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July 03, 2000 02:00 AM

America's light truck love affair continues

Chris Collins
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    AKRON—The last decade could have been called the Roaring '90s for the light truck vehicle market, which includes pickups, sport-utility vehicles and vans. U.S. and foreign auto manufacturers racked up impressive sales of LT/SUV models, especially in the second half of the decade.

    While dramatic gasoline price increases in the first half of this year and rising interest rates might put a damper on LT/SUV sales, figures for the year so far don't show any clear trend.

    And sources from several tire companies said soaring gas prices and higher interest rates have yet to make an impact on original and replacement LT tire sales.

    According to Automotive News, a sister publication of Tire Business, Ford Motor Co. registered a 21.8 percent gain in LT/SUV sales between 1995 and 1999. General Motors Corp.'s increase was greater still: 25.4 percent.

    The Autofacts Group, a subsidiary of PricewaterhouseCooper MCS, said overall light truck sales in May were off 0.3 percent from May 1999. However year-to-date sales stood at 3.7 million vehicles, up 8.7 percent from 1999.

    Purchasers of larger SUVs, many priced above $30,000, apparently aren't being scared off by gas prices that topped $2 per gallon in late June in some midwestern states. Analysts said the prospect of spending a few hundred dollars extra for fuel per year probably isn't an issue for buyers of large SUVs.

    Automotive News reported sales of Ford's Expedition dropped 7.6 percent in the first five months of 2000. However, many potential Expedition buyers may have bought the Ford Excursion—an even larger SUV not available in the first half of 1999.

    Three other large SUVs registered healthy sales gains in the first five months of the year over the same period last year: the Chevrolet Suburban (up 13.6 percent), the Chevrolet Tahoe (up 27.4 percent) and the Lincoln Navigator (up 8.2 percent).

    Manufacturers say the economic uncertainty hasn't affected the sales of LT tires, either.

    "Our business is strong," said Don De Mott, marketing manager of new products for the Michelin brand. Michelin LT tire sales are up from a year ago, he said.

    "I think it'll be several months before we see a significant change in replacement volumes," said Tom Garcia, product planning manager in the passenger and light truck division at Continental General Tire Inc.

    If gas prices ease in the fall, as many analysts predict, Mr. Garcia thinks any drop in sales will be a "glitch" in the overall trend of steady growth in the LT/SUV market for the next three years.

    Kevin Mahl, product manager of light truck tires at Goodyear, said the Akron-based firm's LT tire sales in the first quarter were "pretty respectable." It is too early to tell whether fuel prices will have any effect on sales, he added.

    The effect of gas prices "hasn't hit yet," said Phil Pacsi, director of consumer tires brand marketing for Bridgestone/Firestone Tire Sales Co.

    Crossover vehicles

    DaimlerChrysler A.G.'s enormously successful PT Cruiser is the leader of the pack of this emerging group of sporty vehicles that combine features of the traditional station wagon and the SUV.

    The tire makers all said they see a shift in the SUV market toward smaller, more nimble vehicles with a smoother ride.

    "I don't think you're going to see the growth in the large-chassis vehicles like the Ford Excursion," Mr. Mahl said. "I think the growth is going to come in what has been termed the `crossover' vehicles."

    "We really feel it's (the market) going to shift more towards the ride-oriented," Mr. Pacsi said, "and that's why a lot of our new light truck lines are putting a lot more emphasis on ride comfort."

    "We will see these tires crossing more into passenger and be a passenger-type product rather than falling into light truck," Mr. Garcia said.

    "We've got so many of these vehicles—SUVs—that are being built on car platforms," Mr. De Mott said. "There's really not a tire line that addresses that opportunity in the industry."

    Michelin is working on new LT products for a smoother ride, Mr. De Mott said, but he declined to reveal any details.

    Another trend in the LT/SUV tire market is the shift to P-metric tire sizes from LT sizes. All the manufacturers reported they are manufacturing increased percentages of P-metric tires for both OE and replacement.

    For example, CGT reported 58 percent of its replacement tire production for the SUV/LT market in 1999 was in P-metric sizes.

    Last year Goodyear produced 17.8 million P-metric tires and 30.3 million LT sizes for the LT replacement market and 18.2 million P-metrics and 8.3 million LT sizes for OE light trucks/sport-utes.

    This year Goodyear actually will sell more LT replacement units in P-metric than in OE, Mr. Mahl said.

    New products

    CGT is in the middle of revamping its LT lines in a "Global SUV Project," with specific products targeted to use of the tire and not necessarily specific vehicles. "It was time to update (CGT's LT offering) and refresh it," Mr. Garcia said.

    Continental "ContiTrac SUV" and the General "Ameri.Trac SUV" lines will be introduced in the fourth quarter this year, Mr. Garcia said. They are targeted for the user who does nearly all of his or her driving on paved roads and highways.

    The company plans to develop all-terrain tires with more aggressive tread designs, performance LT tires for the "tuner" market and an "extreme traction" line for introduction in 2001 and 2002.

    BFS introduced new products in its Firestone-brand Wilderness line early this year and is adding a few sizes in the Bridgestone Dueler line, Mr. Pacsi said, but is not ready to introduce anything substantial now.

    Introduced last fall, Goodyear's Wrangler MT/R—an off-road tire with tread elements on the sidewalls—is selling well, Mr. Mahl said.

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