AKRON—Are you ready for a Porsche sport-utility vehicle? Or how about a spin in a Cadillac pickup truck? These are just two examples of new products auto manufacturers are marketing or planning to market in the next few years to meet the driving public's seemingly insatiable demand for any kind of vehicle that is not a conventional passenger car.
And, of course, these SUVs, light trucks and vans need tires—original equipment and replacements.
Ron Zarrella, president of General Motors North America, told Automotive News (a sister publication of Tire Business) that SUVs, light trucks and mini-vans will make up about 60 percent of U.S. light vehicle sales by 2004. Mr. Zarrella added GM will boost pickup truck production by about 300,000 units in 1999 to meet the demand.
Automotive News also reports North American production of trucks through June 12, is up more than 10 percent over the same period in 1998.
And, of course, this surge in the LT and SUV market has meant increased tire sales, according to industry sources.
``From a replacement point of view, our light truck tire business is extremely successful compared with the same period last year,'' said Chris Dickson, vice president of passenger/light truck replacement sales and marketing for Continental General Tire Inc. Mr. Dickson said CGT's first-quarter replacement light truck sales are up about 10 percent over last year.
Goodyear's LT sales also are thriving. ``We're riding a wave of SUV popularity,'' said Kevin Mahl, product manager for light truck tires.
From Bridgestone/Firestone Inc.'s perspective, the market as a whole is increasing, ``and our sales are increasing,'' said Phil Pacsi, product marketing manager.
The Rubber Manufacturers Association reports U.S. shipments of replacement light truck tires (not including P-metric tires) grew 8 percent in 1998 over 1997, and were up 12.2 percent for the first two months of this year, compared with the 1998 period.
And what about GM's prediction that the LT-SUV market will be about 60 percent of the market in five years? How long will this boom last?
``Light truck and SUV sales will remain strong and continue to grow until 2002. Then it might start leveling off,'' said Donald Botka, CGT's vice president of original equipment and tire technology.
``I don't see a plateau for a while,'' Mr. Pacsi added. ``When people get in those (SUVs), they like the feel.''
Earlier this year, Ford Motor Co. unveiled the Excursion—which it hailed as the largest vehicle in the SUV class. Available this fall, the nearly 19-ft.-long Excursion seats 11 passengers and weighs more than four tons.
Ford's announcement set off a firestorm of criticism from environmentalists and served as fodder for late-night TV comedians and editorial cartoonists across the nation. And the Excursion seems to contradict the pledge of Chairman William Clay Ford Jr. that Ford will be a ``green'' company—sensitive to the environment.
Mr. Botka said the Excursion is ``absolutely huge,'' and he predicted the large SUV market has ``kind of run its course.'' He said there will be more niches in the market and a redefinition of what an SUV is.
``The market segments (for SUVs) will also be global as opposed to just North America,'' GGT's Mr. Dickson said.
Mr. Botka said concerns about fuel economy will limit large SUVs like the Excursion and General Motors' Suburban lines to the North American market. Worldwide buyers will want the safety and visibility afforded by higher and larger SUVs, but ``not to the extremes the American OEMs have gone,'' he added.
The consensus among tire makers is the SUV market will continue to move more towards luxury vehicles. Mr. Pacsi mentioned the Porsche SUV expected in the 2002 or 2003 model year. ``Everybody's looking at different ways to approach the market,'' he said.
They're also looking for a smooth ride. ``The consumers who got out of their Cadillac and into a sport-utility vehicle, they're sort of missing that luxury ride,'' Mr. Mahl added.
Mr. Dickson said CGT plans a ``total redefinition of the tire lines that we have.'' In the last two years, he said, CGT has identified four categories in the LT/SUV market: the ``tuner'' market seeking high-performance tires; the ``sophisticate'' market, which wants a passenger-car ride in an SUV; the ``utility'' driver, such as construction workers who occasionally use the truck off-road; and the ``total off-road'' enthusiast.
All three companies said the vast majority of OE fitments are P-metric rather than true LT tires due to the demand for a smoother ride. And this trend is causing a marked shift in the replacement market.
Mr. Dickson said about 23 percent of CGT's replacement sales in the light truck category are P-metric tires, and he expects that share to increase to about 28 percent in the next five years.
Goodyear's Mr. Wells is forecasting big growth in P-metric LT radials. And since Goodyear has such a large OE position, Mr. Mahl predicted, ``We will sell more P-metrics in 2002 than we do radial LT tires.''
Mr. Pacsi of BFS agreed that the P-metric segment of the replacement market will grow faster than the LT share because of OE fitments.
Another changing component of the light truck tire market is the trend toward increasing diameters. ``You probably will see a lot of the 15-inch sizes going away, but more people focusing on the 16-inch, especially the 70 series,'' Mr. Pacsi said.
Goodyear sees the same trend. ``We've seen a migration in the last four to five years from 15- to 16-inch,'' Mr. Mahl said. He said that the 17-inch size is becoming a factor in the marketplace, and Goodyear has an 18-inch fitment on the Land Rover in Europe.
This proliferation is something the industry will have to watch and manage, Mr. Botka said. He said the first generation of light-truck-class tires were 15- to 17-inch and the second generation appears to be 16- to 18-inch.
BFS introduced the Dueler H/L, a ``highway luxury'' tire, in February, and both Goodyear and CGT will introduce new light truck tire lines later in the year.
Sales of the Dueler H/L, available in both P-metric and LT sizes, ``have met or exceeded our expectations,'' Mr. Pacsi said. He said the success of this tire in the early part of the year shows the light truck sales season ``is no longer in the fall, for hunting and fishing, but it is really becoming a year-round business.''
Mr. Pacsi said that the recent advertising campaign promoting BFS's UNI-T AQ tire lines, which includes the Dueler H/L, will be expanded and continued beyond its original deadline of the end of June.
CGT's next venture in the SUV market will be a 17-inch, ``SUV global tire that was designed here in North America,'' Mr. Botka said. The tire will be an OE fitment on the Lincoln Navigator and, referring to CGT's plans to redefine its products, he called it ``the leading edge of the look we're going to have.''
Later this year, Goodyear will launch a replacement for the Wrangler MT, which was introduced in 1988. Mr. Wells called this new tire Goodyear's ``secret weapon'' and said it will compete ``head-on'' with the competition.
Mr. Mahl said that Goodyear also plans a marketing push for the Wrangler RF-A (Rotation-Free Aquatread) light truck tire, which is in its second year on the market. The RF-A has separate tread designs and shape for use on the front and rear wheel positions on four-wheel-drive vehicles.