Tire dealers are anything but average Profiling them reveals strength in numbers Would you consider your business

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1 2018 Facts Section: Overview 28 Tire dealers are anything but average Profiling them reveals strength in numbers Would you consider your business model average? Probably not. But you can learn a lot about your business when you benchmark your profile against the average dealer. That s what our annual Facts Issue is all about. It is full of information that will help you compare your numbers with the rest of the U.S. Take pricing, for example. On pages 38 and 40, we break down average advertised pricing for a number of popular sizes. One size in particular, 265/70R17, lists the national average by region, tire type (winter), price point (good, better, best) and online pricing. Here s how we define the average independent tire dealer. He or she: handles an average of 13.3 tire brands; employs five technicians per store; averages seven service bays per store; derives 46 sales from automotive service. Over the course of 2017, 25 you either added or dropped one or more brands, which is a strong indication of not only your independence, but also the availability of profitable tire brands. How strong is the independent tire dealer channel in the U.S.? As a group it controls 245,000 service bays and employs almost 175,000 techs, half of whom are ASE-certified. It also performs $25 billion worth of automotive service annually. Independent tire dealers represent 61.5 the passenger tires sold directly to the consumer. That s 127 million tires; the next largest tire retail group, mass merchandisers, accounts for direct sales of 24 million tires. When you take wholesaling into account, and give credit to the dealer selling to the retailer who then sells the tire to the consumer, independents dominate even more. And these numbers are not the result of large dealers skewing the data. Close to 60 the 29,000 independent tire dealers in the U.S. are single-store owners, more than enough to keep the figures statistically relevant. So enjoy MTD s analysis of the 2017 domestic tire industry, and find out how successful you really are! Bob Ulrich 2017 U.S. REPLACEMENT TIRE SALES (a $39.6 billion industry) GENDER ANALYSIS OF THE TIRE BUYING PROCESS According to BrightLine Marketing, men decide which brand to purchase and retailer to frequent more often than women when buying tires Farm $535 million Passenger $25.4 billion Male OTR $1.7 billion Female Source: BrightLine Marketing LLC ( Light truck $5.2 billion Truck $6.8 billion All figures in this 13-page Facts Section are Modern Tire Dealer figures unless otherwise noted.

2 2018 Facts Section: Tire shipments A milestone year Passenger and truck tire shipments set records in 2017 The domestic tire industry reached two milestones in Replacement passenger tire shipments ed million units, the most ever. And replacement truck tire shipments ed 19.2 million units, also a record high. (According to U.S. Tire Manufacturers Association preliminary figures, the s will be million and 19.4 million, respectively.) Replacement light truck tire shipments reached their high-water mark last year. The record passenger tire shipment number was especially surprising given the 35.6% drop in consumer tire imports from China. There also was a 20.5% drop in truck tire imports from China. Original equipment shipments were down, U.S. REPLACEMENT AND OE TIRE UNITS SHIPPED, (in millions; imports included) up and up. Passenger units were down close to 5%, perhaps due in part to the disappearing spare. The American Automobile Association says 28 the 2017 model-year vehicles came without spare tires. Temporary spares also are not counted in the shipments. In contrast, light truck units were up 10%, and truck tire shipments were up 7.5% Passenger tires Light truck tires Medium/heavy truck tires Replacement OE U.S. CONSUMER TIRE IMPORTS FROM CHINA (in millions of units) Year Units Yr./yr. change % % % % % % % % % % % % % The largest consumer tire exporter to the U.S. is Thailand at 33.8 million units. Sources: U.S. government, MTD WORLD LEADERS IN NEW TIRE SALES (fiscal year 2017; in billions of U.S. dollars 1 ) Tire company Bridgestone Corp. $26.2 $25.4 Groupe Michelin $23.4 $22.0 Goodyear Tire & Rubber Co. $14.6 $14.7 Continental AG $12.6 $11.9 Sumitomo Rubber Industries Ltd. $6.3 $6.0 Pirelli & Cie SpA $6.1 $6.7 Hankook Tire Co. $6.1 $5.7 Yokohama Rubber Co. $4.5 $4.4 Cheng Shin Rubber Ind. Co. Ltd. 2 $3.7 $3.6 Giti Tire Pte. Ltd. $3.2 $3.1 Toyo Tire & Rubber Co. $2.8 $2.8 Cooper Tire & Rubber Co. $2.8 $2.9 Kumho Tire Co. Inc. $2.5 $2.5 Footnotes 1 Figures are based on yearly average exchange rates. 2 A subsidiary of Cheng Shin Rubber Ind. Co. Ltd. does business as Maxxis International. 30

3 2018 Facts Section: Market share Anchor brands lose some share Tier 2 and Tier 3 brands (and Tier 4?) pick up the slack Analyst Nick Mitchell follows more than just results from publicly traded tire and automotive companies for Northcoast Research Holdings LLC. He also tracks tire pricing and demand by tier. When asked how the tire tiers fared against each other last year, Mitchell 2017 U.S. REPLACEMENT PASSENGER TIRE BRAND SHARES (based on million units) said Tier 2 and Tier U.S. Brand 2017 REPLACEMENT LT TRUCK TIRE Goodyear 12.0% BRAND SHARES Michelin 9.5% (based on 30.8 million units) Bridgestone 7.5% Brand 2017 Firestone 7.5% Goodyear 11.0% Cooper 5.0% BFGoodrich 8.5% BFGoodrich 4.5% Michelin 7.5% Hankook 4.5% Bridgestone 7.0% Continental 4.0% Firestone 7.0% Yokohama 4.0% Cooper 5.5% Falken 3.5% General 5.5% General 3.0% Hankook 4.5% Kumho 3.0% Toyo 4.5% Toyo 3.0% Yokohama 4.5% Multi-Mile 2.5% Multi-Mile 4.0% Nexen 2.5% Kumho 2.5% Pirelli 2.5% Pirelli 2.5% Primewell 2.0% Falken 2.0% Sumitomo 2.0% Hercules 2.0% Uniroyal 2.0% Maxxis 2.0% Dunlop 1.5% Uniroyal 2.0% GT Radial 1.5% Continental 1.5% Hercules 1.5% Cordovan 1.5% Nitto 1.5% Dunlop 1.5% Sailun 1.5% Eldorado 1.5% Big O 1.0% Kelly 1.5% Cordovan 1.0% Mastercraft 1.5% Kelly 1.0% Nexen 1.5% Mastercraft 1.0% Big O 1.0% Sigma 1.0% GT Radial 1.0% Others 5.5% Others 5.0% Because numbers are rounded to the nearest one-half percent, the may not equal 100%. Brands must have at least 1 the market in shipment numbers to be listed at 1%. brands outperformed Tier 1 brands through the first 10 months of the year based on unit growth. We agree, and the market share changes in the charts below compared to 2016 reflect that. Modern Tire Dealer divides the market into four tiers because we feel there are often more than three price points in the marketplace. We define Tier 1 tires as the three BRANDS LISTED BY THE MTD 100 DEALERS, Brand Michelin Goodyear BFGoodrich Dunlop Bridgestone Firestone Continental The MTD 100 represented 4,921 outlets in 2009, and 6,257 in Of all the brands, Cooper made the biggest jump from 2009 to 2017: from 31 dealers to BRANDS LISTED BY THE MTD 100 (Total outlets: 6,257) Rank by number of dealers anchor brands: Michelin, Bridgestone and Goodyear. Upper- and middle-market brands like Continental, Pirelli, Hankook, Yokohama, Toyo, Falken, Kumho, Dunlop, Nexen, Cooper, Firestone, BFGoodrich and General fall into the Tier 2 category. Value brands, such as private brands, are Tier 3 tires. And low-cost radials in general many of the imports from China are Tier 4 brands. Dealers/ outlets 2016 ranking 1. Michelin 88/5, BFGoodrich 79/5, Goodyear 72/4, Continental 67/4, Bridgestone 63/4, Firestone 58/2, Yokohama 57/4, Cooper 54/3, General 54/3, Uniroyal 53/2, Hankook 47/4, Dunlop 45/4, Kelly 42/2, Pirelli 40/4, Toyo 36/3, Kumho 30/2, Nexen 24/1, Falken 23/2, Mastercraft 21/1,231 N/R 20. Nitto 20/2,

4 2017 OE U.S./CANADIAN CONSUMER TIRE BRAND SHARES (excluding imports) BMW Pirelli 33% Continental 27% Bridgestone 25% Dunlop 10% Michelin 5% CHRYSLER/FIAT (FCA) Goodyear 42% Michelin 15% Firestone 10% Bridgestone 7% Continental 6% Kumho 4% Yokohama 4% BFGoodrich 3% General 3% Pirelli 3% Falken 1% Hankook 1% Nexen 1% FORD Michelin 24% Goodyear 24% Continental 20% Hankook 9% Pirelli 8% General 7% BFGoodrich 4% Bridgestone 2% Cooper 1% Toyo 1% 2017 U.S./CANADIAN LIGHT VEHICLE MARKET SHARE (based on production) OEM Ford 18.6% 20.4% GM 21.0% 19.3% Toyota 13.6% 13.8% FCA 14.5% 12.2% Honda 11.7% 12.2% Nissan 6.9% 6.9% Others* 13.7% 15.2% *Hyundai/Kia was the seventh highest at 5.3%. GENERAL MOTORS Goodyear 35% Michelin 20% Bridgestone 17% Firestone 13% Continental 8% Hankook 3% General 2% Pirelli 2% HONDA Michelin 25% Goodyear 25% Bridgestone 17% Continental 17% Hankook 8% Yokohama 5% Firestone 3% MERCEDES Continental 31% Pirelli 26% Bridgestone 15% Michelin 11% Dunlop 9% Goodyear 8% HYUNDAI/KIA Hankook 40% Kumho 40% Continental 10% Nexen 10% NISSAN Continental 30% Michelin 29% Goodyear 20% BFGoodrich 5% Bridgestone 5% Toyo 5% Hankook 2% Dunlop 1% Falken 1% General 1% Kumho 1% SUBARU Bridgestone 60% Continental 30% Goodyear 10% TESLA Continental 45% Goodyear 30% Michelin 20% Pirelli 5% TOYOTA Bridgestone 27% Michelin 24% Goodyear 12% Dunlop 8% Continental 7% BFGoodrich 6% Toyo 5% Yokohama 5% Firestone 3% General 3% VOLKSWAGEN Continental 55% Hankook 30% Bridgestone 14% Falken 1% 2017 U.S./CANADIAN OE CONSUMER TIRE MARKET SHARE (excluding imported vehicles) Goodyear 23.7% Michelin Continental Bridgestone Hankook Firestone Pirelli Kumho General BFGoodrich Yokohama Dunlop Toyo Others 4.5% 4.0% 2.7% 2.7% 2.4% 1.8% 1.7% 1.2% 1.0% 6.0% 15.1% 13.5% 19.7% Others refers to Nexen, Falken and Cooper. 33

5 2018 Facts Section: Distribution Suddenly, they are No. 2 Michelin and SCOA form NTW tire wholesale venture What spurred Michelin North America Inc. to buy 50 TBC Corp. from Sumitomo Corporation of Americas (SCOA)? Michelin Chairman and President Scott Clark says the resulting joint venture is about increasing our service capabilities and increasing our scale so that we can be a better supplier to both independent dealers and to provide secondary supply to our direct customers. By combining Michelin s more than 85 Tire Centers LLC (TCi) distribution centers with TBC s 59 Carroll Tire distribution centers, Michelin and SCOA created the second largest tire wholesaler in the U.S. in terms of market share behind American Tire Distributors Inc. (ATD). The new entity will be called National Tire Wholesale, or NTW. Erik Olsen, CEO and president of TBC Corp., says in addition to raising the company s level of service to its new and existing customers, the new NTW enables us to be a full-service provider to fleets across the United States with the help of TBC s portfolio of retail stores, franchisees and tire brands. How much the joint venture will change the landscape of wholesale tire distribution is unclear. TCi was already a TBC Brands customer, and Carroll Tire sold Michelin s three main consumer tire lines. ATD also sells Michelin, BFGoodrich and Uniroyal tires. For more information on the joint venture, see page 8. U.S. CONSUMER TIRE RETAIL MARKET SHARE Distribution channel Independent tire dealers 61.5% 60.5% 60.5% Mass merchandisers 11.5% 13.0% 14.0% Warehouse clubs 9.0% 9.0% 8.5% Auto dealerships 9.0% 8.0% 7.5% Tire company-owned stores 6.5% 7.5% 7.5% Miscellaneous outlets 2.5% 2.0% 2.0% U.S. NEW-CAR FRANCHISES , , , , , , , , , , , , ,640 Source: National Automobile Dealers Association CONSUMER TIRE DISTRIBUTION CHANNEL MARKET SHARE Initial channel Independent tire dealers 79.0% 78.0% 77.0% Tire company stores 7.0% 8.0% 8.0% Miscellaneous 14.0% 14.0% 15.0% Miscellaneous includes mass merchandisers, warehouse clubs, car dealers, auto parts chains, muffler shops and oil companies/service stations. COMPANY-OWNED STORES IN THE U.S Bridgestone 2, WAREHOUSE CLUB U.S. STORE COUNT The number of warehouse clubs in the U.S. has grown from 1,331 to 1,399 in the last three years. That s a growth rate of 5.1%, led by Costco Wholesale. Warehouse club Sam s Club Costco Wholesale Corp BJ s Warehouse Club Inc The only three brands sold by all three warehouse clubs are Michelin, BFGoodrich and Bridgestone Goodyear 600 Nokian/Vianor 81 34

6 2018 Facts Section: Online tire sales Internet vs. brick-and-mortar 16.7 million tires were sold online in 2017 Selling tires online is a growing trend, with more online-only players making names for themselves each year. The relative newcomers compete against not only brickand-mortar retailers, but also each other, and cannibalize sales from leading online tire companies like the Tire Rack Inc. and Discount Tire Direct. Their growth, at least compared to buying consumer goods online like books, apparel and electronics, is limited because tires need to be installed, something that requires a trip to an established retail location. That changes the whole dynamic of wanting to purchase online. However, that doesn t mean the growth isn t significant. In 2016, 6 the replacement consumer tires in the U.S. were sold online. That number rose to 7%, or 16.7 million tires, in In order to understand what motivates people who buy tires online, Modern Tire Dealer surveyed two specific groups of consumers. The first group was made up of people who had bought tires online; the second group a much smaller sample size was made up of people who had bought tires at physical retail locations. With 79 the respondents to MTD s Online Sales Research Study of Consumers having purchased tires online in the last 18 months, we had the statistical validity to determine what drives their attitudes, behavior and expectations regarding online tire sales. Bob Ulrich ONLINE TIRE SALES: EASE OF BUYING When asked, On a scale of 1 to 5, where 1 is Not at all difficult and 5 is Extremely difficult, how difficult was it to find tires and make the purchase? respondents answered as follows. ONLINE TIRE SALES: PRICING When asked, Why did you choose to buy tires online? respondents said price was a big factor. Online has best price 61% Not difficult 60% Previously purchased tires online 50% Slightly difficult 22% Knew what tires I wanted Easier to buy online 37% 36% Moderately difficult 13% Did not want to visit store 11% Very difficult 2% No trustworthy retailers Bought same brand I had 10% 7% Extremely difficult 2% Source: MTD s 2017 Online Sales Research Study of Consumers Other 1% One of the explanations for Other included, The tires for my car had to be ordered online. Source: MTD s 2017 Online Sales Research Study of Consumers ONLINE TIRE SALES: REPEAT CUSTOMERS When asked, Would you buy tires online again? the online purchasers overwhelmingly responded, Yes. No 4% ANALYSIS: TIRE SELLER VS. INSTALLER Almost 95 the respondents to the mid-year 2017 BrightLine Tire Survey purchased their new tires from the tire installer. Installer 94.5% Online retailer 2.8% Yes 96% Different retailer Tire manufacturer 2.2% 0.5% Source: MTD s 2017 Online Sales Research Study of Consumers Source: BrightLine Marketing LLC (

7 2018 Facts Section: Pricing and sizing High-value-added The need for larger, more profitable tires is not going away Tire manufacturers continue to see highvalue-added (HVA) tires as the way to increased profitability. They are generally defined as 17-inch and larger tires (Michelin North America Inc. says 18-inch and larger), which takes them out of broad-line sizing. But they are more than just a tire size. They are, as Pirelli Tire North America Inc. executives have said for years, premium and prestige tires because they fit on higher-end vehicles. They may cost more, but their return on investment is greater, a win-win for manufacturers and the dealers who sell their brands. When Goodyear Tire & Rubber Co. introduced its Assurance WeatherReady last year, it described it as a premium all-season HVA tire. Chairman, CEO and President Rich Kramer said the trend has been driven by OEM demands. The chart on page 40, Available sizes by rim diameter, shows how popular larger sizes have become. According to the Tire & Rim Association, there are inch sizes, more than any other rim diameter. A year ago, tire industry analyst Nick Mitchell estimated the U.S. market would require approximately four new tire plants to meet the need for an additional 19.1 million HVA tires. That is happening. 38 NEW P-METRIC AND LT TIRE SIZES/SKUS IN 2018 (not counting temporary spares or additional rim contours added to existing LT sizes) P235/50R20 P285/55R20 XL P275/60R20 XL LT205/80R16 LRE LT275/80R17 LRD/E LT305/50R20 LRE LT255/80R17 LRC LT245/75R17 LRD LT295/75R17 LRC LT275/70R17 LRD LT265/60R18 LRD LT325/50R20 LRF LT315/45R22 LRF 37x11.50R18LT LRD/E 33x10.50R17LT LRD 33x10.50R18LT LRD 35x11.50R17LT LRC 37x13.50R20LT LRF Source: Tire & Rim Association 2017 ADVERTISED PRICING BREAKDOWN, 215/55R17 Speed Major Low Cost Overall Radial V-rated $ $83.38 $ H-rated $ $96.55 $ T-rated $ $ $ Source: Tire Intelligence LLC ( AVERAGE ADVERTISED TIRE PRICES (in the U.S.) Major brand Low-cost Overall 205/55R16 $ $74.34 $ /60R16 $ $76.49 $ /55R17 $ $82.47 $ /75R15 $ $98.32 $ /65R18 $ $ $ LT225/75R16 $ $ $ LT245/75R16 $ $ $ LT245/75R17 $ $ $ x10.50R15 $ $ $ Source: Tire Intelligence LLC ( ONLINE TIRE PRICING Online tire pricing varies greatly depending on the website. The Fitment Group collected these advertised prices on two specific tire lines. Advertised web pricing was collected during the weeks of May 14 and Dec. 24, Goodyear Wrangler ATS, size 265/70R17 Website May December econrads.com $ $ goodyear.com $ $ justtires.com $ $ onlinetires.com $ $ simpletire.com $ $ tirebuyer.com $ $ tirecrawler.com $ $ tires.com $ $ tiresetc.com $ $ Hankook Dynapro ATM RF10, size 235/75R15 Website May December dunntire.com $ $ lowtireprice.com $99.00 $ mavistire.com $ $ onlinetires.com $96.86 $91.68 samsclub.com $99.22 $99.23 simpletire.com $ $92.97 tirerack.com $99.25 $99.00 townfair.com $ $ walmart.com $95.00 $94.35 Not all the websites were set up for selling online. For example, dunntire.com offers up a quote and then requires the customer to schedule an appointment - with no money changing hands online. Source: The Fitment Group (

8 2018 Facts Section: Pricing and sizing AVAILABLE SIZES BY RIM DIAMETER 12-inch 1 13-inch 14-inch 15-inch 16-inch 17-inch 18-inch 19-inch 20-inch 21-inch 22-inch 23-inch 24-inch 26-inch Source: Tire & Rim Association MOST POPULAR DOMESTIC OE PASSENGER AND LT TIRE SIZES 2016 OE P-metric/metric P215/55R17 4.0% P265/70R17 3.5% 225/65R17 2.9% P275/65R18 2.8% 215/55R17 2.4% 2015 OE P-metric/metric P215/55R17 4.1% P265/70R17 3.4% P215/60R16 3.2% 225/65R17 2.8% 215/55R17 2.8% 2014 OE P-metric/metric P215/55R17 5.0% P215/60R16 3.4% 215/55R17 2.7% P265/70R17 2.7% P275/65R18 2.6% 2013 OE P-metric/metric P215/55R17 6.1% P265/70R17 4.0% P275/55R20 3.2% P275/65R18 3.1% P215/60R16 3.1% 2016 OE light truck (LT) LT245/75R % LT225/75R16 9.7% 235/65R16 8.8% LT265/70R18 8.6% LT265/60R20 7.8% 2015 OE light truck (LT) LT245/75R % LT225/75R16 9.8% LT265/70R18 9.7% LT275/70R18 7.9% LT245/75R16 7.6% 2014 OE light truck (LT) LT245/75R % LT245/75R % LT225/75R % LT265/70R % LT275/65R18 7.8% 2013 OE light truck (LT) LT245/75R % LT245/75R % LT225/75R % LT265/70R17 8.9% LT265/75R18 8.1% P-metric/metric: The sixth most popular OE P-metric/ metric size, P205/65R16, was not in the USTMA s top 10 list in Neither was the eighth most popular: 275/55R20. Light truck: LT245/75R17 has been the No. 1 OE size for the last six years. It is only the fifth most popular replacement size, however. Source: U.S. Tire Manufacturers Association (USTMA) 40 PRICE POINT BREAKDOWN OF SIZE 265/70R17 BY REGION The most popular OE size on the F-150 is 265/70R17, which was the second most popular OE size in Region OPP Value Better Best Winter Average East North Central $ $ $ $ $ $ East South Central $ $ $ $ $ $ Middle Atlantic $ $ $ $ $ $ Mountain $ $ $ $ $ $ New England $ $ $ $ $ $ Pacific $ $ $ $ $ $ South Atlantic $ $ $ $ $ $ West North Central $ $ $ $ $ $ West South Central $ $ $ $ $ $ Nationwide $ $ $ $ $ $ Average $ $ $ $ $ $ Source: The Fitment Group ( TOP U.S. REPLACEMENT PASSENGER TIRE SIZES, /55R /70R /60R /60R /65R /50R /55R /55R /65R /75R16 TOP U.S. REPLACEMENT LT TIRE SIZES, LT245/75R16 6. LT235/85R16 2. LT265/70R17 7. LT275/70R18 3. LT265/75R16 8. LT285/70R17 4. LT225/75R16 9. LT285/75R16 5. LT245/75R LT235/80R17

9 2018 Facts Section: Commercial Demand and supply Domestic truck tire production will increase in future For all of you commercial truck tire dealers and manufacturers, remember the first quarter of 2017? No? I m guessing that is the result of selective memory. It was pretty slow, and that is an understatement. Market demand eventually picked up, resulting in a record high of 19.2 million replacement truck tires shipped in the U.S. That s Modern Tire Dealer s number. The U.S. Tire Manufacturers Association (USTMA) predicts domestic replacement truck tire shipments will finish 2017 at 19.4 million units, a 4.3% increase over its then-record 18.6 million units shipped in The turnaround in 2017 may have started last February when the International Trade Commission voted against imposing tariffs on truck and bus tires manufactured in China and imported into the U.S. The result was an instant increase in low-cost imports from China, which, despite the high demand, directly led to a 1.4% decrease in retreaded truck tires. Together, however, new and retreaded truck tires topped the 33 million mark domestically. Overseas players are taking notice. The Dec. 19, 2017, announcement by Triangle Tyre Co. Ltd. to build a new consumer tire plant in Edgecombe County, N.C., will lead to two plants built in two phases. The first will produce consumer tires. The second, to be completed by 2023, will be a truck tire plant, to be built next to the first facility. The company s plan for phase two is not surprising. In March of last year, Triangle Tire USA hired Rick Phillips away from Yokohama Tire Corp. to be its vice president of sales. Phillips was instrumental in the building of Yokohama s new commercial truck tire plant in West Point, Miss. When Hankook Tire America Corp. held the grand opening of its consumer tire plant in Clarksville, Tenn., in October, future medium truck tire production was mentioned to me as a possibility by more than one Hankook employee (although Hankook Tire Co. Ltd. CEO Seung Hwa Suh said the company is not looking beyond the first two phases, which center on consumer tire production). USTMA also estimates domestic original equipment truck tire shipments will be up 8% this year. Bob Ulrich 2017 U.S. REPLACEMENT MEDIUM/HEAVY TRUCK TIRE BRAND SHARES (based on 19.2 million units) Brand 2017 Michelin 15.0% Bridgestone 15.0% Goodyear 10.5% Yokohama 8.5% Firestone 7.5% Continental 6.0% Double Coin 3.5% Hankook 3.5% Roadmaster 3.0% Hercules 2.5% Sailun 2.5% Dayton 2.0% BFGoodrich 2.0% 2017 U.S. MARKET SHARE RETREADED TRUCK TIRES (based on 14.3 million units) Bridgestone (Bandag) 44.0% Goodyear 23.5% Michelin/Oliver 22.0% Marangoni 5.0% Continental 2.0% Others 3.5% Brand 2017 General 2.0% Toyo 2.0% Dynatrac 2.0% Aeolus 1.5% Dynacargo 1.5% Sumitomo 1.5% Duraturn 1.0% Gladiator 1.0% Kelly 1.0% Kumho 1.0% Samson 1.0% Westlake 1.0% Others 5.0% All brands listed own at least 1 the market. U.S. RETREADING, 2017 Truck tire units 19.2 million Retreaded truck tires 14.3 million Sales (with casings) $2.9 billion Average retread cost $ Average pre-cure price $ Average mold cure price $ Average casing price $57.24 % precure units 94% Average sales margin 18.9% No. of plants, truck tires 645 No. of plants, OTR tires 18 U.S. TRUCK TIRE IMPORTS FROM CHINA (in millions of units) Year Units Yr./year % % % % % % % Sources: U.S. government, Modern Tire Dealer 42

10 2018 Facts Section: Commercial AVERAGE 2017 INDEPENDENT TIRE DEALER TIRE SALES PROFIT MARGINS Heavy truck 15.7% Medium truck 16.8% Wholesale passenger 11.7% Wholesale truck 10.4% Commercial light truck 20.5% Retail passenger 24.8% Retail light truck 24.6% REPLACEMENT REAR FARM TIRE SHIPMENTS (radial vs. bias) Year Radial % % % % % % % % % % % RADIAL REAR REPLACEMENT 2017 shipments: 315,600 Firestone 28.0% BKT 23.5% Michelin 17.0% Goodyear 14.0% Alliance 7.0% Titan 5.0% Trelleborg 2.0% Mitas 1.5% Harvest King 1.0% Others 1.0% Total 100% BIAS REAR REPLACEMENT 2017 shipments: 450,000 BKT 38.0% Firestone 24.0% Alliance 11.0% Goodyear 7.0% Harvest King 6.0% Titan 4.5% Carlisle 3.0% Trelleborg 2.5% American Farmer 1.0% Others 3.0% Total: 100.0% SMALL FARM REPLACEMENT 2017 shipments: 1.2 million Firestone 22.0% BKT 19.0% Goodyear 15.5% Titan 13.5% Carlisle 12.5% Harvest King 9.0% Alliance 3.0% Trelleborg 2.5% American Farmer 1.0% Others 2.0% Total: 100.0% % 44

11 2018 Facts Section: Plant capacities 62 plants, with more to come Get ready for Nokian, Wanli and Triangle Yearly tire capacity, not production, in North America ed million tires at 62 plants as of Jan. 1, That s up 4.9% compared to 2017, when capacity was million tires. (The does not include race or aviation tires.) In the United States, annual capacity increased by more than 12 million tires to million units, a 4.9% increase. Mexican plant capacity was also up, from 37.2 million to 39.8 million units, or 7%. Canadian capacity was up slightly more than 1%. Two new plants helped with additional production in the U.S. Giti Tire (USA) Ltd. s consumer tire plant in Richburg, S.C., began producing tires last year. Giti is investing $560 million in the Giti At full capacity, the new Giti Tire (USA) consumer tire plant will produce 5 million tires annually. NORTH AMERICAN PLANT CAPACITIES as of Jan. 1, 2018 (in thousands of units) Plant location/ Year constructed Nonunion ISO QS Passenger per day: Light truck per day: Truck per day: Others per day: Total Bridgestone Americas Inc. Aiken, S.C., 2013 x La Vergne, Tenn., 1972 x x Warren County, Tenn., 1990 x x Bloomington, Ill., 1965 x x Des Moines, Iowa, 1945 x x Wilson City, N.C., 1974 x x x Aiken, S.C., 1999 x x x Joliette, Quebec, 1966 x x Monterrey, Mexico, 2007 x Cuernavaca, Mexico, 1980 x x Total: American Industrial Partners (formerly Carlisle Tire & Wheel Co.) Jackson, Tenn., 2009 x Clinton, Tenn. (Dico), 1974 x x Total: Continental Tire the Americas LLC Sumter, S.C., 2013 x Mount Vernon, Ill., 1973 x x x Mount Vernon, Ill., 1988 x x x Total: Cooper Tire & Rubber Co. Findlay, Ohio, 1917 x Texarkana, Ark., 1964 x Tupelo, Miss., 1984/1960 x x Total: Giti Tire (USA) Ltd. Richburg, S.C., 2017 x Goodyear Tire & Rubber Co. Danville, Va., 1966 x x Fayetteville, N.C., 1969 x x Gadsden, Ala., 1928 x x Lawton, Okla., 1978 x x x Topeka, Kan., 1945 x x Medicine Hat, Alberta, 1960 x x Napanee, Ontario, 1990 x x x San Luis Potosi, Mexico, 2017 x Total: Hankook Tire America Corp. Clarksville, Tenn., 2016 x Kumho Tire Co. Inc. Macon, Ga., 2015 x Michelin North America Inc. Ardmore, Okla., 1969 x x x Dothan, Ala., 1979 x x Fort Wayne, Ind., Greenville, S.C., 1975 x x Greenville, S.C. (C3M), 1997 x x x Greenville, S.C. (Tweel), 2014 x Lexington, S.C., 1981 x x

12 Plant location/ Year constructed Nonunion ISO QS Passenger per day: Light truck per day: Truck per day: Others per day: Total Lexington, S.C., 1998 x x Spartanburg, S.C., 1978 x x Starr, S.C., 2013 x Tuscaloosa, Ala., 1945 x Bridgewater, Nova Scotia, Canada, 1971 x x Granton, Nova Scotia, 1971 x x Waterville, Nova Scotia, 1982 x x Queretaro, Mexico, 2002 x Total: Pirelli Tire North America Inc. Rome, Ga., (MIRS), 2002 x x Guanajuato, Mexico, 2011 x Total: Specialty Tires of America Inc. Indiana, Pa., 1915 x Unicoi, Tenn., 1997 x Total: Sumitomo Rubber USA LLC (Sumitomo Rubber North America Inc.) Tonawanda, N.Y., 1923 x Titan Tire Corp. Bryan, Ohio, 1967 x x Des Moines, Iowa, 1943 x Freeport, Ill., 1964 x x Total: Toyo Tire North America Manufacturing Inc. White, Ga., 2005 x x Trelleborg Wheel Systems Spartanburg, S.C., 2015 x Charles City, Iowa, Total: Yokohama Tire Corp. West Point, Miss., 2015 x x x Salem, Va., Total: Grupo Carso/Euzkadi (Continental AG) San Luis Potosi, Mexico JK Tyre & Industries (formerly CIA Hulera Tornel) Mexico City, Mexico Tultitlan, Mexico Tacuba, Mexico Total: Corporacion de Occidente SA de CV (Cooper Tire) Guadalajara, Mexico, 2005 x x x U.S. s: Canadian s: Mexican s: TOTAL: PLANT UNIONIZATION BREAKDOWN 40 Non-union Union 25 Manufacturing (USA) Ltd. facility, which will produce not only the Dextero brand (specifically the DHT2 and Touring DTR1) for Wal-Mart Stores Inc., but also the Giti brand not to be confused with the GT Radial brand for the North American market. The Giti brand, the global flagship brand for the Giti Tire Group, will be introduced in the U.S. later this year. The GT Radial brand, which has been sold through U.S. independent dealers for many years, also will be produced at the plant. The Giti brand will be sold through multiple channels, including independent dealers. At full capacity, the plant will be able to produce 5 million tires a year. The other plant, Goodyear Tire & Rubber Co. s manufacturing facility in San Luis Potosi, Mexico, builds 2,000 tires a day. At full capacity, it will produce more than 16,000 tires a day, or 6 million annually, for North America and Latin America. Also in 2017, three overseas tire manufacturers announced plans to build tire plants in the U.S. over the next few years. Last June, Wanli Tire Corp. Ltd. said it will invest $400 million in a consumer tire plant in Orangeburg County, S.C. When completed, the facility will be able to produce 6 million tires annually. In September, Hille Korhonen, the CEO and president of Nokian Tyres plc, said the company plans to begin producing consumer tires at its Dayton, Tenn., manufacturing facility by By 2022, the $360 million plant will have a yearly production capacity of 4 million tires. And in December, Triangle Tyre Co. Ltd. announced it would build a consumer and commercial tire plant in Edgecombe County, N.C., at a cost of $580 million. 47

13 2018 Facts Section: Automotive services Automotive service survey What a difference 10 years makes How much have sales and profits generated by automotive services changed in the last 10 years? Very little, according to Modern Tire Dealer research. MTD s 2017 Automotive Service Survey shows on average, automotive service at independent tire dealerships generates 46 sales and 45 earnings. Ten years ago, our survey figures were 47% and 44%, respectively. With the exception of mounting and balancing, which they overwhelmingly offer as part of the tire-buying experience, dealers expanded their service offerings in all categories surveyed over the last decade. The biggest increase was in tire pressure monitoring system (TPMS) service, with 95% of dealers offering the service versus 41% in In 2017, 83 dealers provided engine repair/diagnostic/tune-up services, up from 58% in Cooling system service gained 16 points, with 85 dealers offering the service compared to 69% in the 2007 survey. AUTO SERVICES OFFERED BY DEALERS: 2017 VERSUS 2007 The average number of service bays per outlet is 7 and technicians per outlet is 5. Air conditioning Alignment Batteries/electrical Bearings/seals Brakes 59% 73% 86% 80% 78% 84% 91% 96% 97% 93% ADVERTISED OIL CHANGE PRICES: Some 93 tire dealers offer oil and lube service $ $ $ $ $ $ $ $ $ $ $ $16.11 After increasing 34% between 2006 and 2012, the cost of a standard oil change steadily decreased until Source: Modern Tire Dealer statistics Chassis/suspension Cooling system 69% 91% 82% 85% SALES FROM AUTOMOTIVE SERVICE (as a tire dealer sales) Diagnostics/ engine repair Exhaust systems 58% 61% 57% 83% Automotive service 46% Tires 54% Mounting/balancing 96% 97% 93% Oil/lubrication 86% 95% Shocks/struts 80% 95% 2017 TPMS 41% Source: Modern Tire Dealer 2017 Automotive Service Survey These categories were not included in the 2007 survey: chemicals (injection cleaners, detergents, etc), 67%; electronic diagnosis, 81%; ignition and spark, 85%; and visibility (wipers), 94%. Sources: Modern Tire Dealer 2017 and 2007 Automotive Service Surveys 48