Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/114173
feature If the future were any brighter for LT tire sales, you'd need to wear shades Pent-up demand and new vehicle sales add shine to the market By Lori L. Mavrigian B ecause of the dicey economic conditions of the recent past, many customers held of on tire purchases. Tis caused a not unexpected small decrease in the replacement market for light truck tire units in 2012 when compared with 2011 (28.3 million vs. 28.6 million units shipped) according to the MTD January 2013 Facts Issue. However, there continued to be increased demand at the original equipment level (4.2 million vs. 4.1 million in 2011). Tis was due to an increase in the sale of new SUVs and light trucks last year, which is likely to continue in 2013. Paul Taylor, chief economist of the National Automobile Dealers Association (NADA), recently said, "Old cars on the nation's roads and available credit assure a good year for car sales as the economy continues to make modest but positive progress in overall growth." Here are several of the key factors that he feels will support stronger auto sales in 2013. luxury SUVs, according to www.motorintelligence.com. Te largest growth was in the cross-over category, which was up by 15.2%. Te only exception in this segment was the minivan, which showed a 5.2% decrease. One thing that could de-rail the positive forecast for light vehicle sales is rising gas prices, Polk noted. Tis could have an impact "on the mix of vehicles if not overall demand." One thing is clear: You add pent-up demand due to the recession with the continued popularity of this market segment, and the future looks bright for light truck tire sales down the road. 1) Pent-up demand. He notes that the average age of vehicles on the road is a record 11.1 years for cars and 10.4 years for light-duty trucks. Tis shows a lot of pent-up demand Dealer perspective Kaufman Tire Inc. in Seville, Ohio, is one of the company's for new vehicles, which should help propel sales this year. 55 retail and commercial locations located in Ohio, Georgia 2) Available credit. Tere are low interest rates available for and Florida. Te company auto loans to help motivate consumers to fnance e also has 14 wholesale disa new vehicle purchase in 2013, Taylor said. U.S. light truck tire tribution centers in seven 3) Buying options. More new vehicle choices are e states and an e-commerce units shipped available at dealerships, with greater consumer r site, Tread Depot. It is tied (in millions) appeal in design and fuel efciency. for 17th on the Modern Tire 4) More job security. Modestly declining unemployYear Replacement OE Dealer 100 list of largest ment is leading to more consumer confdence. . 2012 28.3 4.2 independent tire chains in "Consumers now expect to avoid layofs." 2011 28.6 4.1 the United States. It sells a 5) New vs. used. Tere is a used-vehicle shortage e 2010 28.0 3.5 wide variety of light truck at the dealerships due to the recent recession. 2009 26.0 2.6 tires, including Goodyear, 2008 30.0 3.0 Industry analysts at R.L. Polk & Co. forecast that t Kumho, Michelin, Pirelli, Source: Modern Tire Dealer 2013 U.S. light vehicle registrations will total 15.3 3 Cooper, General, Toyo and million units, up 7% from 14.4 million in 2012. And d Continental. they see new registrations reaching 15.8 million in n Jim Phillips, commercial 2014 and 16.2 million in 2015. and retail district manager, said the most important feature his Tese predictions seem to be on target. According to Wards- customers are looking today for in a light truck tire is value. Auto (www.wardsauto.com), light vehicle sales for the frst "We average it out as a cost per mile," he said. Tat helps two months of this year totaled 2.23 million units, an 8.5% illustrate to his customers what they are geting for their money. improvement over a year ago. "If it's a 60,000-mile tire, you divide the cost out by the miles, Drilling down a litle further, the latest year-to-date sales and we tell them that over the course of those miles, this is fgures for light-duty trucks showed growth in almost all what you're paying per mile. categories — from pickups and cross-overs to small, large and "If you break it down that way, customers understand the 38 MTD March 2013