‘A More Normal State’: Continental Exec Discusses Construction Tire Demand, New General OTR Tire Line
Continental Tire the Americas LLC is ramping up its investment in small OTR and construction tires. The company unveiled the first offering in its new, all-bias General brand OTR tire line earlier this year during the Tire Industry Association’s OTR Tire Conference.
The first offering in the line, the General TE188, has been designed for loaders, graders and small articulated dump trucks. “We felt this was the right time” to unveil the bias-ply General line, said Shawn Rasey, director of global business development, earthmover tires, Continental.
It gives dealers who offer a “good-better-best” selection of OTR tires “a great offering in the ‘good area,’” he added. “There are so many options in the OTR space right now. Our dealers now have the ability to offer a competitively priced product with a brand name that customers know and love.”
MTD recently caught up with Rasey to discuss market reaction to the line. He also discussed the impact of the COVID-19 pandemic on construction tire demand, what the rest of the year will bring and more.
MTD: How has the COVID-19 pandemic impacted demand for construction and small OTR tires in North America?
Rasey: It’s been crazy for everyone. Early on, we could see dealers and end users trying to conserve cash and use up whatever inventory they had in stock already. As time has worn on through the pandemic, the purchase/sell process has settled back into a more normal state of buying what is needed and starting to plan for forward requirements.
Not all parts of the market are on the same trend line, however. We see significant variation in demand and activity, area by area. This is true in both geographic terms, as well as in market segments. Mining seemed to take a pause early on, while construction has been robust, along with good strength in the aggregates segment.
MTD: Can you describe the current state of construction tire demand?
Rasey: We saw strong demand and positive growth signs in both January and February, and even into March, as 2020 started. In April and May, the market seemed to slow. But beginning in June, demand started to turn more positive. Without COVID-19, I could see that the market would be up multiple points over 2019, but that is not a reality now.
Market indicators point to a more gradual recovery — not quite the traditional, V-shaped recovery that we’ve seen in some previous cycles. But then again, this has been a once-in-a-lifetime event.
MTD: What will the rest of the year look like and what trends should small OTR and construction tire dealers keep an eye on?
Rasey: Clearly, we’re seeing a stronger second half of the year compared to the first half. But whether we get back into any type of supercharged, stronger recovery may have to wait until the election in November. For dealers, I think the key will be watching the demand trends in their local markets and staying nimble in a way that allows them to react to stronger demand when it materializes by being well-aligned with their supply partners.
If markets bounce back faster than we anticipate, there is always a risk of supply being properly aligned with demand — having enough of the right tires when you need them. We’re working hard every day to keep our fingers on the pulse of the market and to have the right supply plans in place to meet our customers’ requirements.
MTD: Can you bring us up to speed on the recently introduced General bias ply line? What has market acceptance been like? Are you planning to add new products or sizes to the line?
Rasey: It’s been overwhelmingly good — even better than what we expected. Dealer and user acceptance of the “new” General brand in OTR happened almost immediately. Our product line fills an important niche: high quality, in key sizes that are priced in a great spot. We’ll be adding a whole new skid steer and backhoe offering in the light construction segment later this year and we’ve started plans to evaluate some additional product gaps that some key customers have asked us to address.
“We’ll be adding a whole new skid steer and backhoe offering in the light construction segment later this year,” says Shawn Rasey, director of global business development, earthmover tires, Continental.