Original equipment tires

tires
It's a competitive world
All the big players want a piece of the original equipment action
Big names fight for a piece of the action

The original equipment tires on your new vehicle are part of an intricate financial relationship between the tire and car companies, dealerships and consumers. You may not have given much thought to those four round black things when you bought your car. But, you will when it comes time to replace them. Therein lies the story.

Slices of the original equipment pie are big!
Any piece of this pie is big

Most car buyers replace the tires that came on their vehicle with identical ones. 

The vast majority of car buyers, rather than shopping around, chose to replace the tires that came on their vehicle with the identical tires. Not only does the tire company benefit from the OE (Original Equipment) business, so to do the new car dealers. A large number of their customers come back for replacement or alternate season tires. That’s why you see so many tire ads from car dealers.

click here to learn how old your tires are 

It all starts during the development stage, several years before a new vehicle is unveiled. Once the designers, and engineers have completed the initial work, they send out an RFQ (Request For Proposal) for the tires to all major tire companies. The engineers know what he want in terms of ride quality, noise levels, rolling resistance, traction. Wear is not a priority because it is the tire company, not the car company that provides the warranty.

Newcomers welcome to original equipment business
Newcomers welcome

Different vehicle types need different tires

Obviously the company about to reveal a new high-end sports car wants a tire that will show off all their hard work on suspension and handling. Maximum grip is the top priority. Their customers do not have wear, and fuel mileage atop their wish list. On the other hand, manufacturers about to introduce a hybrid or electric vehicle, want a tire with extremely low rolling resistance. There is very little emphasis on grip. A luxury car manufacturer will require tires that offer a very smooth and quiet ride. Pickup makers are looking for tires that can accept heavy loads without overheating and good grip on a variety of surfaces.

The details of those RFPs are specific, with numerical goals in each area – ride, handling, wear, noise levels, rolling resistance, traction etc. Tire companies may have a suitable product in their portfolio, one that can be altered to suit or have to develop a new one. Often they can come up with a new compound or tread design for an existing tire to meet the requirements. Or, they may have been working on a breakthrough, and see this as an opportunity to gain awareness.

Original equipment business open to all
Room for everyone

The numbers are huge

In all cases, the numbers are huge. Ford built and sold almost one million F150s in North America last year. That’s five million tires, including a spare! Toyota built, and sold more than 400,000 Camrys in North America last year. They needed two million tires!  

Winning contracts to supply OE tires has both immediate, and long -term implications. For a known brand, it solidifies a reputation. For a new brand is may establish one. For tire dealers, it represents an opportunity to capture a slice of the replacement market.

Original equipment tires a global business
It is a global business

This is a business decision in a very competitive situation. Obviously, to the car company, price is probably the decision maker, provided all bids meet the same specs. The tire company has to keep its price to a minimum to stay in the hunt, or perhaps provide the tires at a slight loss if trying to get the market or a certain segment of it.They know that consumers will come back for replacement units down the road.

Next time you take a test ride, check out the tires! You may see a familiar name, or one you have never heard of – but will become familiar.

About Richard 166 Articles
At the age of five I was already obsessed with all things automotive being able to identify the make and model of car by just the sound of its engine going down the street in front of our house in the small town on the south shore of Nova Scotia. Although I have been covering and writing about the automotive scene for more than 40 years and the light still grows brightly.