{"id":3191,"date":"2019-08-08T16:22:31","date_gmt":"2019-08-08T14:22:31","guid":{"rendered":"http:\/\/en.advancedfleetmanagementconsulting.com\/?p=3191"},"modified":"2019-08-08T16:22:31","modified_gmt":"2019-08-08T14:22:31","slug":"3191","status":"publish","type":"post","link":"https:\/\/advancedfleetmanagementconsulting.com\/eng\/2019\/08\/08\/3191\/","title":{"rendered":"Fleet Maintenance Tire Costs Remain Flat"},"content":{"rendered":"

\"Photo<\/p>\n

Photo via iStockphoto.com<\/em><\/b><\/p>\n

Fleet Maintenance Tire Costs Remain Flat<\/h2>\n

Passenger car replacement tire pricing was flat in 2015 compared to 2014. A key reason for tire price stabilization was less volatility in prices for commodities used to manufacture them.<\/p>\n

The cost of commodities used to manufacture tires continues to be the key cost lever driving the price of replacement tires for passenger cars.<\/p>\n

\u201cRaw material and transportation costs continue to be big drivers in this area. And, of course, the challenge is that both are outside of the control of our company and can fluctuate based on seasonality, regulations, and region of the country,\u201d said Kevin Stephens, North American Sales Manager for Michelin North America.<\/p>\n

In addition, there continues to be limited inventory for some replacement tires. \u201cSeveral vehicle models have unique factory tire sizes with limited, if any, snow tire availability for at least 12 months,\u201d said Frank Stracke, case manager, managed maintenance for Element, a fleet management business.<\/p>\n

As auto manufacturers develop unique tire sizes for new-model vehicles, it impacts the replacement tire supplies for one to two years, as other aftermarket tire companies may not immediately meet the demand for these tire sizes. This lag time limits the selection and availability of replacement tires.<\/p>\n

Larger Tire Diameters<\/h3>\n

The increase in OEM automobile wheel diameters has driven up the cost of fleet replacement tires. The question is, what does the industry foresee for wheel diameter sizes in the future?<\/p>\n

\u201cThere is no doubt we will see a continuation of this trend. Think about it this way; consumers are demanding performance, not just from the vehicle itself, but all components that make up that vehicle. Part of getting that performance includes such things as larger tire sizes, which gives you larger brakes to be able to handle the performance needs of today\u2019s vehicles and driving experience. It seems difficult to have one, without the other,\u201d said Stephens of Michelin North America.<\/p>\n

Another factor influencing tire availability in the aftermarket is existing purchasing agreements between auto OEMs and tire OEMs. \u201cThe challenge is determining which OEMs have signed tire company agreements for unique tire brands and sizes, as this can impact a fleet\u2019s vehicle selector list,\u201d said Stracke of Element.<\/p>\n

Another factor influencing the spread of larger diameter tires within fleets are driver-paid options.<\/p>\n

\u201cDriver-paid options allowing different trim levels have resulted in moving to larger wheel diameters, which are more expensive and challenging to replace,\u201d said Stracke.<\/p>\n

\"Photo:
Photo: Element<\/em><\/p>\n<\/figcaption><\/figure>\n

Forecast for Tire Expenses<\/h3>\n

The forecast is that tire expenses will increase in the 2016 calendar-year.<\/p>\n

\u201cWe foresee a 2- to 3-percent increase in replacement tire pricing driven by unique tire sizes, run-flats, and limited availability for certain vehicles. This commonly occurs with the continued introduction of new tire models and sizes. Like-for-like replacement tire pricing should remain flat. Vehicle selection and options will be very important in determining future tire replacement costs,\u201d said Stracke.<\/p>\n

Seasonality is also a factor in replacement tire pricing, especially with snow tires, which result in product shortages with the onset of severe weather conditions.<\/p>\n

The wildcard continues to be the price of the key commodities used to manufacture tires, in particular, the price of oil. The key to future tire prices is the price of oil, but the near-term outlook appears to be that pricing will remain stable.<\/p>\n

\"Photo:
Photo: Element<\/em><\/p>\n<\/figcaption><\/figure>\n

Tire Company Innovations<\/h3>\n

One factor exerting downward pressure on total fleet tire expenditures is the ongoing improvement in tire quality, which has resulted in longer wear life during the past decade. Tire life has been extended by 10 percent in the past 10 years. This has helped offset some of the recent price increases since the expense is spread out for a longer period.<\/p>\n

In addition, there are a number of manufacturing innovations that are being explored\/implemented by tire OEMs to reduce costs and the impact on wear.<\/p>\n

\u201cSelf-seal technology has a unique rubber compound that plugs holes in the tread that has been punctured. There is a thin layer of rubber compound, composed of natural rubber. The compound surrounds the area and the object causing the protrusion, keeping air from escaping and the tire pressure at its previous level,\u201d said Stephens of Michelin North America.<\/p>\n

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Retrospective:\u00a0The Early Days Of Fleet Maintenance<\/h3>\n

Goodyear, Firestone, and Sears are all relatively well-known stores today, but it was around the 1960s-1970s when they started making a name for themselves in the fleet industry. It was during this time that these national account chains \u2014 along with such others as BFGoodrich, Maaco, and Lee Myles \u2014 started partnering with fleet management companies (FMCs) to provide consolidated billing, product codes, and nationwide pricing.<\/p>\n

\u201cThis was a big deal for fleet managers,\u201d said Eric Strom, maintenance and safety product manager for Element and a 36-year industry veteran. \u201cIt gave them confidence, knowing that the national account network was made up of well-recognized chain stores with consistent billing and pricing.\u201d<\/p>\n

It was also a big deal for the FMCs, which often didn\u2019t have enough garages around the country to service all their nationwide customers. In addition to establishing relationships with these chains, FMCs also formed relationships with glass and rental car companies, which served as an added program. According to Strom, these supplier relationships created a lot of efficiencies from a payment, billing, and processing standpoint.<\/p>\n

In addition, technology has been one of the main game changers for maintenance management. In the early 1980s, FMCs started developing online maintenance reporting tools.<\/p>\n

\u201cBeing able to quickly get their data at their desktop was really the beginning of a self-serve model for fleet managers. Up until that point, FMCs would get all the billing. Everything was paper-based, so there would be boxes and boxes of paper,\u201d said Strom.<\/p>\n

No doubt, the fleet professionals from the 1980s would be amazed as to how far fleet maintenance management has evolved in a relatively short period of time. It is exciting to visualize what changes are on the horizon of fleet maintenance management.<\/p>\n<\/div>\n

Editor’s note: This article is part of a three-part package dealing with fleet maintenance costs in 2015. Read related articles covering\u00a0maintenance costs<\/a> and oil service costs<\/a>.<\/em><\/p>\n

by Mike Antich<\/a><\/p>\n

Source: https:\/\/www.automotive-fleet.com\/<\/a><\/p>\n

FLEET MANAGEMENT AUDIT<\/h3>\n

Fleet management is the use of a set of vehicles in order to provide services to a third-party, or to perform a task for our organization, in the most efficient and productive manner with a determined level of service and cost.<\/p>\n

Fleet management activities are shown in the following graph 1:<\/p>\n

\"fleet<\/p>\n

Graph 1: fleet management activities<\/p>\n

The proposal audit analyses and assesses all fleet management activities shown in the graph 1, and its main goals are:<\/p>\n