The Business Case for Nitrogen Tire Inflation - Fact & Fiction With

John Lucidi Product Manager, Nitrogen Inflation - Parker Hannifin Moderated by

Mike Bowers Executive Editor - DealersEdge

Your Presenter • John Lucidi • Product Manager - Nitrogen Inflation • [email protected]

• Website: www.tiresavernitrogen.com • Blog: www.tirenitrogen.typepad.com Please use the chat box for questions during the presentation. 2

Parker Hannifin Background • • • • • •

$11B company HQ in Cleveland, OH NYSE: PH 55K employees 7,500 distributors serving nearly 500K customers 8 Groups Worldwide leader in gas generation technology and nitrogen tire inflation

The global leader in motion and control technology 3

OE Catalogs

4

Facts About Underinflation • 85% of the population does not or does not correctly check tire pressure • Average passenger vehicle underinflated by 11psi, 18-20% shorter tread life and 3.3% lower fuel efficiency • Underinflation contributed to 250 fatalities, 23K injuries in 1999 • 1.2 billion gallons fuel wasted annually by passenger cars • 1.4% increase rolling resistance for every 1 psi deflation 5

Tire Companies on Nitrogen Inflation “Supports the use of nitrogen based on its ability to better retain air over a period of time.” “Supports the use of nitrogen, as an inflation gas, in all… products, based on the ability for a tire to retain pressure for a longer period of time.” “There’s nothing you can do that is better for your tires than maintaining the right inflation pressure – all the time. Nitrogen could help you do that.” 6

Nitrogen Inflation Testing • All passenger vehicle tests have been lab • Consumer reports - invalid • Ample evidence in commercial trucking: • • • •

7

Internal Bridgestone Study Ford Sperberg Over the road testing

Why Nitrogen Inflation Now • As fuel (and tire) prices increase, maximizing fuel economy is a priority. • Technology to create nitrogen has become more affordable. • Autoinflator technology has simplified the service. • More focus on being green 8

Properties of Nitrogen Inflation

1. Retains inflation pressure longer than air 2. Nitrogen is dry 3. Nitrogen is inert

9

Benefits of Nitrogen Inflation - CONSUMER Better Pressure Retention • Nitrogen permeates 30-40% slower than oxygen • Proper inflation helps to maximize tire life and fuel efficiency

10

Benefits of Nitrogen Inflation - CONSUMER “Engineered Gas” in Tire • No contamination • Nitrogen is dry (-50F dewpoint) • Oxygen, moisture and heat cause rubber to chemically age • Pressure fluctuates less without moisture

11

Benefits of Nitrogen Inflation - CONSUMER Safety • Nitrogen is inert, it does not support combustion • Dry: Reduced pressure fluctuations • Reduced blowouts

12

Benefits of Nitrogen Inflation - CONSUMER Environment

• Maximizes fuel efficiency & tire life • Fewer greenhouse gas emissions • Carbon credit trading

13

Value Statement - CONSUMERS Better fuel economy Longer tire life Fewer tire failures Safer Fewer greenhouse gas emissions • Fewer wasted gallons ROI NHTSA: $132 Annual of gasoline Specs: 20K miles, 60K tires, $3 • Environment fuel, $400 tires, 20 mpg • • • • •

14

Benefits of Nitrogen Inflation - DEALER New Revenue Stream • New, trendy technology • High profit margin • Payback in 2-3 months •