Tire dealers looking to enhance the bottom line at their dealerships should pay close attention to the latest tire shipment forecast from the Rubber Manufacturers Association. Sandwiched among the various market segment predictions is one valuable statistic: Replacement demand for light truck tires will overshadow that for all other tire types into the next century, the RMA's Tire Market Analysis Committee reported.
More specifically, the committee thinks replacement shipments of light truck tires will grow at twice the rate of passenger tires, or 3.4 percent annually, to more than 35 million units by 2003, up from 29 million last year—and that was a record.
Shipments of passenger tires to the aftermarket, meanwhile, will grow at a more modest 1.7 percent per year, the committee predicted.
The desire by owners of pickup trucks and sport utility vehicles (SUVs) to change over from their original equipment P-metric radials to true light truck tires will drive this demand, the RMA said.
You don't have to be a marketing genius to appreciate what those numbers mean to tire retailers.
They spell opportunity.
Assuming the RMA predictions remain on track, dealers should examine the vehicle mix in their local areas to determine how large the SUV/pickup truck market really is. Then prepare accordingly.
Dealers shouldn't overlook related selling opportunities, either. For example, SUV and pickup owners opting for larger, beefier tires may well want or need to go to a larger wheel, or change wheel styles just to be different. Also, many of these owners might consider suspension adjustments or body work modifications.
As a result, dealers may find it advantageous to promote light truck tire and wheel combinations or to establish themselves as the local LT tire specialist.
In a slow-growth business like the tire industry, dealers must be prepared to grab any opportunity that comes along—especially before the competition discovers this same trend.