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Wednesday, December 17, 2014

Cost of tires

Had a question concerning the cost of tires, which some think does nothing but go up, as it relates to the current downturn in the price of gas at the pump.


The argument was that since gas prices have gone down so should tire prices.

Yes it is true that a good portion of the "rubber" in tires is really synthetic which means the raw material is petroleum based. Today's passenger, LT or ST tires have very little if any natural rubber but as you move up in size there is an increasing % of natural rubber.  Some 22.5 size tires have natural rubber as a component but without access to the secret proprietary formulas I can't address the % which could range from 0% to maybe as much as 25% or more.
There is also the special high strength brass plates steel to consider along with numerous other materials such as Silica,
From Whikipedia we see
  • Natural rubber, or polyisoprene is the basic elastomer used in tire making
  • Styrene-butadiene co-polymer (SBR) is a synthetic rubber which is often substituted in part for natural rubber based on the comparative raw materials cost
  • Polybutadiene is used in combination with other rubbers because of its low heat-buildup properties
  • Halobutyl rubber is used for the tubeless inner liner compounds, because of its low air permeability. The halogen atoms provide a bond with the carcass compounds which are mainly natural rubber. Bromobutyl is superior to chlorobutyl, but is more expensive
  • Carbon Black, forms a high percentage of the rubber compound. This gives reinforcement and abrasion resistance
  • Silica, used together with carbon black in high performance tires, as a low heat build up reinforcement
  • Sulphur crosslinks the rubber molecules in the vulcanization process
  • Vulcanizing Accelerators are complex organic compounds that speed up the vulcanization
  • Activators assist the vulcanization. The main one is zinc oxide
  • Antioxidants and antiozonants prevent sidewall cracking due to the action of sunlight and ozone
  • Textile fabric reinforces the carcass of the tire

What hasn't been addressed is the research, manufacturing and transportation costs. With the ever increasing pressure for improved fuel economy, smooth and quite ride as well as, long wear and all season performance the R&D efforts are continually increasing.

I think it is important to remember that oil price at the pump is a poor reflection of the real cost of the commodity especially when most of the materials are  bought based of future delivery so current day to day variations have little affect of the price of oil someone is willing to commit to 5 months or a year in the future.

Another thing to look as is the profit margin of the tire companies over a multi-year basis.  For example I believe Goodyear profit in 2013 was about 3% of sales income.

If you want the nitti gritty check this web site and you will see the Return on Assets ranges from negative 6% to plus 5%

 Here is a good article on the topic.
and another that focuses on the raw materials.

Now please remember I may be a tire engineer and I even play one at RV Conventions but I am not a financial advisor and as we all know past performance is no guarantee of future performance.

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Thursday, December 11, 2014

Tire recalls and Registration


Here are some details on the recent RV tire recall:

 NHTSA Campaign ID Number: 14T015 
Synopsis: Dynamic Tire Corp. (Dynamic) is recalling certain Towmax STR tires, size ST225/75 R15 manufactured June 15, 2014, to October 14, 2014. The affected tires may have the Incorrect Load Capacity and Inflation Pressure Stampings. Thus, these vehicles fail to comply with the requirements of the Federal Motor Vehicle Safety Standards (FMVSS) 119. The misinformation on the label could lead a driver to over-inflate the tires. Tire over-inflation may increase the risk of a tire failure which can increase the risk of a crash. Dynamic will notify owners, and dealers will replace all eligible tires, free of charge. Owners may contact Dynamic customer service at 1-905-595-3593.

The details are that 17,000+ Load Range D Towmax tires with DOT serial ADB4GPD2414 through  ADB4GPD4214are subject to the recall and are to be replaced FREE of charge.

One bit of information that many will skip over is the part where it says Dynamic will notify owners. While this is standard language in recall notices it overlooks a major problem. Just how is Dynamic supposed to know the owner's name & address?

According to Federal law all DOT tires are supposed to be registered and that information is supposed to be entered in a big database to enable future contact in case of a recall. The problem is that according to various studies only about 17% of tires sold by dealers have the necessary registration forms completed and sent to the registration authority.

Do you know if all your tires have been registered? If not then you will probably never know about a tire safety recall.

WHAT SHOULD YOU DO?
        Note this is not limited to Towmax brand tires but applies to all of your car, truck, trailer or motorhome tires.

Confirm that your RV Dealership registered the tires on your trailer or motorhome. If you bought your car or truck new from the company dealer the tires are probably registered.
 You might start by asking what their policy is. You may find some confusion or hemming and hawing on the part of the dealer, I would take as indication that they did not do the task they are supposed to do by law.

Car and truck dealers may do a better job but we all know what can happen if we "assume" someone is doing the job they are supposed to do.I would see nothing wrong with using the on-line registration process below,just to be sure.

If you bought tires directly from a tire dealer you should ask them what their policy is. Some will have clear statements such as we see from Tire Rack. BUT if you get that uncertain response there is a good chance the tires you bought were not registered. Probably the smaller the tire or RV dealership the lower the probability the tires were registered

You can do the job yourself at TireRegistration.com    or simply Google Tire registration and see if your tire brand has a sight just for registering your tires.

Please don't be concerned that this is some "Big Brother" conspiracy. I have never heard of this information being used for any purpose other than notification of a recall.

Finally if you have changed mailing address you might want to update the tire registration. Remember you will need the full DOT serial including the date codes for each tire.

If in doubt on how to read your tire serial number, reviewing THIS post will help.



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