Bridgestone keeps tires at its core in pursuit of fleet, mobility technology

NASHVILLE, Tenn.—Bridgestone Americas Inc. has been investing recently in mobility and fleet technology platforms, but it assured its tire dealer network during a virtual dealer meeting on Nov. 16 that tires remain its core business focus.

"We're going to keep on investing (in tire technology) because it's obviously our core, very healthy business which will continue to grow in the future," Paolo Ferrari, president and CEO of Bridgestone Americas, told viewers during the company's virtual Core Tire Business Meeting. The meeting was held for consumer, commercial and OTR tire dealers.

While vehicles will be running on tires for the foreseeable future, fleet management is an important space that is growing, he said, and that is why Bridgestone has been investing in several software solutions, including IntelliTire predictive analytics, Reach fleet communications and its recently acquired Azuga fleet management platform.

The fleet management solutions are intended to help dealers connect better with their fleet customers and serve them more effectively, Ferrari said.

More vehicles, consumer and commercial, are becoming part of a fleet, he said.

"That's important because fleets, of course, are becoming more and more a key part of an evolving ecosystem of connected vehicles and connected platforms. And we need to be sure we monitor that trend and we become more relevant for fleets by being able to provide more product and solutions for their journey."

Bridgestone is envisioning an umbrella of offerings, or concierge, for the tire consumer that includes online tire purchasing, mobile tire service and subscription service packages.

"The pandemic changed a lot of behaviors for consumers, and the way we see it, in a more convenient, touch-free on-demand world there certainly is going to be an expansion of services and delivery of services that are convenient for the consumer," Scott Damon, COO of Bridgestone Americas, said.

"There's going to be an increase in mobile delivery of tires and tire-related service, even car maintenance, repair maintenance, small services. And they're going to be done at the convenience of the consumer, at their home, their place of business, anywhere where it makes it easy for them.

"It also includes the ability to bundle those packages of services in various subscription forms so it makes a recurring revenue stream and service bundle for the consumer to just offer peace of mind. If we couple that with the increase in on-demand buying through e-commerce, and the simplicity of buying things with your mobile phone in an integrated digital platform, it really transforms the consumer experience the way they're going to buy tires and tire maintenance services."

He added that this scenario offers margin expansion for dealers and an investment in a network where consumers will have a broader portfolio of offerings.

Currently, Bridgestone, like most tire makers, has been dealing with flaggin OE sales as vehicle manufacturers have struggled with parts, microchip and labor shortage.

"We are increasing capacity and imports (of tires) to support both you and our OEM customers as they work to meet pent-up demand for new vehicles," Riccardo Cichi, president and chief sales officer, North America, said.

"One out of every four new consumer vehicles in North America is equipped with Bridgestone or Firestone tires. Our market share has held strong over the past several years and we plan on that continuing for many years to come. We are excited to launch 21 new fitments this year across six major OEMs and we continue to grow our business, especially in high-rim-diameter tires."

On the replacement side, vehicle miles driven has been increasing as traveling by car became the preferred mode of transportation during the pandemic.

With all the market indicators, "we anticipate closing the year above pre-pandemic levels for our consumer tire business," he said.

The growing popularity of light trucks, CUVs and SUVs is driving growth for high-rim-diameter tires, he noted. "We're seeing increased sales of ultra-high-performance, all-terrain and light truck highway tires as a result."

Tires with 18-inch rim diameters and larger fitments account for 65 percent of the total market, he said, up percentage points from 2020. And it is expected to grow to 70 percent by 2025.

This trend will positively impact the replacement tire market, Cichi said, as high-rim-diameter tires account for about 38 percent of all tires in the replacement market this year and are projected to increase to 46 percent by 2024.

TBR replacement tires have remained resilient throughout the pandemic, he reported.

"We ended 2020 slightly above the prior year and up double-digits year-to-date."

"One of the brightest spots in 2021" is Bandag, the company's commercial retreading business, Cichi said.

"For the first time in nearly 20 years, we see the retread industry returning to positive growth with retreading up over 10 percent versus the prior year and 3 percent above 2019 levels. We forecast this continued growth and are excited to continue to drive more retread sales."

He said Bridgestone intends to expand its retread business and reach more fleets.

"In fact, we are aggressively developing and testing a model to start growing retreads in the last-mile delivery segment. Bandag is a highly sustainable solution with tremendous potential and, as mobility evolves, it will become an even greater strategic advantage for our dealers and fleets."

Last-mile delivery has grown exponentially during the pandemic, he said.

"We have increased our investments in last-mile delivery from growing our team to technological development to optimizing our product portfolio. We're doing all of this to drive more of these vehicles to your businesses for service and for Bridgestone and Firestone tires," he told dealers.