Bridgestone: Commercial market returning to 'normal'

NASHVILLE, Tenn. — After the roller coaster ride of the past four years, the commercial tire market in 2024 may be downright normal.

"We think it's going to be a pretty decent year. Probably the most normal year that we've had in a long time, which feels so different coming out of the last four," Steve Hoeft, president of Bridgestone Americas Inc.'s Commercial Truck Group, told Tire Business.

After all the spikes and troughs in trucking and the commercial tire market, "it feels like 2024 is the most normal year we've had in quite some time, and just changing everyone's mindset back toward that is proving to be a little bit more difficult than we might have anticipated," he said.

Hoeft admitted that from a trucking fleet point of view, it's been a tough year so far with rising operating costs. So fleets are becoming more price and value conscious.

That's why telematics that involve monitoring tire pressure and wear is drawing more attention from fleets. Between quality new tires, retreading and tire monitoring systems, such packages can bring the best price-per-mile for fleet customers, he said.

"Right now there's a synthesis of bringing technology solutions into play along with the new tire and the retreads are kind of a three-legged stool that we have branded as Fleet Care."

Bridgestone Fleet Care's Tire Monitoring Service offers remote monitoring of tire condition when trucks are in the yard or continuous remote tire pressure and temperature monitoring while the truck is on the road.

"So we're trying to kind of bring together technology along with great new and retreaded products, along with solutions and then sustainability to kind of bring that whole package of value together. And we're seeing (interest) more and more, especially in the larger fleets, and it's very quickly moving its way down the market. ... The interest in sustainability, even in the last 12 to 18 months, has picked up dramatically on the fleet side," Hoeft said.

"But we think it's going to be a pretty challenging year from a fleet point of view which, of course, puts pressure on the manufacturers and everyone in the value chain here."

While smaller fleets may turn to lower price-point tire brands, Hoeft argued that tier one and tier two brands with complementary retreading actually provide a better cost-per-mile and are more economical — "which is why all of the large fleets run tier one and tier two plus retreading."

"For the most part what we're seeing is more of a trend for strong analytics by the fleets. So they seem to be doing a better and better job of understanding the true value. As you get to the lower-end of the market though, that is somewhat less prevalent, as you would imagine."

Bridgestone is promoting the performance of its premium products versus lower-tier brands, he said.

"We're investing very heavily, and we'll have a lot of new product coming out in 2025 and 2026, both from the TBR perspective along with retreads. ...

"It seems like things have settled out or we're getting back to normal and we're just looking to accelerate our package of value through our Fleet Care offering and it really seems to be resonating very well with the fleets."

Hoeft said there has been some softening in the OE tire market, especially in the last month.

A few OEMs have reduced vehicle production plans in anticipation of new tighter federal emissions standards for commercial vehicles, beginning with the 2027 model year.

The trailer side of the OE business has been "relatively steady, almost a bit more resilient than we expected," he said.

In the replacement tire market, "what we're seeing is this may be the first normal year that we've had in the industry since 2019. Very obviously with the impacts of the pandemic causing a decline and then a bit of an almost unnatural peak in the market — maybe even a bubble would be the right word," he said.

"So we're seeing a bit more of a traditional year or a typical year. And we're also finding that from our sales organization, we're out earning business fleet by fleet. And it's much more than before when we were just chasing available product, quite frankly, to meet an extraordinary demand that was higher than I think any of us had thought it could be. So it's just a much more normal year where we're out just fleet by fleet trying to win our share of a business."

The last-mile-delivery business is still steadily growing after experiencing a surge during the pandemic.

"We do expect it to grow a bit faster, maybe at twice the rate of the rest of the market, because the lifestyle changes that I think the pandemic accelerated — in terms of us all ordering more things directly to our homes — is continuing. But not at the artificially accelerated rate of 2021 to 2022. ...

"So it's still a very viable market, and it's an area we are very focused on from a Bridgestone/Firestone and a Bandag perspective and realizing a very fair amount of success in that space quite recently," Hoeft said.

In 2022 Bridgestone finished selling off about 95% of its GCR commercial tire network. (Nine locations are now aligned with the company's global mining business.)

Bridgestone now relies on its independent dealer network for aftermarket tire distribution.

"We have what we believe is the best collection of commercial dealers, literally, in the world. And what we're looking to do, also during the next couple of years, is to, from a technology point of view, better connect that group and to leapfrog the industry in terms of the technology we have to support our fleets through our dealer network."

Hoeft took over as head of the Commercial Tire Group in December 2022. Since then, he said, the company has "significantly enhanced our interaction with our Bridgestone commercial dealer network. ...

"We want to continue to develop and involve our dealer network. The health of our dealer network is directly tied to the health of our commercial business. We know that, we understand that and we want to make sure that we kind of take that dealer network to the next level during my period of time here.

"And secondly, it is very important not only to Bridgestone as an organization, but to me as an individual, is that we make big strides forward in terms of our impact on sustainability and efficiency of fleets that kind of go hand in hand in the marketplace," he said.