2017 Facts: Overview What to expect in 2017 - Tire Dealer · PDF fileMTD26 January 2017 2017...
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MTD January 2017
2017 Facts: Overview
What to expect in 2017Despite mixed signals, there is a lot to be optimistic about By Bob Ulrich
Even before the 2016 presidential election was over, there were signs 2017 might be a good one for the automotive industry. According to the NPD Group’s Holiday Purchase
Intentions report, Donald Trump supporters were almost twice as likely to say they planned to spend more on automotive products in 2016 than Hillary Clinton supporters.
What will actually happen when Trump becomes president is unknown, although he clearly favors conservative policies. But there are other sources that will give you insight into what will affect your business in 2017.
Nathan Shipley, director of U.S. automotive industry analysis at the NPD Group, says the combination of declining retail prices in 2016 and a slowdown in miles driven growth are pointing to a decline in retail sales in 2017.
At the Automotive Aftermarket Products Expo’s 2017 Aftermarket Outlook session in November, he shared results from NPD’s 2017 Consumer Outlook Survey with attendees. “Our forecast for 2017 is that our industry is going to shrink a bit. It’s going to decline 1.9%.”
Shipley sees ride-sharing, car-sharing services and autonomous vehicles as “industry disruptors” further down the road.
There also are some positive signs. Through September 2016, vehicle miles driven was on a record pace: close to 3.2 trillion miles, even though the 3% growth rate reportedly decreased as the year wound down. Entering the year, AAA’s average price for a gallon of gasoline was $2.34. That’s higher than last year at this time, but still more than $1 a gallon less than the 2014 average, a year in which total miles driven still outpaced the previous year.
NPD research indicates do-it-for-me oil change service has taken two share points from the do-it-yourself consumer market segment.
Nick Mitchell, senior vice president of research for Northcoast Research Holdings LLC, says the drive toward high-value-added (HVA) tires — those 17 inches and larger — will require more production capacity to serve the U.S. market. “Approximately four new tire plants will be needed over the next five years.”Now trending: CUVs, online sales and you
The Ford F-150 was once again the best-selling vehicle in 2016. However, the fastest growing vehicle segment was the CUV segment.
Vehicle registration data compiled by the R.L. Polk Division of
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Farm $ 512 millionOTR $1.6 billion
Light truck $5.1 billionTruck $6.3 billion
Passenger $24.6 billion
Chart 12016 U.S. REPLACEMENT TIRE SALES
( a $38.1 billion industry)
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27www.moderntiredealer.com
2017 Facts: Overview
IHS Inc. shows crossover utility vehicles now comprise 27% of the total automotive market in the U.S.
Considering the CUV market was virtually non-existent 20 years ago, that is significant, says Mike Antich, editor of Automotive Fleet magazine.
“As a consequence, OEMs are adjusting future product plans to meet this ongoing trend. Likewise, commercial fleet sales are also reflecting an increased acquisition of crossover vehicles. Today, as a percentage, fleet registrations of crossover models such as the Chevrolet Equinox, Ford Edge, Dodge Journey, etc., are beginning to mirror the market share found on the retail side of the business.”
The top 10 CUV tire sizes represent 50% of the total CUV tire population, says Rick Brennan, vice president of marketing for Falken Tire Corp. The most popular is size 225/65R17, followed by 215/70R16, 235/65R17, 235/70R16, 225/60R17 and 235/55R18.
There are 3.7 million more vehicles on the road with size 225/65R17 tires than there were in 2012, he adds.
Another trend is the marketing emphasis on millenials, defined by the U.S. Census Bureau as people born from 1982 to 2000. Their $1 trillion in buying power and affection for both digital technology and social media have led tire manufacturers like Goodyear Tire &
Rubber Co. and Michelin North America Inc. to sell tires directly to consumers from their websites, much to the chagrin of some of their dealers. (Nick Mitchell estimates Goodyear sold 200,000 tires online last year.) Other tire manufacturers are expected to follow suit and sell online as well.
“Millennials will form 75% of the workforce by 2025 and are actively shaping corporate culture and expectations,” says Goodyear.
As for Bridgestone Americas Inc.’s approach to online sales , CEO Gordon Knapp says the company’s online platform is designed to drive traffic to tire dealerships. “We want you to participate in it,” he told dealers at the recent Bridgestone Consumer Tire Business Meeting.
Modern Tire Dealer estimates online sales to consumers represents between 5% and 6% of the 236 million domestic replacement consumer tire market.
Despite the increased competition, independent tire dealers remain the strongest of the tire distribution channels. They represent 61% of all consumer tire retail sales and 78% when wholesale distribution is taken into account. Both are increases from 2015.
Retailers average $1.9 million in sales per outlet, and sell 14 to 15 different brands. Wholesalers average $5.2 million in sales, and offer 11 to 12 different brands to their retail customers.
2006
Rank by No. of dealers Dealers/outlets
1. Michelin 71/3,318
2. Goodyear 64/3,035
3. BFGoodrich 53/2,757
2008
Rank by No. of dealers Dealers/outlets
1. Michelin 74/3,665
2. Goodyear 71/3,525
3. BFGoodrich 61/3,210
4. Dunlop 52/2,969
2010
Rank by No. of dealers Dealers/outlets
1. Michelin 83/4,200
2. Goodyear 71/3,877
3. BFGoodrich 70/3,733
4. Bridgestone 62/2,928
5. Continental 55/3,293
6. Dunlop 52/3,301
2012
Rank by No. of dealers Dealers/outlets
1. Michelin 82/4,455
2. Goodyear 76/4,234
3. BFGoodrich 71/4,065
4. Bridgestone 61/4,409
5. Continental 54/3,312
6. Firestone 54/3,003
7. Yokohama 51/3,784
Chart 2BRANDS LISTED BY 50 OR MORE OF THE MODERN TIRE DEALER 100, 2006-2016
2014
Rank by No. of dealers Dealers/outlets
1. Michelin 84/4,536
2. Goodyear 71/4,277
2. BFGoodrich 71/4,176
4. Bridgestone 67/4,604
5. Continental 62/3,616
6. Firestone 59/3,069
7. Yokohama 54/3,722
8. Cooper 51/3,308
8. General 51/3,176
2016
Rank by No. of dealers Dealers/outlets
1. Michelin 89/5,059
2. BFGoodrich 78/4,870
3. Goodyear 73/4,716
4. Continental 66/3,895
5. Bridgestone 65/4,386
6. Yokohama 60/2,794
6. Firestone 60/2,794
8. General 56/3,582
9. Cooper 55/3,822
10. Uniroyal 52/2.623
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MTD January 2017
2017 Facts: Shipments
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OEReplacement OEReplacement
2013201420152016
Medium/Heavy truck tiresLight truck tiresPassenger tires
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Chart 3U.S. REPLACEMENT AND OE TIRE UNITS SHIPPED, 2013-2016
(in millions; imports included)
Year Units Yr./yr. change2016 19.0 -37.0%2015 30.2 -50.0%2014 60.5 +17.9%2013 51.3 +57.8%2012 32.5 +25.0%2011 26.0 -16.1%2010 31.0 -27.9%
Consumer tire demand varied in 2016T ire dealer inventories were over-flowing to start 2016. Demand took care of that, but a mid-year glut again curtailed shipments a
bit. When the year was over, passenger tire sales were good, but passenger tire shipments were down slightly, from 205.9 million units to 205 million. Original equipment shipments were also down, from 49.1 million to 49 million. Well stocked or not, tire
dealers could sell all the LT tires they wanted: Shipments were up nearly 7%, from 29 million to 31 million units.Tariffs reduced U.S. consumer tire imports from China drastically. As a result, overall imports were down slightly, although other
countries almost picked up the slack. The new tire export leader to the U.S. is Thailand, followed by South Korea, China and Canada.
Chart 5WORLD LEADERS IN NEW TIRE SALES
(fiscal year 2016; in billions of U.S. dollars1)Tire company 2016 2015Bridgestone Corp. $25.8 $26.2Groupe Michelin $21.7 $22.3Goodyear Tire & Rubber Co. $14.8 $15.9Continental AG $11.7 $11.6Pirelli & Cie SpA $6.7 $7.0Sumitomo Rubber Industries Ltd. $5.9 $6.0Hankook Tire Co. $5.8 $5.7Yokohama Rubber Co.2 3 $4.0 $4.1Cheng Shin Rubber Ind. Co. Ltd.4 $3.8 $3.8Cooper Tire & Rubber Co. $2.9 $3.0Toyo Tire & Rubber Co. Ltd. $2.7 $2.7Kumho Tire Co. Inc.2 $2.5 $2.71 The average exchange rates between foreign countries and the U.S. dollar differed from 2015 to 2016 as follows: European euro, up 0.2%; Japanese yen, down 10.2%; Korean won, up 2.4%; Taiwan dollar, up 1.6%.2 In 2013 Yokohama Rubber Co. and Kumho Tire Co. Ltd. signed a memorandum of understanding to share resources and “jointly pursue research and development of tire-related technologies to compete with the Big 3.”3 Yokohama Rubber Co. Ltd. acquired Alliance Tire Group B.V. on July 1, 2016.4 The Cheng Shin Rubber USA Inc. subsidiary does business as Maxxis International.5 Sumitomo Corp. of America is run independently of Sumitomo Rubber Industries.
Chart 6U.S./CANADIAN LEADERS IN NEW TIRE SALES
(fiscal year 2016; in billions of U.S. dollars1)Tire company 2016 2015Bridgestone Americas Inc. $7.7 $7.9Goodyear Tire & Rubber Co. $6.7 $6.9Michelin North America Inc. $6.5 $6.7Continental Tire the Americas LLC $2.9 $2.9Cooper Tire & Rubber Co. $2.1 $2.2Hankook Tire America Corp. $1.6 $1.2Toyo Tire Holdings of America Inc. $1.4 $1.4Yokohama Tire Corp. $1.1 $1.2Sumitomo Rubber Industries Ltd.5 $.8 $.8Pirelli Tire North America Inc. $.5 $.6Kumho Tire USA Inc. $.5 $.6
Year Units Yr./yr. change2009 43.0 -7.5%2008 46.5 +14.8%2007 40.5 +50.0%2006 27.0 +28.0%2005 21.0 +44.0%2004 14.6 +36.0%Source: U.S. government, MTD.
Chart 4U.S. CONSUMER TIRE IMPORTS FROM CHINA
(in millions of units)
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MTD January 2017
2017 Facts: Market share
All mixed up:Price and size will affect shareThe demand for Tier 1 tire brands was often overshadowed by demand for lower-priced Tier 3 brands in 2016, according to Nick
Mitchell, senior vice president of research for Northcoast Research Holdings LLC. Based on results from the monthly Northcoast Research Tire Demand Index, Tier 1 tires finished third behind both Tier 3 and Tier 2 tires six out of the first 10 months of the year.
The ongoing trend toward larger diameter consumer tires also is affecting the mix in the aftermarket. Tire manufacturers are emphasizing these “high-value-added,” or HVA, tires in production; Mitchell predicts annual domestic shipments of HVA passenger and light truck tires will increase by 54.2 million units by the end of 2021.
Chart 102016 U.S. REPLACEMENT
PASSENGER TIRE BRAND SHARES
(based on 205 million units)Brand % of totalGoodyear 13.0%Michelin 9.5%Bridgestone 8.0%Firestone 7.5%Cooper 5.5%BFGoodrich 5.0%Hankook 4.5%Continental 4.0%Yokohama 4.0%Falken 3.0%General 3.0%Toyo 3.0%Kumho 2.5%Multi-Mile 2.5%Nexen 2.5%Pirelli 2.5%Primewell 2.0%Sumitomo 2.0%Uniroyal 2.0%Dunlop 1.5%GT Radial 1.5%Hercules 1.5%Mastercraft 1.5%Nitto 1.5%Big O 1.0%Cordovan 1.0%Delta 1.0%Fuzion 1.0%Kelly 1.0%Sailun 1.0%Sigma 1.0%Others 3.0%All brands listed own at least 1% of the market.
Chart 92016 U.S. REPLACEMENT LT TIRE BRAND SHARES
(based on 31 million units)Brand % of totalGoodyear 12.0%BFGoodrich 8.5%Bridgestone 7.5%Michelin 7.5%Firestone 7.0%Cooper 6.5%General 5.0%Hankook 4.0%Multi-Mile 4.0%Toyo 4.0%Yokohama 4.0%Kumho 2.5%Pirelli 2.5%Dunlop 2.0%Hercules 2.0%Mastercraft 2.0%Uniroyal 2.0%Continental 1.5%Cordovan 1.5%Falken 1.5%Kelly 1.5%Maxxis 1.5%Nexen 1.5%Big O 1.0%Delta 1.0%Eldorado 1.0%GT Radial 1.0%Others 5.0%All brands listed own at least 1% of the market.
Chart 82016 BRANDS LISTED
BY THE MTD 100(total outlets: 6,004)
Rank by numberof dealers Dealers/outlets1. Michelin 89/5,0592. BFGoodrich 78/4,8703. Goodyear 73/4,7164. Continental 66/3,8955. Bridgestone 65/4,3866. Yokohama 60/4,2666. Firestone 60/2,7948. General 56/3,5829. Cooper 55/3,82210. Uniroyal 52/2,62311. Hankook 48/3,93712. Dunlop 43/4,01313. Kelly 41/2,30614. Pirelli 40/4,23515. Toyo 33/2,39516. Kumho 31/2,67717. Nexen 25/1,62518. Falken 24/2,37419. Nitto 22/2,20020. Fuzion 20/922
Chart 7CONSUMER TIRE MARKET SHARE
BREAKDOWN BY BRAND CATEGORY(based on 236 million units)
Note: Due to rounding of percentages, totals may not equal 100%.
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31www.moderntiredealer.com
2017 Facts: Market share
CHRYSLER/FIAT (FCA)
Goodyear 53%
Michelin 15%
Firestone 7%
BFGoodrich 4%
Continental 4%
Bridgestone 3%
Kumho 3%
Pirelli 3%
General 2%
Nexen 2%
Yokohama 2%
Falken 1%
Hankook 1%
FORD
Michelin 24%
Goodyear 21%
Continental 20%
BFGoodrich 9%
Pirelli 8%
General 7%
Hankook 7%
Bridgestone 2%
Cooper 1%
Toyo 1%
GENERAL MOTORS
Goodyear 40%
Michelin 20%
Bridgestone 17%
Firestone 13%
Continental 6%
Hankook 3%
General 1%
BMW
Pirelli 30%
Bridgestone 24%
Continental 22%
Dunlop 20%
Michelin 4%
Chart 11 2016 OE BRAND SHARES (U.S./CANADIAN LIGHT VEHICLES, EXCLUDING IMPORTS)
HONDA
Michelin 42%
Goodyear 32%
Bridgestone 17%
Continental 3%
Firestone 3%
Hankook 2%
Yokohama 1%
HYUNDAI/KIA
Hankook 39%
Kumho 32%
Nexen 15%
Continental 14%
MERCEDES-BENZ
Continental 29%
Pirelli 26%
Dunlop 15%
Bridgestone 11%
Michelin 10%
Goodyear 9%
NISSAN
Continental 34%
Michelin 29%
Goodyear 15%
BFGoodrich 6%
Toyo 6%
Bridgestone 3%
General 2%
Hankook 2%
Dunlop 1%
Falken 1%
Kumho 1%
SUBARU
Bridgestone 67%
Continental 30%
Goodyear 3%
TESLA
Goodyear 49%
Michelin 49%
Pirelli 2%
TOYOTA
Bridgestone 33%
Michelin 24%
Goodyear 12%
BFGoodrich 8%
Dunlop 8%
Firestone 5%
Toyo 3%
Continental 2%
General 2%
Yokohama 2%
Hankook 1%
VOLKSWAGEN
Continental 53%
Hankook 32%
Bridgestone 15%
Chart 13U.S./CANADIAN LIGHT VEHICLE MARKET SHARE
(based on production)
OEM 2016 2015
GM 21.0% 19.0%
Ford 18.6% 18.6%
FCA 14.5% 17.0%
Toyota 13.6% 13.6%
Honda 11.7% 11.7%
Nissan 6.9% 6.6%
Others 13.7% 13.5%
Chart 12U.S./CANADIAN OE
CONSUMER TIRE MARKET SHARE(excluding imported
vehicles)
Goodyear 27.1%
Michelin 21.5%
Bridgestone 13.3%
Continental 11.4%
Hankook 4.9%
Firestone 4.7%
BFGoodrich 3.7%
Pirelli 3.6%
General 2.4%
Kumho 2.3%
Dunlop 2.0%
Toyo 1.2%
Nexen 1.0%
Others 0.9%
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MTD January 2017
2017 Facts: Distribution
Turn, turn, turn, turn your inventoryHow often should tire dealers turn their inventories? No less
than four times a year, says Dennis McCarron, executive director of Dealer Strategic Planning Inc. Scheduled
deliveries could increase that to eight times a year.“Inventory should turn frequently enough so that cash is
always available.”
Chart 16U.S. CONSUMER TIRE RETAIL MARKET SHARE
(based on retail sales)
Distribution channel 2016 2014 2012
Independent tire dealers
61.0% 60.5% 60.5%
Mass merchandisers 12.0% 13.0% 14.0%
Warehouse clubs 9.0% 9.0% 8.5%
Auto dealerships 8.5% 8.0% 7.0%
Tire company-owned stores
7.0% 7.5% 7.5%
Miscellaneous outlets 2.5% 2.0% 2.5%
Chart 15CONSUMER TIRE DISTRIBUTION CHANNEL
MARKET SHAREInitial channel 2016 2014 2012 2010
Independent tire dealers
78.0% 77.0% 77.0% 75.0%
Tire company stores
7.5% 8.0% 8.0% 8.5%
Miscellaneous* 14.5% 15.0% 15.0% 16.0%
* Miscellaneous includes mass merchandisers, warehouse clubs, automobile dealerships, auto parts chains, muffler shops and oil com-panies/service stations.
Chart 14COMPANY-OWNED STORES IN THE U.S.
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201620142012201020082006200420022000
Chart 17MARKET SHARE: AUTO DEALERSHIPS VS. MASS MARCHANDISERS
(based on retail sales)
Chart 18U.S. NEW-CAR FRANCHISES
Year Number
2016 16,680
2015 16,545
2014 16,396
2012 17,545
2011 17,700
2010 18,460
2009 20,010
2008 20,770
2007 21,200
2006 21,495
2005 21,640
Source: National Automobile Dealers Association
Actual store numbersBridgestone 2,200Goodyear 600Nokian/Vianor 76
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MTD January 2017
2017 Facts: Commercial
Low-cost imports affected new and retreaded tires I n 2016, replacement truck tire shipments were up 2.2%, to 18.4
million units. Some of those were low-cost imports, which adversely affected the number of retreaded truck tires sold. As the year was
ending, however, preliminary tariffs imposed by the U.S. Department of Commerce were helping retreaders.
According to “Profile of the U.S. Commercial Vehicle Market” by MacKay & Co. and Heavy Duty Trucking magazine, the Class 8 vehicle universe increased 5.8% from 2011 through a near-record 2015, which helps explain the increase in replacement truck tire shipments. Class 8 vehicle registrations were down in 2016, however, which is why OE truck tire shipments were down 14.2%.
The average sales margin for independent truck and wholesale truck tire dealers was 15% and 9.5%, respectively. The margin on commercial light truck tires was 19.1%.
Chart 212017 U.S. REPLACE-
MENT MEDIUM/HEAVY TRUCK TIRE
BRAND SHARES(based on 18.4 million units)
Brand 2017
Bridgestone 16.0%
Michelin 16.0%
Goodyear 11.5%
Yokohama 8.5%
Firestone 7.0%
Continental 6.0%
Hankook 3.5%
Double Coin 3.5%
Hercules 3.0%
Roadmaster 2.5%
Sailun 2.5%
Aeolus 2.0%
General 2.0%
Toyo 2.0%
Dynatrac 2.0%
BFGoodrich 1.5%
Dayton 1.5%
Duraturn 1.0%
Dynacargo 1.0%
Sumitomo 1.0%
Gladiator 1.0%
Kelly 1.0%
Kumho 1.0%
Samson 1.0%
Westlake 1.0%
Others 4.0%
All brands listed own at least 1% of the market.
0%
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20%
30%
40%
50%
60%
Local tire outlet 52%
Tire mfr. through dealer 28%
Tire mfr. direct 12%
Other 1%
'Truck stop 1%
Emergency road service 1%
'Local retread shop 5%
Chart 23COMMERCIAL TIRE DISTRIBUTION CHANNEL MARKET SHARE
(new and retreaded truck tires)
Source: MacKay & Co.,www.mackayco.com
Chart 19U.S. RETREADING, 2016
Truck tire units 14.5 million
Sales (with casings) $3.2 billion
Average casing price $63.84
% precure units 94%
Average sales margin 21.6%
No. of plants, truck tires 650
No. of plants, OTR tires 18
Chart 22U.S. TRUCK TIRE
IMPORTSFROM CHINA
(in millions of units)
Year Units Yr./yr. change
2016 7.8 -17.0%
2015 9.4 +14.6%
2014 8.2 +30.1%
2013 6.3 +0.1%
2012 6.3 +13.5%
2011 5.5 +37.5%
Source: U.S. government, MTD figures.
Chart 20 2016 U.S. MARKET SHARE, RETREADED TRUCK TIRES
(based on 14.5 million units)
Bridgestone (Bandag)
43.5%
Goodyear 23.0%
Michelin/Oliver 23.0%
Marangoni 5.0%
Continental 2.0%
Others 3.5%Note: Due to rounding of percentages, totals for some charts may not equal 100%.
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MTD January 2017
2017 Facts: Commercial
Fighting forsmall farm tiremarket shareL ook for added competitiveness in the
replacement front and implement farm tire market in the future. “I think that’s a
developing market, especially on the radial side,” says Steve Campanella, business intelligence manager for Alliance Tire Americas Inc. “It’s an opportunistic area.”
Bill Haney, off-highway tire manager for Apollo Vredestein Tyres North America Inc., agrees with the radialization trend in the replacement small farm tire segment.
“The market made a jump from U.S. standard bias tires to improved premium bias and implement flotation bias tires, and is now making the next jump to radials in these segments with good results.”
Chart 252016 U.S. REPLACEMENT
FARM TIRE MARKET SHARESRADIAL REAR, REPLACEMENT
2016 shipments: 289,100
Firestone 31.0%
BKT 23.0%
Michelin 17.5%
Goodyear 12.5%
Alliance* 7.0%
Titan 4.0%
Trelleborg 2.0%
Mitas 1.5%
Others 1.5%
Total 100.0%
BIAS REAR, REPLACEMENT2016 shipments: 464,000
BKT 38.0%
Firestone 24.0%
Alliance* 11.0%
Goodyear 7.0%
Harvest King 5.0%
Titan 4.5%
Trelleborg 2.5%
Akuret 2.0%
Carlisle 2.0%
American Farmer 1.0%
Others 3.0%
Total: 100.0%
SMALL FARM, REPLACEMENT2016 shipments: 1.22 million
Firestone 22.0%
BKT 17.0%
Goodyear 15.0%
Titan 13.0%
Carlisle 12.0%
Harvest King 8.0%
Akuret 4.0%
Alliance* 3.0%
Trelleborg 2.5%
American Farmer 1.0%
Others 2.5%
Total 100.0%
Source: Modern Tire Dealer* Yokohama Rubber Co. Ltd. purchased Alliance Tire Group B.V on July 1, 2016.
Chart 262016 U.S. OE FARM TIRE
MARKET SHARES RADIAL REAR, OE
2016 shipments: 168,000 Firestone 40.0%Goodyear 32.0%Michelin 14.0%Titan 5.0%BKT 3.0%Mitas 2.0%Trelleborg 2.0%Others 2.0%Total 100.0%
BIAS REAR, OE2016 shipments: 277,000
Titan 35.0%Firestone 30.0%Goodyear 25.0%Alliance* 6.0%BKT 1.0%Trelleborg 1.0%Others 2.0%Total 100.0%
SMALL FARM, OE2016 shipments: 263,000
Goodyear 32.5%Titan 20.5%Firestone 15.0%Carlisle 12.0%BKT 7.0%Alliance* 6.5%American Farmer 2.0%Trelleborg 1.5%Mitas 1.0%Others 2.0%Total 100.0%
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60%
Replacement
OE
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Chart 24REAR FARM TIRE RADIALIZATION TRENDS
Source: Modern Tire Dealer
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MTD January 2017
2017 Facts: Pricing and sizes
Large rim diameterstake overL arge rim diameters are the new normal for passen-
ger tire sizes. Defined as 17-inch sizes and above, they represent 56.4% of all 351 sizes. They also
are known as high-value-added tires, or HVA for short. Wal-Mart Stores Inc. still advertises smaller sizes. For
example, Walmart has been offering the Goodyear Eagle RS-A in size 195/60R15, still the ninth most popular size, for at least five years. In that time, the price has steadily dropped from $65 in 2011 to $54 in 2016.
Its $37.50 Douglas Xtra-Trac II in size 155/80R13 is no longer available, but the size has not disappeared. It is now known as the Douglas All-Season ($40.91) on walmart.com. Eight other lines also are available in size 155/80R13, ranging from the Evergreen EH22 ($28.70) to the Cooper Trendsetter SE ($70.95).
Chart 29 TOP U.S. REPLACEMENT PASSENGER TIRE SIZES,
20161. 205/55R16 2. 215/60R163. 195/65R15 4. 215/55R175. 265/70R17 6. 225/65R177. 225/60R16 8. 225/50R179. 195/60R15 10. 235/70R16
Source: RMA, MTD
Chart 30 TOP U.S. REPLACEMENT LT
TIRE SIZES, 20161. LT265/70R17 2. LT245/75R163. LT265/75R16 4. LT225/75R165. LT235/85R16 6. LT275/70R187. LT285/70R17 8. LT245/75R179. LT285/75R16 10. LT215/85R16
Source: RMA, MTD
10
15
20
25Prices in dollars
20162015201420132012201120102009200820072006
Chart 31 ADVERTISED OIL CHANGE PRICES
Source: Modern Tire Dealer statistics
Chart 27NEW P-METRIC AND LT TIRE SIZES/SKUS IN 2017
(not counting spares or 17 additional load ranges added to existing LT sizes)
P255/80R17 P275/45R18 P325/35R18
LT355/40R26 LRF 35x11.50R17LT LRE 33x11.50R20LT LRE
37x13.50R26LT LRE 36x15.50R20LT LRE 40x15.50R26LT LRE
Source: Tire and Rim Association
Chart 322016 AVERAGE ADVERTISED TIRE PRICES
(in the U.S.)
Size Major brand Low-cost Overall
205/55R16 $137.23 $77.14 $123.98
215/55R17 $153.27 $88.39 $136.87
215/60R16 $126.89 $78.15 $112.15
235/75R15 $137.27 $100.10 $123.20
275/65R18 $230.62 $211.30 $221.06
LT225/75R16 $172.60 $123.74 $155.88
LT245/75R16 $180.39 $127.30 $162.92
LT245/75R17 $213.73 $150.61 $195.81
31x10.50R15 $182.17 $139.29 $167.01Source for Charts 32-34: Tire Intelligence LLC, www.tire-intelligence.com
Chart 33ADVERTISED PRICING BREAKDOWN,
215/55R17Speed Major Low Cost Radial Overall
V-rated $157.60 $90.59 $140.87
H-rated $151.75 $100.43 $146.44
T-rated $139.78 $106.86 $132.24
$19.54
12-inch: 1
13-inch: 13
14-inch: 26
15-inch: 56
16-inch 57
17-inch: 59
18-inch: 67
19-inch: 25
20-inch: 29
21-inch: 2
22-inch: 7
23-inch: 2
24-inch: 6
26-inch: 1
Source: Tire & Rim Association
Chart 28AVAILABLE SIZES BY RIM DIAMETER
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MTD January 2017
2015 OE P-metric/metric
Size % of total
P215/55R17 4.1%
P265/70R17 3.4%
P215/60R16 3.2%
225/65R17 2.8%
215/55R17 2.8%
2014 OE P-metric/metric
Size % of total
P215/55R17 5.0%
P215/60R16 3.4%
215/55R17 2.7%
P265/70R17 2.7%
P275/65R18 2.6%
2013 OE P-metric/metric
Size % of total
P215/55R17 6.1%
P265/70R17 4.0%
P275/55R20 3.2%
P275/65R18 3.1%
P215/60R16 3.1%
Chart 36PROJECTED DEMAND FOR THE TOP 7 MASS MARKET FORD F-150 SIZES ON 2012-2014
MODELS(includes 2WD and 4WD)
Top sizes Estimated unit sales, 2017
235/75R17 260,312
245/75R17 70,530
265/70R17 6,615,436
255/65R17 659,592
275/65R18 1,071,650
265/60R18 1,176,025
275/55R20 2,502,360
Combined, these seven sizes, which also can be found on other vehicles, total 12.3 million tires, or close to 5% of the projected replacement con-sumer tire shipments in 2017.
Chart 34PRICE POINT BREAKDOWN OF SIZE 265/70R17 BY REGION
Region OPP Value Better Best Winter Average
East North Central $111.81 $141.96 $168.60 $177.55 $145.21 $164.84
East South Central
$114.85 $126.80 $160.83 $178.30 $146.18 $159.37
Middle Atlantic $122.00 $137.03 $174.31 $185.61 $144.14 $170.72
Mountain $110.24 $142.29 $151.72 $168.60 $157.11 $153.76
New England $134.04 $157.54 $180.74 $194.82 $134.39 $179.33
Pacific $105.11 $164.89 $158.81 $175.75 $175.40 $164.73
South Atlantic $118.40 $134.98 $170.31 $180.28 $146.89 $166.20
West North Central
$114.34 $107.94 $148.12 $163.11 $147.53 $146.51
West South Central
$108.20 $134.17 $163.44 $176.09 $160.64 $161.19
Nationwide $115.36 $136.00 $167.37 $178.87 $150.35 $164.45
Source for Charts 34 and 36: The Fitment Group, www.fitmentgroup.com
Ford F-150
size and price breakdown
T he Ford F-150 pickup has been the most popular vehicle in the U.S. for 35 consecutive years. That is why you
can expect to see a lot of 2012 and 2013 models — maybe even heavily used 2014 models — in your dealership in 2017.
There are seven mass market original equipment sizes on all Ford F-150 models from 2012-2014. That includes the Super Cab and the Super Crew.
Here are the estimated shipments in those sizes for 2017, courtesy of The Fitment Group (see Chart 36). In the spirit of inventory man-agement, we also broke down the most popular size, 265/70R17, into five price points in nine regions (see Chart 34).
Not surprisingly, two of the sizes, 265/70R17 and 275/65R18, were among the seven most popular OE sizes in all three model years. And they are also OE options on the 2015-2016 models.2012 OE P-metric/metric
Size % of total
P215/55R17 6.1%
P265/70R17 4.4%
P215/60R16 3.8%
P275/65R18 3.4%
P205/65R16 3.1%
2015 OE light truck (LT)
Size % of total
LT245/75R17 18.6%
LT225/75R16 9.8%
LT265/70R18 9.7%
LT275/70R18 7.9%
LT245/75R16 7.6%
2014 OE light truck (LT)
Size % of total
LT245/75R17 21.7%
LT245/75R16 12.0%
LT225/75R16 11.4%
LT265/70R18 10.3%
LT275/65R18 7.8%
2013 OE light truck (LT)
Size % of total
LT245/75R17 21.9%
LT245/75R16 14.0%
LT225/75R16 11.3%
LT265/70R17 8.9%
LT265/75R18 8.1%
2012 OE light truck (LT)
Size % of total
LT245/75R17 22.1%
LT245/75R16 14.7%
LT225/75R16 11.1%
LT265/70R18 8.1%
LT265/70R17 7.7%
LT245/75R17 has been the No. 1 OE size from 2011-2015. The second most popular size, LT245/75R16, was No. 1 from 1993-2010.Source: Rubber Manufactur-ers Association
Chart 35MOST POPULAR DOMESTIC OE PASSENGER AND LT TIRE SIZES
2017 Facts: Pricing and sizes
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MTD January 2017
2017 Facts: Plant capacities
Wow, a 4.6% rise in capacity!Y early tire capacity, not produc-
tion, in North America totaled 324.5 million tires in 2016, a
whopping 4.6% increase over 2015. And there is more to come; at least 22.3 mil-lion more tires will be available by 2023. The majority of the increases were the result of new plants and facility upgrades in the U.S. and Mexico. U.S. capacity rose nearly 5%. None of the four new plants are unionized. Since 2000, 10 consumer tire plants in the U.S. have been closed. Eight of them were union facilities:
• Goodyear: Union City, Tenn. (2011), Tyler, Texas (2008), and Huntsville, Ala. (2003).
• Continental: Charlotte, N.C. (2006), and Mayfield, Ky. (2005).
• Michelin: Opelika, Ala. (2009), and Reno, Nev. (2002).
• Bridgestone: Oklahoma City, Okla. (2006).
• Cooper: Albany, Ga. (2009).• Pirelli: Hanford, Calif. (2001).
The plants produced an estimated 263,000 passenger and light truck tires a day.
Chart 37NORTH AMERICAN PLANT CAPACITIES as of Jan. 1, 2017 (in thousands of units)
Plant location/Year constructed
Non-union ISO QS
Pas-senger
per day:
Light truck per day:
Truck per day:
Others per day: Total
Bridgestone Americas Inc.Aiken, S.C., 2013 x 0.0 0.0 0.0 0.03 0.03La Vergne, Tenn., 1972 x x 0.0 0.0 6.2 0.0 6.2Warren County, Tenn., 1990 x x 0.0 0.0 9.0 0.0 9.0Bloomington, Ill., 1965 x x 0.0 0.0 0.0 0.29 0.29Des Moines, Iowa, 1945 x x 0.0 0.0 0.0 4.57 4.57Wilson City, N.C., 1974 x x x 32.0 0.0 0.0 0.0 32.0Aiken, S.C., 1999 x x x 25.5 10.2 0.0 0.0 35.7Joliette, Quebec, 1966 x x 9.3 7.2 0.0 0.0 16.5Monterrey, Mexico, 2007 x 8.0 0.0 0.0 0.0 8.0Cuernavaca, Mexico, 1980 x x 11.0 4.4 0.0 0.0 15.4Total: 85.8 21.8 15.2 4.89 127.69
American Industrial Partners (formerly Carlisle Tire & Wheel Co.)Jackson, Tenn., 2009 x 0.0 0.0 0.0 26.0 26.0Clinton, Tenn. (Dico), 1974 x x 0.0 0.0 0.0 15.0 15.0Total: 0.0 0.0 0.0 41.0 41.0
Continental Tire the Americas LLCSumter, S.C., 2013 x 7.4 2.1 0.0 0.0 9.5Mount Vernon, Ill., 1973 x x x 29.0 4.0 8.0 0.0 41.0Total: 36.4 6.1 8.0 0.0 50.5
Cooper Tire & Rubber Co.Findlay, Ohio, 1917 x 7.0 16.0 0.0 0.0 23.0Texarkana, Ark., 1964 x 24.0 8.0 0.0 0.0 32.0Tupelo, Miss., 1984/1960 x x 42.0 0.0 0.0 0.0 42.0Total: 73.0 24.0 0.0 0.0 97.0
Goodyear Tire & Rubber Co.Danville, Va., 1966 x x 0.0 0.0 11.0 2.0 13.0Fayetteville, N.C., 1969 x x 30.5 10.5 0.0 0.0 41.0Gadsden, Ala., 1928 x x 14.5 11.5 0.0 0.0 26.0Lawton, Okla., 1978 x x x 64.0 0.0 0.0 0.0 64.0Topeka, Kan., 1945 x x 0.0 0.5 5.5 0.1 6.1Medicine Hat, Alberta, 1960 x x 0.0 0.0 0.0 13.0 13.0Napanee, Ontario, 1990 x x x 19.0 0.0 0.0 0.0 19.0Total: 128.0 22.5 16.5 15.1 182.1
GTY (General/Yokohama)Mount Vernon, Ill., 1988 x x x 0.0 0.0 3.9 0.0 3.9
Hankook Tire America Corp.Clarksville, Tenn., 2016 x 10.0 5.0 0.0 0.0 15.0
Kumho Tire Co. Inc.Macon, Ga., 2015 x 8.0 3.0 0.0 0.0 11.0
Michelin North America Inc.Ardmore, Okla., 1969 x x x 40.5 3.5 0.0 0.0 44.0Dothan, Ala., 1979 x x 1.2 4.3 0.0 0.0 5.5Fort Wayne, Ind., 1961 21.0 9.5 0.0 0.0 30.5Greenville, S.C., 1975 x x 28.0 0.0 0.0 0.0 28.0Greenville, S.C. (C3M), 1997 x x x 7.0 0.0 0.0 0.0 7.0Greenville, S.C. (Tweel), 2014 x 0.0 0.0 0.0 0.07 0.07Lexington, S.C., 1981 x x 19.0 5.0 0.0 0.0 24.0Lexington, S.C., 1998 x x 0.0 0.0 0.0 0.1 0.1
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43www.moderntiredealer.com
2017 Facts: Plant capacities
Goodyear Tire & Rubber Co.New plant: San Luis Potosi, MexicoCost: $550 millionCompletion date: Not specifiedAnnual capacity: 6 million
Giti Tire (USA) Ltd.New plant: Chester County, S.C.Cost: $560 millionCompletion date: Not specifiedAnnual capacity: 5 million
Michelin North AmericaNew plant: Leon, MexicoCost: $510 millionCompletion date: 4Q 2018Annual capacity: 4-5 million
Pirelli Tire North AmericaNew plant: Silao, MexicoCost: $200 millionCompletion date: By 2019Annual capacity: 2.5 million
Sumitomo Rubber USAPlant: Tonawanda, N.Y.Cost: $87 millionCompletion date: By 2020Annual addl. capacity: 1.8 million
Bridgestone AmericasPlant: Wilson, N.C.Cost: $344 millionCompletion date: By 2018Annual addl. capacity: 1 million
Plant: Joliette, QuebecCost: $250 millionCompletion date: By 2023Annual addl. capacity: 1 million
Added capacity: up to 22.3 million
Plant location/Year constructed
Non-union ISO QS
Pas-senger
per day:
Light truck per day:
Truck per day:
Others per day: Total
Spartanburg, S.C., 1978 x x 0.0 0.0 7.0 0.0 7.0Starr, S.C., 2013 x 0.0 0.0 0.0 0.01 0.01Tuscaloosa, Ala., 1945 x 23.0 7.0 0.0 0.0 30.0Bridgewater, Nova Scotia, Canada, 1973 x x 11.0 3.0 0.0 0.0 14.0Granton, Nova Scotia, 1971 x x 2.0 0.0 0.0 0.0 2.0Waterville, Nova Scotia, 1982 x x 0.0 0.0 4.5 0.5 5.0Queretaro, Mexico x 6.0 0.0 0.0 0.0 6.0Total: 158.7 32.3 11.5 0.68 203.18
Pirelli Tire North America Inc.Rome, Ga., (MIRS), 2002 x x 1.2 0.5 0.0 0.0 1.7Guanajuato, Mexico, 2011 x 8.0 3.0 0.0 0.0 11.0Total: 9.2 3.5 0.0 0.0 12.7
Specialty Tires of America Inc.Indiana, Pa., 1915 x 0.92 0.18 0.05 2.35 3.5Unicoi, Tenn., 1997 x 0.3 0.5 0.05 .25 1.1Total: 1.22 0.68 0.1 2.6 4.6
Sumitomo Rubber USA LLC (Sumitomo Rubber North America Inc.)Tonawanda, N.Y., 1923 x 3.0 2.0 2.3 5.0 12.3
Titan Tire Corp.Bryan, Ohio, 1967 x x 0.0 0.0 0.0 0.33 0.33Des Moines, Iowa, 1943 x 0.0 0.0 0.0 11.25 11.25Freeport, Ill., 1964 x x 0.0 0.0 0.0 8.1 8.1Total: 0.0 0.0 0.0 19.68 19.68
Toyo Tire North America Manufacturing Inc.White, Ga., 2005 x x 8.8 8.8 0.0 0.0 17.6
Trelleborg Wheel SystemsSpartanburg, S.C., 2015 x 0.0 0.0 0.0 0.06 0.06Charles City, Iowa, 2012 0.0 0.0 0.0 0.5 0.5Total: 0.0 0.0 0.0 0.56 0.56
Yokohama Tire Corp.West Point, Miss., 2015 x x x 0.0 0.0 2.0 0.0 2.0Salem, Va., 1968 25.7 1.1 0.0 0.0 26.8Total: 25.7 1.1 2.0 0.0 28.8
Grupo Carso/Euzkadi (Continental AG)San Luis Potosi, Mexico 15.0 5.0 0.0 0.0 20.0
JK Tyre & Industries (formerly CIA Hulera Tornel)Mexico City, Mexico 0.0 1.0 1.0 0.14 2.14Tultitlan, Mexico 7.0 1.5 0.5 0.0 9.0Tacuba, Mexico 8.0 2.5 0.0 0.0 10.5Total: 15.0 5.0 1.5 0.14 21.64
Corporacion de Occidente SA de CV (Cooper Tire)Guadalajara, Mexico, 2005 x x x 10.0 7.2 2.8 0.0 20.0
U.S. totals: 473.52 113.18 55.0 76.01 717.71Canadian totals: 41.3 10.2 4.5 13.5 69.5Mexican totals: 73.0 24.6 4.3 0.14 102.04TOTAL: 587.82 147.98 63.8 89.65 889.25
35Non-union
25Union
Chart 38PLANT UNIONIZATION
BREAKDOWN
Chart 39ADDITIONAL CONSUMER
TIRE CAPACITYTARGET DATES
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MTD January 2017
2017 Facts: Auto service
Chart 40SERVICE WORK: AVERAGE
ANNUAL SALES PER SERVICE PER DEALER
Service Average annual sales
Visibility (wipers) $10,037
Electronic diagnosis $21,196
Ignition and spark $22,073
Exhaust systems $28,320
Cooling system $28,920
TPMS $29,287
Chemicals $30,210
Bearings/seals $47,669
Batteries/electrical $50,246
Oil and lubrication $60,651
Engine repair $61,426
Shocks/struts $62,379
Alignment $69,509
Air conditioning $83,744
Chassis/suspension $126,459
Brakes $151,768
Mount/balance $170,280
Source: MTD research
Chart 42SERVICE WORK: AVERAGE ANNUAL PROFIT PER SERVICE PER DEALER
Service Average annual profit
Visibility (wipers) $4,015TPMS $12,008Electronic diagnosis $12,718Cooling system $13,882Ignition and spark $13,906Chemicals $14,803Exhaust systems $15,010Batteries/electrical $17,586Oil and lubrication $21,228Bearings/seals $22,881Shocks/struts $28,071Engine repair $38,698Alignment $47,266Air conditioning $47,734Chassis/suspension $64,494Brakes $80,437Mount/ balance $105,574Source: MTD research
Where dealers find dollars and profitsThe latest MTD research shows automotive service sales, on
average, generate 45% of total sales and 44% of total earnings for independent tire dealers. The most revenue comes from mounting
and balancing, brake systems service and chassis and suspension work, which bring in $4.8 billion, $4.2 billion and $3.3 billion, respectively, of all independent tire dealer sales. Margins of 68% make alignments the most profitable service category, followed by the engine repair/diagnostics and ignition and spark plug categories, both with margins of 63%. Dealers report margins of 62% for mounting and balancing services.
0
50K
100K
150K
175K
Annual profit
Annual sales
Dol
lars
Mount/balance
Brake system
Chassis/suspension
Air conditioning
Alignment
Shocks/struts
Engine repair
Lubrication
Electric system
Bearings/seals
Chemicals
TPMS
Cooling system
Exhaust system
Ignition system
Diagnosis
Wipers
Chart 41SERVICE WORK AVERAGE ANNUAL SALES AND PROFIT
PER SERVICE PER DEALER
44