The two-year period that is about to end has been nothing short of unique: 2020 was marked by a terrible pandemic that caused countless deaths and profound changes for the entire global economy. This year, on the other hand, we have witnessed a significant recovery, albeit with ups and downs, but threatened by recurrences of the pandemic, a persistent shortage of electronic components, now more than vital for the automotive industry, and by a general increase in the prices of energy and raw materials. These factors threaten to erode the benefits of the post-Covid-19 recovery and obviously concern, along with the automotive sector, also the aftermarket and tire professionals. It should also be noted that the pandemic has not interrupted a trend that was already evident in 2019 and which has 2 main areas that are not entirely separate: vehicles are becoming more and more technological and electric vehicles are growing fast. In 2020, despite a negative market due to the health emergency, their percentage share grew. This trend has been confirmed also in 2021 and could be ascribed to the many government incentives oriented towards the purchase of low-emission cars, and to a growing environmental awareness, as people are looking at the Covid.19 outbreak as a deafening warning of the global environmental crisis.
How National fleet vehicles are changing
We do not know if 2022 will confirm the current sales trends in favour of electric vehicles (pure electric accounted for 7% of registrations in October in Italy, plug-in hybrids 5%, full hybrids 8.2% and mild-hybrids 26.9%) since funds allocated to incentives are running out, but the fact remains that in the first 10 months of 2021 almost 480 thousand new electric and hybrid cars were registered, many of which replaced older vehicles. To these we can add the approximately 282 thousand similar vehicles sold in 2020 and reach 761,621 with a good chance of approaching 900,000 units in the two-year period. We are therefore talking about a huge volume of modern - and connected - cars equipped with at least one electric motor (even if small in some cases) and a lithium battery. These changes are bound to have repercussions also on tires: we know in fact that plug-in hybrids are on average heavier and very often more powerful than their conventional counterparts. Electric cars are on average quite heavy (Mercedes EQA with all-wheel drive weighs about 2,100 kg compared to 1,600 kg of the GLA 4Matic) and their tires have to manage higher torque values, however they must still guarantee the smoothest ride possible to maximise mileage. These cars are, on average, quite new and it is therefore likely that they will turn to official networks for assistance, but this is not so obvious as far as tires are concerned. Professionals in the sector could therefore find themselves facing high-voltage systems (150 and more volts are also found in the compact Yaris Hybrid), which require tires with very low rolling resistance.
While you're at it, can you update my car?
In-car connectivity in cars and light commercial vehicles is now standard across Europe, due to the mandatory automatic emergency call which implies the presence of an on-board SIM card. This is used to forward an emergency call and vehicle's location data if none of the occupants are able to do so. Hence vehicles are connected to the Web, and this enables many services, from remote control of several functions to easier fleet management, including car sharing schemes. Connectivity enables yet another service, destined to become increasingly widespread: wireless upgrade. If Tesla, “born and raised” in the Silicon Valley, has always possessed this feature, other manufacturers are adapting quickly as vehicle management will be entrusted to a powerful processor that will replace many of the traditional "control units". This will make it much easier to receive updates, much in the same way it happens with our smartphones, to add new features, improve existing ones and update the management software. It is therefore possible that a customer, during a repair or a seasonal tire change, informs the tire dealer about being notified of a new "update available" and demands to carry out this update. Is this too futuristic? Wrong! The electric Volkswagen ID.3, for example, has already received a complete update via the web. Will tire specialists be able to perform this task should they be asked to? Information Technology has now been extended to all productive and commercial activities and it is enough to think of satellite navigation: is our tire shop present in electronic maps? The answer must be positive as this means we are “visible”, especially to those who, for example, have an emergency and need a tire shop nearby.
Rental fleets
Fleets are increasingly equipped with remote tire monitoring services and therefore deserve a closer look. Next year, in fact, fleet services such as shared mobility are expected on the rise, as well as in long-term rentals, which are often provided directly by the dealers. In this case, it is likely that customers will rely on the person who rented them the car also for its maintenance. Dealing with fleets is a contentious issue because while it is true that the work volume increases, it also requires investments and having to accept rates that sometimes leave little margin. 2022 is shaping up to be special as in 2020, the average mileage travelled by fleets dropped dramatically, which may have postponed the replacement of many vehicles. 2021 has seen a substantial recovery and, at the same time, production difficulties due to the scarce supply of microchips (production losses are estimated at 5/6 million units this year) and therefore a further postponement is possible. Hence, we can foresee a greater demand in maintenance requirements and additional tire replacements.
The need to be proactive
It is also foreseeable that operators will decide to increase the share of electric vehicles in their rental or light commercial fleet, since these vehicles promise an appreciable reduction in operating costs. This brings us back to the comments made above regarding specific training to be able to operate on high-voltage vehicles which means having to adopt a wide range of precautions and specific tools. The year 2020 has also left a legacy of increased use of logistics for door-to-door deliveries and this has greatly increased the distance covered by light and medium sized commercial vehicles for last mile deliveries, which will therefore need more tires. Another phenomenon to be taken into account is the generalized price increase, which concerns not only raw materials but also the cost of transportation: in theory this could boost the sale of retreads, but the topic is rather controversial as the cost of labour is also on the rise. The tensions created by rising prices and short supply are also felt in the tire sector but could still offer new opportunities to tire dealers who may emerge as consultants suggesting sourcing the tires well ahead of time, given the scarcity on the market, and managing the entire process. Mobile services should also be considered (Pneurama has already covered this topic). Due to the pandemic, people have become familiar with door-to-door services, but now there is another important reason: professional drivers are also in short supply, and therefore their precious time cannot be wasted. Therefore, saving fleet managers the inconvenience of a journey to a workshop, not to mention the downtime, could become a decisive factor in promoting customer loyalty.
