Automotive Fleet, March 2016

as larger tire sizes which gives you larger brakes to be able to handle the performance needs of todays vehicles and driving experience It seems difficult to have one without the other said Stephens of Michelin North America Another factor influencing tire availability in the aftermarket is existing purchasing agreements between auto OEMs and tire OEMs The challenge is determining which OEMs have signed tire company agreements for unique tire brands and sizes as this can impact a fleets vehicle selector list said Stracke of Element Another factor influencing the spread of larger diameter tires within fleets are driverpaid options Driver paid options allowing different trim levels have resulted in moving to larger wheel diameters which are more expensive and challenging to replace said Stracke Forecast for Tire Expenses The forecast is that tire expenses will increase in the 2016 calendar year We 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 said Stracke 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 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 Tire Company Innovations 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 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 Self 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 said Stephens of Michelin North America AF 0 5 10 15 20 1983 Cost Per Unit Per Month REPLACEMENT TIRE COST 1941 1957 1 13 10 13 1 14 10 14 1 15 10 15 0000 0002 0004 0006 0008 0010 00098 Cost Per Mile CPM 00096 00096 1 13 10 13 1 14 10 14 1 15 10 15 1245 Average Cost Per PM REPAIR COST BY MONTHS IN SERVICE 1629 2408 3522 4374 1 to 6 7 to 12 13 to 18 19 to 24 25 to 30 AVERAGE COST PER PM TIRE OCCURRENCE 0 10 20 30 40 50 4083 Average Cost Per PM 4329 4592 1 13 10 13 1 14 10 14 1 15 10 15 0 30 60 90 120 150 129 Average Cost Per New Tire 128 128 1 13 10 13 1 14 10 14 1 15 10 15 00 05 10 15 20 25 30 28 Month Per PM AVERAGE MIS MILES BETWEEN PMs 29 29 1 13 10 13 1 14 10 14 1 15 10 15 0 1000 2000 3000 4000 5000 6000 7000 8000 6082 Miles Per PM 6459 6619 1 13 10 13 1 14 10 14 1 15 10 15 0 10 20 30 40 50 60 70 80 1047 Average Cost Per PM REPAIR COST BY ODOMETER BAND 1583 2763 4264 5443 0 to 15K 15K to 30K 30K to 45K 45K to 60K 60K to 75K 0 20 40 60 80 100 Replacement tire costs for passenger cars has remained relatively flat for the past three years The forecast for 2016 is for a 2 to 3 percent increase in replacement tire pricing driven by unique tire sizes run flats and limited availability for certain vehicles Replacement Tire Cost Per Month Per CPM survey SOURCE ELEMENT RETROSPECTIVE The Early Days Of Fleet Maintenance G oodyear 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 along with such others as BFGoodrich Maaco and Lee Myles started partnering with fleet management companies FMCs to provide consolidated billing product codes and nationwide pricing This was a big deal for fleet managers said Eric Strom maintenance and safety product manager for Element and a 36 year industry veteran It gave them confidence knowing that the national account network was made up of well recognized chain stores with consistent billing and pricing It was also a big deal for the FMCs which often didnt 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 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 Being 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 said Strom 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 STRACKE Element STROM Element AUTOMOTIVE FLEET I MARCH 2016 28