AKRON—Based on strong sales of farm machinery the past several years, Goodyear farm-tire managers expect demand for replacement tires throughout 1999 to be at least on par with last year. A strong farm economy the past few years means there are as many as 500,000 more pieces of farm machinery operating now than a few years ago, said Bill Cunningham, marketing manager for farm tires.
At the same time, though, he said, a lot of the new equipment is specialized, meaning tire wear is spread out over a longer period. The increasing share of drive radials at OE—estimated at about one-third vs. less than 20 percent in the aftermarket—also means increased lifespans of these tires.
New equipment sales this year, however, are expected to lag behind the pace of the past few years, according to forecasts from the machinery companies.
This won't result necessarily in a glut of tires in the aftermarket and the subsequent, inevitable squeeze on prices, said Jim Bamer, product manager, farm tires.
``Actually, the last few years we've been short of tires (due to the strong OE market),'' Mr. Bamer said, ``so this year we should be able to supply our dealers better.''
Goodyear's managers see the downturn at OE as only temporary, picking up again in the second half of 1999.
One trend worth watching: Sales of four-wheel-drive tractors, which had been growing at a double-digit pace in 1996 and 1997, fell by nearly 30 percent last year, including a 49-percent slide in December, according to Equipment Manufacturers Institute data.
Four-wheel-drive tractors have the obvious advantage for tire makers, and dealers, of needing twice as many drive tires. In addition, some farm-equipment makers had taken to mounting duals on 4WDs—in some cases triples on the rear, Mr. Cunningham said.
Complementing its sales efforts with farmers, Goodyear plans to re-emphasize its Gold Star Pit Stop around-the-clock tire repair/service program, and will support it with stepped-up advertising and promotion through farming magazines and the major agricultural shows, Mr. Cunningham said.
On the product front, Goodyear has improved the warranty coverage for its radial drive tires, now offering free replacement in the first year for failures due to workmanship or materials. The company also has extended the limited warranty replacement to eight years from six.
Midwest farmers' tightening of their collective belts is reflected in increased service and repair business, said Ross Fischer, president of McCord Auto Service Inc. in Monticello, Ind.
``Our service calls are up noticeably,'' Mr. Fischer said, ``and we're benefiting from increased `complementary' business, like the ATV and light-truck tires.
``In general, though, farmers in our territory—Indiana, Illinois and Kansas—have definitely tightened their belts. Sales of drive tires are noticeably off; we didn't see the normal year-end, tax-break-related sales surge in December we quite often see.
``With both grain and livestock prices way off, one can hardly blame them for not spending too much,'' he added.
The integration of the Kelly-Springfield business into Goodyear is taking place at the agricultural tire level, as well, Mr. Bamer said, although farm-tire dealers won't be affected as much as their passenger- or commercial-tire counterparts, since only a small percentage of farm tire dealers carries multiple lines.