Getting a grip on off-road light truck tires: You don't have to go very far off the beaten path to make money in this lucrative segment

Oct. 1, 2007

The specialized light truck market segment is fascinating from every angle, especially as a profit opportunity for sales of tires, wheels, lift kits, shocks, and other specialized parts or services.

It's a segment in which professional off-road racing teams abound, and consumers look to them for inspiration when it comes to their own light truck tire and wheel dreams.

It's a segment in which high technology bias-ply tires can still hold their own against radials, especially in extreme off-road competition.

It's a segment in which winning on Sunday sells tires on Monday -- and the rest of the week -- just as it did in the performance tire segment during the 1970s and '80s.

Tires in this segment may be judged by their tread design as well as performance, but make no mistake: performance is the key factor.


Special customers and sizes

Who's buying specialized light truck tires? The big sales numbers come from "off-road profilers" who cruise the roads and may never go off-road, industry participants say. They just want the off-road look and capability.

These customers have a lot of discretionary income and are willing to spend it on their trucks. (They also have regular cars and SUVs that will likewise receive a lot of attention when it comes to tires and wheels.)

One sale to any of these enthusiasts will result in a big ticket, easily over $1,000 and reaching toward -- and even beyond -- the $2,000 mark.

The next largest group is comprised of people whose work takes them off-road, like farmers and those with any agricultural or service job in rural areas. These customers need specialty light truck tires every day and demand real off-road performance.

On the product side, tire manufacturers offer a wide range of sizes, from P-metric and light truck 225/75R15 through 20-inch rim sizes.

The classic 30x9.5x15 is still popular and part of the mix. As a matter of fact, many tire manufacturers feel that products in this segment start with that tire size.

Market data

Though some major companies like Goodyear Tire & Rubber Co. and Michelin North America Inc., as well Toyo Tire (U.S.A.) Corp. and others, are players in this segment, smaller companies are influential as well.

For this article, representatives from five companies were selected to be interviewed about the market and their tires. Their goal is for their respective companies and brands be top-of-mind for consumers in this specialty off-road segment. They include:

* Don Sneddon, advertising manager, Mickey Thompson Performance Tires & Wheels, a division of Cooper Tire & Rubber Co.

* Doug Addis, sales manager for the automotive/LT division, Maxxis International - USA.

* Jedd Emans, vice president, Pro Competition Tire & Wheel Co.

* Dennis King, vice president of operations, Dunlap & Kyle Co. Inc.

* Michael Green, president, Pit Bull Tires/Tire Mart Inc.

Each executive was asked several questions. Their responses provide a unique look into the specialized light truck market.


MTD: How do you define the "specialized light truck" segment?

Answers to this question varied widely, but there are two main points of view. Some define it as starting with competition-capable tires in size 30x9.5x15 and anything larger. These are the companies that do hard-core, extreme off-road competition such as rock crawling and events like the Baja 1000. (Pit Bull, Maxxis and Pro Comp are involved in these activities.)

Others define the segment as any tire having off-road capabilities, even though it may see on-road service most, if not all, of the time. In this category the P-metric and LT radials are included, plus a few large mud-type tire designs. Some also include the bigger sizes, but they do not consider them as the only sizes in this segment.

In addition, siping seems to be a hot item right now, as all five companies talk about it in their literature. Siping can help solve the traction problems with big lug tires on wet slippery surfaces, they note.

MTD: Where is this segment in total dollar volume at this time?

Emans estimates that 4% of light truck tire replacement sales are in specialty light truck for an expected total of about $450 million in 2007. Green and Sneddon estimate it at closer to $500 million.

MTD: What are the keys to promoting this segment, for the manufacturer/marketer and also for dealers?

"Our promotion is our participation. We sponsor several teams in each of these off-road events. It gives us great exposure and a chance to develop and test new products in the most severe conditions. If our tires do well, which they have, we know they will be a winner for the regular motoring public," says Maxxis' Addis.

"We enhance pull-through demand with image advertising strategies and technical articles," says Pro Comp's Evans. "We believe in grassroots marketing campaigns."

Mickey Thompson's Sneddon says his company promotes its products "through targeted ads in off-road magazines, event sponsorships and motorsports participation."

"We are new to this segment in many ways, but we treat it just like the other segments we operate in," says Dunlap & Kyle's King.


MTD: Do you have specific in-store promotional items, point-of-purchase or sales tools for your dealers?

"We offer our dealers a wide variety of POP materials and make them available to our distributors," says Maxxis' Addis. "In turn, they are able to customize the materials that best fit each of their specific dealers. Posters are very popular and we develop a new one each year for each discipline of off-road racing."

"Our counter top mini tire and wheel display showcases both our tires and wheels," says Mickey Thompson's Sneddon. "It allows dealers who do not have a lot of display room to have a life-like model that shows off our wheel and tire designs the right way."

Pro Comp, Pit Bull and Dunlap & Kyle offer technical product catalogs and banners, among other items.

MTD: What are your latest products and how do they fit into this segment?

Dunlap & Kyle says the Buckshot XMT is its newest entry into this market. The tire has been on the market for only a few months. It comes in three flotation radial sizes and 10 LT radial sizes. DK Tires considers this an entry level product for off-road enthusiasts.

Pro Comp's newest is the Xtreme M/T, which also is the company's newest product line. Emans says the tire includes Pro Comp's "TriPly" body construction, deep functional upper shoulders/sidewalls, and an elongated tread design to minimize tread/road noise.

Pit Bull's Green says his company has 24 new sizes spread out between its existing product lines. They have yet to be released in 2007. Pit Bull's Rocker model is its most popular tire.

Maxxis offers the Creepy Crawler, a bias-ply extreme competition tire; the Bighorn, a radial for extreme competition; and the Trepador, which offers both radial and bias tires in the same designs.

Mickey Thompson offers the new Mickey Thompson Baja Radial ATZ and Baja Radial MTZ. In its Dick Cepek brand, Mickey Thompson offers the new Crusher Radial, which has a "skull and crossbones" tread design.


Making the sale

So you have the products and the promotional materials; how do you make the sale?

Selling specialty light truck tires requires several things, say the executives.

The first is a knowledgeable sales professional who knows how to match the customer's perceived needs/desires to the right tire at the right price point.

For example, it would be easy to inadvertently insult a customer driving an expensive SUV by offering him or her a low-priced product.

Executives agree that the basics of sales are just as much at play in the SLT tire segment as they are in other segments, like the ultra-high performance tire segment. Training is available from all specialty light truck tire manufacturers to some extent.

Like the UHP segment, many other sales opportunities are available, including lift kits, shocks, chassis reinforcement accessories and a myriad of other things that enthusiasts want.

The specialty light truck tire and accessory business is healthy and growing. The opportunities there could be a boost to an enterprising tire dealer's bottom line.