EV (al)ready: Continental tires accommodate both drivetrains

PLAYA MUJERES, Mexico — One of the attributes that executives from Continental Tire the Americas say set the tire maker apart from its competitors is its willingness to listen, engage and react to dealer suggestions.

"We want the voice of the customer to be embedded in our decision-making," Bill Caldwell, Conti's senior vice president of sales and marketing, told Tire Business. "That's important."

And the execs say their customers are clear about the direction they want the company to take regarding adding more lines to their portfolio: Enough is enough.

That's one of the reasons the U.S. subsidiary of Hanover, Germany-based Continental A.G. won't add an electric-vehicle-only line of tires. The Continental tires the company produces in plants across the globe, they say, already are EV ready.

Joe Maher, the recently retired product manager, passenger and winter tires for the Fort Mill, S.C.-based firm, spent a significant amount of time during the general session explaining that stance during the Continental Gold Trip, held March 20-24 at the Atelier Playa Mujeres all-inclusive resort, located near Cancun. Approximately 300 dealers qualified for the event, including 36 first-timers.

Roughly 600 dealers, vendors, Conti personnel and guests attended the event, held during its usual spring time slot for the first time since the pandemic altered the schedule.

Conti execs told Tire Business that the tire maker's stance on EVs is based on dealer feedback.

"Could we (make EV-specific tires)? Sure we could," Travis Roffler, director of marketing, said. "Our dealers aren't asking for it. Our (dealer) product council said, 'Forget about it. We don't need another portfolio of tires.'"

"We could have an EV X, Y, Z tire, but it wouldn't be anything different than what we are offering in our portfolio," Caldwell said.

And that's the other main reason Conti execs say an EV-specific tire isn't necessary. The tires in their portfolio offer all of the same performance tradeoffs that consumers seek in a tire, no matter if the drivetrain is an internal combustion engine (ICE) or electric.

"Fuel economy, mileage versus wet/dry. Those are standard tradeoffs, and that's why we have different products — we want to offer customers a choice based on what's important to them," Caldwell said.

If an EV driver prefers more range and less performance, or vice versa, Conti has existing products optimized for those traits, he said.

"So we don't feel the need for a new product because the range of performance is already available in our portfolio," he said. "The message we're trying to get out is, to that customer, that we have a range of products to support varied customer needs in that area."

Maher, who retired April 1 after 21 years with the company, drove that point home to dealers during his presentation at the general session.

"We are EV ready," Maher said. "All of our tires are designed to be put on an electric vehicles."

Conti has OE fitments with EVs manufactured by Tesla Inc., Audi A.G., General Motors Co.'s Chevrolet brand and Nissan Motor Co., among others. The tire maker said it has fitments that cover 90% of EVs on the road today.

Maher noted five characteristics that differentiate EVs from ICE vehicles:

• torque (in EVs it's instant);
• efficiency (EVs are more efficient);
• weight (EVs are heavier);
• noise (EVs are quieter); and
• range (what impacts the range of a battery charge).

The importance for tire makers, he said, is rolling resistance, defined as the amount of energy it takes to keep a tire rolling at a constant speed. Rolling resistance can affect range by up to 10% — typically, that number is between 5% and 7%.

"Rolling resistance has improved over time in our car parc portfolio with increased construction, stronger materials," Maher said. "A lot of that development for OE is incorporated where it works in our replacement tires. The kind of materials we use is similar. All of our tires, regardless if it's an OE or replacement tire, has a low rolling resistance strategy. "

Caldwell said Conti's replacement catalog of product "performs really well for rolling resistance compared to all the product offerings in the market. It's a premium product, so it's already performing at a high level."

Similarly, Maher said the technology for developing quieter tires is the same, whether the tire will fit an EV or ICE vehicle. And that applies to weight, too.

"Four-cylinder and 8-cylinder cars weigh differently, but they have the same tire size," he said.

"The key is the car manufacturer is responsible for taking the weight, the load that can be put in the vehicle, and the vehicle dynamics, to pick the tire size and the load-bearing capacity and speed rating for that vehicle.

"As long as the tire dealer is putting the same load index that came original for that car, you're doing exactly what is necessary for that consumer."

So the strategy question begs: What if the EV consumer is reluctant to replace a tire with a product not specifically made for an EV?

Conti will address that two ways. First, it will roll out educational material designed to inform both the dealer and the consumer about its products designed for both drivetrains.

"Dealers are little bit scared of it, because if you think of it, facing an EV customer, I think they're a little more educated than an ICE customer," Roffler said. "That's why we want to educate these guys about what a tire can do on an EV or ICE vehicle, ... the tradeoffs for EVs are exactly the same as for ICE."

Secondly, Conti will begin manufacturing tires with "EV" and a check mark stamped on the sidewall to signify that the tires are "EV ready." But the execs maintain that any Conti tire will perform well, no matter the drivetrain, with or without the EV check mark.

"It's all about understanding these people, range, creating a balanced tire, and giving options to the person at the counter to be able to facilitate that sale," Chris Charity, vice president of sales, U.S. passenger/light truck replacement business, said. "We want to make sure we have right product that they can support the customer."

Conti continues to intensify its relationship as the exclusive tire of the Universal Technical Institute (UTI), a provider of technical training for those seeking entry-level careers as technicians in the automotive industry. As part of the agreement, Conti will provide tires and curriculum aids to each of UTI's 15 locations across the U.S.

The tire maker continues to introduce the Conti brand to technicians and instructors and show them how they market the brand.

Charity said the UTI collaboration is another example of how Conti listens and reacts to its dealers.

"We don't have our own stores; we aren't hiring technicians," he said, "but over the last couple of years, it's been a consistent theme that dealers are having trouble finding qualified help.

"We found an opportunity to do a three-way win, win, win: A win for the dealers to have access to more qualified technicians; a win for UTI, because we can make sure they are in this conversation with dealers and (know) what we're doing as a manufacturer; and a win for us, to make sure we're adding value for our customers but also working on the marketing side and the branding side and introducing technicians and instructors to our brand, how we go to market and what we do."

Eventually, Conti will try to hook up dealers seeking technicians with UTI graduates, where and when it makes sense.

Last year, Conti debuted a new slogan, "Continental: The Smart Choice in Tires."

Its challenge has been to deliver that message through Conti's sports sponsorships, particularly Major League Soccer and NCAA basketball.

Roffler previewed commercials with soccer and former college basketball stars, making that point for consumers.

"Everything we do in marketing is to drive to you, the dealers, for consumers to make a smart choice for Continental Tire and for your dealership," Roffler said.

"We can't sell tires to a consumer because we don't sell tires to a consumer. You do. We want to make sure the consumer knows the smart choice is to buy the tires at your dealership."

Roffler said his team is working on the same challenge with the new General Tire slogan: General Tire deLIVEers (with the emphasis on live).

The message, Roffler said, is that "whatever it is you want, to family, to your friends, making your lifestyle come to life."

"Whether it's performance, off-road capability, on-road capability, whatever you're looking for in a tire, General Tire delivers."

The new slogans were rolled out last August, during the last Gold Trip. Roffler said many dealers have embraced them.

"We continue to roll them out," Roffler said. "Reaction has been solid."

Caldwell said 2022 was a tale of two stories. The first half, the tire maker was trying to catch up to demand from the supply perspective. That stabilized in the second half, but, he said, interest rate hikes seem to have slowed down demand.

"We also hear from customers, because of family budget tightness, we starting to see a drift into Tier 2 or Tier 3 products," Caldwell said. "There's less money in the system for premium-ness."

That means Conti will begin a renewed focus on the more economical General brand.

"We think (General) is an important part of our portfolio given that customer behavior," he said.

• Expect some new products soon in both lines, Roffler said, on the heels of the first-quarter release of Conti's ExtremeContact Sport02, an ultra-high-performance (UHP) tire designed for the car enthusiast to run on the road or on the track.
• Caldwell said many of the investments being made at U.S. plants revolve around accommodating today's trend for larger-rim- diameter tires, particularly light truck tires.
• Employment continues to be a challenge as older employees retire from the workforce. "That's a focus for us, from a productivity standpoint, getting a new workforce, or a younger, less experienced workforce, up to speed so that the plants are operating at a high level. That's the challenge for us," Caldwell said.
• Debbie Richards, manager of the Gold program, told dealers that the goal is to keep improving the program and provide all the tools and vendor connections to make the independent dealer successful.

"We realize that your businesses and your lives are interwoven," she said.

"We're so honored you've chosen to be a part of the Gold program. Without you, there is no us."