Background on Passenger Tires
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Like makers of many other consumer goods, tire manufacturers seek to distinguish their products from those of competitors through branding. Most sell under heavily advertised manufacturer (or national “flag”) brands as well as associate and specialty brands, some acquired through mergers and acquisitions of well-known tire companies. Goodyear, for instance, sells under its own name and several other nationally recognized brands; it owns Dunlop (in the United States) and Kelly. Likewise, Michelin has acquired the BFGoodrich and Uniroyal brands in the United States, and Bridgestone also sells tires under the Firestone and Dayton brand names. These nine brands accounted for 51.6 percent of the replacement tire consumer market in 2005 (Modern Tire Dealer 2006, 39). Most major tire companies supply both the OE and the replacement markets. They typically use their flag brands for the former and a combination of flag and associate brands for the latter. An exception to this practice is Cooper Tire, which concentrates on serving the replacement market. It sells tires under its own brand name and under associate brands such as Starfire, Dean, and Mastercraft. In addition, most tire makers supply replacement tires to retailers selling under private labels, such as the Sears Guardsman, Wal-Mart Douglas, and Pep Boys Futura. In these cases, the retailer creates and controls the brand, often contracting for supplies from one or more tire makers offering the lowest price or other valued attributes such as supply reliability.
OE Market OE tires outfitted on a specific vehicle are usually developed and supplied by one or two preselected tire makers. From the standpoint of the automobile manufacturer, it can sometimes be advantageous to engage at least two OE tire suppliers to ensure an ample and timely supply and to foster competition. As part of the development process, experimental tires are usually submitted to the automobile manufacturer by the tire maker, along with various test measurements. The tires are evaluated, and further refinements are made as needed. Most automobile companies have in-house tire testing facilities and expertise to assist in tire evaluation and specification. OE tires are usually specified in both quantitative and qualitative terms. The OE specification sheet will define the tire’s physical dimensions, such as mass, width, and diameter within the parameters of tire