Goodyear Run-Flat Tire Value Is Bargain Priced
2 June 1999
Goodyear Run-Flat Tire Value Is Bargain Priced AKRON, Ohio, June 2 -- Prices for safety-minded products like
run-flat tires might be less than you bargained for.
Based on market research compiled by Goodyear in the last 35 years, it's a
fact that today's consumers are actually paying less for better quality tires
than they did 20 years ago. Even the apparent higher costs for
technologically advanced products like run-flat tires offer more value.
On a cost-per-mile basis, tires from the so-called "good old days" would
cost more than three times that of the recently released 75,000-mile warranted
Regatta 2 passenger car tire. Average miles received on passenger tires have
increased by about 15,000 miles during the past 18 years.
Even a higher-priced run-flat tire is a bargain, considering the recent
past. "Can you place a price tag on safety? Is $200 per tire out of line to
keep you and your family out of harm's way?" asked Marco Molinari, Goodyear's
vice president of sales and marketing for North American Tire.
"That's the price of innovation and product differentiation," Molinari
said. "We've done a good job over the years of providing value to consumers
for lower-priced tires. However, when we have breakthroughs in technology and
design, there is a price associated with that innovation."
The price of run-flat tires is similar to other emerging technologies.
For example, in 1970, the Hamilton Watch Co. introduced Pulsar, the first
electronic digital watch. Its cost was $2,100, or about the same as a
Chevrolet Vega.
As competitors followed, prices declined until a new technology emerged.
Today, the digital watch is inexpensive, although recent innovations have
driven the price of some watches up to $1,450.
Molinari said consumers also accept the price of technology in computers
as it relates to the latest computer chip. "They are more than willing to pay
for that performance, but over time -- based on competitive development --
the price of that innovation is replaced with another.
"Run-flats are an innovation worth the price. As the market grows, it
will be of even greater value as we continue to drive material and
manufacturing costs lower," he said.
Molinari expects Goodyear to remain the lead driver of technological
advances in the run-flat tire market. "We pioneered the modern-day run-flat
tire as the first original equipment fitment on the Chevrolet Corvette in the
early 1990s, and we've made continuous improvements since then.
"When provided the facts, a consumer willing to spend more than $100 for a
pair of specialty sports shoes for the family will understand this type of
tire innovation is as big a bargain as those that have kept their price/value
relationship so high during the past 20 years.
"Today's consumers have become very sophisticated in their desires of
product performance, convenience and safety consciousness. It's our
responsibility to do a better job of letting the consumer know what we are
providing in value for their dollar," he said. "Technology -- which allows
tires to last longer, offer improved traction on rain-slick roads or on icy
roads or to run flawlessly without air -- offers value."
At the turn of this century, tires frequently lasted less than 1,000
miles, and it was common to carry six spares. Many cars in the late 1920s
were equipped with two spares and cotton cord tires that sold for $31.15, plus
another $4.50 for an innertube.
"Sound like a bargain? Maybe in price, but those tires offered little
value when compared with today's state-of-the-art tires. At the new
millenium, run-flat tires simply carry a higher value," Molinari said.
