By Jennifer Karpus-Romain, contributing writer
AKRON — The ultra-high-performance (UHP) tire segment continues to hold its place in the market, despite the decline in sales of sedans and rising demand in North America for light trucks, SUVs and CUVs, according to a number of dealers contacted by Tire Business recently.
While some dealers are seeing more sales than others, they agree the success of UHP tires is tied to their position as original equipment, including fitments on SUVs and CUVs.
"The UHP market has been good with the increase in demand for SUVs and CUVs," Greg Lopez, owner of Denver-based The Tire Store, said. "And many are equipped with larger diameter wheels and tires."
Jay Baxter, president at Delaware Tire Centers Inc., said: "UHP sales have been growing, and we have also been focusing more of our marketing resources to attracting these customers."
Delaware Tire operates two locations in Delaware and one in Maryland.
"We are more of a UHP area being in the heart of West Los Angeles," Tom Eisenberg, owner/operator of Los Angeles-based West Coast Tire & Service, said. "We work on a majority of higher-end cars that are usually leased.
"So, for us, the UHP market has steady growth.
"These days more and more OE fitments are lower profile and sportier tires," he added, "so the UHP market grows each year with newer models."
In Texas, Tom Ceniglis Jr., owner of Abilene-based Tom's Tire Pros, said: "In our particular market, we are seeing that the majority of OE fitments on cars are UHP fitments.
"That being H-rated and up, where we used to see more S- and T- rated tires. So, in that regard, we feel as though this segment is growing somewhat, but not near at the pace where it was 10 years ago."
Although UHP tires are popular as OE on vehicles, not all consumers know that.
"It's a mixed bag, not sure of the percentage, but a lot of customers don't even realize they have UHP on their car," Kim Sigman, partner/general manager at Community Tire Pros in Arizona, said.
"And some do and want to make sure the performance on the replacement tires is the same or better."
West Coast Tire's Mr. Eisenberg agreed.
"A majority of our clients' cars come stocked with UHP — so we tend not to switch toward anything else."
Most of the customers coming to the shop for UHP tires are looking for replacement.
"I think the majority of these customers come in not understanding what a UHP tire is, and it's our job to educate them on the differences and why the tire is needed for the vehicle," Mr. Baxter said.
"For the customers who ask for them — they normally come in prepared and have a brand preference along with price expectation."
This is what other dealers are seeing as well. Mr. Lopez said typically customers are not coming in asking specifically for UHP tires.
Delaware Tire's Mr. Baxter noted that "knowledge helps sell UHP."
"We spend a good amount of time with our salespeople training on the features and benefits of UHP tires. If we can be the expert, the consumer will have a higher level of confidence buying from us.
"With that being said, most consumers lean toward price intersecting with safety and performance," he said.
He added that UHP tire sales have increased around 6% to 8% over five years ago.
Mr. Ceniglis said he has seen a lot of changes in UHP tires over the past 10 years, but not as much over the past five years.
"Current UHP sales are down from five years ago," Mr. Lopez added.
Community Tire Pros' Mr. Sigman has seen the opposite, saying UHP tire sales have increased.
Overall, dealers find customers care about the performance of their tires.
"To me the most important feature of a UHP tire is performance," Mr. Ceniglis said. "That's why it is called a UHP tire."
Mr. Sigman agreed.
"It has to be performance, because in most cases they are more money than non-UHP and get fewer miles," he said.
"In a lot of cases when a consumer is replacing OE UHP tires, they would prefer to spend less money and get better mileage by putting a lower-performance rated tire back on the vehicle. But this is not safe for the consumer, so any legitimate tire retailer will not do it."
Yet, some dealers are seeing price being a factor.
"Price is generally the first thing the consumer looks for and then treadwear next," Mr. Lopez said.
"Performance is usually a given."
Several dealers told Tire Business they expect growth in this segment, in part due to their increasing use as OE fitments.
"I think the UHP market offers a good growth opportunity with the consumer for their desire for the 'look' of plus sizing," Mr. Lopez said.
Mr. Sigman shared a similar sentiment.
"If the OE trend continues then they will be a larger segment of the aftermarket," he said.
"We expect UHP tires to grow a bit more due to so many common OE fitments carrying UHP tires and that these fitments tend to have better traction and handling but lower wear life," Mr. Baxter said.
"We have also seen an improvement in the product quality in (Tier) 2 and 3, and we are now able to offer our customers different price points and value propositions.
"We also expect dealers and online purchases to continue to be competitive — one for convenience, the other for price."
While UHP has a place in the tire market, dealers are seeing varying trends affecting their UHP business.
"We plan to continue improving our UHP sales, but our company also continues to focus on aftermarket tire and wheels and accessories as a growth area, as well as regular interval services," Mr. Baxter said.
Mr. Eisenberg also noted online competition factors into his UHP and overall tire sales.
"Tire sales are steadily declining in my area due to online competition," he said.
"The ability to buy tires online is easier than ever, the market share is declining very quickly. I kind of saw that coming though when Tire Rack became so popular, then ATD (American Tire Distributors Inc.) started TireBuyer and all the manufacturers now sell direct to consumers."
Mr. Eisenberg said he expects to focus on service and repairs in the next five years or so and become more of an install center for customers who get their tires shipped to the store.
"I believe UHP tires will remain relevant in the near future and definitely have a strong position in the tire market," Mr. Ceniglis said.
"But who knows what will happen in the tire business over the even next five years: possibly airless wheel-and-tire assemblies (which will more than likely be UHP)?"
One increasingly common discussion in the industry is how the growth of the light truck tire market affects the UHP market.
Mr. Lopez thinks there is a place for both light truck and UHP tires.
"The consumer wants the performance from their SUVs as well, e.g. the Cadillac Escalade with its 22-inch OE size," he said.
Mr. Baxter said he is seeing similar trends.
"There is a transition where customers have migrated from performance sedans into performance SUV/CUV and light truck vehicles," he said.
"They like the extra comfort and space these vehicles afford, not to mention more flexibility while maintaining a high level of power and performance."
Mr. Ceniglis said he sees both sectors having their place in the overall market, but more growth in light truck in his area.
"Where we are seeing growth in our market is in all-terrain and off-road tires for light trucks and SUVs," he said.
"More are coming OE with all-terrain P-metric tires and the ones coming with all-season tires are oftentimes getting refitted with all-terrain or even off-road tires."
"The UHP tire segment definitely has its place in this business, especially in urban areas. But in rural areas and Main Street USA the light truck tire segment is going to grow the fastest, in my opinion," he added.
With the ability for UHP tires to be on SUVs and CUVs, it will continue to have its place in the market.
"The UHP segment will always be relevant," Mr. Eisenberg said.
"My SUV has UHP tires on it."