Light truck market SKUs 'pick up' amid customization, segmentation

AKRON — Tire makers are addressing consumer demands for customization and off-road performance, which in turn has fueled segmentation and SKU proliferation in the light truck tire market.

CUVs, SUVs and pickup trucks are beginning to outpace passenger sedan sales as more consumers use these "utility" vehicles for recreation and commuting — and they are driving a trend for customization.

"Consumer vehicle taste has changed over the last 10 years, and we see that OEMs have been shifting more of their focus on trucks/SUV/CUVs. For example, Ford will cease all passenger cars, except for the Mustang, and focus on CUV/SUV/pickups," Anthony Lee, technical services manager, Toyo Tire U.S.A. Corp., said.

"This change by a major OEM will change the marketplace and shift more tire sales to LT tires as we see fewer passenger cars on the road. The top selling vehicles now are all CUV/SUV/pickups, and tire sales will follow the trends of the vehicles on the road," he said.

"More and more pickups are being used in everyday family life and as commuter vehicles. The utility, convenience and luxurious options all play a part in the popularity of this vehicle segment which was once dominated by commercial-use consumers," Mr. Lee said.

"The market has shifted to light truck tires as the pandemic spurred consumers to buy trucks for a number of reasons, such as home improvement projects, fun excursions or fueled by stimulus check spending," added Jenifer Golba, TBC Corp.'s senior vice president, consumer product marketing.

These trends are causing a major shift of tire manufacturers' focus toward the light truck tire segment over traditional passenger tire fitments.

Sumitomo Rubber North America (SRNA), for example, targeted 55% of its tire business for CUVs, SUVs and light pickup trucks in 2020, compared with 39% for sedans and 6% for truck/bus in the U.S. and Canada, according to Drew Howlett, product manager of light truck, SUV and CUV tires for SRNA's Falken tires.

In the process, tire manufacturers also are addressing consumer demand for tire choices to customize their on-road/off-road vehicles. This has led to segmentation in the LT tire product lines.

"At this point all tire manufacturers are further segmenting their product lines and offering consumers more choices, whether it be a mild AT (all-terrain) or an aggressive AT or an RT (rugged-terrain) or an MT (mud-terrain) or an extreme MT. All the tire manufacturers are looking for ways to distinguish themselves from other products on the market and offer more choices for consumers," Mr. Howlett said.

"When you provide tires for these vehicles, which are personal vehicles, you have to keep the design in mind," said Barry Terzaken, product manager - crossover, SUV and light truck for Continental Tire the Americas.

"We have many segments to consider. We have highway-terrain, we have all-terrain, we have mud-terrain. So we want to ensure we have something that the design is appropriate for what people are interested in.

"One of the bigger trends that we see now is more bold and deeper sidewall styling. Also in the tread pattern, people are looking for something that conveys capability yet not a noisy pattern. So that is very important in the development in the design — that is really about a personal-use vehicle. It's something that is customizable, it's something that fits what they envision what their vehicle will be."

But this desire to meet a variety of consumer tastes is driving more SKU proliferation.

"It becomes more and more difficult for shops and dealers to have the proper tire in stock, especially when you talk about light truck, because you might have someone come in with their Ford 150 pickup truck with a highway-terrain tire on it and they may say they want a highway-terrain tire or they may say they want an all-terrain tire or they may want a mud-terrain tire," Mr. Terzaken said.

"So now there are three options where with a passenger car you really don't have that. And with the easy customization of bolting on a wheel-and-tire package, then you have all the variations and sizes. So the potential for complexity is real, and for sure dealers need to prepare for that. And their supply chain as well.

"As tire manufacturers, we need to address that. We'll look at a new pickup truck fitment and if it comes with a highway-terrain tire, we may very well consider developing an all-terrain fitment in that same size, even though it was never originally developed as an original equipment size all-terrain, but we may add that in," he said.

The segmentation of the LT tire market involves growing demands for larger rim diameters, ultra-high-performance, rugged terrain and all-weather capabilities, as well as tread and sidewall aesthetics.

Larger rims

"In recent years we have seen a shift to larger rim diameters for light truck tires based on sales trends of off-road SUVs with aggressive off-road packages and upscale designs for larger luxury SUVs. These vehicle sales trends have resulted in growth for the aftermarket segment of larger-rim-diameter light truck tires," TBC's Ms. Golba said.

Conti's Mr. Terzaken also has seen the growth in larger-rim-diameter tires for light trucks as consumers seek personalization.

"One of the simplest modifications is adding a new wheel-and-tire package and you upgrade to a larger rim diameter. It's very effective and it's the look that many people are striving for. Not only are we talking about personalization and customization, we even see this being driven from original equipment," he said.

"In recent years, we've seen 20-inch and even 22-inch rim diameter fitments being available on SUVs and pickup trucks. The vehicle manufacturers have realized that the large-diameter-rim trend is attractive to end-consumers and they offer it to look a little more aggressive and commanding. The two coupled together really drive that evolution of rim diameter and the volume that it's generating," Mr. Terzaken said.

In addition to pickup trucks, CUVs are being outfitted with 18- to even 22-inch rims.

However, off-roading enthusiasts tend to avoid upsizing, he added.

"If they're a deep enthusiast, they want to retain the sidewall height, and that's very important for them for shock absorption and going over rocks. So they don't tend to go for larger rim diameters," Mr. Terzaken said.

UHP for light truck

The classic definition of UHP tires involves larger diameter wheels, shorter aspect ratios and higher performance/speed rating. There is a segment of CUV/SUV and even pickup truck owners who want the sporty UHP look and performance.

"Consumers want their SUVs/CUVs to handle like coupes or sedans, so OE UHP sizes and products give the option," Sonny McDonald, national training manager, Toyo Tire U.S.A. Corp., said.

"Typically you're seeing from your original equipment vehicle manufacturers that they're offering performance packages, which kind of drives the UHP replacement market," noted Conti's Mr. Terzaken.

"But just like you have people striving for this upgraded look and personalization, some are personalizing toward off-roads in pickup trucks and SUVs/CUVs, but some are personalizing towards a sportier look and feel and performance — both the performance aspect and perhaps look as well. Just like the off-road segment, we see the UHP segment for light truck tires growing as well because of this desire and ease of customization," he said.

"There really is, I would say, a huge explosion of ultra-high-performance CUVs and SUVs in the past five years, and there really is no end in sight for the CUV/SUV market," Mr. Howlett said.

He noted that about 10 years ago, 15% of the UHP tire segment targeted CUVs/SUVs and the other 85% targeted passenger cars; in the past couple of years that ratio has changed to about 30% UHP tires designed for CUVs/SUVs versus 70% for cars/sports cars.

"Basically what is happening is there are more high-performance, sporty CUVs and SUVs on the market. So just as standard SUVs have been encroaching standard sedan sales, performance CUVs and SUVs are also slowing taking away some of the performance sportscar sales. ...

"I expect UHP CUV/SUV tires to continue to grow in the next five years or more. And even with the electrification of sports SUVs, like the Mustang Mach-E, I expect there will be continued growth of UHP tires, not only for gasoline and diesel vehicles but also for electric vehicles as well," he said.

Rugged-terrain tires

"The demand for rugged-terrain type products has grown exponentially over the past five years and will continue to grow as more off-/on-road enthusiasts are wanting a tire that provides off-road traction with good on-road manners," Toyo's Mr. McDonald said.

"The overlander market is the driving force. Those customers will drive hundreds of miles on pavement to get to their favorite off-road site, then they need the additional traction of an RT product for whatever type of terrain or conditions they may face," he said.

Rugged-terrain tires tend to be the compromise between all-terrain on-/off-road capabilities and the extreme off-road abilities of a mud-terrain tire.

It's a growing niche segment in which several tire makers are introducing products, including Falken, which plans to launch its Wildpeak RT next year.

"It's not a mature segment but a segment tire manufacturers can't ignore at this point," Mr. Howlett said. "The consumers want this hybrid AT/MT tire. It keeps growing and more and more tire manufacturers are entering that market."

The pandemic played a role in boosting off-roading activities.

"As summer continues, consumers are hitting the road to explore, which has led to the growth of the rugged-terrain tire category," TBC's Ms. Golba said. "There has been a shift from traditional mud-terrain tires to rugged-terrain tires which provide dependable off-road capability without compromising comfort and safety, with the added benefit of the mud-terrain's aggressive looks."

All-weather features

Several tire makers have been introducing "all-weather" tires for passenger car and CUVs that offer all-season as well as winter driving performance and carry the three-peak-mountain-snowflake designation (3PMS).

In the light truck tire segment, many all-terrain tires already provide all-weather driving capability, and have for years, and the newer entries carry the 3PMS designation.

"This is an additional safety benefit that truly gives customers additional traction when needed in any type of driving conditions — dry, wet, rain or snow," Mr. McDonald said. "Think about it, you don't always need to use 4-wheel drive, but it's there when you do. Having the 3PMS safety rating gives customers that same peace of mind regardless of what part of the country they live in. The Toyo Open Country A/T III, Open Country C/T, M-55, Celsius CUV and Celsius Cargo are all 3PMS-rated."

Continental also has been offering all-terrain tires with 3PMS certification.

"We're pretty proud the General Grabber APT (all-purpose terrain) and the General Grabber ATX all have the three-peak mountain snowflake certification and always have. ... So we've been doing this for an awfully long time. It provides a sense of confidence to people that they have these capable tires on their vehicle.

"Not only comfortable on-road manners but also the ability to have a little off-road, depending on which line they choose, and then the all-weather aspect of it," Mr. Terzaken said, adding, "When we design these lines, we design them specifically to have that level of capability because we realize this is an excepted level of performance and we exceed that with our design. So that's an important feature of the tire lines."

TBC's Ms. Golba said that demand for all-weather light truck tires is driven by consumers looking for a single tire that can be utilized year-round.

"We believe this trend will continue to grow for consumers who do not want the added expense of purchasing winter tires, especially in the middle to northern U.S. where there is lighter snow and seasonal changes," she said.

Catching the eye

Tires for light trucks are highly visible compared with the lower-profile tires on smaller passenger cars, so many consumers are attracted to an aesthetically pleasing tire design for their CUVs, SUVs and pickup trucks.

"The appearance plays a huge part for consumers to improve the look of their truck," Toyo's Mr. Lee said. "We try to ensure our tires have an attractive appearance but also add function to the tires. Larger side lugs can make the tire look more aggressive but also serve to help protect the sidewall as well as provide off-road traction."

American Tire Distributors Inc.'s Hercules brand recently introduced the Terra Trac AT X-Journey and AT X-Venture tires which each sport two different sidewalls to offer vehicle owners a choice in styles.

"As you create new products, you want to make sure you're offering the end-consumer and the dealer — especially the dealer for us — something to differentiate them that gets them into your place of business," Hercules' Senior Vice President Josh Simpson said.

"One person's thoughts about what an AT tire should look like may be different than another individual's, so we're going to be offering them an option. If you like this aggressive sidewall design, you mount this side out. If you like this design that's a little more subtle, you mount this side out. We give a choice, and we think that's going to help pull some individuals into our dealers and help grow their sales."

Falken's Mr. Howlett agreed.

"I think that (styling) can draw the customer in to a new brand or to a lesser-known brand. So I think it's important for all the brands, regardless of the tier, to really focus on overall aesthetics, especially on CUV/SUV/pickups. The tires are bigger, they're easier to see, especially on the pickups, the sidewalls are bigger. Inherently, the design is a really important factor."

But he warned that tire aesthetics should also represent the tire's performance capabilities.

"I think there is an opportunity for manufacturers to find other ways in the future to provide enhanced aesthetics or more rugged looking tires without using so much rubber and materials. I think one of the things Falken will focus on in the long-term is trying to reduce the weight of our products without compromising on aesthetics and performance. …

"We have to think of how do we meet all the consumer demands for these rugged aesthetics and all the performance the consumer demands but at the same time we don't overbuild the tire and make a heavy tire and therefore the fuel economy is bad or the range is bad on the electric vehicle. I think that's going to be a huge challenge for the manufacturers going forward," Mr. Howlett said.

"They want the look, but at the same time they don't want the downside of what that brings — i.e. road noise, for example. They want a tire that's very capable when they want to go off-road, but as soon as they're back on the highway, it needs to be an on-road comfortable tire, a quiet tire. But, at the end of the day, you also need to give them that look," Hercules' Mr. Liu said.

Other design challenges

The next and most challenging trend will be OE and replacement tires for electric-powered light trucks, SUVs and CUVs, according to Toyo's Mr. McDonald.

"The design and construction for these types of tires will have to focus on range, load-carrying capacity, durability and noise level to meet OE requirements.

"The other design trend will be for those EV aftermarket enthusiasts who want to level and lift these vehicles, which means larger diameter and wider tire sizes that still must maintain reasonable range and load-carrying capacity," he said.

Conti's Mr. Terzaken agreed the EV trend is impacting LT tire design.

"The vehicles are extremely quiet so tread pattern noise really becomes a key factor and you have to ensure that you minimize tread noise while retaining all of the other performance that you need.

"Another key thing is rolling resistance for battery electric vehicles. ... We look at compounding, construction and contours and all features of the tires and strive to increase the range capability of these tires."

EV weight is also an issue, he said.

"These vehicles are heavier due to the battery packs. In our design, something we have to consider is having a tire that gives you the same aesthetic that's still capable of carrying these heavier loads," Mr. Terzaken said, noting that as more electric pickup trucks are developed, this will become an important segment for tires.

Joe Scalzo, Tire Business online content editor, contributed to this report.