As a player in the agriculture segment, weather plays a significant role for the success of Titan International Inc. The Quincy, Ill.-based tire maker has intensified the rollout of its Goodyear R14 crossover tire designed for year-round use, in various conditions.
Tire Business discussed that and other industry topics with Titan's Paul Hawkins, senior vice president, aftermarket sales, North America.
Q: How would you describe business thus far in 2019?
A: We expected a stronger start to 2019, but factors in the North American ag market, including lower commodity prices, ongoing trade concerns and a delayed planting season, have all had an impact.
That said, from an aftermarket perspective, we are very close to where we were last year. We got off to a good start from an order intake perspective. Much of this was fueled by a consistent year-over-year growth in demand for our Low Sidewall Technology (LSW) tires.
We have a number of other bright spots we are excited about in 2019, including growing demand for our 30- and 32-ply Goodyear Logger Lug III forestry tires, as well as for our new Goodyear R14 crossover tire in the compact tractor segment and for our Goodyear R-1W farm tires.
Q: What are some of the pleasant surprises you are seeing in the industry?
A: At the beginning of this year, we were pleasantly surprised with the large demand for our LSW tires. While we had planned for growth this year, the qualifying orders from our dealers included an even higher demand for LSW than we were expecting.
We've also received positive feedback from our dealer network regarding our first-ever aftermarket wheel program. While we offer limited sizes — primarily implement and skid steer sizes — as a response to a market need, we are evaluating the potential to expand that in the near future.
Q: How have tariffs and/or antidumping and countervailing duties affected your company? How are you reacting to them?
A: With the tariffs impacting commodity prices, end-users are hesitant to buy and are minimizing purchases. This has had a dampening effect on our business. We control what we can and adjust accordingly, running our plants at the production levels we need.
The tariffs on steel also have had an impact on business. Because we also manufacture wheels, we work to keep in line with many of our OEM customers regarding steel and are prepared to react alongside them with any market changes.
Q: Where do you see the industry markets heading during the last half of 2019?
A: Although we are hopeful for a rebound, it really is all dependent on what Mother Nature throws at the ag industry. We will be ready to respond to customer needs and changing market demands. On the OTR side, we believe that construction will remain steady and forestry will remain strong.
Q: What kind of trends are you seeing in the marketplace? How is your company reacting to them?
A: Tires for subcompact and compact tractors have traditionally been offered in ag (R-1), turf (R-3) or construction (R-4) treads. But these machines are used year-round in all conditions, and up until now there hasn't been a compact tractor tire as versatile as the machines they're going on.
That's why we introduced the Goodyear R14 crossover tire for these applications — to eliminate the need to choose one tread over another. We think this is the way the market will go, and OEMs certainly agree with that — including Kubota, with whom we've entered into an exclusivity agreement on certain sizes. That said, we're also going after the aftermarket aggressively with this tire and have introduced 18 sizes in the last year and a half.
We're seeing strong growth in our R-1W lines as many customers migrate away from R-1 styles. That's a big part of why we've undergone such a significant expansion of our flagship R-1W line, the Goodyear Optitrac. If weather continues to be wet in our agricultural regions, we also expect to see an uptick in demand for R-2 lines, such as our popular Goodyear Custom Flo Grip.
With the need for flotation, we're seeing a continued increase in demand for our large LSW Super Single tires.
Last year we conducted field testing and ground-bearing pressure testing to demonstrate that our Super Single tires are a viable alternative to track machines. We're finding that more farmers are evaluating their options, and some are even changing from track setups back to wheeled machines.
When it comes down to it, growers are more price-conscious in these market conditions, and if they can get the same performance with a flotation tire setup but at a much lower cost — a difference of $40,000 or more — than a track machine, it becomes a no-brainer to some growers.
Q: What segments look to be strong? Are they sustainable for the future?
A: Within the ag market, we see the compact tractor segment remaining strong in comparison to the rest of the market. And with the new Goodyear R14, we're at a competitive advantage not just on the OEM side of the business but now in the aftermarket.
Additionally, demand for our row-crop R-1W lines and LSW offerings has greatly increased among both OEMs and end-users. As I mentioned previously, forestry continues to be a bright spot for us — both from a market health standpoint and a product quality advantage standpoint.
Q: Do you expect to roll out any additional products in 2019? What will they be and what sectors will they serve?
A: In early 2019 we announced the line expansion of our industry-unique Goodyear R14 crossover tire for compact tractors. We added 14 new bias sizes in addition to the four radial sizes introduced in 2018.