24 minute read
Tread wear and price trump fuel economy
from Modern Tire Dealer - May 2014
by EndeavorBusinessMedia-VehicleRepairGroup
Even green car owners are overlooking low rolling resistance tires
By Ann Neal
The U.S. Department of Energy says up to 15% of fuel consumed by a car is used to overcome a passenger tire’s resistance to the road. Studies by Green Seal Inc., a nonproft environmental standard development and certifcation organization, show low rolling resistance tires can reduce fuel consumption by 1.5% to 4.5%. Yet consumers shopping for replacement tires tend to focus on longevity and price rather than fuel efciency.
“Rolling resistance is a non-factor on choosing tires,” says Doug Eichten, tire and service advisor at Schierl Tire & Service Center in Marshfeld, Wis. “Guests seem to be hesitant to buy into the rolling resistance or the fuel economy.
“When I talk with a guest about lower rolling resistance and fuel economy, it seems to just go past them. Fuel-efcient tires account for less than 2% of our sales, and that is overstated because the sport utility fuel-efcient tire, the Goodyear Assurance CS Fuel Max, is a beter value than the regular tire in the sizes they are sold in.”
Ironically, Prius owners seem to care the least. Eichten estimates less than 1% of his Prius customers are concerned with fuel economy when buying replacement tires. “Most of them are more concerned with how many miles they are going to last.”
Schierl Inc. does business as Schierl Tire & Service Center in six Wisconsin cities. Eichten says the team leaders at all six of the company’s retail locations are in agreement: Few customers want low rolling resistance tires despite their fuel-saving advantages.
Consumers are not asking for fuel-efcient tires in Montana, either. “We see very little customer demand for low rolling resistance tires,” says Jared McDermot, general manager of L.P. Anderson Tire Co. Inc., which does business as L.P. Anderson Tire Factory in Billings.
“Consumers in general seem to have litle knowledge about them, and those who have heard of them are typically misinformed.
Owners of green vehicles are the exception, he says. “Te only demand we see typically comes from customers driving hybrids, Doug Eichten is tire and service and they are more educated advisor at Schierl Tire & Service about these things than an Center in Marshfeld, Wis., where average customer. fuel-effcient tires account for
MTD survey: eco tires
Eichten’s and McDermot’s assessments echo the fndings of the 2014 Eco Tire Survey conducted by Modern Tire Dealer in March 2014. For nearly 60% of the respondents, eco tires make up 5% or less of their replacement tire sales (see Chart 1).
In contrast, 3% said eco tires make up more than 30% of their tire sales.
When asked what percentage of their retail customers ask for eco tires, 80% of the respondents answered 5% or less of them do. Not surprisingly, a high percentage of them own hybrids, electric vehicles and sedans.
Close to 40% of the independent tire dealers surveyed said their customers are willing to pay a higher price for eco tires. However, two thirds of those customers aren’t willing to spend more than a 10% premium (see Chart 2 on the next page).
Even customers replacing eco tires ofen choose standard tires. When asked what percent of customers who come in with eco tires on their vehicles replace them with eco tires, 44% of dealers answered “5% or less of the time.” Another 14% said it happens 6% to 10% of the time. Only 16% of respondents said their customers replace eco tires with eco tires a majority of the time.
Almost two-thirds of dealers said overall demand for eco tires has remained unchanged over the last two years. When asked to predict future demand, 54% said it will remain unchanged over the next two years, while 34% said there will be more demand.
Big and green
Tire manufacturers expect demand for replacement eco tires to grow, especially in the larger vehicle segments.
“OEMs are continuing to demand more fuel-efcient tires for CUVs, SUVs and trucks in order to meet CAFE (Corporate Average Fuel Economy) standards,” says Larry Eckart, OE product expert for Michelin North America Inc. “Tere isn’t quite as much demand in that category in the replacement market for fuel-efcient tires, but it is growing.”
Henry Kopacz, public relations and social media manager for Hankook Tire America Corp., says North American consumers are taking more interest in fuel-efcient tires. “But consumers in general still place their main focus on traction and tread wear when it comes to selecting replacement tires, whether that’s in the PCR, LTR or winter categories.”
Continental Tire the Americas LLC expects fuel efciency to become a bigger part of consumers’ buying decisions. “Unfortunately, many consumers still do not recognize the potential benefts of fuel-efcient tires, but through continued education this should improve,” says Sam Dollyhigh, PLT product planning manager.
Anant Gandhi, product manager for Bridgestone Americas Tire Operations LLC, says the company demonstrates its commitment to consumers and the environment through two key consumer tire products in its portfolio: the Bridgestone Ecopia EP422 for passenger cars and minivans, and the Bridgestone Dueler H/L 422 Ecopia products for CUVs, SUVs and light trucks.
“Te performance targets for these products place strong emphasis on rolling resistance without compromising any other performance metrics,” he adds.
Bridgestone also created the Eco-Product designation for tires that meet environmentally conscious criteria in construction and have improved rolling resistance.
Jim Davis, manager of public relations at Goodyear Tire & Rubber Co., said the company considers fuel efciency or low rolling resistance to be a quality of some tires, rather than a product segment. Continental does not treat fuel-efcient tires as a separate segment either, according to Dollyhigh.
“Instead, we ensure that fuel efciency is one of our design priorities. For example, our latest product in the touring segment, the TrueContact, was designed with a strong focus on fuel efciency in addition to other performance characteristics
60%
50%
Percentage of Dealers 40%
30%
20% What percentage of your consumer tire business is in the ECO segment?
Source: 2014 Eco Tire Survey
10%
0%
5% 10% 15% 20% 25%
Percent of business in ECO segment 31+%
Chart 1: Low rolling resistance tires account for up to 5% of consumer tire sales for nearly 60% of dealers.
50%
40%
Percentage of Dealers
30%
20%
10% How much more will consumers willingly pay?
Source: 2014 Eco Tire Survey
0%
5% 6-10% 11-15% 16-20%
21+% Percent of increase consumers will pay
Chart 2: Sixty-one percent of the dealers who responded
to MTD’s eco tire survey said their customers will pay
more for low rolling resistance tires. Of these dealers, 46% said their customers will pay 6% to 10% more.
which we feel are important such as wet braking and tread life.”
Robert Hepp, vice president strategic planning for Nokian Tyres Inc., says the company has concentrated on lowering the rolling resistance of all its tires for many years. Te high price of gasoline in Finland, where Nokian is based, has helped make fuel efciency a performance target for every tire. Gas is currently more than $7.50 a gallon in Finland, according to Hepp.
“Fuel efciency is always in every tire we are developing. Nokian won’t come out with a specifc fuel-efcient tire; all tires are fuel efcient.”
Segment specifc
MTD asked eco tire manufacturers for an update on fuel efciency, products and technology in the winter, SUV, UHP and light truck segments. Here is what they had to say.
MTD: Are you trying to make tires in the winter, SUV, UHP and light truck segments more fuel efcient? Why or why not?
Gandhi, Bridgestone: We strive to continue to improve fuel efciency without compromising performance characteristics.
Dollyhigh, Continental: We are making our tires more fuel efcient for two reasons. A fuel-efcient tire increases the number of miles a vehicle can travel per gallon of gas. Due to the additional miles per gallon, our customers will save money. Secondly, the improved fuel efciency means there are less CO 2 emissions into the atmosphere per mile travelled.
We believe this is becoming increasingly urgent and is an important growth market. Te OEMs have long required low rolling resistance tires for OE ftments. Our partnership with these manufacturers has resulted in the development of many of our advancements towards improving the fuel efciency of the tire.
Davis, Goodyear: Goodyear continues to incorporate low rolling resistance and fuel-efciency technology into many of its existing auto tires. Our target is to continue to engineer tires with an optimum balance of key performance atributes: wet grip, tread wear and rolling resistance.
Kopacz, Hankook: Rolling resistance and fuel efciency is always one of our performance targets. Tire fuel efciency is one of the main criteria required when developing original equipment paterns for our vehicle manufacturer partners.
Jim Knowles, OE product expert, Michelin: Almost all OE tires are moving in the direction of beter fuel efciency. Te Economic Commission for Europe (ECE) regulations have restrictions regarding the maximum rolling resistance level allowed. Te frst phase of these restrictions started in November 2012. Te second, more challenging, phase of these restrictions starts in 2016. Tis will prohibit tires from being sold in Europe that have high rolling resistance. All of our Michelin UHP summer tires are ECE-marked, which allows them to be sold in Europe.
Mati Morri, manager, heavy tires technical customer
service, Nokian: We have been focusing for several years on materials, compounding, tread designs and constructions to lower rolling resistance on all our products. Tis has been a very important tool in markets in Europe. A year ago, the Nokian eLine achieved the top AA rating on the European Union tire label for best rolling resistance and best wet grip in the summer tire category. We are focusing on raw materials and environmental friendly options.
Steve Carpino, vice president, research and develop
ment, Pirelli North America Inc.: We are making tires in these segments more fuel efcient. Tis is being driven today by the OEMs in the SUV/UHP/LT segments as part of their vehicle fuel economy targets. In the consumer replacement market, the same benefts of reduced fuel consumption can be seen in the newest range of products. Tese products use much of the same technology found in the OE products.
MTD:
What is your latest fuel-efcient product for these segments?
Gandhi, Bridgestone: Te Bridgestone Blizzak WS80 for winter passenger cars and minivans features an improvement over the WS70 for fuel efciency, which comes mainly from the optimized construction and the optimized contact pressure/ footprint of the tire. In addition, we ofer two Ecopia products for passenger cars, minivans, CUVs, SUVs and light trucks.
Dollyhigh, Continental: Our latest products are TrueContact (standard touring), PureContact (luxury performance touring) and CrossContact LX20 (crossover, SUV and truck).
Davis, Goodyear: Te Goodyear Assurance Fuel Max is a tire with focused fuel efciency that provides confdent wet and dry traction. A fuel-saving tread compound helps reduce energy loss. Available in 67 sizes, it fts about 80% of passenger cars on the road, along with many SUVs and crossovers in the Assurance CS Fuel Max version. It ofers all-season capability.
Kopacz, Hankook: Late last year, Hankook announced the launch of the new Dynapro HP2 SUV/CUV all-season tire.
Tis tire will be available to consumers later this year. One of the main areas of focus during the design and engineering of this tire was fuel efciency.
Morri, Nokian: Our latest product in the winter range is Nokian R2 SUV, where we have one of the lowest rolling resistance available. Te latest studded product is the Nokian Hakkapeliita 8 SUV with new cryo-silane compound combined with a next-generation winter silica. Tat new tread compound together with a new patern design guarantee excellent wet/ ice grip and the lowest rolling resistance on the market.
MTD:
What is the latest technology for improving fuel efciency in the winter, SUV, UHP and light truck segments?
Gandhi, Bridgestone: We strive to incorporate the latest and greatest components that are lighter, stronger and more technologically advanced to create more fuel efciency. Once any of our new products achieve our stringent threshold for rolling resistance improvement as well as the other criteria without compromising performance characteristics, we utilize our eco-products designation to communicate to the consumer our promise of fuel efciency and quality.
Dollyhigh, Continental: EcoPlus Technology is Continental’s latest technology for improving fuel efciency. EcoPlus Technology consists of specialized polymers and silane in the tread compound. Te specialized polymers cause less energy to be lost to heat, thus improving fuel efciency. We are able to maintain our excellent wet braking and long mileage in this
proprietary tread compound. Energy can be lost in other areas of the tire besides the tread compound so we are focusing on construction technologies.
Davis, Goodyear: Along with key OE ftments on the most fuel-efcient cars, development work continues on various low rolling resistance and environmentally friendly tires with distinctive rubber compounds using special ingredients such as silica, bio-fllers, functionalized polymers and more.
Kopacz, Hankook: Hankook recently announced its technical partnership with Lanxess, the world’s largest synthetic rubber supplier, to develop synthetic rubber for our products. One area of focus will be on developing rubber compounds which provide improved fuel efciency.
Knowles, Michelin: New technologies include advanced silica tread compounds that provide low rolling resistance plus high levels of traction, and optimized carcass construction to keep the tire running cooler.
Morri, Nokian: We use in all our tires more and more silica-based tread compounds. Tat together with new silanes gives great winter properties and lowers rolling resistance.
Carpino, Pirelli: Much of the latest technology is coming in new polymers, silica, nano fllers and special chemicals and new methods of processing these materials. Te new materials are engineered to add the targeted performance required. Te rolling resistance reduction with these new materials must be achieved while maintaining, or even improving, performances in the other areas such as wet/dry stopping distance, tread wear, steering response and snow traction. ■
Associate dealer programs
Continental’s elite retailers go for the Gold
By Bob Ulrich
Mario Crociata, co-owner of Whitey’s Tire Service in Sumter plant gives the company more options in North America. Brooklyn, N.Y., is an elite Continental Gold dealer. “In 2013, we really turned the corner in terms of being able to Tere are many reasons why he likes being associated supply at a level that we expect to, although we still want to with the dealer program. Patriotism is one of them. improve in that area,” he said. “We want to make products here,
At the recent 2014 Continental Tire Gold Dealer Meeting in where we sell them.” Cancun, Mexico, he was outspoken in his support for the new Te new plant is on pace to produce close to 1 million tires Continental consumer tire plant in Sumter, S.C. His allegiance this year. Tat includes the new Continental TrueContact, an had nothing to do with lower prices or fll rates. all-season performance touring tire, and the year-old General
“No, I just like American. I just like that it’s made here,” he said. Altimax RT43. “We’re overdue. Tere have been too many Te TrueContact is an asymmetric years of everything being made overseas tire designed for standard touring and not being made here. vehicles, small CUVs and mini-vans,
“My personal opinion? We have the according to Continental’s product capability, why not make it here? Why do manager, Joe Maher. It features the we have to keep going to other countries? company’s proprietary performance Keep it on our soil. I’d rather pay a few more indicators (for dry, wet and snow dollars for a tire and have it made here.” traction) on the tread and the EcoPlus
He said the volume discounts are wellogo on the sidewall. come and helpful, but being a member of The tire is available in 31 sizes the Gold Retailer Program, and buying ranging from 185/65R15 88T to from Continental Tire the Americas Inc., 235/55R19 101 H. Te T- and H-rated is not about the money. sizes are backed by a 90,000-mile
“To me, it’s about the pride. I like Contilimited tread wear warranty. Te one nental because I can sell a tire with pride. If V-rated size, 215/45R17 87V, is backed somebody comes in with a warranty issue by an 80,000-mile warranty. I can take care of it without a problem When the frst phase of the plant’s because Continental gives us that ‘extra’ construction is completed by the end to help people and to help us. Like if a of 2017, it will be able to produce customer hits a pothole.” 12,600 tires a day. By the end of 2021,
Te family-owned business also is a the facility will have the capacity to member of other dealer programs. “I’m produce nearly 22,000 tires a day, involved in all of them: Michelin (Alliance), or close to 8 million tires annually. Goodyear (Tire & Service Network), “Now we’re ready to grow,” said Bridgestone Firestone (Afliated Retailer Mario Crociata, co-owner of Whitey’s Tire Service in Brooklyn, N.Y., appreciates that Caldwell. “We’ve gotten through Nationwide Network), Pirelli (FasTrack), the company’s new plant in Sumter, S.C., is the challenge of geting capacity on Falken (Fanatic), Toyo (Driven), Kumho producing tires in the U.S. He is pictured with board in order to get sufcient supply (Premium Fuel), Cooper (Medallion), the new Continental TrueContact. to service customers in the right way. Hankook (One) and Yokohama (AdvanWe’ve been working on the product tage). Like Continental, they give you incentives, all the tools portfolio... and it’s in a really good place right now. you need to help you sell. “Us growing is about you growing, and us growing is about
“I always give a customer a choice: A, B or C. You take your you valuing us some more so that you buy more of our tires.” choice. You want something good, you want something in the middle, you want something OK, it’s your call. I know what I Gold enhancements have on my car. It’s the best tire money can buy. If your family’s Plenty of enhancements have been added to the Gold program in the car, you have to have the best tire on there.” for 2014. According to Chris Jenkins, national programs manager, New plant, new tire they are designed “to put more money in your pocket.”
Bill Caldwell, Continental’s vice president of sales and market1. Marketing line rewards. Continental increased the Gold ing, told atendees the opening of the one million-square-foot Reward on its most popular Continental and General lines. For
the Continental CrossContact LX20, ExtremeContact DWS, ExtremeContact DW, ProContact EcoPlus, PureContact and the new TrueContact, the reward was raised to $7 a tire; last year, it ranged from $4 to $6. For the General G-Max AS-03, Grabber, Grabber AT and Grabber HTS, the reward was increased to $5; in 2013, it ranged from $2 to $4 a tire. All dealers continue to be eligible for volume bonuses, which are paid quarterly. 2. ContiLink. Gold dealers now have complete access to all Continental programs through ContiLink, including Engage 360, the company’s online training program; RPM (for Real Performance Motivation), a rewards program that awards points for tire sales; and the improved Gold Calculator. 3. Dealer locator. Continental has added a function to its dealer 2014 upgrades: Dealers can view their marketing points balance and place orders online via the Dealer Dashboard; redeem B C 2 locator tool: turn-by-turn directions from the consumer’s location marketing points for Falken tires; earn Azenis to the dealership, via Google Maps. Express Shipping privileges if they achieve “Fan” status
Te nine-year-old retailer program was “infused” with more Net Driven, Fanatic’s newest strategic partner. than $5 million this year, added Jenkins. consumer sales team member. Te retail dealer must possess a good
What a dealer needs to do to join: N/A. (or beter); and enjoy reduced pricing on Web services from Goodyear Tire & Rubber Co. Other programs Program name: Tire & Service Network.
Associate dealer programs, like the Continental Gold Program, What a dealer needs to do to join: 1) Commit to an annual are created by tire manufacturers. In turn, they are ofered to purchase volume; 2) commit to an advertising program (one of independent retailers either by the manufacturers or through three levels); 3) submit sell-out data; 4) honor the network’s wholesale distributors. American Tire Distributors Inc., for nationwide warranty claims (road hazard and service warranties); example, ofers nine programs covering 16 brands. 5) adhere to the Motorist Assurance Program (MAP) inspections
Here is an alphabetical list of the other associate dealer programs, and communication standards; 6) employ a minimum of one plus the enhancements made to them in 2014 (for a look at the ASE-certifed technician and one “Tire Expert” per location; 7) Continental Gold program, see page 30). support the National Promotional Program; 8) process national Bridgestone Americas Tire Operations LLC 10) submit to a periodic facility review.
Program name: Bridgestone Afliated Retailer Nationwide 2014 upgrades: New elements are dealer websites; exclusive Network. towing and database marketing programs; an improved targeted
What a dealer needs to do to join: A retail dealer must be print advertising program; and special pricing on in-store mernominated for participation in the program by a Bridgestone chandising tools. retail image, meet Bridgestone’s minimum purchase requirements Hankook Tire America Corp. and agree to implement a representative merchandising plan. Program name: One. 2014 upgrades: Bridgestone has added a capital fnancing What a dealer needs to do to join: a signed enrollment form program for equipment and retail showroom upgrade needs with a 24-unit opening order invoice. through its new “Preferred Partner” Curtis Funding. Te company 2014 upgrades: Hankook has added identifcation for each also plans to launch a certifed tire recycling program for network level. Its quarterly minimum units have increased to 60 units members in the fall of 2014. per quarter and 240 units per year. Two premium lines were Cooper Tire & Rubber Co. as a premium line reward. Marketing kits for Level 3 and Level
Program name: Medallion (Cooper), Century (Mastercraf). 4 dealers were upgraded.
account deliveries; 9) display TSN point-of-sale materials; and added — the K120 replaced the K110 and the H457 was added 2014 upgrades: Associate dealers who are part of these programs Kumho Tire U.S.A. Inc. are supported by Cooper in many ways, including marketing Program name: Premium Fuel. insights and assistance, product education, and other tools and What a dealer needs to do to join: Dealers can reach out to techniques to help build their businesses. their distributors or Kumho Tire directly to join the program. Final approval will be determined by Kumho. A 12-unit opening Falken Tire Corp. order of eligible tires is required for enrollment.
Program name: Fanatic. 2014 upgrades: Te Kumho Tire Dealer Portal is available to
What a dealer needs to do to join: Independent retailers and dealers. Live sales tracking also is available for dealers enrolled car dealers can join by placing an order for as few as 24 Falken under a distributor that has EDI capability. New marketing tires with any Fanatic distributor. resources include logos, tire images and rebate information; in
In April, Kumho Tire U.S.A. Inc. enhanced its Premium Fuel Program by offering double payouts for selling the following tire lines: the Ecsta PA31, 4X, LE Sport and LX Platinum; Road Venture APT, MT and AT; and ecoSolus KL21. These tires also are featured in Kumho’s spring rebate promotion.
addition, point-of-purchase and pointof-sale materials were upgraded. Kumho created the Edge comprehensive training program.
Michelin North America Inc.
Program names: Alliance and Open Market.
What a dealer needs to do to join: Alliance associate dealers have to sign an annual agreement at one of four Bib Levels tailored to meet individual dealer needs. Te minimum unit commitment is 500 Michelin and/or BFGoodrich tires for Bib 1. Dealers must be at least 60% retail. 2014 upgrades: In March, Michelin launched the Open Market Associate Program, which serves those dealers who currently sell Michelin and BFGoodrich tires but need additional support to build volume and eventually become Alliance associate dealers. Open Market associates enjoy electronic agreements and eStatements; quarterly cash payments; and access to Michelin Learning Institute training. Te minimum purchase quantity is 100 Michelin and/or BFGoodrich tires per point of sale annually.
Pirelli Tire LLC
Program name: FasTrack.
What a dealer needs to do to join: Only tire retailers can join. Tere is no other requirement. Rewards start with purchases of 75 Pirelli tires per quarter. Applying tire retailers need to be approved for FasTrack through an enrollment process before starting the program. Only purchases from Authorized FasTrack Distributors are included in FasTrack totals. 2014 upgrades: Te FasTrack Secondary Supplier option has been added with Secondary Supplier purchases counting for rate. National Account Deliveries (car dealer deliveries) count for rate. More FasTrack promotions are planned for 2014 compared to 2013. Tere are also more rewards.
Toyo Tire U.S.A. Corp.
Program name: Driven.
What a dealer needs to do to join: Dealers interested in joining the Driven program should contact their local Toyo distributor or Toyo regional sales manager. Te enrollment process includes an online application and a minimum purchase once the application is approved. Once enrolled, Driven dealers can track their purchases and payouts through the Driven website, which is Driven.ToyoTires.com. 2014 upgrades: Toyo has signifcantly increased its payouts since the fourth quarter of 2013 — the payout to associate dealers has doubled for the majority of Toyo’s tires in the program. Te company also is improving its reporting and making major enhancements to its product training this year.
Yokohama Tire Corp.
What a dealer needs to do to join: Te program is open to full-service retail dealers in the U.S. with a store front. To join, dealers need to complete an enrollment form and satisfy the opening order requirement. 2014 upgrades: Yokohama is going to unveil a new phase of Advantage Online soon. Tis new tool will help distributors and associate dealers maximize their earnings potential by monitoring program progress. Also for 2014, Advantage Commercial introduced new reward payout values for cash and travel, making the dealer’s earning potential bigger than ever.
