How Consumers Will Roll in 2018 and Beyond

SEMA News—February 2018

BUSINESS

By Mike Imlay

How Consumers Will Roll in 2018 and Beyond

Wheel and Tire Market Trends

  Wheel and TireFundamentals to every vehicle, wheels and tires remain staples of the aftermarket and among the first upgrades vehicle owners will make. In evidence at the 2017 SEMA Show were beefy truck and Jeep assemblies, but expect virtually every wheel and tire segment to grow steadily in 2018.
   

Wheels and tires are fundamental to every automobile and therefore remain aftermarket staples. The “2017 SEMA Market Report” estimates the current custom wheel market to be worth $1.21 billion in sales, while performance and special-purpose tires top $2.22 billion combined. Add an off-road and plus-size tire market estimated at another $1.62 billion, and it’s easy to see why 370 wheel and tire manufacturers flooded the 2017 SEMA Show floor to debut more than 175 new products alongside hundreds more of their legacy offerings.

So what can we expect in terms of 2018 wheel and tire trends? The buzz phrase last year was “less is more” in terms of lighter tire materials and rolling resistance as OEMs strove to meet tightening Corporate Average Fuel Economy (CAFE) standards. Meanwhile, “bigger is better” summed up growing consumer tastes for larger, bolder wheels—a styling trend that OEMs eagerly embraced to make their vehicles stand out from the crowd. However, a bullish economy and more lenient government regulation may be the marketplace’s biggest drivers this year.

Tires
To meet the growing demand for larger-diameter truck tires, Yokohama is expanding its Geolander M/T line (shown) into 22- and 24-in. offerings. The company will soon introduce an all-new Avid Ascend GT all-season touring line for passenger vehicles.
 
   

Tire Predictions

“It is not clear what the current administration will do with CAFE regulations,” said Bob Ulrich, editor of Modern Tire Dealer. “I doubt that they will be eliminated, but they certainly could be watered down. Regardless, reducing rolling resistance in tires will remain a goal of OEMs and tire manufacturers alike because it results in fuel efficiency. That is because technology has allowed tire manufacturers to reduce rolling resistance without compromising too much in other performance areas. With that said, the public has yet to embrace the technology, especially when it adds to the cost of the tire.”

What the public does like, however, is the versatility and convenience of all-season tires, which Ulrich identifies as the “hot trend” to watch in the coming year.

“Because of technological advancements, today’s all-season tires are beginning to inch into areas where winter tires have always been preferred,” he observed. “Whether you refer to them as all-season, all-weather or, in the case of the Toyo Celsius ‘variable conditions’ tires, they are closer to being the perfect broadline, year-round tire than ever before. The Celsius even has a three-peak mountain snowflake symbol, technically qualifying it as a winter tire.”

Andrew Briggs, Yokohama vice president of marketing and product management, explained the push among tire manufacturers to produce a wider range of all-season product.

“The OEMs have made a huge impact on the aftermarket, especially in the implementation of all-season product on vehicles that were traditionally fitted with summer UHP product,” Briggs said. “The American consumer has spoken, and while they like the appearance of sport packages and the top trims of premium sport sedans and coupes, they don’t like the tires that have traditionally graced those vehicles. They are willing to trade some driving dynamics for all-season versatility, ride comfort and better mileage.”

For proof, Briggs pointed to late-model vehicle offerings.

“Before 2008, there were only five vehicles on the market with staggered all-season H- or V-rated tires,” he said. “In the last 10 years, that number has risen to over 40. It is happening over a range of marques, from mainstream brands such as Kia and Hyundai to aspirational brands such as Infiniti and Lexus, more traditional luxury such as Cadillac, Mercedes-Benz and Jaguar, or exotics such as Porsche and Maserati. That trend isn’t going away, and it will continue to alter the range and requirements of all-season tires.

“While the consumer aftermarket overall is relatively flat, there are certain segments that are making big moves. V-rated all-season touring tires have shown significant growth over the last three years, especially 18, 19 and 20 in. On the light-truck side, 22- and 24-in.-diameter tires have been on the rise, with the all-terrain segment growing 50% since 2014 and mud-terrain approximately doubling in that same time frame.”

Like other major brands, Yokohama intends to capitalize on those trends with expanded offerings in 2018, specifically with the new Avid Ascend GT, a grand-touring all-season tire designed for “impressive wet and winter traction” and featuring a greater mix of V-rated sizes with rim diameters extending up to 20 in. The tiremaker also plans to expand its Geolandar A/T G015 and new Geolandar M/T G003 into 22 and 24 in. by the end of the year to address current trends in the light-truck customization market.

“Trucks and Jeeps are more popular than ever, and when it comes to customizing them we have to offer lots of choices, confirmed Ken Warner, vice president of marketing for Mickey Thompson Tires & Wheels. “We are constantly searching for niche sizes to complement the vehicle appearance and enhance the usage of that vehicle. OEs are offering terrific-looking tires and wheels, and cool-looking aftermarket features, so they definitely are taking some share from the aftermarket.”

“There is a flood of new mud-terrain tire designs in the market. What was once a specialty tire is now becoming mainstream for truck owners,” added Warner. “They want an aggressive design that delivers great handling, smooth ride, and long mileage without sacrificing off-road performance. We are seeing an increase in large-diameter tires, with 37- and 40-in. tires becoming very popular especially for both Jeeps and pickups. Larger rim diameters are becoming more popular as well, although they are primarily for vehicles that look off-road but are 100% street driven.”

Current consumer trends aside, however, what really has the tire industry talking is a perceived shift in sales channels and an increasingly rivalrous marketplace.

“Online sales were the hot topic at the SEMA Show/TIA Global Tire Expo,” Ulrich said. “The low pricing and increasing number of competitors—fly-by-night and otherwise—have all retail tire dealers concerned. Retailers of automotive parts also are feeling the heat.”

The flood of foreign “upstart” and lower-end tire companies into the market is real. However, any anxiety over internet sales crippling brick-and-mortar channels may be premature. According to recent SEMA market research, the majority of aftermarket consumers definitely research products online but still prefer to shop big-ticket items in physical locations. In fact, in reviewing sales channels, the “2017 SEMA Market Report” found that online channels presently account for only 13% of performance/special-purchase tire sales and 7% of off-road/plus-size tire sales, respectively.

  Tire
Debuting at the recent SEMA Show, Continental’s Extreme Contact Sport is another example of the increasingly competitive all-season market. Manufacturers like Continental are continually improving the handling, grip and tread life of their year-round products.
   

Future Shock?

While tire-industry experts report that new technology is only incrementally affecting their market, that’s not so true for the wheel market, which is rapidly embracing newer manufacturing processes and eyeing both the challenges and opportunities that Advanced Driver Assistance Systems (ADAS) may bring. Combining a variety of automated passive and active safety features and connected-vehicle technologies, ADAS has been identified by SEMA research as a huge but game-changing growth area for the aftermarket. (A copy of the recently released “SEMA Advanced Vehicle Technology Opportunities Report” is available for download at www.sema.org/avt-opportunities.)

ADAS currently encompasses such features as parking assistance, collision and lane-departure mitigation, and advanced cruise control, to name a few. As vehicles become increasingly automated, however, ADAS can be expected to touch every major automotive system or assembly—including wheels and tires.

A small harbinger of things to come may well be “smart tires,” or tires embedded with computer chips that communicate with the vehicle in much the same way tire-pressure monitoring system (TPMS) sensors currently do. While a TPMS reports loss of tire pressure, smart tires are predicted to help manage tire maintenance, including when to rotate and replace them.

“Tire manufacturers are getting more savvy merging chip technology with tire design, so smart tires will happen sooner rather than later,” Ulrich said. “But I don’t believe there will be any negative effects on the aftermarket.”

Gavin Horlick, Voxx Products vice president and chairman of the SEMA Wheel & Tire Council (WTC), noted parallels between the uncertainty surrounding ADAS technology and the recent impact TPMS had on the wheel industry. The latter, he said, was a significant change for the wheel and tire market five to seven years ago. Nonetheless, the aftermarket quickly embraced the new technology, adjusted product, and learned to leverage it.

“I think that smart-tire interaction is going to have a lot of the same characteristics and questions, [especially] for the tire companies that are building compounds that are going to be used on future vehicles,” Horlick said. “I think there are probably a couple of companies at the OEM level that are developing the technology to interact with the car systems, and the companies that are Tier-2 or Tier-3 tire suppliers are going to have to understand the technology pretty quickly to come out with the same thing.”

What smart tires will actually do is still unclear. However, if aftermarket wheel and tire packages alter unsprung weight or rotational mass—or even the diameter or width of the finished wheel and tire assembly—they could conceivably interfere with the technology. That, in turn, could adversely affect performance and safety, meaning that the wheel segment can expect an urgent need for knowledgeable retailers and installers to properly suggest product and maintain the systems.

For the present, the new technologies literally shaping today’s wheels center around manufacturing and production. Flow-form aluminum casting continues to improve, and enhanced robotics and quality-assurance techniques are spreading to more and more manufacturing plants in the United States and Asia, significantly reducing operator error, especially at machining stages.

“Cast-aluminum wheels are fairly heavy by nature of their production process,” Horlick said. “As more automation is introduced into the production process, the finish quality of the parts becomes more consistent and the weight is often reduced. That can equate to the vehicle performing a little bit better compared to a traditional cast-steel wheel.”

DUB Magazine President and Co-Founder Myles Kovacs observed that new manufacturing technologies have also made the forged-wheel market more competitive. “As the price point on all these wheels go down, the forged wheels become more affordable than they were even 10 years ago. The [manufacturing] technology is much better, and so there are a lot more suppliers, and so the forged market is almost over-saturated right now. If you have a CNC machine or know someone who does and you can buy a blank, you’re a wheel company,” he said, cautioning that new manufacturing terminologies also can be somewhat confusing. “It’s funny: people still want multi-piece wheels because they can fit different offsets and things like that for a hard-to-fit vehicle. However, they don’t like the softness of the rims because they bend very easily compared to a forged one-piece. So now they’re doing a forged two-piece, or all these new kinds of forgings [like] ‘rotary forging’ or whatever you want to call them.”

Wheels
Although often more expensive than the average cast wheel, forged designs for trucks and Jeeps remain consumer favorites. Allied Wheel introduced this 20-in. Raceline Modular Double Beadlock wheel at the SEMA Show. It features a long drop center for customized back spacing.
 
   

Style Trends

No matter how they are manufactured, wheels are among the biggest style statements the average consumer can make to a car or, more likely, a truck. And “big” remains 2018’s operative word.

“Like last year, the big-diameter truck applications were certainly the paramount trend at the recent SEMA Show,” Horlick noted. “We saw a lot of forged, eight-lug, wide, tall-diameter truck wheels. But it’s really important to remember that a lot of times that’s a fairly regionalized market. So that’s absolutely the trend down in Texas and maybe in other areas of the South and in Southern California. But that’s not a trend we’re seeing in the Northeast or in areas around Detroit or the Pacific Northwest. The people who are customizing vehicles aren’t doing the 6-, 8- or 10-in. lifts required to fit those massive tire and wheel assemblies on truck applications. They’re maybe using a 20x10, 20x12 or 22x12 size, which is starting to trend toward bigger, more robust wheels, but it’s not as extreme as what we saw at the SEMA Show.”

Those extremes included 1-ton truck applications sporting beefy 26x14 or 26x16 forged truck wheels. But since they’re expensive to produce, such wheels can be cost-prohibitive to the average consumer, and the requisite custom suspension components only add to the price tag. Consequently, many customizing consumers opt for a deep-lift truck design with 20x10 or 20x12 wheels. The advantages can include readily available tires and significantly less-expensive cast wheels.

In terms of passenger applications, concave designs remain incredibly popular.

“The passenger market is becoming a little more segmented, too,” Horlick added. “Ten years ago, it was the import-tuner scene, and wheel manufacturers were able to build a few part numbers that sat on every vehicle. Now, because of social-media influence, consumers who are driving, say, a Ford Mustang are putting particular application products on their vehicles, where that’s not necessarily the same application or the same kind of design features that we’d see on a different vehicle such as a Chevrolet Camaro or a Dodge or even a high-end Lexus.”

As for finishes, Kovacs said, “It’s the ’80s all over again, so you’re seeing the more popular finishes in black, silver, chrome or polished. The difference between a cast and forged wheel is you can polish a forged wheel and shine it up really good, so the forged guys like them polished because they can show them off as forged.”

  Wheels

In the wheel market, expect the ongoing improvement of aluminum casting and quality assurance technologies, along with increasingly innovative designs. The Voxx Falco wheel’s Flip Cap allows for multiple bolt circle diameters to reduce inventory, while having the appearance of an exposed lug, direct drill styling.
   

Coming Soon

Regardless of what’s trending now, the way wheels and tires are sold appears on the verge of total transformation. Imagine a world where a driver gets a notification that a tire is teetering on failure. Because it has GPS and wireless technology, the vehicle then checks for the nearest tire retailer, confirms it has the right rolling stock, makes an appointment, and guides the car there.

“It’s coming,” advised Todd Steen, Jackson Motorsports Group executive director of business development and WTC marketing subcommittee chairman. And he strongly believes that every retail business from big-boxes to independent retailers must be ready for a potential technological tsunami.

“Therein lies the training of our counter salespeople and our shop people,” he asserted. “Jeannie’s Tire and Lube is going to have to know the same thing that Discount Tire, Walmart and Costco know. Not only will we have to be ahead of the curve on new technologies, but we will also need to help [employees] to apply what they’re learning so that when they see it, they’ll know how to react to it. We have to gain consumer trust.”

Whatever comes, aftermarket retailers will be on the front lines of identifying high-quality wheel and tire products, demonstrating superior technical know-how, and upselling consumers with value propositions that clearly explain why the higher-tech innovations are worth the cost. It will be challenging and exciting—but isn’t that what the aftermarket has always been about?

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