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New fuel efficiency mandates will kill some of the tire competition

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New fuel efficiency mandates will kill some of the tire competition

Don’t expect any new players in the replacement truck and bus tire market anytime soon. The United States government doesn’t seem to want them.

Of course, it hasn’t come out and said that. In a free-market society, to do so would be biased at best and illegal at worst. But if your policies point to fuel-efficient-only tire standards, then what is the logical conclusion?

The SmartWay Transport Partnership was strike one. In 2004, the Environmental Protection Agency (EPA) created the program, which is designed to reduce transportation-related emissions and fuel consumption. Fuel-efficient tires certainly advance that agenda.

Tires are more fuel efficient when they roll more freely. The following Class 8 truck tire brands have lines that are SmartWay-verified for low rolling resistance: Arisun, BFGoodrich, Bridgestone, Continental, Double Coin, Dunlop, Falken, Firestone, General, Goodyear, GT Radial, Hankook, Kumho, Linglong, Michelin, Roadmaster, Sailun, Sumitomo, Toyo, Westlake and Yokohama.

Reducing rolling resistance takes research and development — and money. Still, the SmartWay standards don’t appear to be cost prohibitive. On their own, they help not only the environment, but also fleet owners, who save on fuel.

Strike two was the recent commercial vehicle fuel economy regulations announced by the Obama administration. Once again, the purpose of the regs was to reduce vehicle emissions and increase fuel economy.

(I wonder if the president’s superbuses run on fuel-efficient tires? Goodyear Tire & Rubber Co. already supplies size 285/70R19.5 truck tires for President Barack Obama’s limousine, although the tire maker doesn’t have a Fuel Max tire in that size yet.)

The first-ever standards for heavy-duty trucks will require a significant reduction in both fuel consumption and greenhouse gases over time, starting with 2014 model year trucks. Semis will need to reduce fuel consumption by approximately 20% by the 2018 model year, while “work trucks” such as fire and garbage trucks and buses will need a reduction of close to 10%.

If it sounds like the Corporate Average Fuel Economy (CAFE) standards already in place for cars and light trucks, it is. However, the government stopped short of announcing blanket miles per gallon goals because there are so many different truck types with varying usages. Instead, it chose to single out vehicle types and apply percentages.

Reducing vehicle weight is the key to implementing the standards, according to the government. My guess is that vehicle manufacturers will demand tires with even greater fuel efficiency characteristics than the SmartWay standards require, because tire weight directly affects rolling resistance.

Now do you see why I’m worried? What was once a realistic fuel efficiency request from the government suddenly becomes a daunting task for smaller, otherwise viable tire manufacturers. The fewer the participants, the higher the costs for everyone along the distribution chain.

The report even lists weight reduction values for tire and wheel packages. For example, if you take a single wide-base drive tire and match it up with a lightweight aluminum wheel, the weight savings versus dual tires and steel wheels is 147 pounds.

Note the report’s push toward wide-base tires. If you think some manufacturers will have trouble producing truck tires with extremely low rolling resistance, then imagine how hard it will be for them to add wide-base tires to their offerings.

Will they all be able to keep up? I don’t think so. Last year, Pirelli Tire North America CEO and President Mauro Pessi told me the company “is not interested in bringing truck tires here.” His prospects for profitability in that segment were slim even before all these regs. Pirelli makes and sells truck tires abroad, but I wouldn’t expect a Pirelli truck tire to be sold in the U.S. in my lifetime, even if demand outpaces supply.

“Through new fuel-efficiency standards for trucks and buses, we will not only reduce transportation’s environmental impact, we’ll reduce the cost of transporting freight,” said U.S. Transportation Secretary Ray LaHood. “This is a win-win-win for the environment, businesses and the American consumer.” It is not a “win” for everyone, however.

As always, our industry will adapt. Over time, maybe everyone will get up-to-speed.

Then again, there’s always the possibility of the government coming out and admitting that, yes, it doesn’t want any more players in the U.S. truck tire market. In today’s political climate, that really could happen. That would be strike three.

If you have any questions or comments, please e-mail me at bob.ulrich@bobit.com.

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