UHP tires continue to gain wider acceptance

CUYAHOGA FALLS, Ohio — Ultra-high-performance (UHP) tires, once the domain of speed freaks and motorheads, continue to gain additional traction with auto makers and replacement buyers in emerging market segments.

As U.S. consumer preferences gravitate toward larger vehicles — think CUVs, SUVs and light trucks — the shift creates new opportunities for UHP tires that were once mostly associated with sports cars.

UHP offerings, designed to perform better than traditional all-season tires, are seeing their way on to new vehicles at an increasing clip in a years-long trend that ultimately also opens more opportunities in replacement markets.

"The UHP market is no longer just about high-performance packaged coupes and sedans. It has now carried over into SUVs and CUVs," said Sonny McDonald, national training manager for Toyo Tires Corp. USA.

"In the past, UHP consumers were always thought of as driving/auto enthusiasts, gear heads, etc. Today, we now have the 'accidental UHP customer' who buys mid-level coupes and sedans packaged with a tire featuring a traditional UHP size," Mr. McDonald said.

While more and more vehicle types are being spec'd OE with UHP tires, overall demand for H-, V- and Z-rated, low-profile tires has plateaued the past several years, according to U.S. Tire Manufacturers Association (USTMA) data.

The performance category's OE share fell slightly in 2019 to 54.9% of overall shipments, the USTMA data revealed, and has now plateaued at the 55% to 57% level for the past four years. (See chart above and trend graph on page 19.)

The slowing of growth in demand at OE reflects the shifting mix of vehicles produced in the U.S., to the utility category (SUVs, CUVS,) from the more traditional sedan/coupe/station wagon categories.

As the UHP market evolves and expands, so do the factors tire manufacturers must consider when designing these tires, Toyo's Mr. McDonald said.

"The UHP market has always been a benchmark for any tire manufacture when it comes to highlighting new advances in tire designs, compounding and construction. The trend toward high-performance hybrids and electric vehicles puts additional challenges in developing new UHP products that will have to account for heavier weight, more torque and lower pattern/road noise," Mr. McDonald said.

"In the past, the only consideration for a UHP tire was how well do they stick on dry pavement and still be reasonable in the wet," he said.

At American Kenda Rubber Industrial Co. Ltd., Vice President of Automotive Brandon Stotsenburg called UHP "an important and growing segment."

"Many CUVs are continuing to evolve and trend for more handling characteristics, which require, at minimum, V-rated grand touring tires. Some premium CUVs do require W-rated UHP tires with suspension systems to maximize handling," Mr. Stotsenburg said.

"Dealers should be aware of this continuing trend and educate these customers to find the best tire to meet their driving needs," he said.

One traditional drawback in the use of UHP tires has been noise levels that increase as tires wear, causing customers to sometimes remove them prematurely, Mr. Stotsenburg said.

"Manufacturers that have newer design tools are able to offer tires that can offer premium performance and better noise levels as the tires wear. Educating the consumer about those benefits will provide additional value and allow more margin," he said.

"Although the noise level of a 70-80% worn tire is higher than a new tire, it will likely be acceptable to allow the consumer to extend the life and usage of the tire."

"Kenda has seen a significant shift to value for all segments and the UHP segment has followed this trend," he said. "For most consumers, replacement tires requested are not the branded products which were original equipment. These customers do not want to sacrifice performance and want value, not the lowest price."

Kumho Tire USA Inc. places "a significant amount of concentration around our UHP product as there is a higher demand in the market and consumers expect more performance features. An ultra-high-performance product that not only handles well, but with touring characteristics such as comfort, low noise and wet traction," Marketing Manager Chris Han said.

"I see the trend of vehicle manufacturers moving towards UHP products as fitments for their future vehicles continuing to grow in which the RE (replacement) market should see the volume growth benefits," he said.

When it comes to UHP all season, "there is some softness in the northern Midwest, but overall we are seeing growth in almost every region across the entire nation," Mr. Han said. "Summer UHPs are more sporadic when it comes to growth or decline, but overall we are still seeing an increase."

Sumitomo Rubber North America Inc. (SNRA), whose brand stable includes Falken, considers UHP products a big part of the company's heritage, according to Tsuyoshi Johnson, product planning manager.

"With all the discussion about traditional cars giving up market share to the CUV/SUV segment, I am excited to see that UHP tire sales have been holding steady the past few years.

"Of course, there is a rising trend in sport CUVs that may be supporting this trend, but I think the tradition(al) sports car is really fueling this segment at the moment," Mr. Johnson said.

"We are in the middle of fierce horsepower wars that has been going on within the domestic muscle cars and amongst the various European vehicle brands."

Falken is involved in motorsports around the world, from professional teams down to "grassroots enthusiasts," Mr. Johnson said. That includes being selected as a spec tire for the Sports Car Club of America's Solo Spec Coupe class.

Spec races use the same model vehicles with identical specifications to make the competition center around driver talent.

Vehicle makers have been offering higher horsepower options in SUVs and CUVs for years, but manufacturers also are now offering more models with more options and more configurations, a move that is opening additional opportunities for UHP tires, Mr. Johnson said.

"This trend is true for many of the auto makers so I expect to see a shift in UHP size offerings to match the increasingly popularity of this category or perhaps there will be a need for UHP CUV/SUV specific product lines in the future," he said.

The popularity of UHP tires should only continue to rise as auto makers figure out ways to make their vehicles more powerful.

"As the level of performance of vehicles in the market increases, it creates the demand for tires with adequate capability to keep these vehicles stable. This has caused new technologies that offer more performance than ever before," Mr. Johnson said.

"And considering the fact that a majority of consumers are in need of street tires, the dry performance level has to be maximized while still maintaining an elevated level of wet capability and even winter and snow drivability for UHP all season tires.

"With the auto makers continuously finding solutions to increase power output while maintaining fuel efficiency, I don't see this trend ending anytime soon," he said.

The UHP tire segment remains robust, according to Brad Robison, senior product manager at Bridgestone Americas Tire Operations, U.S. and Canada.

"Despite a decrease in sedan sales, the popularity of sports cars, and accordingly the UHP tire segment, continues to hold strong. Much of that can be attributed to the market shift toward CUVs, SUVs and light trucks, where consumer demand for sportier models with more power and responsiveness are driving the upward trend in UHP tires," he said.

According to USTMA data, replacement market shipments of tires H-rated and higher exceeded 100 million units in 2019, an all-time high. That represented 46.7% percent of overall aftermarket shipments, up 5.2% from 2018 and nearly a third versus 2015.

The V- and Z-rated category grew an average of 6.5% a year from 2015 through 2019, the data show, but the H-rated category did even better, growing 9.3% a year during that time. (See chart and trend data on this page and page 18.)

"Consumer expectations of performance tires continue to rise," Mr. Robison said. "Not only do consumers want a tire that delivers ultimate grip and handling, but they also want a tire with longer wear life and all-season performance."

"Consumers today are doing more research about the products available in the market, and they want a tire that performs for a long time and across a variety of seasonal conditions."

Another continuing trend helping push UHP tire sales is the growth in new sizes introduced by OEMs. "With all of the high horsepower cars being offered, we're seeing wider tires in order to attain better traction. In addition, with the growing popularity of CUVs, we're starting to see UHP tires used on sporty variants," he said.

The USTMA data show the 10 most popular sizes OE sizes last year were all 17-, 18-, 19- or 20-inch rim diameter sizes. Together they account for nearly 33% of all OE shipments

Nexen Tire America Inc. said the company has seen growth in the OE segment.

"Ultra-high-performance tires are now no longer limited to sedans. We are seeing the UHP market grow to include the CUV/SUV market as well. Sales of CUVs and SUVs have increased while sedans are trending downward," Megan Wentz, marketing manager for Nexen, said.

At Michelin North America Inc., the last decade has provided significant growth in the UHP market.

"The UHP market, which we define as tires with a Z speed rating (W or above), has doubled in the past 10 years. The growth has been steady year-over-year and we expect this growth to continue into the foreseeable future, not counting some unforeseen result of COVID-19," Steve Calder, technical marketing manager for Michelin North America, said.

"Part of the UHP market growth has been driven by an increasing number of OE fitments coming from the factory with Z-rated tires. While the trend of vehicles in the U.S. continues to shift away from passenger cars to CUV/SUVs, many of these new platforms are coming with Z-rated OE tires, so the shift hasn't drastically impacted the overall UHP market," Mr. Calder said.

Any talk of the UHP tire market in 2020 should include the impact of the COVID-19 pandemic on sales.

Kumho, like many others, is experiencing a "notable impact" on the UHP market due to COVID-19, Mr. Han said.

"We see roughly a 16% decrease in replacement market sales so far compared to 2019. However, due to the changes in consumer-buying behavior, Kumho, as a value brand has been experiencing substantial growth in market share over the past few months," he said.

COVID-19 has brought an overall decline in all tire categories and segments, Bridgestone's Mr. Robison agreed. "As many states take steps to reopen, we are optimistic that we have reached the bottom of this crisis and are focused now on taking necessary steps to position Bridgestone and our customers for a strong post-crisis recovery in all segments," he said.

At Kumho, Mr. Han said he believes growth will continue in the UHP segment despite a hit caused by COVID-19.

"There has been continuous growth in the UHP segment over the past few years. Unfortunately, there has been a significant drop YOY (year-over-year) due to the pandemic, but once we get back to normalcy, we should see the increase in demand for UHP products in the market," Mr. Han said.

"The UHP segment should continue to grow for the foreseeable future."

COVID-19's impact is not just limited to the UHP segment, according to Nexen.

"For many months, stay-at-home orders kept many of us off the roads, and tire maintenance less of a priority," Ms. Wentz said.

"These closures have affected every segment of tire performance. As states start to re-open, we do anticipate tire sales to return. If this happens in the summer months, UHP will be one of the stronger and first segments to return as well."