private brand marketers with whom we talked are not UHP-oriented. Hercules Tire & Rubber Co., for example, is much more broad-line minded and doesn’t have a true UHP tire (to some, the Raptis WR1, which is W rated, might qualify).
UHP product sales are a very small percentage of Del-Nat Tire Corp.’s business as well, less than 2.5%.
“It is not a key segment of Del-Nat’s product portfolio,” says Randy Gaetz, vice president of sales and marketing. “We will continue to monitor the market, and if our stockholders want us to grow this segment for them we will.”
Meet the 14 respondents: These UHP tire experts answered our questions
Bandi Vaczi, marketing communications manager, Apollo Tyres Ltd.
Robert Saul, product planner, Bridgestone Americas Tire Operations LLC.
Bob Liu, product manager for UHP tires, Continental Tire the Americas LLC.
Robert Chew, brand marketing manager, Falken Tire Corp.
Dave Shelton, director of marketing, GITI Tire (USA) Ltd.
Mike Markoff, category planning manager, Goodyear Tire & Rubber Co.
Henry Kopacz, public relations and product marketing specialist, Hankook Tire America Corp.
Rick Brennan, vice president of marketing, Kumho Tire U.S.A. Inc.
Doug Brown, brand category manager, Michelin Sport UHP, Michelin North America Inc.
John Aben, senior vice president of sales and marketing, Nexen Tire America Inc.
Tom Gravalos, vice president of marketing and OE, Pirelli Tire North America Inc.
Maxwell Wee, director of sales, Sentaida International Inc.
Fardad Niknam, senior director of technical services and product planning, Toyo Tire U.S.A. Corp.
Andrew Briggs, director of product planning, Yokohama Tire Corp.
MTD: Please comment on the importance of the UHP market to your company.
Vaczi/Apollo: As part of Apollo Tyres Ltd., Apollo Vredestein produces tires for the Vredestein brand, which is our global niche brand with a focus on the UHP segment.
Saul/Bridgestone: The UHP market is extremely important to Bridgestone. We have a long history of providing UHP product to many of the world’s premier auto manufacturers as original equipment options to fit their sporty models. In addition, we have a full merchandising portfolio of UHP products to meet the demands of the aftermarket.
Liu/Continental: Ultra-high performance is a key segment for Continental. Customers for UHP tires are typically very knowledgeable about tires and demand the best performance. The UHP customer values the technology and performance of our tires, and is more willing to purchase a premium tire.
Chew/Falken: The UHP market is one the most important markets for Falken Tire for multiple reasons. First, the majority of our products are UHP-oriented. We started as a niche performance tire brand, and it is still very much part of our identity. Secondly, the UHP market has continued to grow year over year due to OE vehicle demands. We constantly monitor the UHP market to understand and anticipate trends.
Shelton/GITI: The UHP market in North America is an important segment. GT Radial currently offers three product lines addressing this growing segment. The Champiro HPY is a primarily Y-rated product line addressing the maximum performance sub-category for the summer UHP market. The Champiro UHP1 provides ultra-high performance, focusing on strong summer performance but with the added M+S, for those drivers in more northern areas, and is available in V and W speed ratings. The Champiro 328 is an all-season UHP tire available in H, V, and W speed ratings.
Markoff/Goodyear: The UHP tire segment is very important to Goodyear. We have been an industry leader in the field of UHP tires for many years. From racing to OE fitments to replacement passenger tires, Goodyear innovation has always been at the forefront of UHP products.
We continue to invest in the UHP segment, delivering value to the performance consumer. The segment has high industry growth potential and is a key component to our portfolio of products.
Kopacz/Hankook: The UHP market is very important to Hankook in the United States. This market specifically offers an opportunity for increased sales from both the original equipment and replacement categories. Automobile manufacturers are designing vehicles to come (from) the factory equipped with UHP tires. This is one of the main reasons the UHP market is doing well from both an OE and replacement side.
Brown/Michelin: The performance market is a growing and important part of our relationship with significant OE manufacturers. Michelin’s UHP team works hand-in-hand with major brands including BMW M, Ferrari, Corvette, Porsche and Cadillac, among others, to help maximize the total performance of their vehicles.
The UHP market allows Michelin to present the transfer of technology with examples of the consumer benefit to a driver who is inclined to value motorsports as a proof-point.
Aben/Nexen: The UHP market is very important to Nexen Tire, however, not as much as in the previous several years. Five years ago, a very large percentage of Nexen sales were in the UHP segment, especially in 20-plus inch sizes. With the continued use of aggressive pricing from entry-level brands and the price sensitivity of the segment, Nexen lost some market share. This transition has been by design as we have placed increased emphasis on the growth of our light truck and passenger performance lines, creating more balance in our product offerings available to our customers.
We still believe that Nexen offers the best value in the UHP segment. We will continue to innovate and develop new UHP lines in the next several years with a large emphasis placed upon premium lines with increased size offerings.
Gravalos/Pirelli: UHP is one of the pillars of our business strategy and is vital to us as it allows us to deliver to our customers the best technology available in the market.
Wee/Sentaida: The vehicle manufacturers in the U.S. continue to introduce cars with more performance and lower gas mileage and emission. This development makes it necessary for our tire factory to keep offering higher performance tires to match the vehicle requirements. This helps fuel the growth of the UHP segment in the U.S.A.
Sentaida has been focusing on manufacturing UHP tires since the factory completion in 2009. Our size range has grown from 22 in our first year to over 70 now. This year alone, we are introducing 20 sizes in 17-inch diameters and larger. The introduction also includes staggered fitments in 17-, 18-, 19-, 20- and 22-inch diameters. Sentaida is the only factory in China that is currently producing 32-inch diameter (Delinte) tires. All these developments show how important the UHP segment is to our factory (in China).
Niknam/Toyo: The UHP market remains one of the fastest growing markets in the U.S. Toyo Tires has a long history of success in the UHP market and it is one of the key focuses for our future growth.
Briggs/Yokohama: The UHP tire market always has been and always will be an extremely important segment for YTC. The A001 and A008 really put Yokohama on the map in the United States back in the early ’80s, and we’ve continued to push forward in the segment through the present day. Today, products like the Advan Neova AD08 are at the top of their class in terms of performance. Additionally, our OE relationships with some of the world’s highest performing vehicles such as Porsche, Audi and Mercedes-Benz further speak to the importance of the segment for Yokohama. It is not uncommon at all to have “high performance” be synonymous with “Yokohama” in the minds of consumers. Of course, we are a full line supplier, but we do live up to that recognition, and we continue to use motorsports not only to live up to our image, but also to further the development for future UHP products, borrowing design elements for street tires, from what we learn on the track.
MTD: How does the UHP market in the U.S. compare to the UHP market globally?
Vaczi/Apollo: The car parc is quite different in the U.S. Therefore, relatively bigger sizes are required.
Saul/Bridgestone: We don’t have data for other markets.
Liu/Continental: The main difference for the UHP market in the U.S. compared to the rest of the world is the presence of all-season tires. In most parts of the world, it is common practice to run summer tires when the weather is warm and winter tires when the weather is cold, as this practice is optimum for performance throughout the year. In the U.S., many consumers demand all-season tires, even in the UHP segment. Continental is very successful in the all-season UHP segment with the ExtremeContact DWS, as it is a well-balanced product that performs well in all conditions.
Chew/Falken: The UHP market in the U.S. is still dominant in comparison to the rest of the world. While we see consumption of our product in other regions, the U.S. continues to have the highest demand.
Shelton/GITI: The UHP market in the U.S. is much broader than the global market due primarily to a tremendous expansion in the UHP all-season market. Domestically, the UHP market is expanding and merging with the grand touring all-season tire market, as well as with the market for CUV and SUV UHP tires. Many consumers in the U.S.A. expect their UHP tires to have all-season capabilities and want to drive their sports sedans, CUVs and SUVs year round.
Markoff/Goodyear: Given the fact that the U.S. market is skewed toward all-season tires, the UHP market in the U.S. is more heavily weighted toward all-season products than the rest of the world. Certainly, the U.S. market still supports pure summer UHP tires, but the trend is growing for UHP products to deliver top handling performance year-round through all seasons. Around the globe, the dominant passenger tire focus continues to be on switching between three-season summer tires and winter tires.
Kopacz/Hankook: The UHP market globally is very similar to that in the United States. Globally in 2011, the UHP category accounted for 21.4% of sales; in the U.S. for 2011, that number was 21.2%.
Brown/Michelin: The U.S. market provides both opportunities and challenges in that the product application is not as tightly restricted in the U.S. as it is in Europe, where the speed rating and load index control the product usage.
Cosmetic application and plus sizes, popular in the U.S., are almost non-existent in Europe. The U.S. market provides a wider use of tires as cosmetic applications that provide performance enhancements, too. In Europe, there are government regulations that relate to tire noise, wet grip and rolling resistance.
Aben/Nexen: The UHP market in the U.S. had previously been defined by plus sizing, while OE auto manufacturers, especially domestic companies, were largely conservative with their sizing.
With the recent emergence of large diameter, low-profile sizes as OE fitments, especially by U.S. auto manufacturers, there is less demand for aftermarket wheel and tire packages in the UHP segment.
Our UHP market is now much more similar to the European markets, which has been driven by aggressive UHP OE fitments, especially in the premium and sports segment.
Today, the largest difference between the U.S. and the global market is the high percentage of light trucks and SUVs in our market. The recent trend in OE SUV and light truck sizes has been 18- to 20-inch applications. The owners of these vehicles are much more active in plus sizing, especially in the 20-plus sizes. Many of these extreme plus-size fitments popular on SUVs in the U.S., such as 26-, 28- and 30-inch sizes, are illegal applications in other markets.
Gravalos/Pirelli: Since the automotive industry has become global, the UHP market has also followed suit. There is clearly some differentiation in sizes, and additionally in America, we also have the added complexity of all-season products that are unique to our part of the world.
Wee/Sentaida: The vehicle populations in the U.S. are geared towards bigger sizes compared to the global market. This, in return, is reflected in the demand for UHP sizes in the U.S., which are geared more towards 20-inch and larger sizes.
Niknam/Toyo: Until six or seven years ago, the UHP market in the U.S. was focused more on the replacement market for car enthusiast drivers and few OE high-end vehicles. However, with the expansion of German/European vehicles, the concept of “fun to drive” was introduced in the U.S. The big three automakers started to adapt their vehicle concepts toward “fun to drive” too, and as a result, the OE tire requirements have changed. You will not find any OE requirement which does not ask for more improvement on handling and wet and dry braking. The UHP market started to grow in the U.S.A. as a result of this new mentality and approach, and is still growing. These days, even entry-level vehicles are equipped with T- and H-rated tires when similar vehicles five years ago were equipped with S-rated tires.
However, I believe the UHP market in Europe will be flat over the next couple of years as the European tire suppliers adjust their products to meet new labeling requirements. In order to achieve the EU’s (European Union’s) highest levels of labeling requirements, they must adjust their products and find the highest possible balance between rolling resistance and wet braking.
Briggs/Yokohama: Similar, but different. The global market has some different design standards, and different road types that we do not have in the U.S. yet, or that we do not have at all. The biggest difference, though, is the all-season UHP tire segment, which is unique to North America, and is one of the fastest growing segments in this market.
MTD: Is your company coming out with a new UHP tire?
Vaczi/Apollo: We just introduced our new UHP tire, the Vredestein Ultrac Vorti, this season.
Saul/Bridgestone: Bridgestone introduced several new UHP tires last year, including the Potenza S-04 Pole Position; the Potenza RE970AS Pole Position; the Potenza RE960AS Pole Position RFT, featuring 3G RFT technology; and the Firestone Firehawk Wide Oval AS.
In 2013, we will introduce several more products with a focus on the UHP market.
Liu/Continental: We do not have any new UHP product lines this year, but we continuously add sizes to our portfolio to fit the market demands.
Chew/Falken: We released a new flagship summer perform-ance tire earlier this year, the Azenis FK453 and FK453CC. The Azenis FK453 features the latest in performance tire technology bred directly from racing DNA. It features an asymmetric tread, silica-enriched compound, and a rigid carcass construction.
This translates into the ultimate driving tire with high-speed handling and capabilities.
The FK453 has been engineered for performance coupes and sedans, while the FK453CC was designed for performance CUVs and SUVs, another fast-growing segment.
Shelton/GITI: We continuously introduce new products in the North American market to meet the higher tire specifications required by the newer vehicles and new regulations. GT Radial plans to introduce new UHP tires in 2013.
Markoff/Goodyear: This year, Goodyear has launched two new UHP products. One is a summer UHP tire, the Eagle F1 Asymmetric 2, and the other is its all-season counterpart, the Eagle F1 Asymmetric All-Season. Both products are race-inspired and deliver world-class handling performance.
The Eagle F1 Asymmetric All-Season comes with a 45,000-mile limited tread life warranty; TredLock Technology microgrooves for commanding wet traction; and a dual-zone asymmetric tread pattern.
Kopacz/Hankook: Yes, Hankook will be launching the Ventus S1 noble2 at this year’s 2012 SEMA Show. The W-rated tire is the ideal balance of ultra-high performance and all-season. It will be available in 40 sizes ranging from 205/55ZR16 to 275/35ZR20 XL.
Brennan/Kumho: Kumho has recently launched a new UHP all-season product, the Ecsta 4X. A recent addition has also been the Ecsta LE Sport, our max performance flagship summer UHP product.
Look for a new entry-level UHP all-season and extreme performance enhancement for 2013.
Brown/Michelin: Michelin is constantly monitoring the consumer needs, product development and vehicle usage. Unfortunately I can’t unveil whether or not we’ll have a new UHP product in 2013.
Gravalos/Pirelli: Yes, we are introducing a new UHP all-season tire (the Pirelli Cinturato P7 All-Season) designed and developed specifically for the North American market and North American consumers.
It is our intention to announce the details to our dealers during the Austin (Texas) F1 Grand Prix.
Wee/Sentaida: Yes, in addition to the expansion of our D7 and D8 lines, we also have a new design in the works.
Niknam/Toyo: The Proxes 4 Plus (introduced last June) is the best UHP all-season tire the company has ever made. It delivers better snow braking and significantly longer tread life than its leading competitor, plus a quieter ride over the life of the tire.
Designed for today’s high-powered sports cars, it comes with up to a 50,000-mile warranty and qualifies for Toyo Tires’ “No Regrets” 45-day, 500-mile trial offer.
Briggs/Yokohama: We are constantly evaluating the needs of the market and may be able to make an announcement towards these developmental efforts in the near future. Stay tuned. ■