Demand in light truck market driving dealers' business

"Part of this is that the all-terrain tires in the LT category are coming with better mileage warranties than in the past. The all-terrain tires also have a considerably better ride than they did 20 years ago. Since we are in the Northwest, people want a tread pattern that can be run year-round. People want quality and value, Tier 2 tires."

Mr. Davis shared a similar sentiment.

"Most (customers) are asking for upsize tires over the factory size and in all-terrain patterns that will balance and deliver mileage to boot," he said.

Other dealers find that consumers search for all-around quality.

"Customers in the retail sector that we service are looking for name brand, high mileage, low noise with good traction," said Mr. Riebel.

On the commercial end, price is more of a factor, explained Mr. Antony. The majority of Redco's light truck customers are commercial.

"Typically, price is the top concern for these customers," he said. "Our retail customers tend to look for the best value, not the least expensive tire, unlike our commercial accounts."

Inventory issues

With an increase in size options in the light truck tire market, proximity to warehousing can be imperative.

"Inventory can be almost impossible when it comes to having every size," Mr. Riebel said.

"In our market, we have the good fortune of having three major warehouses as well as inventory that we keep on hand.

"We have a store in an area that does not have a major supplier, but next-day delivery is available. We keep the most popular sizes in stock ourselves and use the vendor warehouse to complete the inventory."

Mr. Davis noted it is tough to keep Cowser Tire in stock with the expanding inventory needs of the LT market.

"We rely heavily on our local wholesalers as well as direct suppliers to supplement what we keep in stock," he said.

Mr. Antony also relishes in the support of a strong supplier network.

"Denver has become a hub of major tire suppliers in the last few years. Fortunately for us, we let them do a large portion of our light truck stocking for us," he said.

"We have no less than five major suppliers within 20 minutes of our location. We will stock eight to 12 of the common sizes, though. Typically we can have any size or brand at our location within 40 minutes of a customer walking into our facility."

A dedicated support staff can ease the inventory capability struggle.

"We stock all types of tires, and with the expanding number of tire sizes, it has become more difficult to stock," Mr. Gill said.

"It is forcing us to have fewer options per size — maybe only one. But it's not as difficult as people might think. We have an excellent person in house that is constantly tracking the marketplace to see what tires are moving up or down for our top selling SKUs."

Challenges ahead

Mr. Antony said it's fortunate that most light trucks use fairly standard sizes. Commercial trucks tend not to be exotic in sizing.

"On the few unusual sizes that come in, we have technicians that are very good at improvising in order to make things work," he added.

"Having skilled people is key, and our technicians are fantastic problem solvers. We service semi-trucks as well, so larger light trucks are no problem for us. As far as balancing larger sizes, we've had good success with the balance-bead products."

Serving the commercial market on top of the retail sector expands dealer capabilities for the LT arena.

Mr. Davis said he knew Cowser Tire would do a good amount of LT and commercial business, so he invested in equipment that could handle both avenues.

"We have the alignment machines with longer ramps and heavier lifting capacities to handle not only the heavy commercial vehicles, but they work great on lifted trucks with oversize tires as well," he explained.

"Our balancers are geared the same way. We purchased them for commercial service but again they can handle any LT size tire with ease. It is a large initial investment but will pay for itself over the long haul."

Mr. Gill said LT service is not new for his business.

"Over the years, we have invested in new equipment as needed," he said.

"This has been a long trend, not something that just started. Like most tire shops, we have hoists that can hold bigger vehicles, but it is still just as quick to use floor jacks for larger F-350-type vehicles."

Technicians stay up-to-date on diagnosing issues with four-wheel drive, Mr. Gill said.

"We update all of our mechanics on a yearly basis as part of our training process," he added. "Generally, diagnosing these problems is seldom an issue."

Mr. Riebel agreed.

"As far as diagnosing problems with 4-wheel drive, we have techs that can address any mechanical issue," he said. "Diagnosing tire problems on these vehicles is much easier if you invest in the high-end balancers that have match mounting capabilities and road force read out."

In general, accommodating light trucks, space and lifting is not the problem, Mr. Riebel said. The equipment needed to mount and balance is more troublesome.

"A quality balancer and tire machine will begin at $12,000 and up for the pair," he said.

Contributing factors

Economic and geographical factors continue to come into play in the success and growth of the light truck tire market.

Mr. Antony said his light truck sales rise and fall with the construction market.

"Also, we ship out of the state, and if the oil price is high, we see a significant increase in our light truck sales as the oil field related companies begin to move."

Mr. Riebel said the oil market affects McWhorter Tire Co.'s business as well.

"We also service the Permian Basin. As the price of oil increases, demand for heavy duty light truck tires increases," he said.

"In the West Texas market, F-150s, F250s, Silverados and Tahoes and Expeditions are abundant. Light truck tires far exceed high performance tires. Work trucks, farm and ranch and oil provide a need in this area for a growing light truck market."

While the commercial world continues to grow, tire manufacturing may be lagging.

"The heavy-duty tires with reinforced steel sidewalls are only built in 16-inch sizes," Mr. Davis said.

"Most trucks built in the last five or six years have come with 17- and 18-inch wheels. We have zero heavy-duty options for these trucks. As far as the consumer side, most major manufacturers seem to be building only standard sizes and leaving the 'specialty sizes' that are so popular to the Tier 2 manufacturer."

He noted the wheel replacement market seems to go hand-in-hand with people wanting larger tires.

"As more of these trucks are produced and 'dressed up' so to speak, the demand for service will skyrocket," Mr. Davis added.

"We are ready for it, and I think anyone who is serious about their store would be wise to get the proper equipment."