Tire size proliferation and plus-sizing are complicating the marketplace, and dealers need to be aware of how vehicle trends affect tire sales, a Kumho Tire U.S.A. executive told Tire Business.
One of Kumho's initiatives for 2004 is educating its dealers on what's happening in the marketplace and why size proliferation and plus-sizing continue to complicate tire selling. Rick Brennan, Kumho's high-performance brand manager, said tire dealers need to pay attention to more than just tires and speed ratings when closing a sale.
``There's a lot of things happening in the industry that are changing the way the dealer has to go about selling tires....It's not all about the tire,'' Mr. Brennan said.
He explained that many consumers now are looking for a tire/wheel package that cosmetically changes their vehicle's appearance.
If a customer wants to change the rim size, then naturally a different tire size will be needed to fit the vehicle. A dealer who knows how to accomplish that likely will satisfy the customer and get referral business, he said.
``For us, it's vitally important to be able to step up the dealer's knowledge,'' Mr. Brennan said, noting that Kumho is interested in making sure dealers sell the right tire for the right application.
Because so many tire sizes are becoming available, Kumho is emphasizing training this year and plans to send its sales force out to train dealership salespeople, Mr. Brennan said.
The company also will make Internet training available to dealers, and one of the areas its Web site will focus on is plus-sizing. The Web-based training should be available by year-end if not sooner, he said.
Mr. Brennan explained that a lot of what's going on in tire sizes can be traced back to vehicle sales trends. U.S. vehicle sales data for the past few years, for example, show that import car brands continue to rise while domestic car sales are declining.
Increasing sales of Toyota, Nissan and Honda cars is a trend tire dealers should take note of because those car makers use higher percentages of OE tires with low aspect ratios and high speed ratings, he said. As a result, H-rated tire sales are ``exploding,'' and 25 percent of all U.S. tire shipments are H-rated tires, Mr. Brennan said, citing Rubber Manufacturers Association data.
Even consumers who buy non-performance cars among the import brands are plus-sizing, he said.
Kumho is responding to these trends by growing its market share in the H-rated segment and the 55-series and lower segment, he said.
The tire maker's ultra-high performance tire market share declined to 6.7 percent in 2003 from 10 percent, but he claimed its high-performance tire market share grew to 6.8 from 2.2 percent.
``We're on the leading edge of that shift in the definition of UHP, and we gotta constantly stay there,'' Mr. Brennan said.
Additionally, tax rebates in 2003 intended for small business owners on vehicle purchases contained a loophole that allowed anyone to deduct 40 percent of the purchase of a full-sized SUV on his or her taxes, he said. That tax rebate impacted tire sales, he explained, as 24-inch replacement tire unit sales skyrocketed to 42,000 in 2003 from 5,000 in 2002. Likewise, 22-inch replacement tire unit sales soared 47.6 percent from 2002 to 200,780.
Mr. Brennan said these vehicle trends mean sizes are driving replacement tire demand, and a tire store customer wanting to plus-size his or her vehicle is more interested in the appearance of the tire and probably doesn't want higher speed-rated tires.
``You don't necessarily need to know speed ratings,'' he said. ``You gotta know the size and load index.''