New light truck sales took a beating last year. A number of factors — most notably record high gas prices and the construction market crash — led to a whopping 24.6% unit decrease in that segment, according to WardsAuto.com. By comparison, light truck sales declined 2.5% from 2006 to 2007.
Independent tire dealers who recently spoke with MTD report seeing fewer pickup trucks, new or used, at their outlets.
“People aren’t driving them,” says Israel Vazquez, manager of Savas Tire & Wheels, a single-location dealership in Bell, Calif.
“You just don’t see them,” says Larry Bobian, manager of Denver, Colo.-based Swis Tire & Automotive.
As the recession continues, light truck sales and usage are expected to decline even further.
How is this affecting LT tire replacement? Is the LT-metric tire segment on the wane?
It depends on what sub-segment of the overall pickup truck market you’re talking about, according to tire manufacturers.
Function vs. form
Pickup truck owners can be split into two general categories, say manufacturers: those who use their trucks for work purposes — including builders, tradesmen and haulers — and those who buy trucks to make fashion or status statements.
For vehicle owners in the first category, LT tires are essential equipment; their pickups require rugged, durable, utilitarian tires.
Those who belong to the latter group almost never take their vehicles off-road and tend to view tires as accessories; aesthetics mean more to them than function.
The pickup-truck-as-status-symbol segment “will shrink,” says Bill Bainbridge, director, brand communications, for Hankook Tire America Corp.
“This is one segment that has been hurt by the recession. These vehicles are not about function; they’re about looking cool.”
“There’s a fashion element that goes along with them,” says Bob Abram, product planning manager for Yokohama Tire Corp.
The fall-off in the construction market has reduced the number of work trucks on the road. However, those trucks that are still running need replacement tires.
“You’re (still) seeing a lot of 3/4-ton and full-ton trucks — vehicles that people are hanging onto,” says Johsua Simpson, vice president of marketing for Hercules Tire & Rubber Co.
“Guys are not replacing these vehicles. They’re in fleets for a long time. It’s a matter of buying a new truck vs. buying a new set of tires.”
The question is, when will work truck owners decide to swap out their old tires?
“We’re seeing these customers come in only when it’s necessary,” says Mike Holt, sales manager for The Tred Shed Tire Pros in Pittsburg, Calif.
Pittsburg, near the San Francisco/Oakland area, was a hub for new construction before the housing market tanked, he says. Construction fleets made up 10% to 15% of the single-location dealership’s business two years ago; they now comprise 3% to 4%.
“Our economy was very construction-driven.”
Nearly 400 miles south in Bell, a Los Angeles suburb, Vazquez says pickup truck owners who do need tires “are holding off. A lot of customers coming in for tire replacement... have wires sticking out of their tires.”
Many, he reports, are buying two tires at a time instead of a complete set. It’s a sign of the times, he believes.
Design and size trends
While pickup truck sales are down overall, “the people who have the money and really want trucks will still buy them,” says Jeff Koehler, marketing manager for Pirelli Tire North America Inc.
That includes niche enthusiasts like off-roaders, says Joe Mazur, brand category manager, BFGoodrich light truck tires, Michelin North America Inc.
“People care passionately about off-roading. They might slow down their purchasing, but they’re not going to abandon the LT tire segment.”
What do these customers want in LT tires? For starters, they want aggressive-looking sidewalls, particularly in “the off-road extreme traction category,” according to Travis Roffler, director of marketing for Continental Tire North America Inc. (CTNA).
“People are looking for more aggressive, luggy designs and new, creative stuff” on the sidewalls, including inlaid, colored letters.
Savas Tire’s Vazquez concurs, explaining that elaborate sidewall designs “are starting to catch on. People are paying attention to them. They don’t want just plain black. The key... will be sidewall designs. It’s the sidewall that catches (customers’) attention.”
Another trend to watch is sizing. “Wheel diameters are still rising on the standard truck,” says Yokohama’s Abram. “With the last generation or two of Ford trucks, 20-inch LT tires came as standard fitment. At one point, almost all tires in the heavy truck segment were various sizes of 16 inches. Now we’ve gone to 17, 18 and 20 inches.”
However, the recession has taken a bite out of extreme plus-sizing, according to Hercules’ Simpson.
“I think at one point when there was a lot of disposable income, you were apt to see Plus 2 and Plus 3 tire and wheel packages. I don’t see a lot of that now. And I see this (trend) happening in other facets of the market, including people who have been putting plus fitments on their big SUVs.”
CTNA’s Roffler doesn’t think sizes will expand beyond 20 inches and 22 inches. “With LT, you get to the point of diminishing returns where you get less sidewall.”
Harder to sell?
Niche enthusiasts aside, the average pickup truck owner — like other vehicle owners — is watching his or her budget closely.
This frugality may change how tire dealers will have to approach customers at the sales counter, says Hankook’s Bainbridge.
“I think the LT tire sale will take a little longer to close than it has over the last couple of years. I think the customer is going to be more concerned about making impulse decisions.
“They want to be sold more; they’ll want more choices. In the past, the consumer might have come in and said, ‘This tire looks good. How much is it?’ Dealers will find that more consumers are going to want to compare” products — not just price, but also features and benefits.
“The dealer is going to have to make more recommendations. You’re going to need more salesmanship to sell just as many tires as before. The whole process is going to slow down.”
“Truck owners are probably more difficult to qualify” than other vehicle owners, says Pirelli’s Koehler. “They have many more choices — highway all-season, street sport, all-terrain, strictly off-road, etc. — especially for trucks that have more mass and increased ride height and are sensitive to changes in driving characteristics.”
“There will always be a truck-buying public,” says Yokohama’s Abram. “You will have to dig in and find out what they want. You will have to be the best at providing service or you will have to create a value proposition that will get them in the door.”
Dealers agree. Long-term, Holt believes consumers will not abandon the LT tire segment, especially those who use their trucks for work. “If it’s a work vehicle, it needs the proper application. The segment has taken a dip because of the economy, but I don’t think this is a permanent wane. There will always be a need for LT tires.”
Vazquez shares his outlook. “When gas prices were really up (last summer), people were parking their trucks. They weren’t driving, and if people aren’t driving, there’s no work for us. But I’m still stocking” LT-metric tires.
If the economy bounces back later in 2009 or early 2010, “people will start driving and people will start buying. I truly believe it’s going to pick up. I see people getting on the roads and putting miles on their trucks.” ■
Eco-friendly LT tires? It could happen if customers see the value
“Green” is the new buzzword in passenger and performance tires. Manufacturers are scrambling to make products more eco-friendly by reducing their rolling resistance and using environmentally friendly components. Will the “green movement” ever spill over to LT-metric tires? We posed the question to several tire company executives. Here’s what they had to say:
Travis Roffler, director of marketing, Continental Tire North America Inc.: “What are you willing to sacrifice? If I can make you a tire that can save you one mile a gallon but sacrifices one car length in braking, is that worth it? There’s always compromise.”
Bill Bainbridge, brand communications manager, Hankook Tire America Corp.: “I think the consumer wants to feel confident he’s making a decision with some environmental concern in mind. Having said that, I don’t know if customers are willing to pay for it.”
Joe Mazur, brand category manager, BFGoodrich light truck tires, Michelin North America Inc.: “Pickup owners may not be buying Toyota Priuses, but I think the eco-friendly concept does resonate with them.“
Jeff Koehler, marketing manager, Pirelli Tire North America Inc.: “Trucks are known for getting poor gas mileage. If you tell someone you can make a tire that will give them x amount of dollars more per tank, they’re going to buy it as long as you don’t give up braking and traction.”
Bob Abram, product planning manager, Yokohama Tire Corp.: “I think the pressure will be there to develop (eco-friendly) compounding and apply it to LT tires. If anyone can benefit from better fuel economy, these huge trucks will benefit.
“We have an eye on... trying to apply (environmentally friendly technology) to more mainstream products,” said Abram.