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October 30, 1995 01:00 AM

GROWING LT MARKET OFFERS OPPORTUNITY: BUT DEALERS MUST KNOW SEGMENT, USERS

Gregory James Kennedy
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    AKRON-The light truck revolution rolls on. For years, light truck sales have been gaining ground on automobiles. In 1994, light trucks made up 41 percent of U.S. light-vehicle sales and analysts-as well as the automakers themselves-are predicting light trucks' sales growth to continue to outpace cars'.

    Chrysler Corp. said it expects a 50-50 split between car and light truck sales by the year 2010. Some say it will happen even earlier.

    It's clear to most industry experts, however, that light truck tires offer independent tire dealers an opportunity to boost sales and profits-but only if they are willing to meet the diverse needs and wants of light truck drivers.

    Automakers are scrambling to grab a larger slice of the LT market and, as a consequence, are offering consumers more and more choices. Among the recently announced offerings are Ford Motor Co.'s 1997 F-150 pickup and Nissan's restyled Pathfinder.

    Detroit has latched onto market statistics that show the growth in the LT market is being spurred by buyers who, in the past, drove cars.

    Catering to that mentality, Ford is making the 1997 F-150 with a sleeker look, a bigger cab and a new suspension system to smooth out the ride. Nissan is adding dual airbags to its new Pathfinder.

    The results are vehicles that, on the outside, have rugged light truck looks, but retain the safety and comfort of a family car.

    ``The beauty of the sport utility is how versatile it is,'' said Ed Schaffer, Dunlop Tire Corp.'s product manager for LT tires. That versatility is a ``gold mine'' for tire dealers who can help customize light trucks-as many as 80 percent of which carry passenger-sized OE tire fitments-to a particular customer's tastes.

    ``Dealers don't have enough opportunities where they can up-grade (besides light truck tires). Too often the decision degrades to price,'' Mr. Schaffer said.

    Michelin North America, which supplied written responses to TIRE BUSINESS' questions, said it agreed LT tires have a potential to provide dealers a greater profit.

    ``Although there has been a trend to treat broadline passenger tires increasingly as a commodity item, this is much less the case with recreational light truck tires,'' the company said. ``This is a relatively high-interest segment, which implies somewhat less focus on price.''

    But attracting drivers of light trucks to a dealership takes work, experts agreed. For starters, the LT market has diversified into at least six categories.

    In a general sense, the market comprises:

    Full-sized pickups like the Ford F-Series and Chevy C/K Series;

    Compact pickups like the Ford Ranger;

    Full-sized sport utility vehicles like the Chevy Suburban and Jeep Cherokee;

    Compact sport utilities like the Ford Explorer;

    Full-sized vans like the Ford Econoline/Club Wagon; and

    Minivans like the Dodge Caravan and Mercury Villager.

    Looking at the U.S. light truck market, pickups constitute about 46 percent of vehicle sales, followed by vans at 28 percent and sport utility vehicles at 26 percent, according to Michelin.

    Much of the recent sales growth has come from the full-sized pickup and sport utility categories, said to Dunlop's Mr. Schaffer.

    But there are lots of regional differences.

    Bill Hopkins, Goodyear's general manager of multipurpose vehicle and specialty tires, advocates dealers take the time to figure out what types of light trucks are in their specific markets before emphasizing LT tires in their business.

    ``It doesn't take a whole lot to see what's out in the marketplace,'' Mr. Hopkins said, noting dealers can simply watch the types of trucks that go by from a street corner or count vehicles in parking lots.

    The first step in selling light truck tires is advertising, industry experts agreed.

    ``An effective way to (attract LT truck tire buyers) is to make sure that your advertising (newspaper, radio etc.) makes it clear that your store is the place to come for expert tire advice for pickups, vans and sport utility vehicles,'' Michelin said. ``You should stress that your understanding of the varied uses to which LT truck vehicles are placed and your extensive line of tire products all but guarantee a successful tire-buying experience.''

    An adequate stock of LT tire types and sizes to fit a particular market area also helps, according to Mr. Hopkins, who said he does not believe the proliferation of sizes will reach the levels seen in passenger tires.

    That's not to say there isn't a growing number of tires for light trucks-regardless of whether they are designated in passenger or LT sizes.

    Tire companies are introducing as many new tires for light trucks as the automakers are introducing the vehicles they fit.

    The strong light truck sales have spurred strong growth in LT replacement tires, as well. This year, LT tire shipments are 5.8 percent ahead of last year's record pace.

    Some wholesalers are finding LT tires to be popular, as well.

    Bill Short, owner of Leininger & Short in Riverside, Calif., said his company sits in the middle of a ``highly light-truck-oriented area.''

    As much as 48 percent of the company's monthly sales to retail dealers comes from light truck tires, Mr. Short said.

    ``(Dealers) need to offer a real wide variety of tires now in order to catch the consumers,'' said Dunlop's Mr. Schaffer, adding that the wide range of tire types stresses a need for a well-trained sales staff. ``It's a golden opportunity for dealers. As the market expands and diversifies, it's crucial that they train to take advantage of it.''

    Goodyear's Mr. Hopkins agreed that a well-trained staff can help dealers gain a reputation as light truck specialists-especially among first-time light truck owners.

    Detailed training becomes even more important for dealers in areas with a large population of off-road enthusiasts who are likely to have extensive knowledge, officials said.

    Sponsoring events, displaying products and services at shows, and networking with enthusiasts can all drive in new business, Mr. Schaffer suggested.

    ``Club involvement can be just a huge, huge benefit to the dealer,'' he said. ``It can also help to have a salesperson or mechanic that is also an enthusiast.''

    It has certainly worked for J&L 4 Wheel Drive Center in Sun Prairie, Wis., according to manager Todd Mallon. As its name implies, the dealership specializes in selling, repairing and customizing light trucks.

    ``Most people aren't that knowledgable,'' he said. ``The majority of our time is spent answering a customer's questions. . . . What really drives the customer in here? They know us.''

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