Modern Tire Dealer - June 2020 by EndeavorBusinessMedia-VehicleRepairGroup

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The latest on dealer sellout trends How healthy is your balance sheet? Union targets consumer tire imports – again Commercial dealer keeps New York City rolling during COVID-19

TRUCK TIRE MARKET MID-YEAR REPORT Shipments, market share and what’s next

June 2020 | Vol. 101, No. 6 | $10 | A Bobit Publication | www.moderntiredealer.com

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The Industry’s Leading Publication June 2020, Volume 101, Number 6

DEPARTMENTS 2 Editorial

F E AT U R E S 18

‘You can’t always get what you want’ — But here are five reasons why you’ll get what you need

Make sure technicians utilize equipment’s full capabilities

4 moderntiredealer.com News and navigation tools for MTD’s website

6 Industry News USW seeks new tariffs on PLT tires

Using the balancer to reduce customer comebacks

Post-COVID-19 rebound Top tire execs discuss rising demand, new tire buying habits

14 Your Marketplace Sell out rates continued decline in April: Meanwhile, COVID-19 boosts demand for tier-three tires

16 Numbers That Count Relevant statistics from an industry in constant motion

Commercial Tire DealerTM

Tiremakers discuss impact of COVID-19, when recovery will begin

36 DSP Insight Pulling customers in or driving them away? It all starts with how you use the phone

38 Creating a Buzz Creating a high-touch culture in a no-touch world: Three things you can do today

40 Business Insight Regular, casual or player? You need all of these customers — but treat them differently

Truck tire service at the epicenter of COVID-19 Barnwell House of Tires keeps NYC moving

AG Tire Talk

Commercially Viable

42 Mergers and Acquisitions The importance of a strong balance sheet: And why a good relationship with your bank is more critical than ever

Truck tire market: mid-year report

Traction vs. flotation: How to optimize each — and use flat plate to measure contact patch

Focus on Industry 44 On the ground floor: Tire Brands America has big plans for new line, network 46 Toyo unveils next-gen Open Country and Proxes tires: Introduces truck tire for ‘super-regional’ applications 47 TPMS Lexus ES Series – 2007-2018

52 Products 54 Ad index 56 Classified ON THE COVER: PHOTO COURTESY OF SNIDER TIRE INC. DBA SNIDER FLEET SOLUTIONS

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30 28 1

Editorial

‘You can’t always get what you want’

BUT HERE ARE FIVE REASONS WHY YOU’LL GET WHAT YOU NEED By

Mike Manges

1. People are driving again. According to INRIX, a firm that monitors transportation trends, passenger car travel is increasing in every state. As of this writing, seven states have seen increases of 10% or more: South Dakota (14%), Wyoming (14%), North Dakota (13%), Maine (12%), Kansas (11%), New Hampshire (10%) and Vermont (10%.) All states, except Hawaii, have recovered at least 24% of their maximum mile reduction, which occurred after COVID-19-related stay-at-home orders were enacted. And in what will be of great interest to those of you who sell and service commercial truck tires, long-haul truck movement is starting to rebound. At press time, INRIX reported that three states — Michigan (7%), Alaska (6%) and Massachusetts (4%) — have seen increased truck movement levels of at least 4%. 2. People will continue to drive. Despite a modest, Memorial Day-related uptick in air travel, fewer people are flocking to airports. Slightly more than 348,600 travelers passed through TSA checkpoints on Friday, May 22. Compare that to more than 2.5 million travelers who were screened on the same date in the United States in 2019. In a late-April conference call with investors, Thomas Nealon, president of Southwest Airlines Co., predicted that the airline’s capacity in May would fall 60% to 70% compared to pre-pandemic schedules, and June capacity was expected to drop to around 50%. (Southwest suffered a historic 500% year-over-year cancellation rate in March.) Until confidence in the safety of air travel has been restored, few of your customers are going to fly to vacation spots — whether aboard Southwest or any other carrier — this summer. But after three months of being cooped up inside their homes, people will want to go places by car. And I’m sure many of you are seeing this already. 3. Motorists will hold onto their vehicles longer. More than 40 million people have lost their jobs due to the economic fall-out from COVID-19. Very few are going to rush out to buy a new car, pickup or SUV within the next several months — or

PHOTO: GETTY IMAGES

ou can’t always get what you want/But if you try sometimes, you just might find — you get what you need.” Mick Jagger and Keith Richards wrote these lyrics in 1969 (or 1968, depending on who you believe) and I’m sure they weren’t thinking about independent tire dealers at the time. But those words do have an unexpected resonance some 50 years later. Very few of us are going to get everything we want this summer. That’s just the way it is. But I’m convinced that your business will get at least some of what it needs over the next several months. Here are five reasons why: even through the end of the year, for that matter. Sales of new consumer vehicles in North America are expected to drop nearly 27% in 2020, according to HIS Markit projections — bottoming out at around 12.2 million units. This means that cash-strapped consumers will continue to squeeze more miles out of the cars that are currently in their garages. At some point, these vehicles’ tire issues — and other maintenance needs — will need to be addressed, which brings me to our next reason. 4. Vehicle owners will prioritize safety. Expensive vehicle modifications, custom wheels, plus-sizing — these things fall under the category of customer “wants,” not “needs.” Few customers will walk into your shop and request a $3,000 lift kit installation this summer. But I guarantee you that vehicle owners will pay more attention to their tires as they maintain a heightened focus on personal safety. This is a great time to remind your customers that tires are essential to their well-being, as well as the well-being of their families, and as such, should be professionally assessed for potential replacement soon. 5. You are ready to capitalize on all of the above. Whether out of necessity or by design, many of you have used the last three months to get leaner, meaner and more efficient — shoring up your systems and improving your processes to serve customers more effectively when demand for what you do starts to rebound. That time is now. Remember — nobody is more qualified or able to take care of customers’ tire and vehicle needs than you and your people. Make your customers believe that, too. Lest you think that I’m getting carried away, I do realize that this probably won’t be the most profitable summer you’ve ever experienced. But I believe it will provide a much-needed boost to your business — and a solid foundation for the rest of the year. And that’s what everyone needs right now. ■ If you have any questions or comments, please email me at mike.manges@bobit.com.

MTD June 2020

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MTD launches new website! MTD’s new website provides an enhanced user experience – with breaking news, feature articles, links to exclusive MTD research and blogs, and much more! Check it out today!

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Organizers of both the SEMA Show and AAPEX are planning to hold their events. They are putting emphasis on show attendees’ health and safety.

The show must go on The coronavirus is still making headlines, but leaders of the Specialty Equipment Market Association (SEMA) and the Automotive Aftermarket Products Expo (AAPEX) have announced the 2020 SEMA Show and expo will be held as planned in Las Vegas Nov. 3-6 (see page 10 for more information). Other big news that grabbed www.moderntiredealer. com readers’ attention concerned Michelin North America Inc.’s plan to end online passenger and light truck tire sales to consumers and the United Steelworkers union asking for a new tariff on PLT tires. Here are our top 10 news items. 1. Coronavirus isn’t stopping the 2020 SEMA Show or AAPEX 2. MTD exclusive: Michelin to end online PLT tire sales to consumers 3. USW seeks new tariffs on PLT tires 4. ATD gears up for post-COVID-19 economic rebound 5. Continental’s Caldwell on COVID-19 crisis: ‘We will recover’ 6. Bridgestone’s Higgins talks post-COVID-19 demand, plant ramp-ups 7. What’s open? What’s closed? The latest on NA tire plants 8. TBC is working toward ‘new normal,’ says CEO Olsen 9. Pirelli North America CEO discusses lessons learned during COVID-19 10. Triangle’s Cicero has unique perspective on impact of COVID-19

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MODERN TIRE DEALER (ISSN 00268496) (CDN IPM #40013413) (USPS #369-170) is published monthly by Bobit Business Media, 3520 Challenger St., Torrance, California 90503-1640. Periodicals postage paid at Torrance, CA 90503-9998 and additional mailing offices. POSTMASTER: Send address changes to MODERN TIRE DEALER, P.O. Box 3312, Northbrook, IL 60065-3312. Please allow 6 to 8 weeks for address changes to take effect. Subscriptions in the U.S. and its possessions, $65; Canadian, $99; Int’l surface mail, $99; Int’l airmail, $198. Single copies, $10, except the January Facts Issue, $30. Address all subscription correspondence to MODERN TIRE DEALER, P.O. Box 3312, Northbrook, IL 60065-3312. Please allow 6 to 8 weeks to receive your first issue. Please address Editorial and Advertising correspondence to MODERN TIRE DEALER, 3515 Massillon Road, Suite 350, Uniontown, OH 44685-6217. The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. For your information: We sometimes make our subscriber information (i.e. fax, e-mail or mailing address) available to carefully screened organizations whose products and services may be of interest to you. If you prefer not to have your information made available, please write MODERN TIRE DEALER, P.O. Box 3312, Northbrook, IL 60065-3312.

MTD June 2020

Industry News

USW seeks new tariffs on PLT tires ‘RENEWED SURGE IN IMPORTS’ VALUED AT $4.3 BILLION

he United Steelworkers (USW) union has filed anti-dumping and countervailing duty petitions targeting passenger vehicle and light truck tires made in South Korea, Taiwan, Thailand and Vietnam. According to Modern Tire Dealer statistics, these four countries exported 85.3 million consumer tires to the United States in 2019, with more than half of that total coming from Thailand. The tires from those four countries accounted for 33% of all PLT tires shipped in the U.S. replacement market last year. The USW says the value of the imported tires from these four countries has increased by 22.1% since 2017. The 71.1 million PLT tires imported from Korea, Taiwan, Thailand and Vietnam that year were worth $3.596 billion. By 2019, their value had increased to $4.391 billion. The USW additionally filed a countervailing claim in the case of tires from Vietnam, alleging that tires made there and shipped to the U.S. are benefitting from government subsidies at home. In a statement dated May 13, a day after the petitions were filed with the U.S. Department of Commerce, USW President Tom Conway said, “Even though demand for (passenger and light truck) tires increased, domestic producers were still forced to grapple with reduced market share, falling profits and lost jobs.” If this feels like a repeat of the USW’s campaign that began in 2014 to impose tariffs on PLT tires from China, that is by design. The union’s attorneys cited the success of that case in the union’s latest petition, and noted that in the five years since those tariffs were imposed, Chinese tire imports “have since shrunk dramatically, allowing the domestic industry to invest in new capacity in the United States.” That assertion about the fall of Chinese imports is true. According to MTD figures, in 2014 imports of Chinese-made PLT tires topped 60.5 million units. That number has dropped 94% to 3.4 million in 2019, according to MTD’s 2020 Facts Issue. But the tariffs on Chinese tires also prompted manufacturers and importers to move molds and production elsewhere — namely, to the countries now targeted by the new USW petition. “The result has been a renewed surge in imports,” the union noted, “this time from Korea, Taiwan, Thailand and Vietnam.” Among the figures the union points to is lessening market Ranking in 2019

Country

Imported PLT Tires

Thailand

45.1 million

South Korea

19.3 million

Vietnam

11.9 million

Taiwan

9.0 million

Total

85.3 million

The countries targeted by the USW’s tariff petition are among the top 10 biggest tire importers to the U.S. market.

If past tire tariff investigations are a guide, it will be at least a year until the USW’s latest petition is settled.

share of domestic tiremakers in what has been a growing industry. Its data shows that in 2017, imports from the four countries accounted for 24.4% of the U.S. passenger and light truck tire market. By 2019, that share had increased to 27.9%. Comparatively, the domestic industry lost market share in that time span, from 41.2% in 2017 to 40.5% in 2019. The USW says it has a presence at five tire manufacturers’ U.S. factories: Cooper Tire & Rubber Co. (Findlay, Ohio, and Texarkana, Ark.); Goodyear Tire & Rubber Co. (Fayetteville, N.C., and Topeka, Kan.); Michelin North America Inc. (Tuscaloosa, Ala., and Fort Wayne, Ind.); Sumitomo Rubber North America (Tonawanda, N.Y.); and Yokohama Tire Corp. (Salem, Va.)

INDUSTRY REACTS

The Tire Industry Association (TIA) isn’t surprised that the USW has taken this action. Roy Littlefield Jr., CEO of TIA, said, “The United Steelworkers petition seeking higher import duties on passenger and light truck tires from Korea, Thailand, Taiwan and Vietnam reflects how tire manufacturing has grown and evolved in these countries in recent years, with the addition of numerous factories from Chinese tiremakers and others. “The union, in seeking anti-dumping and countervailing duties, is looking to preserve tire manufacturing jobs in the U.S., while tire retailers have found success selling products imported from these countries. “It’s not surprising, therefore, to see this action taken by the USW.” Most tiremakers contacted by Modern Tire Dealer declined to react to the USW petition. One exception was Peter Jung, senior vice president and chief operating officer at Hankook Tire America Corp. When asked what action Hankook might take in response to the union’s recent petition, Jung said, “It’s difficult to say at the moment, as it’s still early in the stage and nothing has been decided. We will reorganize our global production portfolio and increase U.S. plant production to meet our U.S. stakeholder demands.” ■ MTD June 2020

Industry News

Bites TIA offers free training The Tire Industry Association (TIA) is offering six weeks of free online training to passenger and light truck tire service technicians through the end of June. Dealers can sign up online.

Federal names president Federal Corp. has promoted C.I. Chen to serve as the company’s president. A tire industry veteran with more than 30 years of experience, Chen most recently served as vice president of Federal.

Nebraskaland Tire picks Mam Nebraskaland Tire Co. Inc. updated its point-of-sale system to the Vast system offered by Mam Software Inc. For the 46 locations doing business as Nebraskaland Tire, Kansasland Tire and Coloradoland Tire, it was their first POS system change in 25 years.

Hankook studies driving Sixty-percent of respondents to Hankook Tire America Corp.’s latest Gauge Index survey say they will take more trips by car as a result of the COVID-19 pandemic. Three out of four respondents said they missed driving.

ZC Rubber extends warranty Zhongce Rubber Group Co. Ltd. (ZC Rubber) is extending the warranty on its Westlake, Goodride, Chaoyang, Trazano and Yartu brand tires to five years on July 1. The warranty upgrade applies to all sizes of passenger, truck/bus radial and OTR tires the company manufactures.

Dealer does a good deed Scott Highfill isn’t an expert in food distribution, but the western regional sales manager for Penn Tires, who previously owned Great Western Tire, says he wanted to support the food banks near him in California. Each week, he’s gathered food and money from neighbors and friends to give to a nearby church food pantry.

Nokian hires logistics leader Nokian Tyres Inc. has hired Christy McDaniel to lead the company’s supply chain efforts in the Americas region. This is a new position for the tiremaker. McDaniel will manage the company’s logistics, supply chain and customer service divisions.

Virus isn’t stopping SEMA Show or AAPEX

eaders of both the Specialty Equipment Market Association (SEMA) Show and Automotive Aftermarket Products Expo (AAPEX) say their 2020 events will go on as scheduled. Nathan Ridnouer, vice president of SEMA councils and membership, told members of the Wheel and Tire Council on May 6 that the 2020 SEMA Show, scheduled for Nov. 3-6, will happen. “When we all get to Las Vegas, it’s going to be a heck of a time for the industry to be excited about ending this crisis, but also jumping forward into the new year.” In addition to the SEMA Show, the association also hosts the Performance Racing Industry (PRI) Trade Show in December in Indianapolis, which will go on as scheduled. “These events are well-positioned to SEMA says the SEMA Show routinely attracts more than 161,000 people to its help us as an industry turn around more combined 2.2 million square feet of indoor quickly. Also, it will be in alignment with and outdoor exhibit space. what the analysts are predicting — that there will be improvement in the fourth quarter of the year. “One of the reasons we’re going out so strong is because companies are relying on SEMA and PRI to be a resource for the industry going forward, not only a resource for conducting business but for debuting new products and also connecting with buyers who really want to get out there and make a splash with their customers.” Ridnouer acknowledged there is work to be done related to safety and security precautions before crowds descend on the Las Vegas Convention Center. In some ways, it will be similar to what the organization faced in 2017, when it had six weeks to enact new security measures after a mass shooting at the Mandalay Bay resort. “The SEMA staff came together to make sure that we not only had a great SEMA Show, but a safe SEMA Show,” he said. Details of what exhibitors and show attendees can expect in terms of safety protocols likely won’t be publicized until closer to the event. Ridnouer says around 2,000 companies have reserved their space for the 2020 SEMA Show, acknowledging that exhibitor registrations are down by 100 to 200 companies compared to a typical year. SEMA has also opened up attendee registration — albeit three weeks later than normal. “People are registering. They’re expecting a show, too.” He said he couldn’t provide an estimate of expected attendance for 2020. “As we get into the summer time frame, we’ll get a better idea of how things are shaking out.”

THE UPDATE FROM AAPEX

AAPEX is co-hosted each year by the Auto Care Association and the Automotive Aftermarket Suppliers Association (AASA). The 2020 event is scheduled for Nov. 3-5. Bill Hanvey, CEO and president of the Auto Care Association, and Phil McCarthy, president and chief operating officer at AASA, gave exhibitors an online update in May. Hanvey noted it was “a very fluid situation,” and said organizers are monitoring both federal and state mandates. “Unless the State of Nevada or the federal government tell us otherwise, we are on with AAPEX and the AWDA conference,” Hanvey said. (The Automotive Warehouse Distributors Association meets in Las Vegas in the days before the opening of AAPEX.) “If we do have to cancel, it would only be because of a government mandate.” McCarthy stressed “the most important thing is that our attendees’ health and safety is our primary concern. Whatever steps we take will be in line with what is recommended and best practices.” –Joy Kopcha MTD June 2020

Industry News

Bites CITEXPO moves to 2021 The organizers of the China International Tire Expo (CITEXPO) have moved the 2020 show to Aug. 16-18, 2021. It will be held at the Shanghai World Expo Exhibition & Convention Center.

BKT partners with award Balkrishna Industries Ltd. (BKT) is the new partner of Tractor of the Year, an award bestowed on European tractors that recognizes cutting-edge technology and a vision of the future.

Continental gives to truckers Continental Tire the Americas LLC partnered with Love’s Travel Stops to give 100,000 truck drivers a coupon to use inside Love’s locations as a token of appreciation for their work during the pandemic.

Tiremakers suffer losses during 1Q

he first quarter of 2020 was difficult for many tire manufacturers. Bridgestone Corp. recorded an 11% year-over-year drop in total revenue and a 39% year-over-year decline in operating profit during 1Q 2020. Sales for Michelin Group declined 8.3% during the first quarter of 2020. The company’s tire volume fell by 11.7% during the same period. Goodyear Tire & Rubber Co. suffered a net loss of $619 million during the first quarter of 2020 versus a net loss of $61 million during the same period last year. Goodyear’s global sales during 1Q 2020 totaled $3.1 billion, a 15% decline versus 1Q 2019. Continental AG posted first quarter net sales of 9.8 billion euros, a 10.9% yearover-year decline. EBIT fell to 432 million euros during the first quarter, half of what the company reported during 1Q 2019. Yokohama Rubber Co. Ltd. posted a year-over-year sales drop of 13.6% during the first quarter. Its operating profit declined by more than 90% 1Q 2019 versus 1Q 2020. Hankook Tire & Technology Co. Ltd. experienced a 12.6% year-over-year sales decline and a year-over-year operating profit loss of 11.2% during the first quarter. Toyo Tire Corp. posted a year-over-year sales decline of 8.9%. Cooper Tire & Rubber Co. posted a net loss of $12 million during 1Q 2020 versus income of $7 million during the same period last year.

Import amnesty requested The Auto Care Association and other trade groups asked President Donald Trump to delay collection of duties and fees on imports through June 2020. The groups said it would give cash-strapped companies relief.

Bauer Built rewards grads Bauer Built Inc. has given $1,500 scholarships to seven high school seniors, all of whom are the children or grandchildren of employees. The company has awarded $130,500 in scholarships named after G.F. “Sam” and Ethel V. Bauer since 1994.

ALI updates website The Automotive Lift Institute (ALI) has updated its website to provide more safety information and resources to lift owners, operators, installers, inspectors and manufacturers.

y the end of the third quarter, Bridgestone Americas Inc. will have added more than 90 sizes to several passenger and light truck tire lines. The Firestone Destination LE3 all-season light truck tire received 64 new sizes during the first quarter of 2020. Two extra sizes were scheduled for introduction in early June. Also during the first quarter, the Firestone X/T all-terrain light truck/SUV tire received eight new Bridgestone is expanding sizes that cover large-diameter rim fitments. the size range of several key The Bridgestone Blizzak LM005 winter tire received consumer tire lines. two new sizes in May. Six more sizes will be added on July 1. Also on that date, Bridgestone will add one size to its Transforce CV commercial van tire and another size to its Winterforce CV commercial van tire. In addition, during the third quarter, Bridgestone plans to add six sizes to its Firestone Firehawk pursuit tire. Five sizes will be added to the Firestone Pursuit AWT line.

Purcell acquires Wilson Industrial Tires

Plaza Tire welcomes governor Plaza Tire Service Inc. played host to Missouri Gov. Mike Parson during his local tour to highlight how the state’s economy is reopening, and how businesses are adjusting in light of COVID-19.

Openbay integrates chat Openbay Inc. has integrated its artificial intelligence-powered online chat platform, Otis, with TireShop, which allows consumers to use the chat window on a dealer’s website to view available service times and book appointments.

Bridgestone adds sizes to consumer lines

urcell Tire & Rubber Co. continues to grow with the recent acquisition of Wilson Industrial Tires Inc., which supplies tires for material handling trucks, plus farm, forestry and lawn service equipment. Purcell officials say Wilson Industrial Tire, which was founded in 1991 by Kenny Wilson, is “one of the only distributors who offers ‘loaners’ for equipment with their tire and wheel exchange program. They also offer all their services - including solids, pneumatics, poly and cushion press forklift tires - on-site, so reductions in productivity are minimal. Solutions, such as track tires and recaps for skid steer tires ,are also available.” Wilson Industrial Tire’s operations will be incorporated into Purcell’s Springfield, Mo., location. MTD June 2020

Industry News

Bites Trailer orders fell 97% Orders of new truck trailers plummeted 97% between March and April and plunged 99% from previous year levels, according to a report from ACT Research.

Nama makes investment Nama Tires Inc.’s parent company says it will invest $10 million in southeast Asia tire projects in 2020. The projects will allow the company to complete its radial truck and bus and passenger tire series.

Titan makes donation Titan International Inc. is making donations to non-profit organizations through its Goodyears Ahead campaign. Visitors to the campaign’s website can select one of five groups to receive a $5 donation.

Double Coin gains exposure Love’s Truck Care and Speedco locations throughout the U.S. have added Double Coin medium truck and bus tires to their available inventories. There are 380-plus locations in the country.

Synchrony adds General Synchrony LLC and Continental Tire the Americas LLC have expanded their partnership with financing options that cover the purchase of General brand tires.

Monro puts brakes on acquisitions

ue to the uncertainty caused by the COVID-19 pandemic and in an effort to keep cash on hand, Monro Inc. is temporarily suspending its acquisition efforts, as well as its national rebranding initiative. Acquisitions have been key to Monro’s growth in recent years. In its most recent fiscal year, the company spent $104 million to acquire 89 stores, plus a distribution center. As for its rebranding efforts, known as the MonroForward initiative, 219 stores were transformed during the chain’s fiscal 2020 year and 71 stores were moved to a more tire-oriented model. The company is halting its acquisition and rebranding efforts as “precautionary steps to further mitigate the near-term headwinds and strengthen its financial Monro is temporarily halting its spending on remodeling and rebranding efforts. positioning.” Monro also says it will defer non-critical capital expenditures; reduce store hours and labor to align with demand; reduce selling, general and administrative expenses; and augment its working capital position. The Rochester, N.Y.-based chain posted a loss of nearly $3.8 million during its fiscal fourth quarter, which ended March 28. Its sales dropped less than a half-percent, year-over-year, during the quarter.

ukka Moisio (pictured) is the new CEO and president of Nokian Tyres plc. He replaces Hille Korhonen. Moisio joins Nokian after most recently serving as CEO and president of Huhtamaki Oyj, a global packaging company. Jukka Heinonen, chairman of Nokian’s board, says Moisio “has a proven record in successfully leading stock-listed companies and company turnaround, delivering strong financial performance and shareholder returns.” ■

BKT launches new website Balkrishna Industries Ltd.’s (BKT) new website gives buyers several ways to search for tires by industry sector, rim size and pattern. The site also features BKT Stories from brand ambassadors.

Bridgestone donates shields Employees at Bridgestone Americas Inc.’s technical center in Akron, Ohio, made more than 1,100 protective face shields and donated them to local medical facilities, as well as the Ohio National Guard.

Federated offers relief As a partner of the Tire Industry Association (TIA), Federated Insurance provides premium reductions to members. The 15% credit applied to Business Auto, Auto Dealer/Garage Coverage and Business Owner premiums from March to June.

Nokian names new CEO

Howard Tire founder Al Howard has died

l Howard (pictured), who founded Howard Tire in Belmont, Calif., in 1962, died on May 3 at the age of 82. Under his leadership, Howard Tire grew to seven locations in the San Francisco, Calif., area, and also included one of the largest wholesale tire operations in northern California during the 1980s and early 1990s. A native of Alameda, Calif., Howard opened his first store with the help of a $10,000 loan given by his maternal grandfather, which was repaid in 60 days.

He eventually sold Howard Tire to Wheel Works in 1995. He is remembered as a mentor to many individuals in business and the local community. He was a U.S. military veteran, having served on the USS Segundo submarine for more than three years. “As a mentor and patriarch of our fourth-generation tire family, you will forever be remembered for your honorable and highest principles,” says Richard Howard. “Our entire family is forever grateful for building the foundation for our success.” MTD June 2020

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Yo u r M a r k e t p l a c e

Sell-out rates continued to plummet in April By

John Healy

MEANWHILE, COVID-19 BOOSTS DEMAND FOR TIER-THREE PRODUCTS

ur recent conversations with dealers leave us with the view that retail sellout trends have showed decelerating growth over the last two months, with growth rates dramatically lower than what they were during the first two months of 2020. For the month of April, surveyed dealers reported they saw unit sales decline 13.1% compared to April 2019 — entirely the result of the impact of COVID-19 on the supply chain and overall economic environment. Respondents reported that they saw an 88% year-over-year decrease in demand in April. None reported positive trends for the month, which contrasts with 25% of respondents who said they experienced growth during the same month in 2019. Our tire demand index was down 90% year-over-year — an 83% drop compared to just one month before. However, commentary from our contacts indicate that mid-April was the bottom of consumer demand as the weeks since then have seen sequential gains. We continue to hold the perspective that volumes — in the long run — will be more closely aligned with GDP growth, although the months ahead will likely show an unprecedented decrease in number of units sold, albeit at a decreasing rate of declines.

FLIGHT TO VALUE

Our latest survey of dealers revealed that out of all price segments, tier-three brands have experienced the most growth over the last few months. Based on feedback from respondents, we believe that the resurgence of tierthree brands will likely continue as long as COVID-19-related issues impact the economy. Our belief is that those consumers who choose to buy tires will opt for value

brands in order to preserve cash for other products. Therefore, we are not surprised that tier-three products are experiencing the most demand right now. However, looking past COVID-19, it is not unreasonable to expect that some consumers will gravitate again to tier-one and tier-two brands. As for now, given the current environment, we believe that pragmatic consumers will go with what they perceive to be the most functional products at lower price points.

RAWS FELL 25% IN APRIL

Looking closely at the recent trajectory of raw material costs, the cost of materials required to build a common consumer tire fell 25% on a year-over-year basis in April. This continues the trend of declining raw material prices that began to materialize during the second half of 2019. Since July 2019, costs have fallen every single month, with the exception of December 2019. Holding current spot prices flat would yield a 25.3% year-over-year decrease in the cost to build a tire during the second quarter of 2020, down 15.2% from last quarter. Raw material costs during the second quarter of 2020 are expected to fall 19.3% versus the same period last year, while decreasing 8.4% from the first quarter of 2020. Looking at individual components, we note that carbon black has started to see

cost pressures subside on a year-over-year basis after a 1.3% decrease that started this trend in October 2019. This continues what we characterize as a massive turnaround for carbon black, whose prices had been in double-digit year-over-year growth mode for every month prior to July 2019 — all the way back to the start of 2018. Crude oil prices, which peaked in April 2019, saw year-over-year, double-digit declines during the months leading up to December 2019, when a cost bump of 21% occurred. Declines continued in early 2020. In February, oil prices decreased by 8%, followed by a sharp drop of 50% in March and an even bigger decline of 74.1% in April as OPEC and Russia were unable to come to a consensus on oil production levels in the face of severely diminished demand. Natural rubber prices, of course, are tied closely to oil. They fell substantially by 26.7% on a year-over-year basis in April. Synthetic rubber costs have stayed in the negative zone for 13 straight months, year-overyear. And finally, as discussed in previous installments of this column, the price of fabric, cord and other tire reinforcement components continues to track negatively on a year-over-year basis. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC based in Cleveland, Ohio. Healy covers a variety of subsectors of the automotive industry.

Snapshot of dealers’ PLT tire volumes (year-over-year change) Feb-19

Mar-19

Apr-19

Feb-20

Mar-20

Apr-20

Average

Increase

57%

45%

54%

35%

29%

41%

Flat

22%

31%

17%

30%

14%

29%

Decline

21%

24%

29%

35%

57%

88%

30%

Total

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

MTD June 2020

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1 Based on a treadwear test using tires in size LT265/70R17 121/118R on 2018 Ford F250 pickup trucks, loaded up to 9800 lbs, vs. the following competitors. Actual on-road results may vary. Average projected mileage to wearout: MICHELIN® Agilis® CrossClimate®: 24,500 miles, Bridgestone® Duravis™ M700 HD: 20,600 miles, Firestone® Transforce™ AT2: 22,000 miles, and Firestone® Transforce™ HT: 19,800 miles.

C-METRIC

17.6 million

Estimated total U.S. replacement commercial truck tire units that will be shipped during 2020, according to latest U.S. Tire Manufacturers Association (USTMA) report published on April 24. SOURCE: USTMA

48%

Average total sales from automotive service at independent tire dealerships.

4.5 million

SOURCE: MODERN TIRE DEALER’S JANUARY 2020 FACTS ISSUE.

Number of truck tires exported from Thailand to the U.S. last year – an increase of 87.5% from 2018. SOURCE: MODERN TIRE DEALER’S JANUARY 2020 FACTS ISSUE.

COURTESY OF AKEBONO BRAKE CORP.

NumbersThatCount

Relevant statistics from an industry in constant motion

Average number of brake jobs tire dealers do per month. The average ticket price is $301.17, which generates $159,018 in annual sales with an average annual profit of $81,099. The average gross profit margin on brake/electrical sales is 51%. SOURCE: MODERN TIRE DEALER’S JANUARY 2020 FACTS ISSUE.

Average number of service bays per outlet at independent tire dealerships.

Average number of tire brands sold per independent tire dealership. SOURCE: MODERN TIRE DEALER’S JANUARY 2020 FACTS ISSUE.

SOURCE: MODERN TIRE DEALER’S JANUARY 2020 FACTS ISSUE.

MTD June 2020

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Mounting and balancing

Using the balancer to reduce customer comebacks

MAKE SURE TECHNICIANS UTILIZE EQUIPMENT’S FULL CAPABILITIES By

Joy Kopcha

oad force balancing isn’t new. But two decades ago, many technicians didn’t want to dedicate the time to do it on every tire that needed balancing. “For a long time, it took an extra 25 seconds,” says Greg Meyer, product manager for Hunter Engineering Co.’s wheel balancers. “To a technician, 25 seconds feels like 25 minutes. Road force machines became comeback fixers.” And this wasn’t an isolated occurrence. Meyer says the entire industry grew to accept that 10% of tire customers would come back complaining of vibrations and a rough ride on new replacement tires. “Maybe a good shop was 5%, but if you weren’t doing a good job, it might have been 20% of customers not satisfied with ride quality. For many years, our industry fixed them as they came back. Well, those days are over. A lot of times, people don’t come back.” That’s why Hunter has focused development efforts on making its road force balancers function quickly and automatically. Lasers measure the wheel dimensions and runout and automatically check the wheel’s centering. Messages on the screen alert the technician to a possible bent wheel or mis-centered tire and guide them through the corrective process. Meyer says it’s important for owners and store managers to establish a policy that every tire is road force-balanced. Machines can be set to automatically check road force on every balance, but if that automatic function isn’t enabled, technicians have the ability to turn it off and on as they want. He says Hunter can’t “see” all of its machines at work, but Meyer estimates 30% to 40% of the company’s Road Force Elite balancers are set to use the load roller for road force with every use. About half of technicians use it most of the time, he notes. “If you have 98% to 99% (of customers) that are happy with your work, then that continues to grow your business, and that pays dividends over time because you’re not losing customers. In the internet world, if one unhappy customer goes online and complains about how he went back to the shop twice and the car still vibrates, that can set you back for months.” Even with well-manufactured aluminum wheels, Meyer says seemingly small improvements in road force can provide a big improvement in comfort. A well-made aluminum wheel may only have 0.002 of an inch of runout. Moving a stiff point in a tire from the high spot to the low point of the wheel “might get four or five pounds of road force reduction, even with only 0.002 of an inch of runout.” Considering the normal limit for road force for passenger cars is 20 pounds, that’s a significant reduction. Combining proper mounting methods and forced matching, Meyer says 98% of the tires and wheels that leave a tire dealership

Lasers on the Road Force Elite measure wheel dimensions and runout and also check the centering, all of which are important factors in maximizing ride comfort and the benefits of road force balancing. Sometimes, Hunter’s Greg Meyer says the best solution to a slight vibration coming from a single tire might be to move that tire to the rear axle.

will be in good shape. “You may have one percent or two percent that you have to do something with. Maybe the tire isn’t okay or the rim is bent. But you’re dealing with a fraction of a fraction now, as opposed to 10% or more.” Dealers should also recognize there are times where road force measurements above the standard set by an original equipment manufacturer are acceptable. A 1987 pickup truck that’s used on the farm is an example. If the road force is 24 pounds, it’s probably alright. If it measures 55 pounds, it probably needs to be addressed. “That’s good business,” says Meyer. “Don’t throw good money after bad. Time is money.” That’s a practical message that resonates with Dave Shedlock, director of national accounts for BendPak Inc., the maker of the Ranger line of balancers and tire equipment. Shedlock says it’s good to remember that proper balancing doesn’t require road force. “We believe that the two major components of accurate balancing are proper centering and proper torqueing. Using the proper adapters on any brand of balancer will most often yield the desired results. Collets, truck cone kits and flange plates are all essential balancing components for any wheel balancer. “Bottom line, road force balancing is likely not for every customer,” says Shedlock. “While it is overkill for many customers, it is also a very useful tool for extreme low-profile tires or to resolve persistent vibration problems. “Even the most sophisticated balancers cannot eliminate vibrations from a bent wheel or an out-of-round or irregularly worn tire.” ■ MTD June 2020

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Executive perspective

Post-COVID-19 rebound

TOP EXECS DISCUSS RISING DEMAND, NEW TIRE BUYING HABITS By

Mike Manges

hen will demand for tires rebound? Which segments will bounce back sooner? How has COVID-19 changed consumer tire buying habits? Top executives at various tire companies recently shared their thoughts with MTD. (Check out the COVID-19 Resource Center on www.moderntiredealer.com for full-length interviews.)

JOHN HAGAN Nexen Tire America Inc.

ROY BROMFIELD Toyo Tire U.S.A. Corp.

“We truly believe there is a lot of pent-up demand, so we just have to ride through the storm and be prepared for when it’s over and things improve,” says John Hagan, Nexen Tire America Inc.’s executive vice president of sales. “In June, you’ll see more improvement. In July, you’ll see even more improvement. And I think by the August or September time frame, you’ll see what I call respectable numbers.” “Prepare for an emergence from this crisis,” Roy Bromfield, president and CEO of Toyo Tire U.S.A. Corp., tells dealers. “It will come.”

YONGSIK SHIN Kumho Tire

BILL CALDWELL Continental Tire the Americas LLC

BRANDON STOTSENBURG American Kenda Rubber Co. Ltd.

ARVIND PODDAR Balkrishna Industries Ltd.

Bromfield says dealers need to be “positioned for success when the market returns to normal and perhaps for even a surge in business to meet pent-up demand.” Yongsik Shin, the head of Kumho Tire’s Americas region, says the North American consumer tire replacement segment could normalize within a few months. Buyer preferences will shift, too, he adds. “Buyers who were once accustomed to upper-tier brands will look to more products” in lower tiers. “Consumers are treating their cash preciously now — no different than

T.J. HIGGINS Bridgestone Corp.

OWEN SCHIANO American Tire Distributors Inc.

companies — so we’re seeing a certain (trend toward) lower price points,” says Bill Caldwell, senior vice president of sales and marketing for Continental Tire the Americas LLC. “We’re certainly seeing less headwind with our General brand, which is a step lower in price point than our premium Continental brand.” Brandon Stotsenburg, vice president of American Kenda Rubber Co. Ltd.’s automotive division, believes that “value-based passenger and light truck will recover faster

than other segments. In the near-term, it may be more practical for people to drive to destinations rather than take planes, and the independent tire dealer will be in a prime position to benefit from this.” The impact of COVID-19 on OTR and farm tire demand was “comparatively less than in the passenger and light truck tire markets,” says Arvind Poddar, chairman and managing director of Balkrishna Industries Ltd. (BKT.) “We are blessed to have our own mold-making factory. We

MANNY CICERO Triangle Tire USA

RICHARD SMALLWOOD Sumitomo Rubber North America

roll out 60 to 70 new products every year, in most segments of OTR tires, and will continue to do so.” T.J Higgins, global chief business strategic officer for Bridgestone Corp., told MTD that the unique dynamics of the COVID-19 crisis have changed how some customers are buying tires. “We’re seeing more e-commerce activity — certainly more than we’ve seen in the past as a percentage of sales. I don’t know if it will sustain in the future, but we have to continue to update

ERIK OLSEN TBC Corp.

CLIF ARMSTRONG Marangoni Tread North America

MTD June 2020

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Executive perspective our capabilities to handle those transactions that customers would like to have.” In early-May, Owen Schiano, chief operating officer at American Tire Distributors Inc., told MTD he was “optimistic” that demand for tires will grow “over the next month or two months. Hopefully, as we enter the fall, we will start to return to what I call normalcy.

“More and more of our customers have fully booked and scheduled appointments. I’ve heard a lot of examples of (appointments) scheduled out even further than they have been historically.” Manny Cicero, CEO or Triangle Tire USA, says that “if we use China as an example — and if we lag two or three months behind them, like we seem to

do — they were shut down in January and February” due to lock down orders. “And now things are seemingly back to normal. It would follow, then, that by mid-summer, we will be back to PIETRO BERARDI normal in the States, Pirelli Tire North following the China America Inc. curve.” “I tend to be a contrarian when it comes to the concept of pent-up demand,” says Richard Smallwood, CEO and president of Sumitomo Rubber North America. As governments relax stay-at-home orders, “there will be those consumers who have waited to replace their tires until they felt it was safer to do so and now will come back to buy tires.” But with more than 40 million Americans out of work, the market “will most likely take a while to recover and it will take customers some time to feel comfortable spending money on anything right now — even tires.” In the meantime, he maintains, flexibility will be critical. “We’re adapting our programs to make sure they help dealers during this transitional period. Things will get better.” Erik Olsen, president and CEO of TBC Corp., believes it’s too early to pinpoint when the tire market will roar back to its previous level of strength. “What I do know is that at TBC, we are working toward what our ‘new normal’ will look like,” he says. On the retread side of the industry, Clif Armstrong, CEO and president of Marangoni Tread North America, sees good things ahead. “Most people I talk to are very bullish about where they are. And they’re looking forward to things starting to loosen up. It won’t be an on-off switch. But it will come back at a pace that allows the market to plan for what the business climate will be.” Pietro Berardi, CEO of Pirelli Tire North America Inc., says he has been impressed by how quickly dealers have adapted to changing business conditions. “We’ve seen our partners investing in online capabilities for consumer interaction, using this time to get associates up to speed” on training and “getting organized with new ideas, such as touchless service, and adapting to remote communication tools.” ■ MTD June 2020

Commercial Tire Dealer™

TRUCKTIRE MARKET: MID-YEAR REPORT TIREMAKERS DISCUSS IMPACT OF COVID-19, WHEN RECOVERY WILL BEGIN By

Mike Manges

Also in CTD Truck tire service at the epicenter of COVID-19: Barnwell House of Tires keeps NYC moving ............................28 Traction vs. flotation: How to optimize each .....................................30 Commercially Viable ........................ 34 w w w . M o d e r n T i r e D e a l e r. c o m

COURTESY OF YOKOHAMA TIRE CORP.

he U.S. truck tire market looked much different at the end of last year than it does now. Through the end of 2019, 18.7 million medium truck tires had been shipped through the replacement channel, according to the U.S. Tire Manufacturers Association. Class 8 and new trailer orders were on a downward trajectory, but numbers were still at respectable levels. And tonnage was increasing, albeit slightly. Then, not too long later, COVID-19 hit. And to say that things have not been the same since is an understatement. The impact of the pandemic’s economic shock manifested in a major way in April. The American Trucking Associations’s tonnage index plunged 12.2% that month — the largest monthly tonnage decline in 26 years. Class 8 truck orders plummeted to an unprecedented level of just 4,000 units –and nearly 75% fewer orders than what was reported during April 2019. According to ACT Research, which tracks trucking industry trends, trailer orders dropped on a year-over-year basis by 97% in April — 99% less than even one month prior. Replacement truck tire shipments, which were up 10% in March, began to fall in April, as well. Through the middle of May, it is estimated that 7.8 million replacement medium truck tires had been shipped in the U.S. All of these things have had an impact on truck tire manufacturers and marketers. But to what extent?

“As states start to reopen and people get back to work and manufacturing starts again, freight will increase,” says Dan Funkhouser, vice president, commercial sales, Yokohama Tire Corp. “Replacement demand will follow.”

Here’s what executives from those companies had to say as they take stock of the first half of 2020. (Their answers are listed in alphabetical order, according to last name.) MTD: How did the COVID-19 pandemic and resulting government actions impact your commercial truck tire business in the U.S. and Canada?

Manny Cicero, CEO, Triangle Tire USA: Our commercial truck tire business was first severely impacted by the sudden imposition of countervailing duties in early-2019. The impact of COVID-19 on the overall trucking industry just worsened the situation. Patrick Etheridge, director of sales, Prinx Chengshan Tire North America: Fortunately, we are scheduled to launch

Tr u c k t i r e m a r k e t : M i d - y e a r r e p o r t

COURTESY OFBRIDGESTONE AMERICAS TIRE OPERATIONS

our Thailand factory in late May. The COVID-19 pandemic hasn’t really impacted us here, but we do foresee a slower roll-out than anticipated. This is mainly due to reduced demand in the current market. Dan Funkhouser, vice president, commercial sales, Yokohama Tire Corp.: As states began to shut down in March and manufacturing plants were impacted, we worked extra-hard to ensure dealers, fleets and government facilities had product to keep their operations running. In April, there was a slowdown in purchasing as the impact of regulations were felt throughout the economy. As states are starting to reopen, there has been an uptick in business. However, there is still a cloud of uncertainty. But things appear to be headed in a positive direction. Marshall Gillespie, manager, commercial and specialty products, Hercules Tire: In mid-March, the Hercules commercial truck tire business experienced a slight dip in sales in North America, as expected. However, we started to see sales go back to forecasted levels in April and early May. Michael Graber, vice president of sales, Toyo Tire U.S.A. Corp.: Like most others in the commercial tire industry, we experienced an unexpected decline in sales through the initial stage of the pandemic. However, the decline was slight in our case and we saw a normalizing of volume in the second half of April. We expect a strong rebound. Bob Klimm, Sumitomo Rubber North America (SRNA/Falken): April is when Falken started to see a downward impact on commercial tire sales. We were coming off an excellent first quarter and then we saw a noticeable reduction in our daily order volume at the beginning of April. The second half of the month was slightly better but still off our average daily order rate. Even with the minor disruption, we are optimistic about our commercial truck tire sales. Marty Krcelic, executive vice president, TBC Corp (Sailun/Sumitomo): Our supply chain and logistics team continued to focus on supply and demand, as well as inventory levels. Current orders to our distribution centers continue to be onschedule and products continue to flow. All factory-direct orders are being processed and shipped. And we are experiencing increased demand.

“We anticipate recovery will happen sooner for the commercial TBR replacement segment than for the OE business,” says Chris Ripani, president of truck, bus and retread tires, U.S. and Canada, Bridgestone Americas Tire Operations.

Richard Li, global marketing director, international business, Zhongce Rubber Group Co. Ltd. (Westlake): The pandemic forced the economy (to) idle and the situation reduced demand for commercial truck tires greatly. Meanwhile, no forecast shows that the economy will recover very fast, so most tire distributors have to clear their inventories. Chris Ripani, president of truck, bus and retread tires, U.S. and Canada, Bridgestone Americas Tire Operations: There has been an overall decline across all tire categories and segments due to the global pandemic. However, our commercial tire business, and retreads in particular, have been less impacted by the COVID-19 crisis as fleet customers continue to play a critical role in keeping essential goods and services moving during this time. As many states take steps to reopen, we are optimistic that we have reached the bottom of this crisis. Brian Sheehey, vice president, marketing, Alliance Tires Americas Inc. (Aeolus/Galaxy): Alliance experienced

a mild first quarter of 2020, but April saw increased demand for (our) brands. Between warehouse inventory and containers on the water when our Alliance Tire Group manufacturing plants were briefly shut down by the COVID-19 emergency, we have been able to maintain a steady flow of truck tires to the marketplace. Jinki Shin, sales management manager, Kumho Tire U.S.A. Corp.: The TBR business sector of Kumho has not been seriously impacted by the COVID-19 pandemic. Kumho has maintained stable sales volume in both March and April, compared to last year. Walt Weller, senior vice president, China Manufacturers Alliance LLC (Double Coin): It definitely had an impact but not as much as on the consumer tire side. Trucking and the commercial tire business were deemed essential, so there was some business being done. Paul Williams, executive vice president of commercial vehicle tires, Americas region, Continental Tire the Americas LLC: Continental has a large manufacturMTD June 2020

Tr u c k t i r e m a r k e t : M i d - y e a r r e p o r t ing footprint in the U.S., which helped us mitigate any impact. Our plant in Mount Vernon, Ill., is Continental’s largest truck tire plant worldwide. The plant suspended production for a short period to give us time to implement additional protective measures for our employees and in-line with demand. OE business was on hold, as many (truck manufacturers) implemented production shutdowns. The plant has already resumed production and we don’t anticipate any impacts to stock or availability this year. Rob Williams, vice president of commercial sales, Hankook Tire America Corp.: The dealers’ main focus has been keeping their fleet customers up and running during this time. With many of our dealers’ businesses being impacted, we also felt the effects in April regarding our sales. MTD: A number of tire manufacturers suspended production at their U.S.-based truck tire plants earlier this year due to COVID-19. Can you quantify expected shipment declines as a result of these actions? Cicero (Triangle): We actually have not seen a dramatic decline in our truck tire business year-over-year, largely due to the negative impact in 2019 on overall volume. This year is holding steady and we do not expect further declines the remainder of the year. Etheridge (Prinx): We cannot quantify that number. Being new to the market, we can only speculate, based on previous data. Given what information we have received, we do anticipate a slower 2020 than we forecasted, even when the market rebounds. Funkhouser (Yokohama): The overall number of tires shipped will decrease. However, because replacement market demand and OE dropped as a result of the slowdown, we are confident that we’ll be able to meet customer demand throughout the remainder of the year. Gillespie (Hercules): Fortunately, Hercules has not been significantly impacted by suspended production in the U.S nor have we seen a slowdown in shipments We pride ourselves on maintaining sufficient inventory due to ongoing communication and collaboration with our dealers. Graber (Toyo): It would be difficult to speculate on the overall market decline

CEO POV

Cooper’s Hughes provides his take on the truck tire market Cooper Tire & Rubber Co. President and CEO Brad Hughes provided the company’s perspective on the truck tire market during Cooper’s first quarter investor conference call. “Overall, I think as we look at the TBR business, it’s still reasonably healthy and is an industry less affected, particularly in North America, than the light vehicle tire part of the industry so far, and it looks like it’s going to remain that way over the course of the year,” he said. “People are using equipment, tractors and trailers right now. As we all know, those are some of the folks that are out on the front lines right now, continuing to do their jobs. And that is, to some degree, reflected in what we’re seeing in overall TBR demand. “Clearly, OE is in a slightly different position than the replacement market,” he added. “But the replacement market, as we and others look at it, looks like it’s going to remain relatively healthy. Overall, we’re expecting still a relatively strong year for our TBR business.” since Toyo imports all medium truck tire products from Japan. As far as Toyo volumes, we have had no suspension of production in our medium truck tire factory in Kuwana, Japan. The factory has continued to produce at capacity, which will allow us to support the replacement tire segment as demand increases. Klimm (SRNA): We do not expect any shipment declines due to our temporary plant shutdown. We are in excellent shape as far as our inventory. In fact, we currently have a good supply of safety stock. We feel confident that we will be able to maintain our excellent fill rates as demand increases. We have the capacity and the production time line to stay on pace with the increase in business that we expect to see. Krcelic (TBC): Our partnerships with suppliers remain strong as we continue to support one another and programs that have been implemented for business continuity purposes. Our distribution centers remain open for shipments and we are in close communication with all team members, diligently working to maintain the flow of product and maintain service levels. Li (Zhongce): The shipment decline is mostly due to the reduction of demand, not the suspension of production. At the moment, we expect a 10% to 20% decline of shipments in 2020, but will amend according to the latest situation. Ripani (Bridgestone): We know that shipments will be down for the year and the overall level of recovery will be dependent upon the safe and effective reopening of businesses at the market level. Our supply chain and product pipeline remain strong

and we don’t anticipate any disruption to our ability to meet fleet customers’ needs now or in the future. Sheehey (Alliance): Due to the COVID19 pandemic, we had to temporarily suspend production in our plants in India for a few weeks while our plant in Israel continued to operate at full capacity. Our Indian plants resumed production in late-April and we have inventory of tires across the U.S., so we do not expect any significant impact on our truck tire shipments the remainder of the year. Shin (Kumho): At this stage, we are forecasting about a 10% to 12% decrease in the replacement market and about a 15% decrease in OE market sales. Weller (CMA): It is hard to quantify the impact from plant shutdowns at this stage. It could be as much as 25% below prior year. Williams (Continental): We are not anticipating any dramatic impact on truck tire shipments. The USTMA estimates that the replacement truck tire market will be down approximately 7% compared to last year and our production schedule has been in-line with demand. On the OE side, we expect a more significant decrease. Williams (Hankook): Fortunately, we have not had a slowdown in production nor our supply chain pipeline as we are able to source products from our other plants across the globe. Our current inventory levels remain strong and we expect our supply to remain at levels to meet market demands. MTD: When do you expect OE and replacement tire demand to bottom out MTD June 2020

U.S. replacement truck tire market share at mid-year Brand

Bridgestone

13.5%

Michelin

13.5%

Goodyear

9.5%

Yokohama

8.5%

Firestone

7.0%

Continental

6.0%

Double Coin

4.0%

Hankook

3.0%

Roadmaster

3.0%

Toyo

3.0%

BFGoodrich

2.5%

Hercules

2.5%

Dynatrac

2.0%

Falken

2.0%

General

2.0%

Sailun

2.0%

Sumitomo

2.0%

Dayton

1.5%

Westlake

1.5%

Aeolus

1.0%

Gladiator

1.0%

Kelly

1.0%

Triangle

1.0%

Uniroyal

1.0%

Others

6.0%

*Based on an estimated 7.8 million units through May 15, 2020

and when will demand in both channels start to rebound? What are you doing to prepare for this? Cicero (Triangle): This is impossible to predict. If the U.S. follows the same lag period as China, then demand should start picking up in late-third quarter/early-fourth quarter. But there are too many variables to give an accurate forecast. Our factories have been running at near-full capacity since mid-February. We are well-situated to supply the U.S. market. Etheridge (Prinx): We are seeing mixed results right now in different market segw w w . M o d e r n T i r e D e a l e r. c o m

ments and different parts of the country. The faster people can get comfortable getting back to their routines, the faster this rebounds. I am an optimist and believe we can get back on track by mid-third quarter of this year. Funkhouser (Yokohama): I believe we hit bottom in April and the first part of May. We’ve certainly seen positive movement since that time. As states start to reopen and people get back to work and manufacturing starts again, freight will increase. Replacement demand will follow. Gillespie (Hercules):. While we currently do not foresee a drop in demand, we’ve adopted more frequent communication with our dealers and team for vital decisions and continue to closely collaborate on strategies for the remainder of the year. Graber (Toyo): Since Toyo does not supply OE tires in the commercial segment, I will speak to the replacement market. We expect demand to gradually increase and return to normal levels later in the year. The timing really depends on the success of the reopening efforts of the states. Toyo has maintained regular production of all medium truck tire products and will be ready for demand when it returns. Klimm (SRNA): We believe we hit the bottom in April and that we will start to see replacement demand increase as more cities and states open back up and more businesses restore operations. We’re optimistic that the worst is behind us. Marty Krcelic (TBC): At TBC, we are working towards what our “new normal” looks like. We have prepared for many scenarios to ensure we have the product our customers want, when and where they want it. As stay-at-home orders are lifted, I believe all segments of the tire market will bounce back. Li (Zhongce): We are an overseas supplier, so it takes some time for us to ship tires from Thailand to the U.S. Therefore, we will increase our inventories in the U.S. for a quick response to increasing customer demand after the pandemic. When people return to work, they will need tires immediately but distributors might not have much in stock. We may offer 24-hour delivery service. Ripani (Bridgestone): Certainly, it is difficult to assign a time line for this recovery. This is an unprecedented situation, and as we’ve all seen, this crisis is very

fluid. That said, as many states begin to take steps to reopen, we are optimistic that we have reached the bottom of this crisis and that our business — and our customers’ businesses — will begin to rebound. We anticipate recovery will happen sooner for the commercial TBR replacement segment than for the OE business as segments like last-mile delivery, long-haul and waste have remained operational. Sheehey (Alliance): We started to see replacement tire demand rebound in midto-late April, once the pandemic situation and resulting government actions became clearer. We expect to see measured growth in June. Prior to the Indian government’s restrictions that temporarily suspended manufacturing, Alliance’s four North American warehouses were stocked at 125% above normal seasonal capacity, so we have been able to continue supplying our customers. Shin (Kumho): At Kumho, we expect that replacement tire demand will bottom out in June and then will start to rebound in early July. However, the OE market will not recover until the third quarter due to high inventory levels of Class 8 trucks. Kumho is building up inventory levels in preparation for future supply. Weller (CMA): We anticipate that OE will not start to come back until year-end. We have prepared by making sure our warehouses have ample supply so when it does come back, we are positioned to support our customers. Williams (Continental): On the OE side, we are cautiously optimistic that April was the lowest month. We hope demand continues to rebound, growing month over month through the end of the year. However, it is important to remember that the OE market overall is expected to be down 31% year over year. On the replacement side, the market is only anticipated to be down 7% overall, so we don’t expect to see a major rebound effect. Williams (Hankook): OE demand reduction may have a transverse relation to replacement sales after a period of time. An example would be fleets keeping trucks longer. Thus, there would still be a demand for tires on these units as older units often (inflict) more wear and tear on tires. With the uncertain future, our goal is to work with dealers to ensure we can provide product at the right place to keep fleets moving. ■

Tr u c k t i r e s e r v i c e d u r i n g C O V I D - 1 9

TRUCK TIRE SERVICE AT THE EPICENTER OF COVID-19 BARNWELL HOUSE OF TIRES KEEPS NEW YORK CITY MOVING

Mike Manges

arnwell House of Tires Inc. operates throughout New York City — which has become the epicenter of the COVID-19 pandemic in the United States. The Ronkonkoma, N.Y.-based dealership is the exclusive truck tire and retread supplier to the New York City Department of Sanitation, which is the largest municipal sanitation department in the world with more than 2,200 waste haul trucks. Trash pick-up hasn’t stopped during the COVID-19 crisis, Scott Weeden, Barnwell’s vice president of sales, told MTD. Typically, the sanitation department orders 800 truck tires a month from Barnwell. In early April, the organization abruptly bumped its requirement to 1,500 tires. “When they went to that, it caught us off-guard,” says Weeden. Barnwell worked with its supplier to locate additional units. “Once we get those first 1,500 units in there, we’ll see what they need to order moving forward,” Weeden said in early-May. The dealership also supplies new tires and retreads to school bus fleets, some of which have been used to transport infected patients from hospitals to quarantine centers. “The bus drivers have to wear hazmat suits.” Barnwell also counts several utility fleets among its customers. “We’re doing fleet surveys to stop problems from happening after trucks leave the yard,” says Weeden. “One company is letting its drivers take trucks home every night, so that has made it kind of tough to check those vehicles.”

Barmwell wrestles with the human cost of COVID-19 COVID-19 has impacted Barnwell House of Tires in a personal way, says Scott Weeden, the dealership’s vice president of sales. “We had three people in our organization test positive for it and three have spouses who tested for it.” Two of the company’s fleet customers “have had people die from it,” he told MTD in late-April. “One owner came down with it.” The father of another fleet’s owner “was in the hospital on a ventilator. The hard thing about this is that (everyone) has been so focused on making things continue to happen that even when someone gets the virus and dies, there’s no grieving period. There are no funerals. It’s ‘we have to move on and get past it and keep the city going.’ “It’s been really, really trying,” he says. “I live in Brooklyn and the sirens haven’t stopped. It’s real.”

Barnwell House of Tires employees, like delivery driver Jose Herrera, are wearing personal protective equipment.

The pandemic has forced some of Barnwell’s utility customers to implement new practices. “They’re keeping one driver in one vehicle to stop the spread of the virus.” Barnwell’s employees, including roadside service truck operators and delivery drivers, have changed the way they interact with customers. “We’ve gone paperless,” says Weeden. “We don’t require signatures for pick-ups or deliveries. On road service calls, when we come out, we follow all the social distancing requirements. There’s no physical signature” after calls are completed. Surprisingly, Barnwell is running fewer road service calls. “It has dropped off compared to what we’re used to. But every call is vital.” Weeden says operating during the COVID-19 pandemic has made Barnwell a more nimble and efficient organization. “You have to focus on your process, your inventories and your cash flow,” he notes. “We’re delivering into the most densely populated area of the country, while practicing social distancing. It’s been challenging, to say the least. But we’re becoming more efficient. Customers throughout our network can order a product today and we’ll have it delivered tomorrow. “We’re also being smarter on what we’re ordering,” he continues. “Instead of having 40 units on the shelf we might only have 20. We’re being proactive with our customers — seeing what they need. We do a lot of tracking of tires. We’re working smarter.” Barnwell was in a “strong position” before entering the crisis, he adds, “and when we come out of this, we’ll be an even stronger company. “But nobody could have predicted the magnitude of the impact of the virus, especially in (the New York City) area. We’re doing what we can to keep everything moving as best as possible. ■ MTD June 2020

A G T i r e Ta l k

TRACTION VS. FLOTATION HOW TO OPTIMIZE EACH AND USE FLAT PLATE TO MEASURE CONTACT

Modern Tire Dealer has partnered with AG Tire Talk to provide answers to insightful questions that farm tire dealers have about farm tire technology. This is the next installment in our ongoing series, which is designed to help farm tire dealers better connect with their customers. A trending question, followed by an abridged version of the answers, will appear in our Commercial Tire Dealer section every other month. For complete answers, check out www.agtiretalk.com! COURTESY OF ALLIANCE TIRE AMERICAS.

QUESTION: What is the difference between traction and flotation, how do you optimize each and how do you use flat plate as a measurement tool? NICK PHILLIPPI, national product manager, Alliance Tire Americas Inc.: Traction and flotation can have a complicated relationship. Sometimes they work together and other times they can work against each other. Understanding both can help farmers make appropriate tire choices. From a tire engineering standpoint, traction, or tractive force, is the maximum amount of force that a tire can place against the surface for forward movement. Flotation is the ability of an object to remain on top of a surface. Optimum flotation is going to be very dependent on soil types and soil conditions. If you’re in sloppy, thin mud, wide tires can provide plenty of flotation to keep you on the surface, but that slick soil will offer very little traction. If you’re in heavy soil, where a shallower lug can gain traction but you want to minimize soil compaction and rutting, you want more moderately sized lugs and a really large footprint from wide flotation tires or very-high flexion (VF) tires. Of course, in farming, you don’t get the same conditions every day. The problem is that many people select tires based on the most extreme conditions they may encounter, rather than according

to more typical use scenarios. That can lead to inappropriate choices. For instance, an R-2 tire may be helpful for a week or so during a particularly wet midwestern spring, but it would wear too quickly, ride rough and tear up fields most of the year. You have to think about the conditions you operate in over the course of a whole year. Do you want a rounded contact patch for digging into the soil — which is characteristic of a bias-ply tire — or the flatter, broader contact patch that you see with steel-belted radials? Think about what gets you through your soils, how much slip you can tolerate, how much compaction your soils can take, and what your tolerance is versus the cost of fuel, tires and maintenance. DAVE PAULK, manager, field technical services, BKT USA, Inc.: Modern tractors are designed to transmit power from the engine to the ground. Transmitting that power requires moving traction to the soil surface. Traction determines how efficiently this power is used. When the engine delivers too much power to the tires and friction to the soil is minimized, tires will spin. Most modern medium- to high-horsepower tractors need added ballast to minimize wheel slip and maximize traction. The weight is determined by the type of implements being used. Traction can be impacted by air pressure, flotation, and the MTD June 2020

A G T i r e Ta l k

COURTESY OF MICHELIN NORTH AMERICA INC.

the weight, the better the flotation. When you are increasing the footprint and/or reducing weight carried, you are reducing the weight per square inch or down pressure. Tire selection is key to maximizing footprint. Adding more tires, wider tires, larger-diameter tires, higher load-carrying capacity tires, higher aspect ratio tires or IF and VF tires can help achieve this goal. There are really no industry standards for comparing footprints. In general, using the flat plate or footprint calculations as a tool to increase flotation is quite easy. The larger the footprint, the better the flotation. Utilizing the footprint to increase traction is not so clear-cut. In some cases, the smaller the footprint, the better the traction — because you simply increase your weight per inch or per unit area. The biggest problem is wanting to maximize traction to optimize efficiency while your minimizing compaction potential to keep from reducing crop yields. Flotation and traction are almost on a teeter-totter. As flotation increases, traction decreases due to reduced ground pressures. As flotation decreases, traction increases. These opposing effects are not so dramatic under low-torque applications but they can be quite extreme in hightorque situations. In sloppy soil conditions, there can be such a thing as too much flotation and not enough traction. Oppositely, you also can have too much traction and inadequate flotation.

contact area with the soil. A greater contact area and less inflation pressure will generally increase traction. Flotation tires are designed to deliver maximum traction while minimizing soil compaction. They have wider footprints to distribute the weight of the tractor, combine, cart, or implement over a wider area of soil. Flotation tires can roll over loose or wet soil and minimize damage by not creating deep ruts. They can be used in free rolling or drive wheel applications and can carry a large amount of weight. Increased flexion (IF) and VF technology have contributed to the versatility of flotation tires. The flat plate measurement of a tire is the contact area of the tire to the soil in square inches. The greater the contact area of a tire’s footprint, the better the weight is distributed over the soil. Distributing the weight over a larger area reduces soil compaction and can increase traction. Row crop applications are limited to wider flat plate measurements by row width. If row width is not a concern, as in tillage or minimum tillage applications, a larger flat plate works well for traction. By managing the footprint of the tire, a farmer can increase traction and lower fuel costs. Managing the power of the tractor ensures that the tractor is weighted correctly and horsepower is efficiently used. Managing ballast ensures the horsepower of the tractor is moved to the ground, where it has the greatest value and is most efficiently used. And managing tire inflation pressure means using the right amount of air for the weight of the tractors and implements in motion. JIM ENYART, technical manager, CEAT Specialty Tires Inc.: Flotation is the ability to remain on or near the soil surface as you are moving across that surface. Flotation is directly related to the weight and the footprint of the tires that are carrying that weight. The larger the footprint, the better the flotation. And the lighter

HARM-HENDRIK LANGE, agriculture tires field engineer, Continental Agriculture North America: In farming applications, traction and flotation tires have different operational tasks, although they are partly used together in many cases. The best example is a large slurry tanker being pulled by a large tractor across a field. What´s the main difference between traction and flotation tire applications? For creating traction, and to achieve the maximum footprint possible, it is often required to have the maximum number of lugs connected with the ground. But sometimes, maximum traction requires getting through a small layer of wet mud or loose surface material to grip the more solid soil layers below. This means that a little increase in tire pressure can, in certain cases, further increase the traction potential. But this always depends on the actual condition of the ground. The main task of the flotation tire is to reduce rolling resistance for low pulling force at high loads, especially on deformable surfaces, like dry sand or wet soils. The pressure in flotation tires should not be much higher than the inflation pressure of tractor tires. Keep in mind that while a driven tire actively works against the “bulldozing effect” by rotating, a non-driven tire needs to be turned by outer forces. With deeper track depth and small tires, the “bulldozing effect” becomes more and more significant as the tire is pulled against the soil wave. This means small tires with higher inflation pressure levels waste much more energy to fight against the soil wave in front of the tire. RICK HARRIS, regional sales manager, GRI Tires: Flotation is the tire’s ability to reduce the impact on field conditions, like soil compaction. Traction is the tire’s ability to accomplish work with fewer resources, such as fuel, labor, time and mechanical wear and tear. Radial tire technology increases traction and flotation simultaneously, much like a drag slick at the start line. The tire’s sidewalls absorb the engine’s torque, allowing the tread to remain in full contact with the ground and produce optimal traction. MTD June 2020

DAVID GRADEN, operational market manager, agriculture, Michelin North America Inc.: In sloppy soil conditions, there can be such a thing as too much flotation and not enough traction. On the other end of the spectrum, you can have too much traction and not enough flotation. To achieve the best of both traction and flotation, I would recommend an IF or VF tire, with astandard R1W lug, at the proper recommended air pressure. If your machine weight distribution and air pressures are set properly, there is little that can stand in your way of getting the job done. To take it a step further, you could also use gross flat plate as a tool to determine which tire is best for you. Gross flat plate, or contact patch, is basically defined as the footprint a tire puts on the ground. When measuring gross flat plat for standard radial tires, the footprint area is measured at maximum load and pressure for a 20 mile-per-hour application. When measuring gross flat plate for IF/VF tires, however, calculate for the tire’s maximum speed schedule at maximum load and corresponding air pressure. Gross flat plate is not linear, which means the measurement at max load and pressure will not be the same at operating conditions. As you go down in pressure and load, the increase in gross flat plat is exponential. Depending on the size and volume of the tire, the growth from max load and pressure to least load and pressure could be up to a 30+% difference.

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GREG GILLAND, business development and ag segment manager, Maxam Tire International: Traction is the term used to explain how a tire overcomes the friction between the surface of the rubber tire and the ground. Flotation is the ability of a tire to stay on the surface of soft ground, soil or snow without rutting or digging into the surface or ground, thus limiting the tire from overcoming the friction or providing traction. In agricultural applications, tires are designed to deliver the optimal traction or flotation based on their size, load capability and compounding. In all cases, assuming the right tire size has been chosen, the key to delivering the best possible traction or force to overcome friction is the air pressure for a given load. When operating with a tractor in the field, the coefficient of traction is measured by the slip of the tires. If you work in the field at higher road inflation pressures, you will likely experience higher tire slip and tires will float less, creating higher compaction. If you road a tractor at lower inflation pressure levels, you will have less slip but higher rolling resistance, which leads to faster tire wear and increased fuel consumption. The tires also will provide less comfort and lower lateral stability. If you find that slip is too high or low, check your inflation levels and verify the load distribution from front to rear. Add or remove ballast, as required, and adjust the working depth of any towed implement.

SCOTT SLOAN, ag product manager, Titan International, Inc.: Traction is the force that causes a moving thing to stick against the surface it is moving along. Lack of traction can cause excessive tire to slip, which equates to poor fuel efficiency and loss of productivity. This can be corrected in a number of different ways — the first being that the tractors total weight is properly ballasted to the amount of horsepower. Typically, 100 pounds to 120 pounds per rated horsepower is the appropriate target. The correct weight will utilize the tractive efficiency of the tires in order to transmit the power properly to the ground. To gain more floatation, minimize the ground bearing pressures to increase the buoyancy or floatation of the machine. The heavier the machine, the more ground contact area is needed to carry that load. The trick comes with balancing both traction and flotation. Understanding the give-and-take between traction and floatation gives growers a chance to choose the best fitment for their machines. One method used to balancing traction with flotation is to dual or even triple tires on equipment. However, as with any dual or triple configuration, depending on the soil conditions, this will result in rutting or loose soil being pinched, and a berm will be created between the tires. Another method that has been gaining popularity is to replace duals with super singles. This immediately reduces the rutting in the field. It also narrows up the machine, making it easier to maneuver in tight areas. ■

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The flat plate provides the ability to evaluate the contact patch of the tread at recommended inflation pressures. A larger tread contact patch promotes increased traction and flotation. A greater surface area reduces the amount of equipment and cargo weight supported by each section of the contact patch, increasing flotation and mitigating soil compaction.

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Commercially Viable Toyo NanoEnergy M671 targets super-regional fleets The Toyo NanoEnergy M671 super-regional tire combines traction, fuel efficiency and tread life. The SmartWay-verified M671 features improved tread compounds developed through the company’s Nano Balance Technology. It also incorporates Toyo’s advanced e-balance design, which maintains the tread profile of the tire while reducing strain at the bead area and belt edge for greater stability and longevity under heavy loads. The M671 features an optimized wide tread pattern with 3D sipes that provide even contact pressure, increased traction and minimized irregular wear for longer tire life. A high elongation top belt and stone ejectors help protect the casing from damage and provide retreadability. TOYO TIRE U.S.A. CORP. www.toyotires.com

Winntec dolly helps with safe handling The Winntec Truck Wheel Dolly provides a safe and easy assist when installing or uninstalling wheels from commercial vehicles. The Wheel Dolly allows the technician to use his or her body weight to push the handle down to lift the wheel assembly. The tool, which can lift up to 485 pounds, has heavy-duty industrial bearings and three positions for rollers that are adjustable depending on tire size. It’s designed for use on all wheels from 6.5 inches to 24.5 inches. The dolly’s longer rollers provide for safe handling of super singles, too. GAITHER TOOL CO. www.gaithertool.com

Triangle unveils latest ST tire BKT offers fuel savings and comfort with LIFTMAX LM 63 Tractors used in industrial, logistics or multiple sectors have a new option from BKT, the LIFTMAX LM 63. The tire provides low rolling resistance, reduced vibrations and enhanced stability. Its all-steel casing is equipped with multilayer steel belts. The tire also provides enhanced resistance to punctures, extended service life and reduced fuel consumption, whether it’s used in loading, compacting, building, recycling or port handling applications. It is available in size 6.00R9 and size 8.25R15, with more sizes in development. BALKRISHNA INDUSTRIES LTD. (BKT) www.bkt-tires.com

Hankook’s SmartCity AU04 targets bus applications Hankook has introduced the SmartCity AU04 for bus applications. The all-position tire’s core structure and compound have been developed to be more heat-resistant and allow for longer service life. Its tread design combines two different zigzag groove patterns to improve wet traction and braking. The rib spacing between tread sections helps to improve fuel efficiency, and the tire’s sidewall protector guards against side impacts. The tire is available in size 305/70R22.5. HANKOOK TIRE AMERICA CORP. www.hankooktire.com

The Triangle TRT01S is an all-steel specialty trailer (ST) tire for recreational and small work-related trailers. Available in the ST235/80R16 and ST235/85R16 sizes, both 14-ply rated and M-speed rated, the TRT01S features all-steel construction for durability and long tread life. Other attributes include a solid shoulder rib and circumferential grooves for even, uniform wear, plus a specially designed, cool-running compound for improved tread wear. The tire is backed with a two-year road hazard warranty and a 100% replacement manufacturer’s warranty within one year of purchase and 50% replacement in year two. TRIANGLE TIRE USA www.triangletireus.com

Firestone truck lineup get an update with FD692 The Firestone FD692, the latest medium truck tire for the brand, is SmartWay-verified and features 400% more biting edges than its predecessor. The FD692 has earned the 3-Peak Mountain Snowflake certification. Other features include a highrigidity tread pattern to control tread block movement for even wear and reduced rolling resistance. The new tire also boasts proprietary sidewall technology and is designed to limit heat loss, while enhancing fuel economy and reducing overall tire weight without sacrificing durability. A stone rejector platform boosts the tire’s retreadability. It’s available in four sizes. BRIDGESTONE AMERICAS INC. www.commercial.firestone.com

MTD June 2020

DSP Insight

Pulling customers in or driving them away?

IT ALL STARTS WITH HOW YOU USE THE PHONE By

Jeff Morgan

here are so many great tools for marketing yourself to new customers: digital and print ads, social media, websites and more. When used well, these channels can certainly get new customers to consider you for their tire and service needs. And often, they will drive customers to your door. However, in most cases, before customers flock to your store, they will still pick up that old communication device called the phone. What kind of experience are your employees creating for customers when they call? Do they make the customer feel welcome? Do they inspire the customer to visit your store? If your people are not using the phone properly, all of the great marketing campaigns you have launched and all of the other communication tools you are using will be rendered meaningless. It starts with the very first moment the phone rings. Is it a priority for everyone at your dealership to ensure that phone is answered quickly? In today’s world, if a phone is not answered within the first few rings, customers will move on. Once an employee answers the phone, what does the customer hear? Have you ever called a business, only to hear someone speak so fast that you cannot understand what they are saying and you must ask them to repeat what they have just said? Perhaps you called a business only to hear a very unfriendly, unenthusiastic voice on the other end? How did that make you feel? What was your immediate perception of that business? This is the same response that your customers will have if they experience the same things when calling your store. It is important that your entire staff knows that when they answer the phone — regardless of how rushed, aggravated, or apathetic they may feel at the moment — they must step into the utopian world

The goal is to give the customer a compelling reason to walk in the door and you should make sure that everyone who works for you is aligned to this objective. You can be very friendly, informative, and responsive over the phone, but if you do not proactively invite the customer to visit, you can miss out on an opportunity.

of the telephone with a smile on their face. Putting a smile on your face puts a smile into your voice. Try it! You might be amazed at how different you sound when you are physically smiling. Another common mistake is the use of the hold button. First, do not do what I like to refer to as “insta-hold.” You know you have experienced it: “Thank you for calling. Can you please hold?” Before you even have a chance to ask your question, you are already “on hold!” This is very aggravating. And for many customers, this gesture implies that they and their needs are not that important to you. This is made even worse if a customer is left on hold for a long time or is put on hold again after you finally pick the call back up. When answering the phone, let your customer at least express the reason for his or her call.

Often, the hold button is used out of habit or for personal convenience, as opposed to true necessity. A customer should only be put on hold for one of two reasons: 1) So the employee answering the phone can move to a different phone for access to privacy or extra information, or; 2) To transfer the caller to another employee who is better-equipped to assist. I realize that many of you are thinking that if you have another customer in front of you at the sales counter, this is a good reason to use the hold mechanism. While this may be a reason, it is not optimal. Let me explain. Most calls made to tire dealerships are completed within one to two minutes. That is not too much time to excuse yourself. In most cases, the MTD June 2020

customer in front of you will understand. After all, you have to run a business. Additionally, if you have a culture where everyone is empowered to answer the phone, odds are that someone else will pick it up. And finally, if the customer on the phone is inquiring about a complex estimate, it is absolutely acceptable to collect the information you need, explain that it will take you a bit of time to pull the estimate together, and offer to call the customer right back. This will give you time to finish with the customer in front of you. The key is as soon as you have completed the in-person transaction, you follow through immediately with what you promised the phone customer, calling back with the estimate in a timely manner. You will find that most callers much prefer that option to sitting on hold for what seems like ages. But perhaps the biggest opportunity your business has when it comes to phone etiquette revolves around selling. I am not talking about selling tires or service. There is only one thing that you are trying to sell over the phone: a visit to your location! The goal is to give the customer a compelling reason to walk What kind of experience are your employees creating for your in the door and you should make sure that everyone who works customers when they call your store? for you is aligned to this objective. You can be very friendly, informative, and responsive over the phone, but if you do not If you want to experience this for yourself, call your nearest proactively invite the customer to visit, you can miss out on an competitor — or better yet, call several of them. Ask about tires for your personal car or some other vehicle. Just be consistent opportunity. “Just bring your car on down” is not good enough. and ask about the same thing at every location you call. Take You must be very deliberate when you invite them in. some notes. What was the phone experience like? When you Let me give you an example. A customer wants to get a price are all done, put yourself in the shoes of the customer. Which of on tires for his car. Maybe he wants to know what’s the cheapest option or what will be his “best value?” The reason doesn’t matter. those dealerships would you do business with and why? I think When you provide the requested information, do you stop there? you will find that the things that we discussed here weighed into If so, the customer may ask when they can that decision. come in or they can simply thank you and Then ask yourself the more difficult quesmove on. Do not leave that visit to chance. tion: How does your business compare on Do not just wait for the Make sure to mention other reasons that the the phone? Could you have lost a customer customer should do business with you – things to that competitor? Think about how your customer to ask for an like quick mounting and balancing, valuebusiness comes across to a potential customer appointment. Make sure you added services, specials, rebates and more. on the phone. Then sell the visit by sincerely saying If you do not have the ability to listen proactively offer one. something like, “We actually have several to the calls that come into your store, have different tires that could work for your car. someone call your store with the same inquiry When would be a good time for you to stop by so I can show that you called the competition with. Again, imagine that you you your options? Is this afternoon or tomorrow morning better are a customer looking for somewhere to do business. How did for you?” your location measure up to the competition? You might realize Notice I did not ask, “Would you like to come in and look that you have a huge opportunity for improvement. around?” That is a simple yes-or-no choice. Give the customer a The good news is that phone etiquette is a skill that can be yes-and-yes choice. While this may not seem like a big difference, improved with strong follow-up. Make sure your team is leveraging it certainly increases the odds of the customer coming in, as well all the keys to create a positive phone experience and invite the as demonstrating your desire and willingness to help him. customer to come to you. Leveraging appointments is also a great tool. Do not just This is an easy skill to hone through role play as well. Have wait for the customer to ask for an appointment. Make sure you two employees stand back-to-back so they cannot see each other. proactively offer one. In today’s busy world, people want to know Choose one to portray a customer and then role-play a phone that they can get serviced and not leave it to chance. call. Listen in and provide feedback after the exercise ends. Do Again, how you ask for the appointment can make a difference. this regularly and you will build a culture of maximizing the Do not just ask, “Would you like an appointment?’ Think yes/yes phone as a customer-increasing tool. I know you will see positive and say, “I have morning and afternoon appointments available. results if you do! ■ Which works best for you?” The customer will pick one or the other. Then you can nail down a time. Tire industry veteran Jeff Morgan is the executive director of Dealer Strategic You’ve heard the old saying that you have one chance to make a Planning, the DSP Group. He can be reached at jeff.morgan@20dsp. com or (310-533-2576) See the website www.20DSP.com. first impression. That initial phone call might be your one chance. w w w . M o d e r n T i r e D e a l e r. c o m

Creating a Buzz

Creating a high-touch culture in a no-touch world THREE THINGS YOU CAN DO TODAY By

Dan MacDonald

Say thank you the old-fashioned way. In a low-touch world, everything is email and text messages. It’s fast, easy and so impersonal. News flash: People’s in boxes are overflowing. They probably don’t have time to read one more darn email. I suggest you go “old school” and start sending some good, hand-written thank you notes for certain key customers each month. To guard your time, be selective and just commit to writing 10 letters a month. And start by thanking the folks who stayed with you during the COVID-19 crisis. Let them know in a personal way that you appreciate their

PHOTO: GETTY IMAGES

s America starts to gradually reopen, what an extraordinary opportunity to re-boot your business in a fundamental way — by truly putting the customer at the center of your culture. This starts by asking yourself a simple question: Do you have a high-touch culture or a transactional, low-touch culture? That might seem like an odd question to ask during this time of social distancing. What I’m really talking about is how your team connects with your customers by doing the small, simple things better than anyone else. Think about your last trip to the DMV to renew your driver’s license. Not exactly a warm and welcoming experience, was it? Is your dealership treating customers that way? Do you know your repeat customers by name? Does your team greet everyone that comes to your dealership with a friendly smile and a warm welcome? Do you make your customers feel special and appreciated? If so, that is awesome! I suspect your customers recognize this, which is one reason why they keep coming back to you. But if you honestly can’t can answer “yes” to those questions, this is an opportunity to make a change that won’t require a big investment but will pay off in a big way. Here are three simple ideas:

Never underestimate the power of the written word. Start sending hand-written thank you notes to key customers each month. Tell them that you appreciate their loyalty and business. And consider including discount cards.

loyalty and trust during these uncertain times. Just a hand-written note to say, “Thank you. I appreciate your business,” is powerful. You could even drop in a few discount cards — maybe for 15% off their next oil change or new set of tires, or even one for them and one to “refer a friend.” If you track the redemption rate, I suspect it will be worth your time and effort. Low-touch doesn’t have to be low-tech. Another idea to reach out to customers in a personal way is it send them a “video thank you.” Just get out your smart phone, record a short, thoughtful video and send it to your customer in an email with a link to the video. (You you can store these on YouTube, Vimeo or a number of services.) The video should be about 20 seconds or so. The script might say, “Hi Joe! I just wanted to say thank you for your business and the trust you showed in us by bringing your vehicle in for service during the COVID-19 crisis. We are so grateful for your business. Also, this email includes a digital coupon for 15% off your next oil change. Take care and we’ll see you soon.” Short, sweet and personal. Set a high standard. The companies that excel in high-touch customer service — think Nordstrom’s, Chick-fil-A, or

Apple — don’t leave it to chance. They don’t just tell their employees to provide good customer service. They define it and train their employees on specific behaviors. These include greeting each customer with a smile and a warm hello, listening closely to their needs, asking about their day, making eye contact and always saying thank you. Simple stuff, right? Don’t assume your employees know this. Tell your employees exactly how you expect them to treat every customer. Finally, always remember that you set the tone. When you see an employee display great, high-touch customer service, make sure you celebrate it. Even better, provide instant recognition and hand that employee a $10 Starbucks card or another reward in front of the whole team. You may even write that employee an old-fashioned thank you note for taking such good care of your customers. ■ Dan MacDonald is a freelance writer and former public relations director for Bridgestone Americas Inc. He founded MacDonald Communications, which focuses on public relations and digital marketing. MacDonald can be reached at (615) 681-5381 or dan@maccomm.net, website: www.maccomm.net.

MTD June 2020

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Business Insight

Regular, Casual or Player? YOU NEED ALL OF THESE CUSTOMERS – BUT TREAT THEM DIFFERENTLY By

Dennis McCarron

ow many customers visit your location once and never come back? A quarter of them? Half of them? More? It is critical that you know that number and who those people are. The good news is, this information is right inside your point-of-sale system. In fact, nearly any point-of-sale system can use its database to determine how often customers visit and how many are “one and done.” You may need a third-party vendor to extract the data, but it isn’t difficult to do. Once you have that information, developing a plan to service that customer is critical. And that plan requires a lot more than just allocating a few thousand dollars towards advertising. Let’s look at the three most common “customer types,” including their spending habits, and what it will take to get their attention and pull them into your store:

advertising campaign, a friend’s recommendation — any of those things may pull this customer away to give another business a shot to see if they are better than you. You need to use a steady stream of inexpensive marketing to remind these customers that you exist. This could take the form of social media posts, radio — if you do that in your market — or anything that reminds them that you are here to serve them. Once this customer is in your store, your employees must execute so that the experience is memorable and seared into the casual customer’s brain. This can be difficult in our industry. Casual customers make up the bulk — 50% of more — of your customer base. They visit two or three times a year and make basic purchases, maybe a brake job with some front-end work thrown in. The lifetime value of this customer is huge, especially as a demographic, so advertising to get them to visit and then making their experience memorable is worth the investment.

The Regular knows the name of everyone who works for The Player sees automotive maintenance as a game. They you, actually likes the coffee in your waiting are not interested in a relationship and room and understands that business is a might even see you as an adversary. In their two-way street. mind, doing business with you is merely a With regulars, the trust It’s OK to ask a regular to bring his or her transaction. And that’s OK. Without these car in on another day because your store is customers, you would struggle to pay the factor is high on both sides. already busy. Regulars — who typically make bills. Just do not “over-promise” when it up 10% to 20% of your customer base — get comes to servicing their vehicles. Because this type of customer tends to be vocal with complaints, it and will absolutely show up on that other day. This customer is a partner and understands the give-and-take many businesses try and fix everything for them. But bending of business. over backwards will not pay off. Just treat the business you receive With regulars, the trust factor is high on both sides, and very from this customer for what it is: a transaction. little advertising or spend is needed to get this person — and usually Don’t be flippant, though. Any transaction is worthwhile. Make more than one car that they own — to show up when scheduled. sure your business 100% performs according to agreement and But you need to make this person feel special and follow be very clear with standards, but only meet this person half-way. through on your promises. Maybe you hold some kind of in-store And don’t get trapped into discounting everything to make customer appreciation event or program for your regulars? Or players happy. Their happiness does not equal loyalty. maybe you put a basket together of gift cards from other local Pick a service that will appeal to them, but pick just one. Do businesses and a few coupons from yours and deliver that to the not be the cheapest alignment, the cheapest brake service and the cheapest tire at the same time. Pick one thing and maximize it. customer’s front door? This is a unique customer, and any gesture you make needs to match that uniqueness. It is far more profitable and easier to convert a casual customer into a regular than it is to move a player into the casual category. The Casual Customer is interested in your dealership. He or Focus your marketing efforts on the casual, but don’t entirely she may not have liked your Facebook page or actively follows ignore the regular or the player. You need all of them. ■ you on Instagram, but this customer cares. However, this person is not a crusader for your business. Dennis McCarron is a partner at Cardinal Brokers Inc., one of the leading The casual customer is fairly loyal, but also is at a high risk brokers in the tire and automotive industry (www.cardinalbrokers.com). of being steered away from your business. A new shop, a fancy To contact McCarron, email him at dennis@cardinalbrokers.com.

MTD June 2020

Mergers and Acquisitions

AND WHY A GOOD RELATIONSHIP WITH YOUR BANK IS MORE CRITICAL THAN EVER By

Michael McGregor

n times like these, we learn the business lessons that stick with us for the rest of our lives. One lesson I think we’ll see is that the tire dealers who have kept all of their technicians and best sales people employed during the COVID-19 pandemic will recover faster than those who did not. Another lesson is that the customer loyalty you earned by doing the right things over the years will tide you over during the rough times. And the third lesson, from a financial perspective, is that having a strong balance sheet helps tire dealerships survive downturns better. As of this writing, more than 40 million Americans, many of them already living paycheck to paycheck, have filed for unemployment. Stay-at-home orders have caused a huge drop in spending and travel. With much of our economic growth driven by consumer spending, and with so many consumers now jobless and struggling, until they have money and breathing room, it’s going to be a slower climb out of this trough than any of us would like. A prudent approach for tire dealers is to hope for the best but plan for a long slog. Try to not get too far ahead of the consumer. Conserving your cash and strengthening your balance sheet might be some good goals to set and hit in the near term. Don’t be afraid to get back on that strategic growth plan if opportunities present themselves. But analyze the risk just a bit more thoroughly than you used to and make the decision with an eye towards the impact it will have on your financial strength. We focus a lot on the P&L sheet in the tire business and not nearly enough on the balance sheet.

So what defines a strong balance sheet? Let’s run it down: • First, a strong balance sheet means managing towards an adequate, smart and appropriate level of working capital (current assets minus current liabilities). How do you get to a smart level of working capital after business fully opens? Save more and spend less. Collect early and pay late. • Next on the balance sheet, you need to examine your assets. Are they incomeproducing and productive assets? This applies to inventory, equipment and lines of business. If those assets and lines of business are not contributing positively to income, think about dumping them.

If those assets and lines of business are not contributing positively to income, think about dumping them. I once ran across a tire dealer who started as an exhaust system specialist before expanding into tires and undercar service. Fast forward a few years and he rarely sold exhaust service anymore. But every back room of every store was jammed with obsolete pipes and mufflers and no tires. I would have sold the pipes for scrap and made room for tires. • Lastly, a strong balance sheet employs a balanced capital structure. Having access to capital is one of the primary benefits of being a for-profit company. But access to capital options varies with the size of the business. The larger the business, the more capital options that are available. A balanced capital structure means having

some equity and some long-term debt, but not so much debt that it puts your existence at risk. I’ve observed that some of the best-run tire dealerships have little or no long-term debt. Also think about your relationship with your bank. Good banks will help you during a downturn and bad banks will cut and run. Having a good banking relationship is important even when you don’t need the money. It’s like having a safety valve. During the recent Paycheck Protection Program, some tire dealers had no bank to submit their application to. Over the long run, tire dealers with strong balance sheets should win over those without. To a certain extent, you take a gamble in business today. Take picking a new store location, for example. You can look at a new location’s demographics, map the competitive environment, analyze traffic counts and then take the leap of faith and make the investment. Despite all of that analysis, sometimes the store is a dog from day one and will be a dog forever. You need to be able to withstand that hit, and a strong balance sheet helps with that. To me, having a weak balance sheet is a little like going to Vegas and betting against the house with only a hundred bucks in your pocket. You might win in the short run, but if you stay at the tables too long, the house will clean you out. ■ Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/tire-and-service) and advises and assists multi-location tire dealers on mergers and acquisitions in the automotive aftermarket. For more information, contact him at michael.mcgregor@focusbankers.com.

MTD June 2020

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The importance of a strong balance sheet

Focus on Industry

On the ground floor TIRE BRANDS AMERICA HAS BIG PLANS FOR NEW LINE, NETWORK By

Mike Manges

ou don’t often hear of a tire company touting its main product as a “super-economy brand.” Yet that’s how tire industry veteran Steve Hutchinson describes his company’s flagship line. The positioning of the brand is by design, he says. Hutchinson’s new venture, Tire Brands America (TBA), is launching in the most difficult economic environment since the Great Recession. Tire buyers are looking for affordable alternatives that don’t sacrifice quality or performance, according to Hutchinson, who is the Huntington, Calif.-based firm’s president and CEO. And the same can be said for wholesale tire distributors, he claims, which TBA is targeting as it builds its sales network.

to feel like they can set their own prices.” Hutchinson believes TBA can sign 10 to 15 wholesale distribution points within the next three months. “We’re not focused as much on numbers as we are attaching ourselves to the right players. Whether we have 20 or 30 distributors on-board by the end of the year… that really doesn’t matter. It’s quality over quantity.

WHOLESALE PLANS

The goal of TBA, which opened its doors this past March, is to help “foreign-manufactured brands that have no U.S.-based sales team or are under served in terms of sales and marketing,” says Hutchinson. TBA’s new Xcellent line is “brand-new for the United States market and is made for the needs of the U.S. market,” he notes. The line is built by Crown Tyre, a Thailand-based manufacturer. Hutchinson’s sales team — which consists of tire industry veterans Art Michalik, Joe Anzelmo, Jack Bidding, Dave Howe and Sean Brennan — is exclusively pursuing wholesale distributors. “We want the distributor to have a steady, consistent supply from us, which means they have to order on a steady, consistent basis.” TBA has no plans to establish its own U.S.-based warehouse. Running a warehouse “would add 10% to 12% to our price,” he says. Instead, the company is offering exclusive territories. “We want our distributors to take ownership of the Xcellent brand. We want them

“We want our distributors to take ownership of the Xcellent brand,” says TBA President and CEO Steve Hutchinson.

“In every market, we’re looking to sign up one — not two or three. And we’re going to run with that. These companies will set their own margins. “I think a lot of distributors, especially today, are looking for exclusivity. The approach that we are bringing to the market — protected sales territories, strong margins, not having to look over your shoulder — will be very well-received at a time when people are looking for solid partnerships,” he says.

LIGHT TRUCK FIRST

TBA’s decision to promote Xcellent as a “tier-three, super-economy brand” enables it to enter the U.S. market “without a lot of start-up costs. “Crown has been selling tires into the U.S. market since the early-2000s,” he says.

“They have a lot of experience designing and building tires to Department of Transportation specifications. Their history has been very strong in terms of quality.” TBA introduced its first product in the Xcellent line, the Xcellent Roadbreaker A/T light truck tire, in early April. The tire is available in 24 sizes and fits 15- to 22-inch rims. The next product, the Roadbreaker M/T, will be available in June and July in 12 sizes, ranging from 17 inches to 22 inches in diameter. And another light truck tire, the Roadbreaker R/T, will be available this summer in 31, 17- to 22-inch sizes. The company plans to roll out ultra-high performance and SUV tires under the Xcellent banner this fall. A radial medium truck tire line will follow in 2021. TBA is deliberately targeting the growing light truck tire market for now. “It’s the hot market opportunity,” says Hutchinson. “And our sales advantage — in terms of having razor sharp pricing — is very strong in the light truck tire segment. “These are well-designed products: a three-ply casing, very strong construction, and nice-looking. No shortcuts have been taken. It’s a simple sales pitch.”

LOOKING AHEAD

“We couldn’t have picked a worse time to get started,” says Hutchinson, referring to the current economy. “But I’m a huge believer in the spirit of America and the spirit of Americans. COVID-19 will pass and I think things will be pretty much back to normal. They have to be.” Customers have been “very accommodating and understanding,” he notes. “I think they know that this (crisis) is temporary and they have to look forward, too. “We’re looking to provide a steady supply to wholesale-distributors, consistent with their orders, that can be forecast more accurately over time.” ■ MTD June 2020

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Focus on Industry

Toyo unveils next-gen Open Country and Proxes tires AND INTRODUCES TRUCK TIRE FOR ‘SUPER-REGIONAL’ APPLICATIONS By

Mike Manges

he fall-out from the COVID-19 pandemic has not slowed Toyo Tire U.S.A. Corp.’s product roll-out schedule. “Although we have had to curtail a number of planned launch activities due to coronavirus guidelines and restrictions, we still feel it is critical to bring these products to market,” says Toyo President and CEO Roy Bromfield. Toyo resumed production at its consumer tire plant in White, Ga., in early-May. “And I know that our new product planning and technical teams here in the U.S. are still very active with our colleagues in Japan relative to new product development,” he says. Toyo recently introduced two new products in its popular Open Country light truck and Proxes ultra-high performance lines. And it has expanded its commercial truck tire offering with “a super-regional” drive tire.

120-PLUS SIZES

The new Toyo Open Country A/T III is available in 70 popular sizes that fit rim diameters ranging from 15 inches to 20 inches. By the end of this summer, the tire will be available in a total of 127 SKUs. The tire features a new tread compound and design for confident wet braking and handling; a more evenly distributed void area for enhanced on- and off-road traction; increased tread block rigidity for extra handling stability; and staggered shoulder lugs for optimized off-road traction, according to Toyo officials. The tire also contains 3D multi-wave sipes for “enhanced wet and snow traction” and stone ejecting blocks to repel rocks from grooves. In addition, two distinct sidewall designs “on all sizes allow for subtle customization.” Select sizes are available with outlined white lettering. Toyo says the Open Country A/T III targets Ford F-Series, Chevrolet, GMC, Toyota and Nissan trucks, SUVs and CUVs, as well as Jeep and RAM models.

90% COVERAGE

The new Proxes A/S ultra-high performance all-season tire covers nearly 90% of the passenger tire market. Available now in 61 sizes with 28 more on the way, the tire features a newly developed, specialized silica tread compound for optimal wet and dry performance; a dynamic taper and improved rib design for even more contact pressure during braking and enhanced cornering stability; multi-wave sipes that minimize irregular wear and enhance both wet and dry performance; and a rim protector. The Proxes A/S comes with a competitive mileage warranty of 50,000 miles for V- and W-rated sizes and a 40,000-mile warranty

The recently introduced Toyo Open Country A/T III is available in 70 popular sizes that fit rim diameters ranging from 15 inches to 20 inches. By the end of this summer, the tire will be available in a total of 127 SKUs.

for Y-rated sizes. The tire, which is available in 16- through 22-inch diameters, gives Toyo dealers the ability to “simplify their shelf space,” says Kevin Arima, senior manager, consumer products and technical services, Toyo. It replaces the Toyo Proxes 4, Proxes 4 Plus and Proxes T1R products.

SUPER-REGIONAL FOCUS

Toyo also has expanded its commercial truck tire line with the introduction of the Toyo NanoEnergy M671 super-regional drive tire. The SmartWay-verified product provides “superior traction, exceptional fuel efficiency and excellent wear life,” according to Toyo officials. The M671 incorporates Toyo’s advanced e-balance design, which maintains the tread profile of the tire while reducing strain at the bead area and belt edge for greater stability and longevity under heavy loads. In addition, it features an optimized, wide tread pattern with 3D sipes that provide even contact pressure, increased traction and minimization of irregular wear for longer tire life. “The combination of a high-elongation top belt and stone ejectors helps protect the casing from cuts and damage, providing excellent retreadability. Maximum fuel efficiency is achieved through the uniformity of the cap and base compound, which increases wear resistance. Advanced tread and sidewall compounds provide increased fuel efficiency.” The tire is available in three sizes: 295/75R22.5 G/14, 11R22.5 G/14, and 11R22.5 H/16. ■ MTD June 2020

TPMS

Lexus ES Series — 2007-18

w w w . M o d e r n T i r e D e a l e r. c o m

ALL ART COURTESY OF TOYOTA, LICENSE AGREEMENT TMS1002

he Lexus ES Series (models 20072018 for the ES 350, and 20132018 for the ES 300h) tire pressure monitoring system (TPMS) has a tire pressure monitor valve sub-assembly (equipped with a tire pressure sensor and a transmitter) installed in each tire and wheel assembly. The sensor measures the tire pressure, and the measured value and transmitter ID are transmitted to the tire pressure monitor antenna on the body as radio waves. These radio waves are then sent to the tire pressure monitor ECU from the tire pressure monitor receiver. If the transmitter ID has already been registered, the ECU compares the measured air pressure value with the standard value. When the value is less than the standard value registered in the tire pressure monitor ECU, the warning light on the instrument cluster comes on. CAUTION: The warning system may not activate immediately if bursts or sudden air leakage should occur. The tire pressure warning reset switch is used to address the differences in the air pressure settings by the type of tires, or the differences in pressure between the front and rear tires. This switch is used to initialize the warning system after certain repair procedures. The tire pressure warning selector switch allows two sets of ID codes to be registered. The code of the tires originally installed on the vehicle is registered on the switch at “MAIN.” When a new set of tires is installed, they can be registered in the “2nd” position. Once registered, the setting position can be changed each time tires and wheels are replaced, and re-registration is not required. NOTE: When the tires whose ID code are registered at “MAIN” are used, the system does not work properly with the selector switch set at “2nd.” If the tires whose ID code are registered at “2nd” are stored nearby, the system will detect their tire pressure (and vice versa). NOTE: This system has transmitters with different bending angles at the tire pressure sensor for aluminum wheels. They are not interchangeable with other wheels. Under the following conditions, the system may not function properly:

Figure. 1: Locating the TPMS reset and selector switches.

IS THE ONLY

COMPLETE

• The areas, facilities or devices that use similar radio wave frequencies are located in the vicinity of the vehicle. • A radio device of similar frequency is used in or near the vehicle. • A lot of snow or ice is stuck to the vehicle, especially the wheels and around the wheel houses. • The battery of the sensor has been depleted. • A tire without a tire pressure sensor is used. • Snow tires or tire chains are used. • The spare tire is in use. • If any other wheels than the specified ones are used, the system may not function properly because the radio waves are differently transmitted from the tire pressure sensor. • Depending on the tire type, the system may not function properly even though

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TPMS the specified wheels are used. • Although tires with tire pressure sensors are used, the TPMS selector switch is set to the other tire setting.

TIRE PRESSURE MONITOR WARNING INDICATORS

NOTE: The tire pressure warning light may turn on due to natural causes such as natural air leaks or tire pressure changes caused by temperature. In this case, adjusting the tire pressure will turn off the warning light. When the tire pressure warning light and message do not go off, or when they come on during driving, check tire pressure and adjust as necessary. Warning indicators should turn off a few minutes after air is put into a deflated tire. If the warning indicators are still on even though the tire pressure is correctly adjusted, the tire could be punctured. Repair as necessary. If the tire pressure warning indicators come on within several hours after adjusting the tire pressure, the tire may have a slow air leak. If the tire pressure warning light is blinking even after adjusting the tire pressure, selection of the tire pressure selector switch “MAIN”/”2nd” may be incorrect. If the warning light is still on or blinking, there is a malfunction in the TPMS. See appropriate manufacturer service information.

TPMS RESET PROCEDURES

NOTE: The system will need to be initialized when tires are rotated; tires are replaced with tires of different pressures; tire pressure sensor and/or the tire pressure monitor ECU are replaced. See “Initializing tire pressure monitoring system.” When a tire pressure sensor and/or tire pressure monitor ECU are replaced, the sensor ID must be memorized by the tire pressure monitor ECU prior to system initialization. See “Tire pressure sensor registration.” NOTE: Initialization is NOT required if re-inflating tires to the specified tire pressure.

INITIALIZING TIRE PRESSURE MONITORING SYSTEM

CAUTION: DO NOT push the reset switch without adjusting tire inflation pressure of all four tires. Otherwise, the low tire pressure warning light may not come on even if the tire pressure is low, or it may come on when the tire inflation pressure is

Figure 2: Identifying the data link connector terminals.

Figure 3: Locating the tire pressure sensor transmitter ID.

actually normal. If you push the reset switch while the vehicle is moving, initialization is not performed. NOTE: Perform initialization AFTER the transmitter ID registration procedure (if registration is required). NOTE: When initializing the system, the current tire condition is stored as a standard. During initialization, the tire pressure sensor measures the inflation pressure of the tires and registers the signals that are transmitted into the tire pressure monitor ECU at a frequency of one per minute. The initialization process is completed when the signals from the four tires have been received. The initialization process is canceled if the engine switch is turned off during initialization. To initialize again, the tire pressure warning reset switch must be pressed again. For this reason, once the tire pressure warning reset switch has been pressed, turning the engine off is not recommended for a minimum of 20 minutes. NOTE: Perform the tire pressure adjustment after the vehicle has sufficiently cooled down. If the vehicle is not sufficiently

cooled down, increase the air pressure by 3-4 psi (20-30 kPa) in addition to the specified value. 1) Set the tire pressure of all wheels to pressure specified on the tire and loading information label. 2) With the vehicle stopped and the parking brake applied, turn the engine switch on (IG). NOTE: Initialization is usually completed in 2-3 minutes. When the initialization is completed incorrectly, diagnostic trouble code (DTC) 2177/77 is set after driving the vehicle about 20 minutes or more. 3) Press and hold the tire pressure warning reset switch (may be located to the right or left under the steering wheel - see Figure 1) until the tire pressure warning light blinks three times at one-second intervals. 4) Confirm that the correct tire pressure data of all tires is displayed on the Techstream screen. NOTE: Initialization can be terminated by connecting terminals 13 (TC) and 4 (CG) of the DLC3 (see Figure 2).

TIRE PRESSURE SENSOR REGISTRATION

NOTE: If the tire pressure sensor and/or tire pressure monitor ECU are replaced, the transmitter ID needs to be registered in the tire pressure monitor ECU prior to system initialization. To perform this procedure, the Toyota intelligent tester must be used. It is not necessary to register the sensor IDs when only tire rotation is performed. Register transmitter ID 1) Set the tire pressure of all wheels to pressure specified on the tire and loading information label. 2) Connect the Techstream to DLC3 (located under the steering column). 3) With the vehicle stopped and the parking brake applied, turn the ignition switch ON. Turn Techstream ON. NOTE: If the system is in the initialization mode, it is unable to perform registration. Therefore, restart the registration after terminating the initialization or confirming that the initialization has been completed. 4) Perform the transmitter ID registration. Enter the following menus: Chassis / Tire Pressure Monitor / Utility / ID Registration. 5) Using the TPMS selector switch (if MTD June 2020

AUTOMOTIVE INTELLIGENCE

TPMS KITS Ask Your Autel Distributor for Details

Figure 4: Here’s a exploded view of the tire pressure sensor.

equipped - otherwise go to next step), select the “MAIN” registration mode (or “2nd” if registering in 2nd mode). See Fig. 1. 6) Input the transmitter IDs (ID1 to ID4) using the Techstream and transmit it to the tire pressure monitor ECU. 7) The “ID Registration is complete” will be displayed on the Techstream display. NOTE: The tire pressure warning light will continue to blink until the tire pressure warning ECU and receiver receives the input ID signals. Confirmation of transmitter ID registration 1) Connect the Techstream to DLC3. 2) Turn the ignition ON. Turn Techstream ON. 3) Enter the following menus: Chassis / Tire Pressure Monitor / Data List. Check the Data List for correct tire pressures. 4) If normal pressure values are displayed, the IDs have been registered correctly. NOTE: It may take about two or three minutes until the values are displayed. If the values are not displayed after a few minutes, perform troubleshooting according to the inspection procedure for DTCs C2121/21 to C2125/25 or C2131/31 to C2135/35. If the IDs have not been registered, DTC C2171/71 or C2172/72 will be stored in the tire pressure warning ECU and receiver after three minutes or more. NOTE: After all IDs are registered, DTC C2126/26 (for “MAIN” mode) or DTC C2127/27 (“2nd” mode) is set and the tire pressure warning light blinks for one minute and then comes on. Once the tire pressure warning ECU and receiver successfully receive radio waves from all the transmitters whose IDs are stored in the ECU and receiver, DTC C2126/26 or C2127/27 is deleted and the tire pressure warning light goes off. If equipped with a TPMS selector switch: Determining installed wheels transmitter ID status (“MAIN” or “2nd”) w w w . M o d e r n T i r e D e a l e r. c o m

Figure 5: Disengaging the bead using the tire remover.

NOTE: TPMS selector switch identification (see Figure 1). 1) Turn the ignition ON. NOTE: TPMS Selector Switch button operation (see Figure 1). 2) Set the tire pressure warning selector switch to the “MAIN” position. 3) Ensure the tire pressure of all wheels is set to the specified values. 4) Remove the valve core, and rapidly reduce the pressure of one tire (above 40 kPa/30 sec.). 5) Check for the following items. If both of them are true, the transmitter * ID of the currently installed wheel is registered to “MAIN.” • Tire pressure warning light comes on. When checked with the Techstream, the tire pressure data displayed on the screen has been changed for the deflated tire. 6) If either of the above conditions is not true, switch the tire pressure warning selector switch to “2nd.” Perform steps 3 through 5) again. If both conditions are now true, the transmitter ID of the currently installed wheel is registered to “2nd.”

TS508/TS508WF PLUS

DEMOUNTING/MOUNTING PROCEDURES

NOTE: The system will need to be initialized when the tires are rotated; the tires are replaced with tires of different pressures; the tire pressure sensor and/or tire pressure monitor ECU are replaced. When a tire pressure sensor and/or tire pressure monitor ECU are replaced, the sensor ID must be memorized (registered) by the tire pressure monitor ECU prior to system initialization. See “Reset procedures.”

COMPLETE

SOLUTION

TIRE PRESSURE SENSOR

CAUTION: DO NOT try to install a tire pressure sensor in a steel wheel or aftermarket wheel. Use only in original style factory wheels.

Phone: (855) 288-3587 • USSUPPORT@AUTEL.COM AUTEL.COM • MAXITPMS.COM • MAXISYSADAS.COM

TPMS TIRE PRESSURE MONITORING SYSTEMS

NOTE: The average life of the grommet of the tire pressure sensor is approximately five years, at which time it must be replaced. If the valve is leaking air, is less than five years old and there is no problem with grommets, retighten the valve nut to 35 in.-lbs. (4 N.m). Whenever the tires must be replaced, replace the grommets for the tire pressure sensors as well. NOTE: If the tire pressure valve subassembly is going to be replaced, make a note of the 7-digit number (transmitter ID) before installation, as it cannot be seen after sensor is installed see Figure 3). Whenever a new sensor is installed, it will need to be registered in the tire pressure monitor ECU. Removal 1) When replacing a wheel or tire, tire pressure sensors must be set up in one of the following ways: • Remove the sensor from the old wheel and install it to the new wheel. Keep the same wheel with tire pressure sensor and replace only the tire. • Use a new wheel and sensor (the new sensor must be registered after installation). 2) Remove the wheel. Remove the valve core and cap, and release air from the tire (see Figure 4). NOTE: Keep the removed cap, valve core, nut and washer. 3) After ensuring that air is sufficiently released, remove the nut and washer that is used to fix the tire pressure sensor and drop the sensor inside the tire. NOTE: Be careful not to damage the tire pressure sensor due to interference between the sensor and tire bead. 4) After dropping the tire pressure sensor into the tire, disengage the bead using the shoe of the tire remover (see Figure 5). 5) Remove the bead on the upper side in the usual operation. 6) Take out the sensor from the tire and remove the bead on the lower side as in the usual operation. NOTE: Check that no cracks or damage is identified on the grommet. If so, replace the grommet together with the washer and nut. The tire pressure sensor is powered by a lithium battery. When disposing of the sensor, remove the battery and dispose of properly. 7) Remove the inner grommet from the tire pressure sensor.

Figure 6: Installing the tire pressure sensor.

Figure 7: Positioning the tire pressure sensor.

Installation 1) Insert the tire pressure monitor valve into the valve installation hole. Insert from the inside of the rim so that the print surface can be seen (see Figure 3). Check for the following: • Check that there is no visible deformation, damage or other abnormalities on the transmitter. • Check that there is no foreign matter on the inner grommet and around the rim hole. • If installed in the reverse direction, the tire pressure monitor valve may be damaged or fail to transmit signals when running at high speed. • If installing a new tire pressure monitor valve, write down the ID number before installation (see Figure 3). It is necessary to register an ID in the ECU after installation. 2) Install the washer on the tire pressure monitor valve from the rim side and tighten the nut to 35 in.-lbs. (4 N.m). See Figure 6. Check for the following: • Ensure there is no foreign matter on the washer and nut. Check the condition

of the tire pressure monitor valve and grommet. • Check that there is no oil, water or lubricant around the rim hole, tire pressure monitor valve, washer and nut. Failing to do so may result in improper installation. 3) After the tire is inflated, the valve nut may be loose. Retighten the nut to the specified torque, and then check for air leaks with soapy water. 4) Set the wheel disc to the mounting machine and install the lower tire bead. Position the main body of the sensor in the shaded area as shown in the illustration (see Figure 7). 5) Making sure that the tire bead and tool do not interfere with the main body of the sensor and that the sensor is not clamped by the bead, install the upper bead. 6) When putting air into the tire, first install the tire pressure valve straight on the stem of the tire pressure warning valve and transmitter. 7) Install the tire and wheel assembly. 8) When a new sensor is installed, the ID code will need to be registered. See “Reset procedures.” Up to two sets of codes can be registered. Since one ID for the originally installed sensor is registered at “MAIN” of the selector switch, use the “2nd” position to register an ID for the new sensor. 9) For any other type of replacement, the sensor ID code will not need to be reregistered. If using the originally installed tires, put the selector switch at “MAIN.” If using tires purchased later, put the switch at “2nd.” 10) After completing the operation, remove the valve core to rapidly release the air in the tire. Ensure tire pressure warning light comes on. If warning light does not come on, refer to appropriate manufacturer service information. 11) If there is an air leakage, tighten the nut to a force of 35 in.-lbs. (4 N.m), and push the valve core 2-3 times to remove any dirt attached to the valve core. If air continues to leak, replace the grommet, washer and nut. ■ Information for this column comes from the tire pressure monitoring systems data in ProDemand®, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in Poway, Calif., Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com. To read archived TPMS articles, visit www.moderntiredealer.com.

MTD June 2020

Products Vredestein launches all-season UHP tire The new Vredestein Hypertrac all-season ultra-high performance tire “demonstrates Vredestein’s rapid portfolio growth and kicks off a new product cadence that will continue through 2020,” according to company officials. The tire, which is available in 38 sizes, provides “marketleading wet performance” thanks to its contour, which is designed for dynamic pressure distribution and an optimized footprint, as well as faster water evacuation due to its high-void tread pattern and optimized groove positions. The Hypertrac also boasts a breakthrough compound that employs “unique resins that help deliver the optimal performance drivers seek from tires in this category,” a polymer blend ratio that has been tuned for excellent wet grip, and other features. APOLLO VREDESTEIN www.vredestein.com

TGI expands Cosmo offering Tire Group International LLC (TGI) has added three lines to its Cosmo brand lineup. The Cosmo El Jefe HT is a premium crossover/ SUV tire designed for comfort. It is available in 15 sizes. The Cosmo El Tigre AT all-weather tire has earned 3-Peak Mountain Snowflake certification and is available in 22 sizes. The Cosmo TigerTail is a European-inspired tire for crossover and SUV applications. All three products feature Cosmo’s Ultimate Tire Technology, which includes a bead reinforcement system, “directed super silica compounding,” and more, according to TGI officials. TIRE GROUP INTERNATIONAL LLC www.tiregroup.com

Hercules expands winter tire lineup The Avalanche TT is the latest addition to the Hercules winter tire line and will be available in 23 sizes, ranging from 16 to 22 inches. Made in the United States, the studdable tire — which targets heavy-duty pickup trucks, large SUVs and cargo vans — features Snow Grip Technology, which boasts proprietary design features “that work together to get drivers through winter’s extreme conditions,” according to Hercules officials. The tire also contains Snow Grabber Grooves, which help trap and hold snow, delivering enhanced traction; center rib tie bars; thin-gauge, full-depth siping for optimized biting edges; and other features. The Avalanche TT has earned 3-Peak Mountain Snowflake certification. HERCULES TIRE www.herculestire.com

NAMA introduces UHP tire NAMA Tires Inc. is bringing its Maxmach ultra-high performance tire to the United States market in 20 sizes. The tire, which will fit wheels from 17 inches to 24 inches in diameter, is manufactured in Vietnam and will be available by container shipments. It features three wide ribs for enhanced steering precision and mileage; sharp, lateral sipes and kerfs for optimized performance in wet conditions; an asymmetric tread design with a strong outside shoulder for steering stability; and more. NAMA TIRES INC. www.namatire.com

Hankook extends Kinergy sizes Hankook Tire America Corp. has announced size extensions for two consumer tires, the Kinergy PT (H737) and the Kinergy ST (H735). Production of the new sizes is underway at Hankook’s consumer tire plant in the United States. The Kinergy PT (H737) gains 32 sizes, covering most of the grand touring and high-diameter segment, while the Kinergy ST (H735) gains 30 sizes. “By offering over 50 news sizes across our Kinergy line, consumers will have more options than ever when it comes to finding a safe, comfortable and fuel-efficient tire to meet their daily driving needs,” says Peter Jung, senior vice president and chief operating officer, Hankook. HANKOOK TIRE AMERICA CORP. www.hankooktire.com

Maxam unveils port tires Maxam Tire North America Inc. has unveiled two port tires, the MS307 PORTXTRA IND-3 and the MS407 PORTXTRA IND-4, both of which have been designed to “meet the heavy load requirements in port and terminal applications,” according to company officials. The MS307 PORTEXTRA IND-3 features an all-steel tread and targets port applications “that run heavy loads and long cycle times.” The MS407 PORTXTRA IND-4 contains a deep, stabilized tread that provides high levels of traction, reduced heat build-up and long tread life. MAXAM NORTH AMERICA INC. www.maxamtirena.com MTD June 2020

NOVEMBER 3â€“6, 2020 LAS VEGAS CONVENTION CENTER

SEMASHOW.COM/REGISTER

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ADVERTISER

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American Omni Trading

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AUTEL

19, 47, 49

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BendPak Inc. Ranger Products

www.mybendpak.com

BKT USA Inc.

www.bkt-tires.com

Chevron U.S.A. Inc.

www.havoline.com/pitpack

Continental Tire

www.continentaltire.com/offers

Cooper Tires

www.coopertire.com

DSP 20 Group

www.20dsp.com

Falken Tires

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Firestone Tire

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Hunter Engineering Company

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K & M Tire Inc.

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Ken-Tool

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Kenda Tires USA

IBC

www.kendatraction.com

Kumho Tire USA Inc.

www.kumhotireusa.com

Linglong Americas Inc.

www.linglongtire.com

Maxxis Tires

www.maxxisaccelerate.com

Michelin North America Inc.

www.michelintruck.com

Mr. Tire/Big 3 Tire

www.mrtirebig3tirectd.com

Nexen Tire America Inc.

IFC

www.nexentireusa.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Prinx Tire North America Inc.

www.prinxtire.com

SEMA Show

www.semashow.com/register

Sentury Tire

Vipal Rubber Corporation

www.vipal-usa.com

ZC Rubber America Inc.

www.arisuntires.com

www.delintetires.com/dealerinquiries

MTD June 2020

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