Heavy-Duty Vehicle Tire Market Study Analysis

From: Transport Canada

The objective of this study was to collect information from the Canadian trucking industry to provide a perspective on the rate of uptake of low rolling resistance tires in Canada.

Introduction

In 2015, Canada’s total greenhouse gas (GHG) emissions were 722 million metric tonnes on a carbon dioxide equivalent (CO2 eq.) basis. Approximately 24% of these emissions were from the transportation sector, including 62.5 million tonnes from heavy-duty gasoline and diesel powered vehicles.

Given their contribution to total Canadian GHG emissions, and their growth over time, the Government of Canada has proposed Regulations Amending the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and Other Regulations Made under the Canadian Environmental Protection Act, 1999 to further manage GHG emissions from heavy-duty vehicles and engines.

One option for improving fuel economy and reducing GHG emissions for heavy-duty trucks and trailers is the use of low rolling resistance tires. The objective of this study is to collect information from the Canadian trucking industry (including Class 7 and 8 vehicles and the trailers they pull) to provide a perspective on the rate of uptake of low rolling resistance tires in Canada.

The Heavy-Duty Vehicle and Engine Greenhouse Gas Emission Regulations

The Heavy-Duty Vehicle and Engine Greenhouse Gas Emission Regulations (the Regulations) were published in the Canada Gazette, Part II, on March 13, 2013. These regulations are now described as “Phase I” of the Regulations. The Phase I Regulations applied to various vehicle classes, including tractors defined as Class 7 or Class 8 heavy-duty vehicles manufactured primarily for pulling a trailer, but not for carrying cargo other than the cargo in the trailer. The Phase I Regulations had requirements for manufacturers, importers, and distributors, including CO2 emission standards.

Environment and Climate Change Canada proposed amendments to further reduce greenhouse gas emissions from on-road heavy-duty vehicles and their engines for post-2018 model years in the Canada Gazette, Part I, on March 4, 2017. The proposed amendments would introduce more stringent GHG emission standards that begin with the 2021 model year for on-road heavy-duty vehicles and engines. Starting with the 2021 model year, the proposal introduces new CO2 emission standards for “heavy line-haul tractors” and “heavy-haul tractors”. In addition, starting with the 2018 model year, CO2 emission standards are proposed for trailers that become progressively more stringent up to the 2027 model year.

Fuel Economy Options and Low Rolling Resistance Tires

The rolling resistance of a tire is defined as the force needed to keep the tire rolling at a constant speed on a level surface and is usually expressed in the form of a rolling resistance coefficient (CRR). Two types of low rolling resistance tires are now relatively widely used by fleets, namely low rolling resistance conventional tires and low rolling resistance wide base single tires. Various design modifications to tread design, tread depth, sidewalls, rubber compounds, and other tire components can contribute to achieving lower rolling resistance and improved fuel economy. These changes can also affect other aspects of the tire’s characteristics such as traction in rain or on snow or ice, tread life, and cost.

The U.S. Environmental Protection Agency’s (EPA’s) Smartway Verified List identifies close to 200 tire brands and over 750 low rolling resistance tire models. These tires are those that reduce fuel consumption by 3% or more relative to the best-selling new tires for line haul Class 8 tractor-trailers. Some empirical evidence from the U.S. suggests that:

a very high proportion of tires on sales of new trucks and tractors are low rolling resistance duals or wide base singles; and
over 75% of fleets have some low rolling resistance tires, and nearly 50% have some wide base singles.1

Canadian Fleets

Information was collected from a survey of fifty-four Canadian fleets with Class 7 and 8 tractors. The survey respondents included 42 for-hire fleets, 8 private fleets, and 4 rental fleets. Fleets with head offices in every Canadian province were surveyed. In total, the survey covered nearly 13,000 tractors and 35,000 trailers (an average of over 800 units per fleet). Given an estimate of 402,000 heavy-duty trucks in Canada, the study sample represents about 3.2% of the Canadian inventory of heavy-duty trucks.

The sampled fleets traveled 1,740 million vehicle kilometers in 2016, with over 80% by for-hire fleets. In total, the 12,795 tractors had 115,114 tires and the 34,799 trailers had 306,912 tires. As a core finding from the study, the 422,026 tires were comprised of:

41% conventional (non-LRR) tires;
49% low rolling resistance dual tires; and
10% wide base single tires.

There were variations in the uptake of low rolling resistance tires by fleet type, with for-hire fleets having the highest use of fuel saving tires.

Tire Manufacturers

Efforts were made to understand the 2016 national market for heavy-duty tires, and the shares of those that were low rolling resistance dual tires and wide base single tires, through consultations with tire manufacturers.
Seven North American tire manufacturers with sales in Canada completed surveys on their tire businesses. These businesses had sales of approximately 1 million tires in Canada in 2016, representing about 40% of the market estimate of 2.5 million tires. As a second key finding of the study, these tires were comprised of:

58% conventional (non-LRR) tires;
40% low rolling resistance dual tires; and
2% wide base single tires.

The tire manufacturers anticipated that there would be virtually no change in the shares by tire type in 2020.

Heavy-duty Truck Manufacturers

Two of the four North American heavy-duty truck manufacturers provided information on their sales of trucks and tires. The Canadian sales of those two manufacturers represented approximately 40% of the estimated market for Class 8 trucks in Canada in 2016. Based on reported sales, Class 7 trucks represented much less than 1% of the heavy-duty market.
The companies provided information on the types of tires found on their 2016 sales of heavy-duty trucks, with:

31% being conventional (non-LRR) tires;
63% being low rolling resistance dual tires; and
6% being wide base single tires.

Heavy-duty Truck Trailer Manufacturers

Fourteen major North American trailer manufacturers were approached with questions about their sales of tires on trailers, and ultimately eight responded with information. These eight companies reported selling approximately 15,000 trailers in 2016, which is expected to represent about 45% of the annual market for trailers in Canada.
The companies provided information on the types of tires found on their trailers sold into Canada in 2016, with:

28% being conventional (non-LRR) tires;
66% being low rolling resistance dual tires; and
6% being wide base single tires.

While these shares are very similar to those reported by tractor manufacturers, there was diversity in terms of the responses from individual trailer manufacturers.

Key Findings and Conclusions

The rates of tire uptake found among fleets, tire manufacturers, tractor manufacturers, and trailer manufacturers are summarized in Table 1.

Table 1: Summary of Tire Share Information, By Tire Type
Tire Type	Canadian Fleets	Tire Mfrs.	Truck Mfrs.	Trailer Mfrs.
Non-LRR Conventional	41%	58%	31%	28%
LRR Conventional	49%	40%	63%	66%
Wide Base Single	10%	2%	6%	6%
Total	100%	100%	100%	100%

On the basis of this evidence, it is expected that the shares of tire types on Canadian fleets are:

45% non-LRR conventional tires;
50% low rolling resistance conventional tires; and
5% wide base single tires.

This conclusion weighs the inputs from the Canadian fleet relatively highly (but considers the possibility of an unrepresentative sample, particularly in terms of wide base single tires). It also reflects the fact that the inputs from the three manufacturing groups represent the sales for a single year (2016) while the fleet estimates represent a sampling of the fleet across various model years.

Several perceptions of fleet managers have deterred the uptake of low rolling resistance tires. For low rolling resistance dual tires, these predominantly include concerns over winter traction, off-highway traction, and an uncertain return in terms of fuel savings versus costs. Fleets were also concerned with the weight limits that exist in some provinces for wide base single tires and their availability particularly as replacements.

Heavy-Duty Vehicle Tire Market Study Analysis
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