NASHVILLE, Tenn.—The mobility ecosystem of tomorrow may not resemble anything like the highways of today.
The vehicle may look completely different than the one that sits in your garage. It probably not only will communicate with other cars on the road but also with the infrastructure it uses, the service shops that will repair it and the individuals who program it. And there's a chance it will be powered electrically, making the combustion engine obsolete.
But, according to Rich Kramer, Goodyear chairman, president and CEO, there is one common thread between the cars of today and the vehicles of tomorrow: Tires.
With forecasters predicting that vehicle miles traveled globally will double to 20 trillion miles by 2030, demand for tires only will increase.
"Here's your headline: We believe that these trends have the potential to launch a brand new wave of growth in the tire industry," Kramer told attendees at the 2018 Goodyear Customer Conference Jan. 25-27 at the Gaylord Opryland Resort and Convention Center in Nashville.
"As electric autonomous fleets become more accepted, and beyond that, more preferred, their usage is going to dramatically increase," he said.
Kramer said the 10 trillion miles traveled around the globe translates roughly to 1.5 billion tires sold annually. It stands to reason that if the number of miles traveled globally doubles, so will tire consumption—to 3 billion.
"Think about our share of that incremental growth," Kramer said. "That's a different way to think about our business."
Of course, nobody knows with certainty what might happen, but Kramer said there's no doubt that mobility will undergo a dramatic shift in the future.
Even if vehicle miles traveled falls short of predictions—say half of what is projected—that's still a lot of additional tires to sell.
"That's fantastic," Kramer said. "Where are we going to find growth like that? This new world of mobility is coming, and that's why I say our industry is facing an opportunity for growth that we haven't seen in 100 years."
It took a century for the world to reach 10 trillion miles traveled. Now, some say it may take just 15 years to double that.
"That's why you'll hear me say this is a great industry to be in," Kramer said. "I'm excited about the opportunities, and that why when we talk about the future for Goodyear and for all of us together, it's so great. That's something for us to be excited about."
Attendees heard presentations from several members of Goodyear's North American executive team as the Akron-based tire maker rolled out a number of new products during the show. They include the Assurance MaxLife, an all-season passenger/SUV/minivan tire with an 85,000-mile limited treadwear warranty; and the Eagle Enforcer All Weather police pursuit tire, designed specifically as a replacement tire for police vehicles.
Kramer, meanwhile, gave dealers a glimpse of some of the trends shaping the mobility ecosystem of the future. He used an acronym to summarize those trends: FACE—Fleet, Autonomy, Connectivity and Electric.
Ride-sharing, or fleets, has become an accepted norm, he said, given the success of Uber and Lyft. Today, public transportation costs the least, but it is the most inconvenient. Car ownership, he said, is the most convenient but costs the most, about $1 per mile driven.
That could decrease to 10 to 20 cents per mile if ride-sharing becomes standard, which Kramer classified as a game changer.
Autonomous electric fleets, he said, combine low cost with reliability. As they become more prevalent, "vehicle miles are going to increase dramatically, and the need to service those fleets, like we do today in many other areas, is going to increase as demand increases," Kramer said.
The emergence of fleets also provides another benefit for drivers: Newfound time. Instead of driving, passengers will have the opportunity to gain valuable minutes in their day to devote to something else.
"A variety of new companies that are advertisers are going to come in and try to monetize your time," Kramer said.
Some forecasters say that by 2050, the autonomous industry will be a $7 trillion business, Kramer said. Whether that transpires or not, he said the recent Consumer Electronics Show in Las Vegas drove home the point. He maintained that the CES has displaced the annual Detroit auto show as the event where auto makers reveal new concepts.
"If that's not a sign that we're legitimatizing the notion that there's a change afoot in the auto industry, I'm not sure what is," Kramer said.
He pointed out two takeaways from the CES: Companies are investing heavily in the autonomous business, and several companies that have little to do with the transportation business—such as Google L.L.C., Intel Corp. and Dyson Ltd.—are exploring ways to capitalize monetarily on the technology.
"The most impressive thing you see is improvement in the automotive driver assistant system that are really the guts of the driverless system," Kramer said. "All those things are what makes this autonomous trend very real."
Kramer cautioned that despite all the investment, autonomous vehicles remain years away for several reasons.
First, the technology must work on a larger scale, he said, in a way that "performance justifies the cost." Second, this technology must meet regulatory approval, and those regulations are not yet written.
"To keep it in perspective, there's a lot going on and it's real, but a lot still has to happen before these come in this space," Kramer said.
The vehicles of tomorrow not only will be connected with each other, but Kramer said also in ways we might not even imagine.
"As much as there is innovation and software things going into autonomous vehicles, I would tell you that mindshare and capital is going into connectivity, and that's so important to allow this trend to happen," he said.
The trend toward electric vehicles continues. Kramer said the combination of stringent regulations, particularly involving reduced emissions, and improvements in battery technology, has created the ideal environment.
He cited three major auto makers as proof. General Motors Co. has stated electric vehicles are the future, while Ford Motor Co. announced recently it was doubling its investment in electrified vehicles, with plans to debut 40 electric models by 2022.
Volvo Group said recently that starting in 2019, all of its models will be electric or hybrid.
"If you take all these trends," Kramer said, "and put them together—fleets, autonomous, connective and electric—what we see developing is something that is redefining consumer transportation as we know it."
Goodyear has been a leader as well as a partner for auto makers and other companies as part of this oncoming mobility revolution, Kramer said.
"(The world) is moving fast and in more directions than ever. So in this new world, which presents more choices and options than ever, my question is, who would you rather be with?"
Kramer reviewed some of Goodyear's recent initiatives, including:
- Partnering with original equipment manufacturers to embed sensors in vehicles—not just in tires—to accumulate and interpret data that will improve a vehicle's driveability;
- Working with OEMs to improve rolling resistance, with the goal of improving battery life and reducing noise that otherwise would have been drowned out by a conventional engine;
- Launching an advanced tire maintenance pilot program with Stratim Systems Inc., a San Francisco-based startup whose technology platform tracks, monitors and oversees fleet maintenance for thousands of vehicles operated by more than 50 mobility services in more than 25 markets across North America;
- Expanding its collaboration with Tesloop Inc., which operates a fleet of semi-autonomous electric-powered Teslas between Las Vegas and Los Angeles, by supplying wireless sensors in its tires with the goal of improving tire management and maximizing uptime for its fleet; and
- Purchasing Ventech Systems GmbH, a Germany-based developer of automated tire inspection technology under the trade name PneuScan, allowing Goodyear to expand its two-year-old "Proactive Solutions" fleet management business by being able to offer a user-friendly, closed-loop service that measures tire pressure, tread depth and the weight of vehicles that drive over the PneuScan device.
Kramer described the company's online approach in the retail environment, where 80 percent of consumers go online before purchasing tires and half of all customers shop on their phones.
He said Goodyear has driven more than 100,000 appointments to Goodyear-aligned customers in the past year.
"I believe our role has to be around simplifying the tire-buying process and creating the kind of experiences today's empowered consumer expects," Kramer said. "I believe our job is to be available to serve customers in any means that they choose. That's what our obligation is together."
Kramer said Goodyear expects to have more than 150 OE fitments in 2018, the best in the industry. He said that the company is No. 1 in brand awareness, "one of the most iconic brands in the entire world."
"We don't take that for granted. We work hard every day to make sure we give the advantages of that great brand to help grow your business.
"So who would you rather be with?"
Kramer posed that question to the company as well.
"The answer is easy: It's all of you. You're the ones with the tires, the service, the expertise, the know-how. You're the ones who have the experience, the knowledge, the passion and the commitment.
"You're the ones who provide the solutions. You're the ones who respond to the consumers' changing needs. You're the ones who align with us to make sure we keep people moving forward.
"You're the ones that we want to be with, committed to winning together, now and in the future."