OUR VIEW: Consumers just keep on truckin’
AKRON — Upsizing, downsizing, right-sizing…. Choosing one of those options can put a business owner in a precarious position.
Should tire dealers take a chance and stock more light-truck tires at the expense of passenger tires? Should they limit the number of specialty or high-performance tires? Or is their current mix just right?
Perhaps the time has come — or will be coming very soon — when your next tire order could contain more LT/SUV/CUV tires than passenger tires, something unheard of just a few years ago. Our reporting this week shows the enormous proliferation of light-truck vehicles in the market. In fact, the numbers are quite staggering.
Light trucks (including SUVs, CUVs, work vans, etc.) are outselling passenger cars by a 2-to-1 margin.
Consumers in almost every region of the U.S. are taking advantage of lower fuel costs to buy and/or replace passenger vehicles with SUVs, CUVs or light trucks. In fact, six of the top seven highest selling light vehicles in 2017 were SUVs, CUVs or light trucks, led by the Ford Motor Co.’s F Series trucks.
In the last five years, sales of light vehicles have risen 64 percent, to 11.13 million from 7.02 million in 2012. Several models have had double-digit growth
Some tire dealers say they are witnessing the transition firsthand. Light truck tires account for 60 percent or more of sales for some dealers, while that percentage is much lower for others, especially, it seems, in more urban areas.
Still, there are no signs the trend toward increased light truck vehicle sales will slow anytime soon. With the Big 3 auto makers implementing and/or considering reductions in the production of passenger vehicles, Bank of America Merrill Lynch forecasts that 71 percent of vehicle introductions in the 2019-22 model years will be light vehicles.
Meanwhile, research shows high-speed-rated tires are gaining popularity with consumers. Passenger tires with V- and H-speed ratings account for 55 percent of the total U.S. replacement sales volume, according to a recent study, as each segment gained more than 20 percent of the market.
Speed ratings for SUV tires also increased, with consumers moving to H-rated tires from S-rated versions. R-rated light truck tires (up to 106 mph) still account for more than half the market, but they dropped to 50.8 percent of the LT market in 2017 from 52 percent in 2016.
So what does that mean for the tire dealer?
First of all, know your area. Take note when that customer who came in two years ago with a Ford Fusion returns to replace the tires on the used F-150 she just bought.
Second, listen to customers. Every manufacturer, it seems, is unveiling the latest and greatest in its lineup of light truck, off-road and/or all-terrain tires. What works best? What has the most affordable price point?
Finally, follow market trends. Stay informed by perusing the latest numbers in Tire Business. Figure out what’s right for you in your market, today, tomorrow and a year from now.
And remember, one size doesn’t fit all.