AKRON—They're the cream of the crop—V- and Z-rated ultra-high performance (UHP) tires that fetch higher prices in the showroom and can produce more profits for tire dealers.
And UHP tire purchasers typically are more affluent and discriminating than economy-minded buyers looking for a set of tires for less than $100.
The Rubber Manufacturers Association reports UHP tires are the hottest-selling segment of the replacement passenger tire market. Year-to-date, V- and Z-rated replacement tire sales are up about 10 percent over 1999.
According to the RMA, the performance replacement segment (comprising H-, V- and Z-rated tires) is more than 4 percent ahead of 1999, vs. overall replacement passenger tire market growth of about 3.2 percent this year.
Several manufacturers contacted by Tire Business Staff Reported growth in UHP market segment sales, but none would provide specific sales figures.
"Our share is keeping pace with that growth," said Adam Murphy, BFGoodrich brand marketing manager for performance tires.
Goodyear's Bob Toth, brand marketing manager for Goodyear auto tires, said sales of UHP tires are "doing very well."
"We are experiencing a good sales trend," said Steve French, national sales manager for Toyo Tire (U.S.A.) Corp.
Year-to-date sales are "exceptionally outstanding," said Mike Leverington, director of marketing for Kumho Tire U.S.A. Inc. Until this year, Kumho had only been minimally involved in the UHP segment. But sales of the ECSTA Supra 712 line that was introduced at 1999's International Tire Expo, he said, "have been absolutely off the charts."
In order to exploit this growing market segment, each of the manufacturers is adding sizes now or in the near future to their UHP lines. The tire makers also said they will promote these lines in the coming year and are keeping an eye on the emerging sport-truck performance tire market.
Toyo is taking the most aggressive stance in the sport-truck performance market by adding 22- and 23-inch V-rated sizes to its Proxes S/T line. The new sizes debuted at the current International Tire Expo (ITE) in Las Vegas.
"We know that it's the first 22-inch tire which is load-indexed and the correct sizing for the domestic-manufactured sport-utility full-sized truck on the full-size platform, both GM and Ford," Mr. French said. Toyo introduced two sizes: 305/45R22 and 325/40R22. He also called the debut of the 23-inch Proxes S/T (size 305/40R23) "pretty exciting."
Toyo also unveiled two 20-inch sizes of its Proxes T1-S line for passenger cars at ITE. "We believe, in passenger car tires, 19 inches is the optimum size," Mr. French said. Toyo's dealers also wanted a 20-inch size, so Toyo added that "to be taken seriously as having a full range of car tires."
In 2001, BFGoodrich will add sizes to its g-Force T/AKD, g-ForceKDW and Scorcher T/A lines, Mr. Murphy said. In September, BFG added an 18-inch, Z-rated tire to the Scorcher T/A line, and will introduce two 19-inch sizes to that line by year-end.
BFG also has four 20-inch sizes in the g-Force T/AKDW line, including a 295/40R20 for the sport truck market. "It's really a fast-growing market," he said. "There's really no reason to expect it's not going to continue to grow from there."
Goodyear divides its UHP tires into two tiers based on price, Mr. Toth said. He called "tier one," which contains the Eagle F-1 GSD2, "the no-holds-barred segment."
"Tier two" includes the Eagle HP-Ultra Plus, which he said is an "entry price point" product. In 2001, Goodyear will add 10 sizes of 18- and 20-inch tires to this line. "This truly was intended to be our tuner market tire."
At the higher end, Goodyear recently added 11 sizes to the Eagle F-1 GSD2, giving this UHP line 36 sizes ranging from 15- to 19-inches.
In sport trucks, Mr. Toth observed that two original equipment tires are being used by sport truck enthusiasts.
When production problems at Ford delayed the rollout of a special "Harley"-theme edition of its F-150 pickup, Goodyear released excess inventory of the OE fitment Eagle G-2 (size 275/45R20) tires for retail sale, Mr. Toth said. In a few months, sales were so strong that dealers ran up a two-year backorder on that tire.
Goodyear added molds and increased production, Mr. Toth said, and that tire is now readily available.
Sport truck enthusiasts also are buying the 20-inch Eagle GSD, a run-flat tire that is the OE fitment on the rear wheels of the Plymouth Prowler, as an aftermarket customizing feature, he added.
Kumho's Supra 712 "has been our No. 1 success story this year," Mr. Leverington said. Sometime next year, the South Korean tire maker will increase its number of performance sizes to 60. "We will greatly enhance our 19- and 20-inch offerings in the 712," he added.
In 2001, Kumho also will introduce a line to replace the Supra 711 that will be a step above the Supra 712, Mr. Leverington said. The yet-to-be-named tire will be comparable to Michelin's Pilot line, he said, will provide good traction and be "extremely responsive."
"The BFG brand has a long history of being a player in V- and Z-(rated tires)," said Mathew Aaron, brand manager of BFG tires. "I think in '01 we're going to be having a renewed emphasis on performance and ultra-high-performance lines of products in the traditional sense."
For BFG, an aggressive TV advertiser in the past, that means more targeted print advertising and other types of promotions. BFG has five performance tire managers in the field, Mr. Aaron said, who attend enthusiast events and conventions and work with clubs.
BFG is planning a national promotion to target the performance market in 2001, but he declined to provide any details.
Toyo participated in about 50 car shows this year, Mr. French said. It will add more events next year and will be the official tire supplier for the 13-event Speedvision Cup GT and touring class racing series.
Mr. French also said Toyo will sponsor four drivers in the National Hot Rod Association's import drag racing division.
"Kumho will have a national retail pull-through event that will bring a $25 U.S. Savings bond with the purchase of four tires," Mr. Leverington said.
Kumho also will introduce a new racing tire during the 2001 Sports Car Club of America road racing series, he said, that drivers will use in addition to the Kumho's current V700 racing tire.
Dealers and the future
Mr. Aaron said BFG will "continue the Scorcher trend" with more color. Scorcher's success—at the retail level and custom-ordered via BFG's Web site—proves use of color on tires is "no longer a toy," he added.
"This is a unique marketplace," Mr. Aaron said of the UHP market, "and the consumers have very specialized needs." He urged tire dealers to take steps to learn how to sell and service ultra-high-performance tires.
"These (UHP) customers are among the most loyal in the market," added Mr. Murphy. "You'll most definitely see an improvement in the bottom line."
Mr. Toth noted Goodyear's dealers could see even more profits in the ultra-high-performance market, because owners of smaller sports cars would like to eliminate the size and weight of the spare tire.
"If there is a segment that seems to be more aggressively embracing the concept of run-flat (tires), it is the ultra-performance segment," he said. "Run-flat is becoming trendy in the ultra-high-performance market."
"What we're doing with ultra-high-performance tires from 2000 on is like night and day from what it was," Kumho's Mr. Leverington said. He feels Kumho's pricing structure will draw more value-driven customers who want the look and appearance of performance tires without "sticker shock" prices, rather than brand-driven customers.
"We're finding that the ultra-high performance trend is opening up opportunities for our existing dealers," Toyo's Mr. French said, noting the increased popularity of sophisticated vehicles like Volvo, BMW and Audi, provides more opportunity to sell ultra-high-performance tires.