Truck Tire Market In Full Expansion
The new Uniroyal commercial truck tire line made its Canadian debut last April at the 2015 ExpoCam truck exhibit in Montreal.
The Uniroyal brand has always positioned itself as a maker of high-quality, affordable light duty truck and passenger vehicle tires. The American tire manufacturer has decided to branch out into the truck tire market with the introduction of the Uniroyal truck tire line. Until recently, Uniroyal touted itself as a ʺTier 3ʺ affordable-quality tire behind stablemates Michelin and BF Goodrich. When asked which of its competitors it intends to challenge by journalists covering the event, ʺ Chinese brands ʺ was the response from company officials.
When TireNews was launched ten years ago, there was a lot of talk about Chinese brands, but none were ever actually sighted… We thought this sleeping giant was snoozing, but as we all know now, it has risen.
China has one of the world’s largest populations. As it continues to open up to the rest of the world, especially on the commercial front, the ramifications have finally made their way to the commercial vehicle tire market, amongst others. China has become the biggest producer of motor vehicles on the planet, with more than 60 registered vehicle manufacturers, including several truck manufacturers. Understandably, the demand for tires is huge. At this moment, there are over 110 tire manufacturing facilities in China with production capacity of more than 120 million commercial vehicle tires annually. These 2013 figures are from the China Manufacturers Alliance. According to tire industry publication Tire Business, worldwide demand for these types of tires is estimated at 144 million units, which is hard to prove, as many tire manufacturers refuse to divulge their annual production numbers.
As we all know, truck tires are segmented into three tiers: 1, 2 and 3. Tier 1 tires are produced by stalwart brands Bridgestone, Goodyear and Michelin, which cover 60 to 65% of the radial-ply truck tire market. Tier 2 brands include BF Goodrich, Continental, Dunlop, Firestone, General, Toyo, Kumho, Hankook and a few others, which occupy approximately 30% of this market, with several of these brands currently targeting the Tier 1 market. Lately, the Tier 3 market has been expanding at tremendous rate. This market segment includes tradespeople and local delivery businesses, and is the main battleground where less visible brands such as Cooper Tire and others must compete with newcomers such as Aeolus, Double Coin, Sailun and at least twenty others that hail mostly from China, and, as of now, Uniroyal’s new Tier 3 truck line.
Lately, this market has now fallen into the hands of several Chinese manufacturers including Aeolius, Double Coin, Linglong, Trangle, Primewell, Westlake, Long March, Runway and a host of others. These brands are purchased mostly by users who place little or no importance on retreading, as their businesses do not require that they travel great distances on a yearly basis. The initial low selling price of Tier 3 tires becomes a huge factor at time of purchase.
Higher Quality, Higher Sale Price.
When Chinese brands first made their way into our market, we had huge suspicions as to their quality. American officials also had their eye on Chinese tires, which were often priced lower than retreads, while the price of steering axle tires was even more appealing.
Obviously, as production increases, so does the valuable experience gained from this growth and development. Truck manufacturers eventually started displaying interest in certain Chinese brands for original equipment purposes. With time, Chinese tire manufacturers began imitating Tier 1 production methods (while certain Tier 1 manufacturers began investing in Chinese production facilities) which, consequentially, began to produce high-quality products. Several Chinese brands have recently made their way onto the SmartWay list while an increasing number are now offering retreadable tires. As expected, as the quality of the tires increased, so did the price.
Some of you may remember a time when North-Americans made fun of Japanese tires. Where are these brands now…? This situation is similar to that of Chinese tire manufacturers today. In spite of this, the picture is not as rosy as it may seem. The Chinese economy has slowed down considerably, and the demand for raw materials has risen sharply. These forces will most likely increase consolidation in the truck tire industry, with likely increases in quality as the quantities diminish.
Chinese tires are here to stay. They may have a strong Tier 3 presence for now, but they won’t remain stuck in this inferior market segment forever.