Modern Tire Dealer - June 2022 by EndeavorBusinessMedia-VehicleRepairGroup

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The advertised service is a lease-to-own agreement provided by Snap RTO LLC. While no credit history is required, Snap obtains information from consumer reporting agencies in connection with the lease-to-own application. Not all applicants are approved. Stand-alone auto services are not leasable. Installation costs may be included subject to limitations. 1 Forbes. (2022, May 21) Here’s what to expect from the 2022 summer travel season [Press Release]. Retrieved from https://www.forbes. com/sites/christopherelliott/2022/05/21/heres-what-to-expect-from-the-2022-summer-travel-season/?sh=4901346a2bf1 2

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6/1/2022 10:26:22 AM

3 questions with Grand Prix Performance How to track employee productivity Solving the compensation plan puzzle

TRUCK TIRE UPDATE

MANUFACTURERS DISCUSS MARKET FORCES MARKET SHARE BY BRAND PROFIT OPPORTUNITIES IN ALIGNMENT

June 2022 | Vol. 103, No. 6 | $10 | www.moderntiredealer.com

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The Industry’s Leading Publication June 2022, Volume 103, Number 6

ON THE COVER: JUSTIN SMITH OF EXIT 11 TRUCK TIRE SERVICE, RICHFIELD, OHIO PHOTOGRAPHY BY SCOTT GALVIN

40 The team from Horst Tire, including owner Lonny Horst (second from right) is all smiles. Find out why, starting on page 40.

F E AT U R E S 20

DEPARTMENTS 4 Editorial Watch out for catalytic converter theft Are you protecting your vehicles and customers’ cars?

6 moderntiredealer.com News and navigation tools for MTD’s website

8 Industry News

Gross Tire topped $1 million in sales last year — without fixing a single car

‘It comes down to expertise’

Flexibility, ‘knowing limitations’ helps Robbins & Franke thrive

Kenda chairman discusses demand, shipping and tariffs Yang expects double-digit growth in 2022

16 Numbers That Count Relevant statistics from an industry in constant motion

18 Your Marketplace

60 Business Insight The pros and cons of tracking productivity No system is perfect, but these tips will help you get started

62 Focus on Industry: Sailun sees ‘big opportunity’ in EV tires Continued ‘flight to value’ also benefits company and its dealers

66 Focus on Dealers: ITDG members celebrate big wins

Commercial Tire Dealer™

Tough road to travel

Horst Tire wins with old-fashioned service

Company celebrates 60th anniversary with open house

68 TPMS 73 Products 74 Ad index

Market forces are squeezing truck tire manufacturers, marketers

Owner spends most days in a service truck

Group is approaching ‘magic number’ of 1,000 locations

67 Focus on Industry: Kenda touts new products, faster ‘cycle time’

Engine oils are more complex than ever

And stocking strategies have followed suit

Solving the compensation plan puzzle Employees need to be on the same page and incentivized

What’s your dealership’s mission? Is it more than just making a profit?

3 Questions with Jessica Palanjian Rankin of Grand Prix Performance

A prime location doesn’t hurt either, says co-owner

56 TEN Insights

58 Mergers and Acquisitions

‘Tires-and-wheels-only’ format generates big returns

Opportunities in truck alignment

Service can uncover hidden revenue

AG Tire Talk: All-steel versus other casings

A refresher on performance benefits and applications

Commercially Viable

Modern Tire Dealer is a proud member of:

w w w . M o d e r n T i r e D e a l e r. c o m

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5/26/22 6:43 PM

Editorial

Watch out for catalytic converter theft

ARE YOU PROTECTING YOUR VEHICLES AND CUSTOMERS’ CARS? By

Mike Manges

nflation. Labor shortages. Price increases. Supply slowdowns. Rich Lucas, owner of Lucas Tire & Automotive, a singlelocation dealership in Chicago, Ill., has been luckier. He hasn’t A pandemic that just won’t go away. The litany of problems lost a converter at his store. But thieves have struck some of his facing tire dealers is long and seemingly endless. Just when you don’t need another headache, here’s a new customers’ cars. one — catalytic converter theft. “We lock everything up at night. We have a good alarm system. We have a good camera system. But these thieves are so good” Maybe you’ve already experienced this at your store. Maybe at what they do. “They can remove (a converter) in 10 minutes. you haven’t. But it’s a problem that’s affecting more and more of They’ll watch to see if a guy parks his car and then gets on a bus your peers. And your dealership could be next. Catalytic converter theft has become so widespread that close to go to work. They do their homework.” to 20 states are crafting laws to help curb the problem, according “We’ve been talking with more people who have had converters to the National Insurance Crime Bureau, stolen from their residences or their offices,” which says the crime is being driven by the Mike Smith, manager at Reno Vulcanizing rising value of precious metals palladium, Auto Care, a three-location dealership in platinum and rhodium. Reno, Nev., told me not long before this As you know, these substances are key issue of MTD went to press. components of catalytic converters. And “I have even had a few people make all three are trading at sky-high prices. attempts on some of our vehicles, including (More on that later.) a delivery truck. One of my employees … Many of your fellow dealers are taking his converter was stolen while he was at action to address the problem. In one case, work, right behind our building, during members of the Ohio Tire & Automotive business hours.” Association (OTAA) recently voted to Smith said the dealership is doing what endorse Ohio House Bill 408, which would it can to protect vehicles, but is limited require people selling catalytic converters Nearly 20 states are evaluating legislation to by space. to provide extra proof of ownership. “We attempt to get everything into the curb catalytic converter theft. In testimony before the Ohio House shop overnight, but we’re so busy that we Criminal Justice Committee, OTAA board member John Marshall, can’t accommodate all the vehicles that are here. We forewarn vice president of Dayton, Ohio-based Grismer Tire Co., called our customers to not drive cars here until the day of service.” this provision “a common sense approach. Brandon Johnson, general manager at Eagle Tire Pros, a “Simply by requiring this proof of ownership, which reputable single-store dealership in Jacksboro, Tenn., told me thieves have businesses are happy to provide, we can dramatically curtail the not targeted his outlet. “We take security very seriously and we’re blessed with local law enforcement that patrols frequently.” ability of criminals to access quick cash,” he said. But catalytic converter theft was “a real problem” in his area The problem isn’t isolated to one state or region. not that long ago. “We were going through some months where Bob Kelly, who oversees Sullivan Tire Co. Inc.’s 75-plus retail stores in New England, recently told me that the Norwell, Mass.we were replacing two a week” on customers’ vehicles. based dealership has “experienced catalytic converter theft in our Catalytic converter theft is not a flashy news story. But with own distribution centers.” platinum selling at $988 per ounce and palladium going for At one location, thieves stole converters from six delivery roughly $2,000 an ounce as of this writing, it’s a problem that isn’t trucks. “It cost $2,000 per vehicle to have them replaced. The going away anytime soon. (Did I mention rhodium is currently bigger the truck, the easier it is because they can crawl underneath valued at $16,000 per ounce? That’s more than I paid for my car it. All they do is cut the front and back of the cat and they can several years ago.) be gone in minutes.” It goes without saying, but I’ll say it anyway: Make sure you’re Kelly said Sullivan Tire has since “upped” its security. “Our doing everything you can to protect your vehicles and your buildings have cameras. We put all vehicles up front under a customers’ vehicles. This will help prevent another problem you lighted area and bring them into bays, whenever possible. We don’t need right now. ■ try to get our customers to pick up their cars when we’re open so they’re not left out at night, waiting to be picked up.” If you have any questions or comments, please email me at mmanges@10missions.com.

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MTD June 2022

5/30/22 9:49 AM

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5/26/2022 9:29:50 AM

ModernTireDealer.com DIGITAL RESOURCES FOR THE INDEPENDENT TIRE DEALER

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In October 2021, executives from Jack Williams Tire celebrated the opening of the company’s 39th store in Carlisle, Pa. This past April, the dealership announced it was selling its locations to Mavis Tire Express Services Corp. The stores will transition to the Mavis brand.

No matter the news, dealer news wins Dealers want to know what’s happening in the marketplace and they’re curious about what other tire dealers — whether competitors or not — are doing, too. So while some big-name tire dealerships attracted attention last month, so did owners of smaller dealerships, like Dale Donovan, the owner of Donovan’s Auto & Tire Center, who gave up working on the weekends for better profitability and productivity. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Mavis is buying Jack Williams Tire Monro will sell wholesale business to ATD Podcast: Why closing on Saturdays has improved business Discount Tire invests in Revvo Technologies What to remember when selling EV tires Pirelli invests in Mexico plant, will open R&D center Cooper moves into TireHub warehouses Retreaders held back by supply issues Kenda chairman discusses demand Tire dealers grapple with catalytic converter theft

HOME OFFICE 3515 Massillon Rd., Suite 200 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 Website: www.moderntiredealer.com PUBLISHER Greg Smith gsmith@10missions.com (330) 899-2200, Ext. 2212 EDITORIAL Editor: Mike Manges, ext. 2213 mmanges@10missions.com Managing Editor: Joy Kopcha, ext. 2215 jkopcha@10missions.com Associate Editor: Madison Gehring, ext. 2216 mgehring@10missions.com PRODUCTION Creative Services Director: Zach Pate Art Director: Jonathan Ricketts Graphic Designer: Audrey Mundstock Production Manager: Karen Runion, ext. 2210 krunion@10missions.com Production Artist: Lauren Coleman MARKETING STRATEGISTS Bob Marinez bmarinez@10missions.com (330) 899-2200, ext. 2217 Marianne Dyal mdyal@10missions.com (706) 344-1388 Dan Thornton dthornton@10missions.com (734) 676-9135 Sean Thornton sthornton@10missions.com (269) 499-0257 Kyle Shaw kshaw@10missions.com (651) 846-9490 Martha Severson mseverson@10missions.com (651) 846-9452 Chad Hjellming chjellming@10missions.com (651) 846-9463 MTD READER ADVISORY BOARD Rick Benton, Black’s Tire Service Inc. Jessica Palanjian Rankin, Grand Prix Performance John McCarthy Jr., McCarthy Tire Service Co. Inc. Jamie Ward, Tire Discounters Inc. CUSTOMER/SUBSCRIPTION SERVICE (800) 260-0562 subscriptions@moderntiredealer.com

EXECUTIVE OFFICE 10 Missions Media 571 Snelling Ave. N. St. Paul, MN 55104 (651) 224-6207 CORPORATE OFFICERS President: Jay DeWitt Vice President: Chris Messer

Modern Tire Dealer (ISSN: 0026-8496) is published monthly by 10 Missions Media, LLC, 571 Snelling Ave N, St. Paul, MN 55104-1804. Copyright © 2022 by 10 Missions Media, LLC. All rights reserved. Modern Tire Dealer content may not be photocopied, reproduced, or redistributed without the consent of the publisher. Periodicals postage paid at St Paul, MN and additional mailing offices. POSTMASTERS Send address changes to: Modern Tire Dealer, 571 Snelling Ave N, St. Paul, MN 55104.

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MTD June 2022

5/31/22 2:13 PM

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Industry News

Kenda chairman discusses demand, shipping and tariffs YANG EXPECTS DOUBLE-DIGIT GROWTH IN 2022

s chairman of Kenda Rubber Industrial Co. Ltd., Jimmy Yang oversees a multinational operation that includes offices in the United States, Europe and the company’s native Taiwan; seven manufacturing plants – including one in Taiwan, one in Indonesia, two in Vietnam and three in China; and a North American subsidiary, American Kenda Rubber Co. Ltd., that continues to gain market share. During a recent event at Kenda’s North American Technical Center near Akron, Ohio, to celebrate the company’s 60th anniversary, Yang sat down with MTD to discuss Kenda’s growth, plus the impact of supply chain issues, tariffs and other challenges. Kenda’s 2021 global sales totaled $1.25 billion. (Approximately 35% of Kenda’s revenue last year was generated by its North American operation.) MTD: Demand for tires in North America exploded across all product segments in 2021. Do you see that continuing? Yang: During the pandemic, demand for all kinds of tires — bicycle tires, motorcycle tires, passenger and light truck tires and outside equipment tires — shot up very high. Kenda enjoyed very strong growth in 2021. Kenda had record high sales. We forecast the market will continue to be strong. In the last few years, we’ve put so much investment in branding, marketing and product development (in North America.) The image our team has created — premium products at a value price — is working well. MTD: Are you planning to make further investments at your passenger and light truck tire plants? (Editor’s note: Kenda ships passenger and light truck tires to the North American market from one of its two plants in Vietnam.) Yang: Our Vietnam factory will continue to grow. We have a 20,000-unit-a-day

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capacity. Today, we are at 60% capacity. So we will (fill) that remaining 40% … by the end of 2022. MTD: Supply disruptions and elevated shipping costs have been a major topic of discussion among MTD readers. What’s your take on the situation? Has it affected Kenda’s ability to get products to its North American customers? Yang: Our manufacturing in Asia was not (initially) disrupted by the pandemic. But without (shipping) containers, it made it difficult … as tires were produced and piled up at factories. You can’t continue to make tires if you have nowhere to store them. So that hurt production. And shipping costs are probably five to six times what they used to be. In the good old days, it cost no more than $4,000 to ship a box from Asia — whether it was China, Taiwan or Vietnam — to the United States. Now you have to pay $20,000 or more for containers. Every tire we import from Asia has to bear (additional freight costs.) And I don’t see that easing up anytime soon. But now at least shipping capacity is more available. We can now get the shipping space. We can book containers. But the cost is still very high. We have opened business with carriers we did not have a relationship with (previously.) We’ve tried to grab as much shipping space as possible and we’ve had a good degree of success. MTD: Last year, the U.S. International Trade Commission applied duties to consumer tires made in Taiwan, plus South Korea, Thailand and Vietnam. What impact has this had on Kenda’s business? Yang: Trade wars across the world seem to be constant. It’s not just America and China. It’s Europe and China. It’s India and China. In the past, our factories in China were a very important part of our

“Depending on the situation, we have long-term plans that we may eventually have to expand our tire manufacturing capabilities in North America and also Europe,” says Jimmy Yang, chairman of Kenda Rubber Industrial Co. Ltd.

manufacturing base globally. (Tariffs levied on passenger and light truck tires made in China) forced Kenda to move some of our production from China to Taiwan. In 2021, the anti-dumping tribunal (in the U.S. levied) substantial duties against South Korea, Taiwan, Thailand and Vietnam. So we were already branching out capacity into our Vietnam factory. That put Kenda in a better position. And the factory (in Vietnam) is the newest factory for Kenda automotive tires. Before the duty was imposed … we were already in production. Our factory is doing really well and will meet the growth generated by our team. MTD: We continue to hear reports about tensions between Taiwan and China. Does that concern you? Yang: That’s something that’s a very sensitive issue. Kenda has been very happy investing in China. We set up our first factory in China in 1990. Kenda was one of the earliest (tire) companies to invest in China. We have a lot of friends there. Will there be conflict? It’s hard to predict what may happen. We have to prepare ourselves… with our factories in Indonesia and Vietnam and also continue expansion in Taiwan. ■ MTD June 2022

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Industry News

Monro will sell wholesale business to ATD

Bites Bandag prices go up On May 2, Bridgestone Americas Inc. increased prices on Bandag tread rubber and cushion up to 17% in the United States and Canada. Ancillary products’ prices were slated to increase as well.

Michelin hiked prices Michelin North America Inc. raised passenger and light truck tire prices between 5% and 12% and increased on- and off-road commercial tire prices up to 12% on June 1.

Pirelli increases prices Pirelli Tire North America Inc. is increasing its passenger and light truck tire prices in the U.S. by up to 10% on June 15. Specific amounts will vary by line and tire size.

Yokohama plans price hike Yokohama Tire Corp. will raise its consumer replacement and commercial truck tire prices in the U.S. on July 1. Specific amounts have not been disclosed.

New Simple Tire leaders Brothers Andy and Josh Chalofsky, the founders of Simple Tire LLC, are both leaving behind their executive leadership roles in 2022 to co-lead other businesses. For CEO Andy Chalofsky, that will include partnering with Dealer Tire LLC in a start-up venture. Karthik Iyer is Simple Tire’s new president and CEO.

onro Inc. is divesting of its wholesale and tire distribution business — which the company values at an estimated $105 million — and selling it to American Tire Distributors Inc. (ATD) In the agreement with ATD, Monro says ATD will provide tire distribution directly to its stores. Monro President and CEO Mike Broderick told investors that a thorough review of the company’s wholesale operations showed “we were too small to be an effective competitor.” Monro has seven wholesale locations — in the Carolinas, Kentucky and Tennessee — and in a joint press release, the companies said those facilities serve more than 3,500 customer locations. According to Monro’s 2021 annual report, the company leases all seven of its warehouses. Monro says that the supply agreement “will improve the company’s tire availability, allowing the company to be a better seller of tires at higher margins.” ATD is acquiring Monro’s wholeMonro also will be able to focus on its retail sale business, which has operoperations, category management and working ated under the Tires Now brand. capital optimization. “We are adding volume and geographic reach that will make us an even stronger supply chain partner to our customers and the manufacturers with which we work,” says Stuart Schuette, president and CEO of ATD. The deal is expected to close this month after it clears customary antitrust review hurdles. ATD will pay Monro $105 million in cash for the assets, with an initial payment of $65 million to be paid at closing. The remaining $40 million will be paid quarterly “based on Monro’s tire purchases from or through ATD.”

Lowe Industrial joins Purcell Purcell Tire & Rubber Co. has acquired Lowe Industrial Tire Service LLC, a single-location dealership in Grain Valley, Mo., from Jason Lowe, its owner. Lowe will bring his 30-plus years of industrial tire expertise to Purcell’s location in Kansas City, Mo.

Sullivan acquires C&R Tire Sullivan Tire Co. Inc. has acquired C&R Tire, a two-store business with locations in Worcester and Sturbridge, Mass. The acquisition gives Sullivan Tire 77 retail locations throughout New England.

Unimax gets new investor National Bank Investments Inc. has acquired a 30% stake in Unimax Ltd., a company that manages several retail tire and automotive banners in Canada, including Point S. The deal has led to Unimax buying all shares of Distribution Stox Inc., its former distributor.

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How lockdowns in China could impact shipping

OVID-19 lockdowns in China “are hitting a global container distribution system that is already severely stressed and facing reduced capacity,” according to a report from global shipping consultancy Drewry. While a reduction in “port calls” in Shanghai, China — which has been under strict lockdown since mid-March — “accelerated considerably since mid-April,” ship congestion “worsened considerably at Shanghai,” according to Drewry officials. “The greatest uncertainty is when China’s lockdown restrictions will end and the bullwhip/rebound impact this will have across the supply chain.” Many factories “will need first to replenish their inventories of raw materials and then do a cold ‘re-start.’ Also, liner shipping schedules COVID-19-related lockdowns in China will take at least one rotation to normalize. may complicate the shipping crisis “This would mean that even if lockdowns even more, according to Drewry. were to end today, the predictability and capacity of the container distribution system would be jeopardized during summer peak season.” MTD June 2022

5/31/22 2:12 PM

A LONG WAY

TOGETHER

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5/25/2022 9:28:08 AM

Industry News

Graber promoted to Toyo USA CEO

Bites Tire Discounters expands Tire Discounters Inc. has acquired Virginiabased Thompson Tire. The deal, which includes seven retail stores and a commercial tire center, gives Tire Discounters 12 outlets in Virginia and 170-plus locations nationally.

Marvin Bozarth is honored Marvin Bozarth was honored by Valebridge Media Services in the United Kingdom with a Lifetime Achievement Award for his many contributions to the retreading industry over the decades. Bozarth worked for Purcell Tire & Rubber Co., the American Retreaders Association and ultimately the Tire Industry Association before retiring in 2018.

Register for SEMA/AAPEX Registration is open for both the 2022 Specialty Equipment Market Association (SEMA) Show, which will take place Nov. 1-4, and the Automotive Aftermarket Products Expo, which will be held Nov. 1-3, both in Las Vegas, Nev.

oyo Tire Holdings of Americas Inc. has appointed Michael Graber president and CEO of Toyo Tire U.S.A. Corp. Graber had been vice president of sales for the company and brings nearly 30 years of professional experience to the role, much of it in the tire industry. Tatsuo Mitsuhata, vice president in charge of global sales at Toyo Tire Corp. of Japan, says, “We are excited to have Mike as our next president and CEO of Toyo Tire U.S.A. Corp. (TTC). Michael Graber “His broad background, including the last eight years of has been promotprogressive responsibilities within TTC, gives us confidence ed to president and CEO of Toyo that Mike will be able to lead this critical unit in our most Tire U.S.A. Corp. significant market. He joined Toyo in “He has the knowledge and respect of our customers, under- 2013 as the comstands the market and challenges we face and is a great advocate pany’s truck tire sales manager. for the Toyo Tires brand. Mr. Graber will continue our aggressive U.S. growth plans by maintaining our commitment to our dealers and customers.” Graber will lead a team at Toyo Tire U.S.A. Corp. responsible for replacement market sales, strategic sales planning, pricing, marketing, product planning and consumer affairs. “It is an incredible honor to have the opportunity to lead this organization,” says Graber. “Our talented team is committed to exceeding the expectations of our dealer partners and loyal customers. We intend to build on our strong foundation while continuing to develop innovative products and deliver first class customer service.” An interview with Graber will appear in the July 2022 issue of MTD. “Our dealer partners are critical to growing our brand,” he says.

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5/24/2022 9:23:28 AM

Industry News

Flynn’s Tire is looking for a few good dealerships

Bites Pirelli invests in Mexico Pirelli & Cie SpA will invest $15 million at its plant in Silao, Mexico, over the course of the next two years. The investment includes the creation of a research and development center at the plant.

Goodyear expands network Goodyear Tire & Rubber Co. has added two outlets to its company-owned store network — one in Dayton, Ohio, and another in Beckley, W. Va.

OK Tire store opens A new OK Tire location has opened in Balcarres, Saskatchewan, under the leadership of a trio of owners — Gregory den Brok, Jai Deep and Aaron Leegwater. The team has more than 20 years of experience. The new store will offer passenger and commercial tires, plus on-the-farm and 24-hour mobile tire service.

RNR gives a mom a car RNR Tire Express recently chose Shante Johnson in Safety Harbor, Fla., from more than 5,000 nominations as the winner of its 2022 Mother’s Day Giveaway. Her prize was a 2022 Hyundai Kona.

Allied Tire founder dies R. Conrad Heinson, the founder of Allied Oil & Supply Inc. and later Allied Tire Co., died May 16 at the age of 96. He started Allied Oil & Supply in 1958 and later opened Allied Tire, creating a network of retail tire stores that stretched from Omaha, Neb., to San Diego, Calif.

Sun Auto enters Oregon Sun Auto Tire & Service Inc. has entered the Oregon market by acquiring Good Neighbor Tire & Auto Service, which has two stores in that state, plus two more outlets in Washington.

Pomp’s supports TAT Pomp’s Tire Service Inc. is supporting the mission of Truckers Against Trafficking (TAT). The commercial tire dealership has added the nonprofit’s logo and safety message onto its first truck and is training employees to be on the lookout for victims of human trafficking. Pomp’s, which is based in Green Bay, Wis., has been a partner with TAT since 2017.

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nother independent tire dealership, Hermitage, Pa.-based Flynn’s Tire & Auto Service, is on the acquisition trail. “We’re looking to grow,” says Joe Flynn III, the company’s president. Flynn’s Tire has more than 30 locations. Flynn says “there are two things we’re looking for. One is if somebody has a single store with good sales numbers in either western Pennsylvania or eastern Ohio. And we’re interested in multi-store dealerships. We would consider chains outside our current area.” In September 2021, Flynn’s Tire acquired Snyder Tire, a single-location dealership in Wintersville, Ohio, from its longtime owner, Don Snyder. Other recent Flynn’s Tire acquisitions include L&M tire, a dealership with stores in Hermitage and Grove City, Pa., and Wexford Goodyear, which was based in Wexford, Pa.

In September 2021, Flynn’s Tire acquired Snyder Tire, a single-location dealership in Wintersville, Ohio, from its longtime owner, Don Snyder (pictured center, with left, Flynn’s Tire President Joe Flynn III and Jim Flynn, company vice president.)

Three TIA veterans earn new titles The Tire Industry Association (TIA) has reorganized its leadership team, resulting in new titles for three veteran employees. CEO Dick Gust says the changes to TIA’s organizational structure will help the association better serve its mission. All three will report to Gust. The changes include new titles and responsibilities for longtime TIA executives Sandra Martinez, who becomes chief operating officer; Kevin Rohlwing, who is now chief technical officer; and LaKisha Pindell, who has been named vice president of meetings and events. Previously vice president of operations, Martinez is a 24-year veteran of TIA. She will be responsible for overseeing day-to-day business operations, including finance and human resources, as well as ensuring the infrastructure is in place to achieve TIA’s strategic goals and deliver on its mission statement. She also will have direct responsibility of overseeing policies and procedures needed to drive sustainable growth and operational efficiency within TIA, according to the association. Rohlwing, who most recently served as TIA’s senior vice president of training, has spent 26 years developing and directing the association’s tire technician training programs. He will be responsible for analyzing tire industry data and trends to ensure the content and direction of the association’s technical training programs, seminars, workshops and white papers are aligned with TIA’s strategic goals. In addition, he will be tasked with ensuring that TIA’s industry positions are consistent with existing regulations, standards, guidelines and best practices, as well as defending those positions in regulatory proceedings and civil litigation, when necessary. He also will create timelines for the development and deployment of technology services to maintain a “member-focused outlook” and ensure that technical resources meet the association’s short- and long-term goals, Gust said. Pindell, a certified meetings planner, has spent 18 years at TIA organizing and managing board meetings, special events and conferences. She will be responsible for overseeing all activities related to the association’s meetings, conferences and special events. In addition, Pindell will implement event strategies, assist in event venue research, create vendor networks, and conduct contract negotiations for meeting and event support services and contact sponsors. ■ MTD June 2022

5/30/22 10:00 AM

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5/27/22 2:18 PM

NumbersThatCount

Relevant statistics from an industry in constant motion

$9.5 BILLION

Overall size of the U.S. commercial truck tire replacement market in 2021, according to MTD estimates. SOURCE: MTD’S 2022 FACTS ISSUE

16%

6.3 MILLION

SOURCE: MTD’S 2022 FACTS ISSUE

SOURCE: UTSMA

Average sales margin for a medium truck tire in the U.S.

72.5%

Percent of freight in the U.S.— by weight — that’s hauled by trucks. SOURCE: AMERICAN TRUCKING ASSOCIATIONS

02_MTD_News-Numbers.indd 16

Number of original equipment commercial truck tire units that will be shipped in the U.S. during 2022, according to U.S. Tire Manufacturers Association estimates.

7.65 MILLION

Number of people employed in jobs related to trucking activity in the U.S. SOURCE: AMERICAN TRUCKING ASSOCIATIONS

MTD June 2022

5/26/22 7:23 PM

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Yo u r M a r k e t p l a c e

Inflation takes a bite out of tire demand By

John Healy

INTEREST RATE HIKES COULD POSE ANOTHER CHALLENGE

ecent conversations with tire dealers leave us with the view that retail sellout trends have slowed and turned negative on a year-over-year basis. We note that April was the strongest month of last year in terms of retail sellout, while April was the weakest sellout month so far in 2022. The net number of respondents to our latest survey who indicated they observed positive year-over-year tire demand was fewer than 50%, which compares to higher demand rates experienced during the months of March and February. One of our contacts noted that sellout trends have slowed so much that he is struggling to keep his business afloat after a strong 2020, which saw his dealership achieve record-high volume and gross profit. While we recently indicated that tax refund payments have lagged previous years and we believed there may be a near-term tailwind to replacement tire sales given the delayed refunds, it appears that this will not be the case. Refunds were still not enough to drive higher unit volume as tire manufacturer price increases and inflationary pressures on the broader economy worked to dampen consumer spending. While we continue to hold our long-term view that volumes will ultimately become more closely aligned with current levels of GDP growth, we will closely watch Federal Reserve actions as interest rate hikes pose a risk to economic expansion and could drive short-term GDP contraction.

TIER PREFERENCE

While we have reported that tier-two tires continue to be preferred by many consumers, respondents to our latest survey tell us that tier-one tires were most popular among their customers last month. As lower-tier tires typically perform well when tire prices are on the rise, we are a bit surprised to see strong demand for tier-one products and believe that consumers who have been less impacted by inflation are contributing to tier-one brands’ popularity. Respondents also have told us that tier-three brands are gaining traction, which we believe is indicative of the current economic environment as many consumers are feeling the pinch of inflation. One of our dealer contacts told us that he is seeing much greater consumer interest in opening price point tires due to the current pricing. Looking forward, however, we believe that most consumers will opt for tier-two tires in the long run as they strike a balance between value and other attributes.

IMPACT ON MILES DRIVEN

Miles driven also appear to be declining — albeit slightly. April 2022 showed a 1.8% decline versus the same month in 2021. While rising gas prices due to geopolitical risks are a concern, our recent data analysis suggests that demand for gas will remain steady and poses a minimal threat to a large reduction in vehicle miles traveled.

Snapshot of Dealers’ PLT Tire Volumes (Year-Over-Year Change) Feb-21

Mar-21

Apr-21

Feb-22

Mar-22

Apr-22

Average

Increase

67%

83%

57%

60%

16%

42%

Flat

20%

11%

10%

17%

27%

Decline

80%

22%

17%

43%

30%

67%

31%

Total

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

02_MTD_News-Numbers.indd 18

That said, we do feel that sustained pain at the gas pump — coupled with rising inflation in all areas of consumer spending — will have an impact on vehicle use.

AN UPDATE ON RAWS

When examining the landscape, we continue to believe that the pricing environment in North America will remain rational and in-line with raw materials costs. The basket of raw materials needed to build a common replacement consumer tire rose 33.7% on a year-over-year basis this past April, while decreasing on a sequential basis from the previous month. This continues the trend of increasing year-over-year raw material inputs that began at the start of 2021, with year-overyear increases in April and March at the highest levels since spring 2010. Of all the raw material components we track, only natural rubber decreased in cost during the latest tracking period, dropping 4.4% on a year-over-year basis. All other components have increased in price — most dramatically carbon black and oil. We note that the price of carbon black jumped 66.3% in April 2022 — the largest increase in carbon black pricing we have seen since 2005. The price of crude oil increased 63.1% during April, though this was an 8.5% drop from crude oil prices observed during the previous month. Synthetic rubber prices were up 21.4% in April, year-over-year. The price of reinforcement items like fabric and cord continues to increase, which continued the trend that began last year. In April, reinforcement item prices rose by 42% — the largest year-over-year increase since we began tracking these components 17 years ago. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland. Healy covers a variety of subsectors of the automotive industry.

MTD June 2022

5/26/22 7:23 PM

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5/25/2022 8:01:03 AM

Gross Tire Center

‘Tires-and-wheels-only’ format generates big returns

GROSS TIRE TOPPED $1 MILLION IN SALES LAST YEAR — WITHOUT FIXING A SINGLE CAR By

“When someone calls and asks what we do, I say, ‘Tires and wheels only,” says Kerry Gross, the owner of Gross Tire Center Inc. (right), with son, Lucas, at the dealership’s 89th anniversary celebration last month. They’re posing with the mascot from a local radio station.

Mike Manges

ross Tire Center Inc., a single-location dealership in the small city of Williamsport, Pa. — population 28,437 — generated $1.3 million in sales last year without performing a single oil change or brake job. In fact, the dealership — which is celebrating its 89th year in business — doesn’t offer a single auto repair or maintenance service beyond tire and wheel installation. And that’s how fourth-generation owner Kerry Gross likes it. “When someone calls and asks what we do, I say, ‘Tires and wheels only,’” he says. “When I pull a car in, I’ll have two or three guys jump on it. We can knock a

03_MTD_Feature-3Questions.indd 20

car out of here in 20 to 30 minutes. We just had a Toyota RAV4 in here. We had the car done in about 15 minutes. Of course, that was the perfect situation. The car had steel wheels. It was a quick, easy job.” The dealership’s customers also prefer simplicity, says Gross, 50, who took the reins of the family business from his father, John Gross Jr., in 1999.

‘THEY DEPEND ON US’

Custom wheel sales are a big component of Gross Tire’s business, but not by design originally. Selling wheels “kind of happened by accident,” says Gross. “We had remodeled our shop. And a friend of mine, who has a

tire store, sent a couple of pictures of his showroom to me, after he had remodeled it. “I remember seeing the chrome wheels hanging on his walls and said, ‘That looks sharp.’ So I ordered a few wheels to display and it grew from there.” The dealership’s wheel customers rely on Gross and his team of four full-timers and two part-time employees for advice. “We’ll usually show them the catalogs we have. We also explain to customers, ‘If you buy wheels online, make sure it’s the correct bolt pattern and make sure you get the right lug nut kit.’ The average guy doesn’t know how to do all of that.” At that point, most customers will hand the particulars off to Gross. MTD June 2022

5/26/22 7:25 PM

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Gross Tire Center behind our original bay. We can get three vehicles inside now. We used to work outside, year-round, rain or shine. We’d jack cars up in the parking lot. We don’t have to do that anymore.”

BIG CELEBRATION

Gross Tire’s open house drew hundreds of people. “I promoted the heck out of it on my personal Facebook page and my business Facebook page,” says the single-location dealership’s owner. “I was posting about it every day” leading up to the event.

Employee Drew Mankey stands next to a display of tires and wheels in Gross Tire’s showroom. “For most people, buying a wheel package is a big undertaking,” says Kerry Gross. “They’re not expecting it to be done in five minutes. It’s not like buying a pair of shoes at the mall.”

“They depend on us to get it done right.” Custom wheels for pickup trucks and SUVs are popular at the dealership, too. “I buy from four different wheel vendors and can have wheels shipped here in a couple of days,” he says. “For most people, buying a wheel package is a big undertaking. They’re not expecting it to be done in five minutes.”

RECENT EXPANSION

Gross says he’s involved with nearly every aspect of his dealership’s operation. “I write up tickets. I answer the phone. I set up lifts. I take vehicles out for test drives.” Nothing beats “working with the customer — taking time to help someone,” he notes. “I’m completely independent. I buy from 11 different wholesalers. I go where the deals are. I can offer a brand name tire at the same price as a Chinese import.

03_MTD_Feature-3Questions.indd 22

A longtime Gross Tire customer took home a new set of Nexen passenger tires.

“My first year in business, I sold 1,600 tires — all by myself. In an average year now, we’re doing 8,000 tires or better. When the fracking industry was in full swing, we did over 10,000 tires in one year.” Fracking — the practice of injecting high-pressure water into rock to extract natural gas — was a booming industry in Pennsylvania, peaking there in 2011. “It was enormous. We had a lot of (fracking) fleet accounts. We’d have a couple of trucks in here every day.” Since then, legislation and market forces have combined to reduce fracking activity in Gross’ part of the state. (However, Pennsylvania still leads the United States in natural gas production.) Gross Tire made up for lost fracking fleet revenue without straying from its “tires and wheels-only” model. Business has been so good that the dealership recently added 1,500 square feet to its service area, which created a second tire service bay. “It’s 60 feet deep and 18 feet wide. We also doubled the size of our work area

Gross Tire was founded nearly 90 years ago by Harry Gross Sr. He sold gas “and also did oil changes and sold tires. “Then my grandfather, John Sr., took over in the 1940s. By 1946, he had outgrown” the company’s original building “and moved to where we are now.” John Gross Jr. took over in 1970. “In junior high school, one of my first jobs was collecting cash for my dad from self-serve gas customers. I’d sit in the little window with my school books, doing my homework.” Last month, the dealership held an open house event to celebrate its 89th anniversary. Hundreds of people attended the day-long gathering. “I promoted the heck out of it on my personal Facebook page and my business Facebook page. “We gave away 200 hot dogs,” plus hundreds of shirts, hats and other items. A longtime customer won a drawing for a new set of Nexen passenger tires. Each Gross Tire employee played a role. “My son, Lucas, who is 17, and I were in the booth handing out goodies. My secondin-command, Jay Baboolal, was in the bay,” demonstrating tire service equipment. “My brother, Keith, was running the grill. My future son-in-law, Drew Mankey, ran a cornhole game. My first officer, Eric Berger, was in the office, manning the phone.” A local country music station, WILQFM, sent a DJ to broadcast from the dealership’s parking lot. “Every 20 minutes, he’d go live and say, ‘We’re checking in from Gross Tire. We’re giving away free prizes.’” Looking ahead, Gross says a fifth generation of family ownership is a possibility. His son, Lucas, works at the dealership part-time. “He comes in every day after school and he’s here every Saturday. He’s taking the automotive repair course at the local high school. He’s learning everything — from brakes to inspections.” Until it’s time to step aside, Gross says he will “keep slinging tires and wheels. We have a nice formula right now. We stay busy all day long.” ■ MTD June 2022

5/26/22 7:26 PM

23_TIRECO_0622.indd 23

5/31/2022 8:24:59 AM

3 Questions with Grand Prix Performance

‘It comes down to expertise’

3 QUESTIONS WITH JESSICA PALANJIAN RANKIN OF GRAND PRIX PERFORMANCE By

Mike Manges

Grand Prix Performance’s customers “are looking for us to guide them,” says Jessica Palanjian Rankin, the dealership’s vice president (far left.) Her father, Jerry Palanjian (center) founded Grand Prix 51 years ago “and oversees everything that’s going on” at the company. Her brother, Alex (right), runs the family’s custom wheel fabrication business.

ounded 51 years ago by Jerry Palanjian, Grand Prix Performance has become the go-to tire and wheel source in the Newport Beach, Calif., area for owners of Porsches, Maseratis, million-dollar Bugattis and other exotic cars. Grand Prix also offers window tinting, wraps, black-out packages, powder coating and even its own wheel fabrication service that designs and builds tailor-made rims. (No two sets are the same.) The dealership’s customers have a lot of money to spend, but don’t always know what they want. “They depend on us to guide them,” says Jessica Palanjian Rankin, the company’s vice president.

03_MTD_Feature-3Questions.indd 24

In this MTD exclusive, she discusses what it takes to serve Grand Prix’s sophisticated customer base, how the dealership keeps up with ever-changing service standards and why the company would rather set — than follow — trends. MTD: Beyond levels of disposable income, what sets the owners of super-expensive, high-end cars apart from the average buyer and how do their expectations differ? Palanjian Rankin: We’re in a unique area. We’re in the center of car culture and adjacent to the entertainment industry, with Los Angeles being just north of us. A lot of trends start in California. A lot

of innovation comes from this area. So we’re lucky to be in a place where a lot of exciting things are happening. We have a really sophisticated clientele. People here are exposed to the newest, the latest and the greatest. They see it on the road and in dealerships where the newest cars are. People here are informed maybe more than the average person when it comes to their vehicles because many of them are enthusiasts. People here love their cars. They love to drive. And there’s not a lot of public transportation. People are in their cars a lot. Cars are an extension of their personal space and who they are. MTD June 2022

5/26/22 7:26 PM

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3 Questions with Grand Prix Performance They depend on us to guide them. They’re counting on us to be the experts and to take the headaches out of sorting through the endless options.There are some brands people come in for. But I think a lot of times people are looking for us to guide them and help them make good choices. However, I do think people are the same whether they drive an economy car or a Bugatti. People want the same things. They want to be treated with respect. They want you to respect their time. They want you to listen. And they want you to help them with the process. That’s all basic stuff, regardless of how much they are willing to spend with us and how expensive their cars are. We don’t treat people differently based on what they’re driving and what they’re going to do with us. It comes down to expertise. Customers want us to make it easy for them. That’s why they trust us to handle their cars. MTD: Shop equipment and training needs are different when servicing high-end vehicles. How do you keep your employees current with the latest training and standards? Palanjian Rankin: You have to stay current with best-in-class equipment. But that being said, if you don’t know how to use it, then it really doesn’t matter. It’s important for us to invest in equipment, but we’ve learned that even more than equipment, you need the right, well-trained people — experienced technicians. That’s a big differentiator for us. You need to know how to troubleshoot. People don’t want to feel like we’re using their car for a trial run. There’s always something new to learn and we stay up with it because new cars are coming through our shop all of the time. We recently had a brand new car in — an Audi e-tron. We hadn’t seen it before. We asked the owner to come in for a measuring session to make sure the custom wheels he wanted us to make for him would fit perfectly. We have techs who have a lot of experience, know our standards and what we expect. Customers know our guys because they see the same faces. A lot of times, customers will bring in lunch for them when they’re working on their cars. They know it’s a team effort. Our employees are a big part of our story — the expertise and knowledge they have compared to people

03_MTD_Feature-3Questions.indd 26

Grand Prix Performance provided tires and wheels for this million-dollar Bugatti. “We’re starting trends,” says Palanjian Rankin. “We’re not just responding to them.”

who might be trying to build a new team from scratch. You can tell the difference and you can feel the difference. As a consumer, I know the frustration I feel when (dealing with) lack of service or expertise. I think people today are even more appreciative of our brand of service. We also have good relationships with our tire manufacturers and tire vendors. We rely on them to spend time with us, keep us informed and train our guys about products. We’re also active members of the Independent Tire Dealers Group LLC and we participate in the Tire Industry Association. And we’re hands-on as a family. My dad, who recently turned 81, is here every day. He oversees everything that’s going on. We answer the phone ourselves. We don’t have a phone tree. You come in and you can talk to a person. We’re always available. We want to help people solve their problems and purchase the things they want to buy. Whatever it is, we’re here to handle it as soon as we can and as well as we can. And I think that’s becoming more and more rare. MTD: Custom wheel demand can ebb and flow in different parts of the country, but wheel sales have always been strong in southern California. What are the secrets to selling custom wheels and keeping up with the ever-changing styles and preferences? Palanjian Rankin: We like to think of ourselves as taste-makers. We’re always

looking to see what the latest and greatest is. What are the new finishes? What are the new styles? What are the new fitments? We’re starting trends. We’re not just responding to them. We have a wheel manufacturing facility that’s run by my brother, Alex. We can innovate and create products. We can see what works and what doesn’t. We can take risks. We can do bespoke projects. We can do one-offs. We can do smaller batches. We can maintain control and quality in a way that when dealing with third parties, you can’t always do. We control the process because we’re not at the mercy of other people. Alex knew we could do it well and he was right. He’s very committed to quality and precision. We deal with wheel vendors, also. Because we are so close to so many (wheel) manufacturers, we have stock. And we also have access to a lot of suppliers that can provide products very quickly. I think if we were somewhere else in the country where we had to rely on long freight times, it would be a different story. You need to have things in stock for people who want it right now. But with the custom stuff, you’re going to have to wait no matter what because it’s a fitment specific to your vehicle. It’s not a bolt-on. Our customers don’t always know what they want, but they know where they want to end up. We help them get there. ■ MTD June 2022

5/31/22 2:13 PM

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Robbins & Franke Tires

Flexibility, ‘knowing limitations’ helps Robbins & Franke thrive A PRIME LOCATION DOESN’T HURT EITHER, SAYS CO-OWNER By

Maddie Gehring

obbins & Franke Tires & Auto Repair in Cliffside Park, N.J., is a multi-generational dealership when it comes to its owners, employees and customers. A huge factor in the longevity of the dealership is its consistency. Robbins & Franke has been in business for 70 years, opening in 1952. Robert Knaack and Mike O’Shea are its owners. (Knaack is a third-generation owner. O’Shea is a second-generation owner.) O’Shea started working at the dealership in 1975. Knaack started working there in 1989, when he was 14 years old. “It’s a rite of passage,” says Knaack. “You’re just born into it.” Knaack says he didn’t have any intention of taking over the business and went away for college. After college, he had job interviews lined up, but they ultimately fell through. “My father said, ‘What are you doing? You’ve got to come back to the business.’ I graduated college on a Saturday and came into work that Monday.”

BUSTLING LOCATION

Robbins & Franke is three miles south of the George Washington Bridge, which takes motorists from New Jersey right into Manhattan. Being the largest New York City borough, Manhattan brings in a lot of customers for Robbins & Franke. Knaack estimates there are about half a million people living within a 10-mile radius of his store. He says the dealership also sees a lot of action because there are not a lot of retail tire outlets in Manhattan. For many motorists on the island, Robbins & Franke becomes the default option. “If someone searches for a specific tire, w w w . M o d e r n T i r e D e a l e r. c o m

03_MTD_Feature-3Questions.indd 27

Robbins & Franke will pop up because we are so close to Manhattan and in the middle of everything,” says Knaack. Robbins & Franke has a very diverse range of customers because of its location. “The area we are in is a huge melting pot that ranges from first-generation immigrants to millionaire Wall Street bankers,” says Knaack.

TRADITION AND CHANGE

Knaack and O’Shea say digital technology has changed their approach to business. Robbins & Franke lists its inventory online and has started to test social media. The company recently moved to online billing for its customers, which was a new service. Now, instead of handwritten bills, customers receive their bills via text message with a link to leave a review of the dealership. Knaack acknowledges that 99% of the reviews customers provide are positive. Robbins & Franke is a busy dealership, servicing about 60 cars a day. In addition to tires, it provides other services, including oil changes, brake work, wheel alignments and batteries — all of which have been offered since the company opened. (The dealership is one of the oldest Hercules brand dealers in the country. It started selling Hercules products in 1960.) Knaack says the biggest challenge in his business is that every car is different. He explains that years ago, there were only a few tire sizes, four different oil filters and three different sets of brake pads. Now, there are hundreds of each. “Supply chain issues and trying to match up original equipment tires on new vehicles can be an absolute nightmare,” he says. The dealership’s main competitors,

“The area we are in is a huge melting pot that ranges from first-generation immigrants to millionaire Wall Street bankers,” says Robert Knaack, who owns Robbins & Franke Tires & Auto Repair with Mike O’Shea.

Robbins & Franke is a busy dealership, servicing about 60 cars a day. In addition to selling tires, it provides other services, including oil changes, brake work, wheel alignments and batteries.

big chain stores, can’t compete with the service that Robbins & Franke is able to provide to customers, according to Knaack. Customers know all of the company’s 16 employees on a first-name basis, he says. One of the dealership’s biggest successes, according to Knaack, is keeping a high employee retention rate. “I believe the ‘new guy’ at our store has been here for about 12 years now.” Knaack tells the story of hiring a young

5/30/22 10:03 AM

Robbins & Franke Tires man a couple of years ago. Customers were intrigued. “I was probably asked 30 times who this new guy was. Things don’t really change here.” Even though employees are knowledgeable enough to jump from one job to another, each person has their own defined role. And Knaack, who works about 60 hours a week, has contact with almost every customer who walks through the door. He believes this one-on-one communication with customers is another thing that sets Robbins & Franke apart from chain stores. Knaack says he and his employees treat their customers the way they would want to be treated and go above and beyond in taking care of them. Another secret to Robbins & Franke’s success is “knowing our limitations,” says Knaack. “We stick to what we know best. We are really good at tires. We are really good at wheel alignments.” The unpredictability of COVID-19 also created some changes for Robbins & Franke. The no-contact protocols that were put in place during the peak of the pandemic

have stuck around, but in a more relaxed way. For example, Robbins & Franke communicates with and schedules customers online more often than before COVID-19. Knaack believes another positive that came from COVID-19 is that the tide is turning when it comes to box stores and auto service chains in his market. “People want to deal with people whom they know and they know if there is a problem it will get taken care of right away — correctly,” he says.

‘EVERYDAY IS MONDAY’

“I like to use the term, ‘Everyday is Monday,’” Knaack says when asked about the future of Robbins & Franke. Knaack and his team believe in taking everything one day at a time, so each day is a new start. They stay on their toes and anticipate anything that comes their way. The dealership’s longevity fills Knaack and his team with a sense of pride and fulfillment. “Robbins & Franke is only as good as our last quarter,” says Knaack. “We are always striving to do better.” ■

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5/24/2022 9:20:15 AM

Auto service

Engine oils are more complex than ever

AND STOCKING STRATEGIES HAVE FOLLOWED SUIT By

Mike Manges

s vehicles become more complex, engine oils will continue to follow suit, according to officials from Valvoline and Shell Lubricants. “Engines are being asked to run hotter and incorporate newer technologies in order to (achieve) better efficiency and increase power,” says Sean Nguyen, Pennzoil scientist and automotive lubricant specialist, Shell Lubricants. “And engine manufacturers have shifted to a more fuel economybased approach.” This has forced oil manufacturers to “make thinner-weight oils to meet these modern requirements. These oils still need to protect engine parts,” while delivering other benefits, including extreme temperature performance. “We used to see that 10w30 and 5w20 were the most common” viscosity grades, says Mike Warholic, senior technology manager, Valvoline. “And now we see 0w20 and 5w20 being more common.” Motor oil technology has improved in other areas. “The first is base oil quality,” says Nguyen. “Quality has improved dramatically due to improvements in the refining process and the way synthetic oils are made. “We know that synthetic oil goes through chemically engineered processes and the molecules in these oils are what we would describe as (having) more uniform properties, with fewer impurities.” Additives in oils also have improved significantly, he explains. “Top-tier oil manufacturers and suppliers have turned to better ingredients. And these ingredients are not just for one characteristic in the formulation. They have synergistic, dual-purpose properties.”

INVENTORY CHALLENGES

More than 80% of respondents to MTD’s latest Tire Dealer Automotive Service Survey offer oil changes at their locations at an average of 205 jobs per month. There will be plenty of oil change work for dealers in the years ahead, even as the North American vehicle population continues to electrify, according to Warholic. “In the aftermarket arena, shops are still seeing old vehicles. The key is having the right inventory mix to cover those older vehicles, but also to cover new vehicles. It can be a bit of a struggle.” Original equipment vehicle manufacturers (OEMs) also can specify certain engine oils for different cars, SUVs, CUVs and light trucks, he says. “It gets complicated quickly.” Geography also can play a role, adds Warholic. Tire dealers in rural areas “might see more trucks and larger SUVs. In the city, they may see smaller vehicles. If you’re in a warmer region, you

03_MTD_Feature-3Questions.indd 30

“In the aftermarket arena, shops are still seeing old vehicles,” despite the growing number of electric cars, according to Mike Warholic, senior technology manager, Valvoline. “The key is having the right inventory mix to cover those older vehicles, but also to cover new vehicles.”

may not need (to stock) oil that has the same low-temperature properties” required in northern climates. “You have to know your customers and you have to know what they’re driving in order to have the right oil on hand at the right time.”

THE RIGHT INTERVAL

Oil change intervals have lengthened. But that doesn’t mean vehicle owners should press their luck. Dealers should encourage customers to follow auto manufacturerdictated oil change intervals. “A lot of people think motor oil manufacturers control intervals,” says Nguyen. “It’s the manufacturer of the engine that controls the intervals. They know the nuances of what their engines can do.” “Oils have gotten a lot better, which allows them to go longer — but not forever,” says Warholic. “There are components in oil that break down no matter what. Every oil has a finite life. Three thousand miles is the low end now. Typically, 5,000 miles is the (new) minimum. “We always say, ‘Follow OEM guidelines, whether it’s a fixed number in a manual or (a vehicle’s) on-board computer, which will tell you, ‘Hey, change the oil now.’ “The OEMs do a lot of testing to make sure you have the right oil in your engine and that they’re prescribing the right intervals to make sure the engine is protected. OEMs are very sensitive to that.” ■ MTD June 2022

5/26/22 7:27 PM

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5/26/2022 11:53:33 AM

Commercial Tire Dealer™

TOUGH ROAD TO TRAVEL

MARKET FORCES ARE SQUEEZING TRUCK TIRE MANUFACTURERS, MARKETERS By

Mike Manges

hat are truck tire manufacturers and marketers up against as the second half of the year begins? That’s a big question. And there’s no single, allencompassing answer. Like commercial tire dealers, truck tire manufacturers and marketers are being squeezed by a wide range of factors — most of which are beyond their control. In this MTD exclusive, executives discuss forces that are shaping the North American truck tire market and how these dynamics are impacting their business. MTD: What are the biggest challenges facing truck tire manufacturers right now and why? GARY HENDRICKS, general manager, commercial products, North America, Apollo Tyres: One of the major issues facing truck tire manufacturers is the global supply chain condition. Global supply chain disruptions continue to plague the North American truck tire market with container shortages, vessel constraints, exorbitant freight costs, shipping lane inconsistencies, lingering port congestion, inland transportation challenges, truck driver shortages, labor readiness issues — all remain considerable factors affecting domestic supply. Demand has returned to pre-COVID-19 levels. However, the COVID-19 pandemic clearly had a negative impact on global supply, which took a bit longer to ramp back up to capacity. Now we are trying to catch up. STEVE SUTHERLAND, vice president, commercial dealer sales, Bridgestone Americas Inc.: Several challenges face the North American commercial truck tire segment, but the biggest issue facing manufacturers is demand for tires, which remains strong and continues to outpace the supply. In addition, domestic production capacity is constrained and imports from Asia are challenged with rising shipping costs and port delays. Finally, the tight supply of new tires is supercharging an already strong demand for sustainable and economical retreading services. This spiking demand for retreading is putting pressure on the supply in a way that hasn’t been seen in many years. At the end of the day, our fleet customers are focused on availability and it is currently more important than price.

Also in CTD Horst Tire wins with old-fashioned service..........................40 Opportunities in truck alignment............................................48 AG Tire Talk: All-steel versus other casings.........................50 Commercially Viable.................................................................54

04_MTD_CTD-CommerciallyViable.indd 32

“Demand has returned to pre-COVID-19 levels,” says Gary Hendricks, general manager, commercial products, North America, Apollo Tyres. “However, the COVID-19 pandemic clearly had a negative impact on global supply, which took a bit longer to ramp back up to capacity. Now we are trying to catch up.”

WALT WELLER, senior vice president, China Manufacturers Alliance LLC/Double Coin: Fundamentally, the issue is that the U.S. market is an import market. More than 50% of what we consume comes from somewhere else. Transportation costs are a major issue and will continue to be going forward — especially ocean freight. From the fourth quarter of 2019 to the present, ocean freight costs have increased four- to five-fold. Other logistics issues are creating havoc with longer lead times, inflexible delivery schedules and the lack of visibility to containers coming from overseas are just some of the issues creating added costs. Domestic (truck tire) manufacturers also are importing much more than they have in the past to supplement their domestic production. ROB WILLIAMS, senior vice president, TBR sales, Hankook Tire North America: Rising costs continue to be the biggest challenge in the commercial truck tire sector — driven by a combination of supply chain slowdowns, increased fuel costs and labor shortages. These conditions are affecting not only tire manufacturers, but also commercial truck tire dealers and customers. The U.S. commercial truck market experienced unprecedented growth in 2021 versus prior years. This — coupled with major bottlenecks on shipping, lack of containers and vessel space, port congestion and driver shortages all converging at once — made it very difficult to meet dealer and fleet demand in the North American market. RICK PHILLIPS, CEO, Keter Tire USA Inc.: One of the biggest challenges for manufacturers right now is trying to forecast production and trying to make sure you have the right product available at the right time. Shipping and delivery continue to be major challenges and the entire industry is struggling with it right now. This will likely continue for the remainder of the year. MTD June 2022

5/26/22 7:28 PM

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Tr u c k t i r e s products, TBC Corp.: Supply chain issues continue to be the biggest challenge for tire manufacturers. Other significant challenges for all tire manufacturers include obtaining raw materials in a timely and cost-effective manner, as well as the increased cost of moving products to distributors and consumers due to COVID-19-driven labor shortages and supply chain disruptions.

“The biggest issue facing manufacturers is demand for tires, which remains strong and continues to outpace the supply,” says Steve Sutherland, vice president, commercial dealer sales, Bridgestone Americas Inc.

KEN COLTRANE, vice president, marketing and product development, Prinx Chengshan Tire North America: Being able to supply tires to the market in a timely manner has been one of our biggest challenges. The cost of freight, of course, is another. As an importer, our biggest challenge is overcoming the high cost of freight. Freight cost for an imported TBR tire can range from $40 to $140 per tire or more, depending on tire size and destination. ALAN EAGLESON, TBR segment manager, Sailun Tire Americas: The biggest challenges that Sailun Tire Americas faces are supply chain and logistics. It is a similar challenge across all industries that import products from overseas. Rates have quadrupled and service has been reduced by more than 50% in some cases. The high-volume container customers carry the hammer and smaller customers go to the back of the bus. A couple of other challenges are in raw material cost and OE demand. It is not so much the base raw materials — although some materials are higher — but it is the increased cost of shipping raw materials that has impacted costs. NICK GUITERREZ, sales director, Sentury Tire USA: It’s true that every single import supply chain, including the tire segment, has been impacted by inevitable rising costs. Tire manufacturers are faced with the challenge of continuing to meet the demands of their customers in a timely manner and also cover operating expenses, while remaining competitive. BILL DASHIELL, senior vice president, product marketing for commercial tire

04_MTD_CTD-CommerciallyViable.indd 34

JOAQUIN GONZALEZ JR., president, Tire Group International Inc. (TGI): We have seen freight skyrocket over the last 18 months because of lack of equipment on the ocean freight side and lack of drivers on the inland freight side. Prior to the pandemic, inland freight was already adjusting to new Department of Transportation regulations that targeted driver service hours and how those hours were logged. This led to many manufacturers shifting development of truck tires from a traditional regional or long-application to an all-inclusive, superregional (application). DAVE JOHNSTON, senior manager, commercial products and business development, Toyo Tire U.S.A. Corp.: One of the biggest challenges facing commercial truck tire manufacturers is meeting the demand of the market. While Toyo’s truck tire production did not slow down during the pandemic, expansions were quickly absorbed into the market. Global logistics challenges continue to hamper the industry as the economy recovers. Raw material costs, shipping and labor remain the top challenges facing tire manufacturers in 2022.

mitigated by local production, access to tires with a shorter availability window has been a big benefit for us. MERRY WANG, general manager, Zhongce Rubber Group Co. Ltd./ZC Rubber: The biggest challenge is the shipping situation. Since last year, shipping companies have increased freight (costs) several times. The other challenge comes from raw material price increases. It’s a big jump since last year. Manufacturers cannot adjust their pricing according to cost increases immediately. MTD: Do you foresee current challenges turning around or correcting themselves during the second half of the year? HENDRICKS (Apollo): Unfortunately, I don’t foresee things turning around or correcting themselves that soon. Domestically, we are battling inflationary conditions U.S. replacement medium truck tire market share at mid-year Brand

Michelin

13.5%

Bridgestone

13.0%

Goodyear

9.0%

Yokohama

8.5%

Continental

7.5%

Firestone

7.0%

Double Coin

5.5%

DEMETRIC MASS, national sales manager, truck tires, Yokohama OffHighway Tires America Inc.: Throughout the industry, shipping challenges and rising raw material costs are a challenge. We also are seeing rising demand for truck tires, especially for regional applications. And many tire manufacturers are under a great deal of pressure to keep up.

Falken

3.5%

Hankook

3.5%

Toyo

3.5%

Roadmaster

3.0%

Sailun

2.5%

General

2.0%

DAN FUNKHOUSER, vice president of commercial sales, Yokohama Tire Corp.: There really isn’t one major issue, but rather a collection of challenges facing all of us. The global supply chain bottlenecks have been well-documented, as have the rising operational and raw material costs. Despite the rising costs, though, demand remains quite high. While cost increases aren’t exactly

Sumitomo

2.0%

Westlake

1.5%

BFGoodrich

1.0%

Gladiator

1.0%

Triangle

1.0%

Others

11.5%

BASED ON AN ESTIMATED 9.2 MILLION UNITS SHIPPED THROUGH MID-MAY

MTD June 2022

5/31/22 2:16 PM

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Tr u c k t i r e s that are affecting us all at the fuel pump, the grocery store and virtually all facets of American life. Escalating raw material prices — particularly rising oil prices — will continue to create pricing pressure on manufacturers to manage costs while remaining competitive. We do feel that things will become a bit less volatile in the second half of 2022 and then hopefully (will) begin to stabilize and improve somewhat in 2023. SUTHERLAND (Bridgestone): Economists and industry experts are predicting a slowdown, possibly a recession, by early 2023. Although truckload carriers are seeing demand normalize as retail inventories start to recover, they have a long way to go. This should provide a tailwind for truck demand through 2023. In general, we expect the demand for truck tires and retreading to remain relatively strong through 2023. WELLER (CMA/Double Coin): Unfortunately, we do not unless there is a sudden change in demand. Given the current state of affairs and the current economic climate, we believe this could last well into 2023. The added complexity of the COVID-19 shutdown in Shanghai, China, and its effect on an already-stressed logistics system is the main culprit. Having said that, Federal Reserve (interest) rate hikes may slow the market. It’s something to watch very carefully. WILLIAMS (Hankook): The industry has been facing these challenges for over two years now and we expect that a complete turnaround is unlikely before the end of 2022. Many elements of disruption are impacting the industry in North America and globally; these will take some time to correct. This is exacerbated by the fact that many of these challenges have knock-on effects. PHILLIPS (Keter): We are seeing a lot of dealers in an overstock position and at the same time, demand seems to have calmed a bit. Business is still good, but it’s not crazy like it was much of last year. Hopefully, as we get through the second quarter and into the third quarter, demand will continue to inch up and the inventory position will work itself out. Shipping actually seems to be getting a little better. COLTRANE (Prinx): Most people think that the supply chain will eventually get fixed. The steamship lines seem to be working hard

04_MTD_CTD-CommerciallyViable.indd 36

“Heading into 2022, I think there was a lot of optimism that there would be some corrections,” says Dan Funkhouser, vice president of commercial tire sales, Yokohama Tire Corp. However, various factors “continue to have an impact.”

to manage their capacity to keep shipping rates where they are. By not increasing the capacity, rates are remaining high and lead times continue to suffer. EAGLESON (Sailun): Logistics seem to be slowly improving. However, there will be demand for shipping earlier this year because of delays in supplying the retail Christmas season in 2021. Shipping companies have expanded their fleets. GUITERREZ (Sentury): We estimate that these trends will continue and are planning for increased delivery times and fuel surcharges throughout 2022. Vessels continue to be backed up, with record longer sail times. Transportation companies can no longer operate on contracts from prior years due to outrageous fuel costs. We have to think on our feet and face the fact that it costs more to maintain the bottom line. DASHIELL (TBC): Over time, inflation is likely to have a softening impact on overall consumer demand — reducing some of the pressures on the supply chain. Most experts believe we will experience some type of supply chain cost correction before the end of the year. JOHNSTON (Toyo): Toyo expects the balancing of supply and demand in the commercial tire market to push into 2023. Demand continues to be strong and is forecasted to continue at these new levels. Tire dealers’ shelves are still not at optimum supply levels and the ability of manufacturers to significantly increase supply is limited by production capacity and available labor. We are seeing improvements, but they aren’t at the rate that matches current market conditions.

MASS (Yokohama Off-Highway): I don’t think anybody really knows when raw material costs, high shipping costs and inflation will come down and it’s a difficult conversation to have with customers. As for the factors driving the shift to regional truck tires, I don’t think the market is going to change anytime soon. Whether it’s Amazon, online shopping, grocery deliveries or any other last-mile moves, the commercial truck tire market is going to continue to look for highly scrub-resistant, fuel efficient tires that can take a lot of wear and tear. FUNKHOUSER (Yokohama Tire Corp.): It’s really difficult to say. Heading into 2022, I think there was a lot of optimism that there would be some corrections. However, continued lockdowns in some Asian ports over lingering COVID-19 issues, the situation in Ukraine and the rising price of fuel, as well as all other goods here at home, continue to have an impact on things. WANG (ZC Rubber): At the beginning of the year, everyone said (the shipping situation) will get better in the second half of 2022. But since the China lockdown, it has made things complex again (with) less goods shipped during April and May. MTD: What’s your advice to commercial truck tire dealers in the meantime? What should they prepare for? HENDRICKS (Apollo): Align your company with a supplier that focuses on mutual success and your company’s profitability. Focus on providing your customers with the best service you can provide in the markets you serve. Forecasting becomes more crucial for both dealers and their suppliers in terms of manufacturing consistencies and improved supply dependability. Pricing headwinds will continue to be an issue, which further illuminates the importance of providing your customers value for money spent. SUTHERLAND (Bridgestone): Continue to focus on service and don’t be afraid to charge for it. Labor costs have gone up significantly over the past two years and they must be passed along. As the challenges that began in 2020 continue to persist, continue to communicate regularly with your manufacturer partners to ensure visibility to challenges and opportunities that may impact business. MTD June 2022

5/31/22 2:16 PM

37_ZC RUBBER_0622.indd 37

5/25/2022 8:09:05 AM

Tr u c k t i r e s WELLER (CMA/Double Coin): Nothing really different than what we see most dealers doing at the moment. Be vigilant, plan for extended lead times — 30 to 60 days extra and maybe more — and be in constant communication with your suppliers, as well as your customers. WILLIAMS (Hankook): For dealers, the most important strategy is to have a keen understanding of market dynamics and constant changes occurring to prepare for inventory levels and fleet demand. It is beneficial to manage backorders closely as many manufacturers are working on filling backorders with minimal products available to purchase on-hand. Also dealers should consider further consolidating SKUs to focus on high runners that may be more readily available, as well as having strong alignments with their preferred manufacturers to keep inventory readily available in their pipeline. PHILLIPS (Keter): Don’t get distracted and keep doing the things that make you successful. Take care of your people, stay close to your customers and communicate with your suppliers. Your people are essential to delivering quality service. Your customers not only provide the revenue that keeps your business alive, but they also have the point-of-the-spear kind of information you need to work with your suppliers to provide a viable supply plan. There are so many external factors affecting (dealers’) business that it’s hard to predict what might happen next.

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EAGLESON (Sailun): Position yourself with strong suppliers who have an understanding of all of the challenges mentioned. Dealers should have a Plan B for supply should there be delays with their current suppliers. Although it requires additional financial resources, I would recommend dealers keep an additional 30 days of inventory on hand, over and above what they would normally stock. Continue to keep orders in the pipeline. GUTIERREZ (Sentury): Stay consistent and partner with suppliers that continue to deliver and have capacity. Time is money and we believe that on-demand information will alleviate some frustrations and help dealers have the most control possible during tumultuous times. DASHIELL (TBC): Demand will continue to be strong, even if not at the current robust pace. Therefore, commercial truck tire dealers should partner with strong suppliers and manage their inventory to maximize in-stock tires. GONZALEZ (TGI): In terms of current dynamics for commercial dealers, I am seeing more and more of them begin to increase inventory levels and buy ahead of price increase. This is a 180 from the last five years, where we have been in a price-declining market and dealers relied on distributors to deliver just-in-time inventory. This way dealers benefited from the very best market price. Over the last 18 months, that dynamic has shifted. This has prompted dealers to start investing in their inventory. JOHNSTON (Toyo): Truck tire dealers will need to rely on their existing relationships with tire manufacturers to ensure their customers have tires. And tires that have a durable casing will rise in value as retreading will continue to be a large part of the equation — particularly in the U.S. market, as more fleets are looking to incorporate retreading to mitigate supply challenges in the near term. MASS (Yokohama Off-Highway): The commercial truck industry is fortunate to have a professional community of dealers. My advice to them is to focus their experience and knowledge on predicting their needs in the months ahead and communicating with their manufacturers’ reps. Help your reps help you.

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FUNKHOUSER (Yokohama Tire Corp.): They should choose their long-term partners carefully. Remember those that have continued to work closely with them during this period of relative volatility because they are the ones that value the business and can appreciate the issues that dealers are facing every day. WANG (ZC Rubber): With the shipping situation getting tight again, the commercial tire supply (will tighten) again.

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04_MTD_CTD-CommerciallyViable.indd 38

MTD June 2022 5/24/22 1:11 PM

5/30/22 10:06 AM

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5/27/22 2:13 PM

Ag tires

HORST TIRE WINS WITH OLD-FASHIONED SERVICE OWNER SPENDS MOST DAYS IN A SERVICE TRUCK

Joy Kopcha

orst Tire LLC provides “oldfashioned service.” Lonny Horst, the dealership’s owner, may not have started his business with that as a specific goal. Yet he’s fielded phone calls from multiple customers who have thanked him for providing just that. He says he’s not sure how to do it any other way. “That’s how I was raised,” he says. “You treat people like you’d want to be treated.” That personal touch is helping the singlestore dealership in Adrian, Mich., grow.

A CAREER BY CHANCE

Horst might not have ever entered the tire business if not for his brother-in-law. In 2013, he was working in construction, like he had done since he was 16, but a bad knee made roof work difficult and especially precarious. He was wondering what else might be out there. Then his brother-in-law, Justin Hess — who took over his dad’s ag-only tire business in the state of New York — suggested he consider tires. Hess grew up in the tire industry and has been working in a service truck since he was a teenager. During the slow winter months of the construction season, Horst went to New York and joined the crew at Hess Farm Tire LLC. “I think I was up there for maybe three weeks and I liked it,” he says. “I ended up buying my own service truck. I’d probably never have considered tires if it wasn’t for him. He’s the one who lit the spark (in me) for tires.” Horst started small. He and his wife, Ashley, were living in eastern Ohio. He had a small garage at home and in the beginning, tires were delivered to their house. If he wasn’t home, Ashley would keep a list of tires that were dropped off and the names of customers who needed them. “It was a little primitive,” he says with a smile. The next year, he built a shop. And over

04_MTD_CTD-CommerciallyViable.indd 40

Since Horst Tire opened in 2018, the business has continued to attract new customers. Owner Lonny Horst attributes its visibility along U.S. 223 west of Adrian, Mich., as a contributing factor to its growth.

time, the business grew. Another brotherin-law, Sheldon Horst, joined him and added passenger and light truck tire service to the mix. Sheldon focused on consumer tire customers and Lonny stuck with the commercial tire clients. Then the church that Lonny and Ashley attended announced it was planning to start another one in Adrian. It asked if any families were interested in making the move to a new community. The Horsts visited Adrian, which is tucked just inside the Michigan state line and less than an hour from Toledo, Ohio. They ultimately said yes to a new adventure. In 2018, Horst sold his share of his Ohio tire business to his brother-in-law and set out to start over again in Michigan. By June 2018, he had opened Horst Tire.

K&M TIRE IS A PROBLEM SOLVER

One of the consistencies in Horst’s two-state tire career has been his partnership with wholesale-distributor K&M Tire Inc. When Horst first moved to Michigan, K&M Tire didn’t have a sales representative serving the Adrian area, so he worked with K&M Tire Regional Sales Manager Jay Goring. Horst says Goring has been a reliable, go-to source who is willing to help solve any problem.

“He’s helped me out tremendously getting started here, and still does. We still talk on the phone every day. If not for K&M Tire, I don’t think we’d be where we are today. They went over and beyond to help me out.” That help has come in all forms, he says. In the beginning, money was tight. Horst says K&M Tire “kind of went out on a limb” by offering him “pretty generous terms to get started.” When Horst Tire secured a contract with the City of Adrian to service government vehicles, Goring and others from K&M Tire helped with the paperwork. “They’ll walk you through anything,” says Horst.

A SMALL TEAM

Horst is one of four full-timers on staff at his company. And truth be told, if he could spend all day, every day, working in a service truck, he’d be one happy guy. Sometimes Horst gets a funny look when a customer realizes the owner of Horst Tire is changing tires on a tractor in a muddy field or answering an after-hours service call. “I love it,” he says. “Every job is different. I’ve always enjoyed manual labor. I don’t like book work. I do just enough (of that) to get by. I’d rather run in the truck and let these guys take care of it.” Those guys are Horst Tire’s other three full-time employees, plus Ashley. She manMTD June 2022

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Ag tires

Horst Tire owner Lonny Horst, left, talks about the next service call with employee Ryan Keil. Keil is the company’s newest hire. He’s managing the service desk and all of Horst Tire’s consumer and commercial appointments.

in medium truck tire service and he’s not looking to take business away from them. As his business has become more established in the community, he’s picking up a few local fleets. And as law enforcement has learned he’s available, he’s getting more of their calls. Some of that growth has come as tire supply has been tight. When a customer can’t get the tire he wants, Horst says “they start looking.” Other customers have come back to him to buy tires after he answered an emergency roadside call and provided good service. “When they’re down, we help them out without raking them over the coals — with hopes they call us for their new tires.” On the farm tire side, there aren’t many other tire dealerships that offer on-location service in this southern strip of Michigan. The closest competitors are at least an hour away. And even then, some of those other commercial dealers only service truck tires and don’t touch OTR tires, including products for ag applications. “They sell it sometimes and I usually end up installing it for them,” says Horst. “As far as competition, there’s not a lot. We try not to take advantage of that in case competition comes. I don’t want to have to make big changes.”

WHAT’S BEST FOR BUSINESS

Horst Tire has four full-time employees. From left to right, Brad Horst, Ryan Keil, owner Lonny Horst and Sherwin Schlabach.

ages the business’ books, while also playing mom to the couple’s four young children. Sherwin Schlabach has been at Horst’s side since he started installing tires in Ohio. Schlabach manages inventory and ordering — plus larger customers like the City of Adrian. He can float from the service bay and front counter to the service truck. Horst says Schlabach “can do anything — probably more than what I can do.” Ryan Keil is the company’s newest hire. He joined Horst Tire last fall and is managing its sales counter. Keil is working to move the company to more appointments and less walk-in tire service. He also schedules service calls. Brad Horst, the owner’s nephew, is the final member of the company’s full-time team. He’s a tire technician who works in the shop, but also assists on larger service calls. The four-man team — along with a few part-time workers — are building a business, though they already have more work than they can complete on any given day. “My employees are great,” says Horst. “I would like to see that we go to about six (full-time workers). I would like to get another guy in the truck. We need two trucks right now. More service calls come in a day than I get done. I would really like to have two trucks on the road all the time.” Horst says there are other dealerships in the region who specialize

04_MTD_CTD-CommerciallyViable.indd 42

Even as he adds to his team, Horst hopes to keep himself on the road in one of his trucks. He says a lot of people ask him why he keeps working so hard. “I’m not sure if something’s wrong with me or not, but I enjoy it. I enjoy selling tires to people. I enjoy talking to people. I don’t enjoy chasing money. I’ll sell you anything you want and I’ll put it on, but after that....” He also thinks Horst Tire is doing better business now that he’s turned more of the in-house office operations over to others on his team. He admits there were times he likely didn’t create invoices for jobs that were done. “I let a lot of stuff slip. It’s more profitable if I stay out in the truck. “It can be hard to turn the image of your business to another individual, but I wasn’t enjoying it and I wasn’t getting it done right. And the service calls weren’t getting done right because I was trying to be in two places (at once), so I had to choose. I picked the truck.” That humble spirit is guiding his plans for the future, too. He hopes to one day build a new location. His current two-bay outlet sits on a busy two-lane U.S. highway next to his home. He bought land immediately to the west of his current business and envisions a larger space, with drive-through bays that are easier for trucks to maneuver in and out of. “We’ve done a few little sketches. I’ve priced a few buildings, but then the cost of steel and lumber went crazy, so I’ll just keep dreaming for now until things level out. “I don’t want to jump in too big and sink the ship. We’re outgrowing (this space) quickly, but we’ll push it as long as we can.”

THE PEOPLE PROBLEM

Horst’s dreams of expansion are tempered by reality. Finding good employees to join the Horst Tire team is as big of a task as it is anywhere. Horst has been looking for another service truck technician for about a year. Business has grown to the point that he can’t afford to pull another person away from the shop to answer service calls in the field. MTD June 2022

5/30/22 10:09 AM

Ag tires “It’s frustrating to get good help to show up everyday. My guys are great. But they can only do so much. They run hard. There’s only so much you can do and only so many hours in a day to do it.” And he knows that means retaining employees is just as important as recruiting additional ones. At Horst Tire, that has come in actions both big and small. One big one has been to adjust to a five-day workweek. Again, the inspiration for this change comes from Hess, his tire dealer brotherin-law in New York. Horst went to New York to run Hess’ shop while he was out of the country for a couple weeks. “He’s not open Saturdays” — something Horst had never considered as an option. But Hess told him, “Your service should be good enough to wait until Monday. They should be willing to wait a day-and-a-half for better service.” The caveat is that Hess still provides service calls to farmers on weekends. He doesn’t leave customers or equipment stranded. Horst was intrigued, so in the spring of

Without another ag tire dealership nearby, Horst Tire has an ongoing backlog of service calls to replace tires for local farm customers. Lonny Horst says anytime a tire problem stops a farmer in his tracks, that customer’s call jumps to the top of the list.

2021, Horst Tire tested a Monday-throughFriday schedule. Emergency service calls were answered like normal. “I get more out of my guys. We get more done in five days than we did in five-anda-half. Everyone hated working Saturdays.

“The mood on a Friday is much better. I think they work harder and faster just because it’s the last day of work and they have a two-day weekend. “No one has to come in for four hours” on Saturday.

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Ag tires He admits there have been a few customer complaints — but only a few. “I didn’t think you could do it. I thought you had to be open Saturday.” He’s since heard of other friends in the business who have made the same change. “They all say the same thing — you get more done. My guys aren’t burned out. Come Monday, they’re ready to go. On Friday, they’re giddy because they’re almost done.” The change has alleviated the pain of scheduling the right number of workers on the weekend, too. For example, some Saturdays, Horst wouldn’t have enough workers. The next weekend, he would bring everyone in — only to discover there wasn’t enough work to keep them busy. “It’s definitely been worth it. If I could figure out how to take Fridays off, too, I would.”

THE POWER OF LUNCH

While Horst Tire’s scheduling change has been a big boost to employee morale, pizza has also played a role. Every Wednesday at Horst Tire is pizza day.

It started as a random whim. Horst asked his wife to pick up pizza for lunch on her way to the shop. It was a hit and he figured they should just keep doing it. “It’s so small, but it’s at least a bright spot halfway through the week. And it’s caught on that Wednesday is pizza day.” He has friends who have started doughnut and coffee days for customers once a week and laughs as he hears stories of customers scrambling to find a reason to stop by on those days just to grab a doughnut. So far, he’s sticking to pizza for his employees — though Horst Tire does have coffee available in its waiting area. “As long as my guys like their job, that’s my priority. I cater to my workers. I want them to come back tomorrow.” He can’t compete with the big cash bonuses that larger companies are offering to entice applicants and workers. He tries to pay a fair wage and treat people well. “If they like their job, it sure helps.”

FLUCTUATIONS IN FARMING

Farmers’ willingness to pay more for their

preferred tire brands can ebb and flow at times, just like the overall farming economy. Grain prices and cattle prices are critical to their operations — and their profits. On a typical day, the customer conversation in the waiting area easily turns to farming and the latest market report. Horst says he doesn’t need to overhear those conversations to know how things are going. “I can tell when it goes up. I can tell when the yield is good and when the price is good. There’s a trickle-down effect. “The tractor that could make it through the fall gets new tires,” he says. “Farmers get a little extra money, put new rubber on and then next spring, they’re ready to go. It’s preventive maintenance. It’s a lot easier to do when there’s extra money.” It’s not all glamorous, though. Sometimes it means “putting tires on old, rusty tractors that could have been scrapped.” Most days, Horst is working through a perpetual waiting list of service calls at local farms. The priority always goes to a customer who can’t keep working until Horst Tire arrives to repair or replace a problematic

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Ag tires The pace can be frenzied, but Horst prefers that to the alternative. “It tempts you to add on and build big shops. Yet it scares me. How long is it going to last? Will this just blow over until next year and then we’ll be looking for work? I wish it was more steady.”

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tire. That means there’s a constant juggling of appointments. He says his customers are patient and understanding. “Usually, all the farmers get it, because they’ve been there (and) in that other guy’s shoes.” Typically, it might mean that a morning appointment gets pushed to the end of the day or an afternoon stop gets bumped to the next morning, he says. But it also means that rather than scheduling a tire replacement for a specific date and time, Horst Tire gives customers a window — as in, a tire service technician will be there on Tuesday or Wednesday. “We’re upfront with them. We tell them we’re behind, we’ll get there and we’re doing our best. Very rarely does someone throw a fit about it.” That might not work in every industry, he admits, but Horst says farmers are accustomed to things breaking and they never know when that’s going to happen. It’s not uncommon for Horst to be in the service truck and en route to a job when another, more pressing call comes in. So he will detour to that new call and then his nephew, Brad, will meet him on site with the tires for the job. Whenever that service call is done, he’ll return to regular programming and head toward the original job. “If you’re a really scheduled person, this industry — I don’t know if it’s for you, especially in the service truck,” he says. “Being ready to change your plans at any moment is how it is in the service industry.”

As it stands now, farm and commercial tire sales and service make up 60% of Horst Tire’s overall business. The passenger and light truck tire side of things is growing and it seems that more area residents are turning to Horst Tire for their tire needs. “They keep showing up. Ryan continues to add many new customers” into the dealership’s database. Adrian is the largest community in Lenawee County, with a population hovering around 20,000 people. The nearby lakes and Irish Hills are summertime draws and the Michigan International Speedway is less than 15 miles away. Horst Tire sits on a two-lane highway that’s a primary route to these destinations. And as a result, any special event — especially those at the race track — draws customers. It’s not uncommon for the dealership to sell out of trailer tires on an event weekend. “People are coming from a couple hours away and their tires maybe should have been changed before they left. On weekends, it’s a steady stream of campers past here, so the road frontage here plays a major part (in customers finding us).”

WORKING WITH THE NEIGHBORS

There are some other small tire dealerships in the area and Horst says his goal is to work with them rather than against them. He’ll perform service calls for those other dealers when needed. Horst says there’s plenty of work for everyone, especially after some other small, mom-and-pop automotive shops have gone out of business. At least three of them have closed since Horst Tire opened in 2018. Two of the closures came during the pandemic. “We work together here. We’re not taking work from others. They’re good guys and most of them don’t want to do tires. They don’t take tires from me. I send my alignments to them. We just have a good relationship working back and forth.” MTD June 2022

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Tr u c k t i r e s e r v i c e

OPPORTUNITIES IN TRUCK ALIGNMENT SERVICE CAN UNCOVER HIDDEN REVENUE By

Mike Manges

rom a profit opportunity standpoint, there’s more than meets the eye to truck alignment, says Kaleb Silver, director of product management, Hunter Engineering Co. “Many times when you need to do an alignment there are what we traditionally call front end parts or suspension parts that need to be checked and occasionally replaced to ensure that alignment is going to hold. “You have kingpins that wear. You have tie rods that wear, especially in vocational settings.” Dump trucks, for example, often “see a higher wear rate than other vehicles,” he notes. “It’s not just about aligning the vehicle. It’s making sure all of the parts are good and you don’t have worn-out parts under the truck that are going to cause misalignment to reoccur quickly or will cause tire wear. “A common misconception is that a front end alignment is all that really matters, but it’s not. You can have front tire wear that’s caused by tandem scrub.” If tandems aren’t aligned properly, “they Truck alignment service can be “a great opportunity to take someone who’s showing can basically ‘steer’ the truck as you’re driving promise in another position and give them a step up,” says Kaleb Silver, director of and then you wear (out) the front tires trying product management, Hunter Engineering Co. to counter the rear push you’re getting.” The problem also will cause ride complaints, according to “The adjustment is a little different comparing pickup trucks Silver. Drivers will sometimes report “that the truck pulls one and cars to three-axle tractors and dump trucks and things like way or seems hard to control. These are common things that are that, but the general concept is very much the same. You’re trying to align all the wheels to drive straight down the road. the result of a misalignment on the rear of the vehicle.” Alignment also can help reduce driver fatigue and increase “In our mind, it’s a great opportunity to take someone who’s safety, he says. showing promise in another position and give them a step up.” “Another thing is fuel economy. A lot of people think of wheel alignment as being a tire life-savings thing. It’s also about getting ROBUST NEED the best fuel economy possible. It takes a lot of fuel to wear tires Hunter estimates that more than 50% of heavy trucks on roads down faster than they’re supposed to.” today need an alignment. “There’s a lot of opportunity and it’s opportunity that has a “A lot of (truck owners) only think about aligning front tires decent-size dollar figure attached to it,” says Silver. because steer tires cost quite a bit. But you need to align all axles “A three-axle truck alignment is commonly $300 or a little to get the best drive and the longest tire life.” more in some markets. It can usually be completed within an TECH TRAINING hour or just a little bit more, depending on the shop and the “There are a lot of technicians who specialize in wheel alignment.” technicians. It’s almost all labor. says Silver. “It can provide a great living.” “And it’s very likely during the course of performing an alignment With the proper training, passenger car alignment technicians that you’re going to identify other service items that are going also can transition into performing truck alignments, he adds. to provide additional opportunity and additional income.” ■

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MTD June 2022

5/26/22 7:43 PM

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5/24/2022 10:56:10 AM

A G T i r e Ta l k

ALL-STEEL VERSUS OTHER CASINGS A REFRESHER ON PERFORMANCE BENEFITS AND APPLICATIONS

Modern Tire Dealer has partnered with AG Tire Talk to provide answers to insightful questions that farm tire dealers have about farm tire technology. This is the next installment in our ongoing series, which is designed to help farm tire dealers better connect with their customers. A trending question, followed by answers, will appear in our Commercial Tire Dealer section every other month. For complete answers, click on www.agtiretalk.com. steel casings have a higher ply turn-up around the bead and are easier to repair. Steel-belted tires are designed with fabric carcasses — like nylon or polyester — overlaid under the tread area. This provides a flatter footprint by making the casing rigid and has better penetration resistance. It also can reduce rolling resistance. The benefits of a flatter footprint include better traction, even wear, better handling and longer tire life.

QUESTION: What’s the difference between all-steel and steel belt casings, what applications are recommended for each and what performance benefits do they provide? DAVE PAULK, manager, field technical services, BKT USA: There are differences in all-steel belt casings and steel-belted tires. Both have their advantages for different applications. All-steel casings have

04_MTD_CTD-CommerciallyViable.indd 50

a steel belt instead of a fabric belt running from bead to bead in a radial design. In all-steel casings, there is generally one steel belt in the sidewall. Since steel doesn’t shrink or stretch, it allows for a consistently sized casing. The steel belt helps give the tire a flatter footprint and gives the carcass strength. This allows for higher inflation pressures, more load carrying capacity, lower rolling resistance, higher speeds and casing durability. All-

DANA BERGER, ag business development manager, Continental Commercial Specialty Tires: When it comes to tires, the carcass is the drop of water that causes a ripple effect. Without a strong, stable beginning, what could have been a masterpiece will fall apart in an instant. A tire’s carcass requires real attention to detail, as it is responsible for the damping and flexion of a tire. It must be constructed with quality materials and an imaginative approach to be able to address various applications. Commonly used textile materials — nylon, polyester and rayon — allow for this flexibility. Each has its own positive and negative attributes. Nylon provides mid-range stability and medium shrinking and is excellent at absorbing energy. Polyester offers better dimensional stability than nylon and low shrinking, but only an average level of energy absorption. Rayon is different still. Like polyester, it allows good stability, but it will deteriorate when wet, which shortens its long-term endurance. M.H. MAHAJANSHETTI, technical director, Global Rubber Industries Pvt. Ltd.: The tire industry is evolving rapidly to meet agricultural needs. Identifying the most effective tire for MTD June 2022

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A G T i r e Ta l k the application is important. Nylon and polyester belt plies are traditional. Some of the benefits of nylon are improved integrity at elevated temperatures, improved toughness, improved fatigue resistance, improved impact resistance — akin to armor, improved wear resistance, and more. Polyester/nylon tires provide the best performance for select applications.

Here are a few considerations dealers should evaluate when choosing tires: traction, load carrying capacity, soil compaction, driver comfort, durability and value for money. Selecting the right tire for the application impacts fuel and vehicle efficiency, crop yield, soil or crop root damage, high carbon sequestration, vehicle downtime and maintenance, vibration and more.

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GREG GILLAND, vice president, global agriculture, Maxam Tire North America: The key difference between the two types of construction is how the radial tire uses the single radial casing as a spring mechanism to push the working belts onto the working surface. This ensures a uniform contact patch for the tire’s tread to deliver both the necessary traction and friction to carry the required load in any direction under power. In the case of bias-ply tires, the carcass is made up of multiple plies of material that function as a single unit like a balloon to push the tread onto the surface area. Under a working load, both tires work very differently as to how the tread area or footprint will function to deliver needed traction. The improved footprint and traction delivered by radial tires have accelerated the transformation of the specialty tire segment toward adopting radial tires. DAVID GRADEN, operational market manager, agriculture, Michelin North America Inc.: When choosing the best tire construction, it all comes down to application as nylon/polyester/steel-belt and all-steel casings have different features and benefits. When determining the right tire for an application, consider what the client will be doing with his machine. As a general rule, polyester is known for better ride characteristics, whereas nylon is known for increased durability. The need for one over the other can also be determined by how much or little flexibility is needed for the tire to perform at its potential. RYAN LOPES, national product manager, Yokohama Off-Highway Tires America Inc.: Though our selection of carcass ply material is often proprietary, the choice between polyester and nylon is typically a matter of balancing strength, adhesion, weight and cost within the demands of the application. All-steel construction offers the combination of durability, strong adhesion and excellent heat dissipation, which is why you’ll see it in premium ag tires designed for highspeed, high-strength applications. Another aspect of tire design lies in innovative uses of cap plies and belt edge strips, which allow us to tap into various materials to provide added functionality and enhance tire life. ■ MTD June 2022

5/31/22 2:17 PM

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6/1/2022 10:32:25 AM

Commercially Viable Yokohama makes trailer tire available

Hercules Strong Guard line expands

Yokohama Tire Corp.’s latest commercial truck tire, the Yokohama 121T, is available in the United States. The tire comes in two sizes — 215/75R17.5 and 235/75R17.5 — and has been designed for trailer axle applications. Rated for severe snow performance, the Yokohama 121T features a threegroove tread pattern; serpentine grooves that evacuate water; a precisely engineered concave lug for extra grip; and a ridged shoulder design that minimizes wear and improves straight-line stability. YOKOHAMA TIRE CORP. www.yokohamatruck.com

American Tire Distributors Inc. (ATD) has added to its Hercules Strong Guard medium truck tire line with the introduction of the Strong Guard H-MA, a premium, mixed-service, all-position product. Features include large siped tread blocks; a rugged, four-rib design; deeper tread depth and up to 10% wider tread width for enhanced stability; 15% wider steel belts for casing protection; and more. The Strong Guard H-MA is available in sizes 11R22.5, 11R24.5 and 275/70R22.5. Another is on the way. AMERICAN TIRE DISTRIBUTORS INC. www.herculestirescommercial.com

Bandag drive tire tread rolls out The new Bandag B713 FuelTech drive tire tread from Bridgestone Americas Inc. is SmartWayverified and delivers long-lasting service life, improved traction, irregular wear minimization and other features, including a new proprietary compound, 3D siping and a continuous shoulder design. The Bandag B713 FuelTech is available in sizes 210, 220, 230 and 240. BRIDGESTONE AMERICAS INC. www.bandag.com

Nokian adds sizes to OTR tire line Nokian Tyres plc has added three sizes to its Ground Kare OTR tire line, which targets excavators and other machines. The sizes include 710/40-22.5, which boasts an extra-large footprint for working on soft ground; 600/50-22.5, which is designed for smaller machines; and the 620/60-30, which offers enhanced load-bearing capacity. All three sizes are available in North America. NOKIAN TYRES PLC www.nokiantyres.com

ZC Rubber tires are SmartWay-certified Zhongce Rubber Group Co. Ltd. (ZC Rubber) reports that two of its medium truck tires — the Arisun AT552 (pictured) and the Westlake AZ599 — have earned SmartWay verification. The Arisun AT522 is a trailer axle tire that is designed for intermodal use. The Westlake AZ599 is for steer and trailer applications. It contains ZC Rubber’s PSCT Technology, plus four wide tread grooves and multiple sipes for extra traction and water evacuation. ZR RUBBER www.zc-rubber.com

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Maxam OTR tire series gets more sizes Maxam Tire North America has added sizes 370/75-28 and 400/75-28 to its MS915 OTR tire series. The MS915 features a deep, non-directional tread pattern, a wide footprint, wearand cut-resistant compounds for enhanced toughness and traction, and more. The tire has been engineered for use on graders and telehandlers. MAXAM TIRE NORTH AMERICA www.maxamtire.com

MTD June 2022

5/26/22 7:44 PM

DON’T MISS OUT!

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6/1/2022 12:47:54 PM

TEN Insights

Solving the compensation plan puzzle

EMPLOYEES NEED TO BE ON THE SAME PAGE AND INCENTIVIZED By

Randy O’Connor

hroughout my career, I’ve had a diverse array of roles, including store manager, area manager, district manager, business consultant, associate director, director of operations, executive director and vice president. Of course, each of those positions had its own unique set of benefits and compensation plans. Some were well-written and others not so much. As the years have passed, it’s become glaringly apparent to me that the relationship between the compensation/benefit plan and the execution of the role was super-important. As a matter of fact, speaking from both first-hand experience and my observations of thousands of pay pIans, I can tell you that the design of your compensation plans has as much to do with achieving your business goals as with the skills and work ethic of your employees who are doing the work. Recently, compensation has been a very hot topic. The local car wash is advertising $15 an hour, plus cash tips. WalMart’s average hourly rate is $15. Amazon is averaging $18 an hour for warehouse workers. Add to that the seemingly endless press coverage of wages and labor and everybody believes their value has gone up. The pressure you may be feeling because of the wage and hour disruption occurring now is understandable. But this is another example of how disruption can be turned into opportunity. Let’s say you just decided to give your three general service technicians a raise from $12 an hour to $14 an hour. You either felt like it was fair or you felt like you had to. Either way, you did it and you’re not alone. You’re also not alone in two other ways. One, our industry has a pretty consistent set of pay plans. General service team members get hourly, plus some spiffs. Technicians get a flat rate. Sales advisors are hourly, plus

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receive some type of sales commission. Service managers are either hourly/salary, plus commission. And managers are either salary/hourly, plus commission. What’s also pretty consistent is the number of dealerships that perform at or under 5% net profit annually. Let’s run some numbers. You’re a $2.1 million a year location operating at 52% gross profit. Your payroll runs 48% of gross profit and your non-payroll operating expenses run at 24% of sales. Your net is 3%. Throughout the year, the three general service techs mentioned earlier clock 6,000 regular hours, plus 750 overtime hours. Your payroll just went up by $14,625.

Make sure everyone in your business is aligned on expectations up front. If everything else remains the same, your payroll just went from 48% to 49% and your net just went from 3% to 2.3%. If that doesn’t seem fair, you’re right. It’s not fair to you or your business and it isn’t sustainable. It’s the “all-else-remains-thesame” part of the equation that you should be questioning. That’s where the design of your pay plans and the opportunities in a disrupted market I mentioned come into play. After more than 20 years working with independent tire dealerships, plus big box and private equity-owned shops, I want you to remember the following: Quid pro quo. People value money and respond positively to incentives. Rewarding certain behaviors with something that your employees value will reinforce the behavior and encourage more of it. The sales cycle should determine what percentage of

total compensation should be base versus commission. Quid pro quo compensation structures are the most successful structures for sales-driven revenue models. Alignment. A well-designed pay plan starts with budgets and goals. Your annual business plan should have outlined your budget for a given position. That same business plan should help you outline specific measures needed from the position to achieve your financial performance goals. Aligning budget with goals is a natural next step. The key to execution is making sure the commission portion of your business’ pay plan focuses on the most important outcomes within a position’s control. Which pieces of the business within the employee’s control will have the biggest impact on the financial goal execution? For example, we all know that vehicle inspections drive sales. How many of your general service techs are paid on completing the inspection as opposed to sales from the inspection? Also remember that when you hire an employee, you delegate a certain amount of control and decision-making ability to that person. Meanwhile, you retain ownership of your business’ assets and the liability for any losses. For example, you hire a new manager with a 10% share of net profits. While the new manager wants to maximize sales and gross revenue, you may decide you need to invest in new shop equipment. As you plow through net profits with your investments focused on the long-term health of your business, the manager could feel slighted. Make sure everyone in your business is aligned on expectations up front. ■ Tire and auto industry veteran Randy O’Connor is the executive director of TEN (Training and Education Network). He can be reached at roconnor@10missions. com. For more information, see www.mtdten.com.

MTD June 2022

5/30/22 10:13 AM

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6/1/22 4:35 PM

Mergers and Acquisitions

What’s your dealership’s mission? IS IT MORE THAN JUST MAKING A PROFIT? By

Michael McGregor

Supreme Court Justice once of businesses are looking inward when presenting themselves to the public. obser ved that “the true Statements like “we are after complete symbol of the United States customer satisfaction,” “we will not be is not the bald eagle. It is undersold,” “safety is our priority” and the pendulum. And when “we offer the highest quality” are what the pendulum swings too far in one I mostly find. direction, it will go back.” This pendulum swing may be happenA few have vision statements, but ing right now with regards to corporate the purpose of those is to explain why profits and employee wages. According customers should shop at their stores.. to the Federal Reserve Bank of St. Louis, An effective mission statement corporate profits as a percentage of explains your organization’s reason for gross domestic product (GDP) more existing. It’s a simple, short explanation than tripled from a low of 3.7% in 1985 of your company’s purpose and intent. to a high of 11.5% in 2021. This mission statement At t he s ame t i me, can support a company’s employee compensation as of being the best or I urge you to find vision a percent of GDP declined being the lowest- priced by 20% over much of this or whatever that vision is. your mission. same period, from the high But a concise statement point in 1970 to the low point of 2015. must give your employees, customers and stakeholders an idea of what you are all This is partially what is behind the “great resignation” we observed durabout. And it should give your associates ing COVID-19. We’ve seen decades a greater sense of identity. of unparalleled profits in corporate In my previous career, my mission America, while workers’ wages have was “to keep people driving by providing remained stagnant. peace of mind with predictable, affordSome workers feel they have been left able, high-quality car care.” out and their wants have been ignored. The “keeping people driving part” The pendulum has now swung back in was intended as the general purpose their direction. Many are looking to “feel good” — implying we help move “work to live” rather than “live to work.” people and society forward. The other They want to be valued for the work parts related to our subscription-based they do and they demand higher pay. model that was intended to re-engineer the auto service business. Why else would 4.5 million people quit their jobs last November — the Customers and employees bought highest resignation rate per month into our mission. This was reflected ever, according to the Bureau of Labor in everything we did in our stores and Statistics? Workers voted with their feet. even in our community involvement. While there are many ways to attract Every month, each of our stores took in and retain employees, I’m going to a donated or abandoned car and fixed it focus on just one — having a mission up at no cost for needy people through or purpose they can buy into, other Goodwill’s Car Donation Program. Our than just making a buck. employees felt really good about this and A quick check of some leading autoit reinforced our mission to improve motive chains’ websites tells me that a lot the auto repair business for everyone.

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When I exited that business, I chose to reinvent myself as an investment banker. I was no longer on the grand mission of re-engineering the car care business and was instead “just doing deals.” My son, Neil, who was maybe eight years old at the time, told me that what I was now doing was just as important as what I did before because I was helping people. So that’s my mission. I help people. If a tire dealer wants to pick my brain about what their options are, I’ll spend some time educating them — even though I can’t represent them if they are too small. If a tire wholesaler is facing liquidation because their main vendors pulled their lines, I‘ll see what I can do to engineer a quick exit — even if it’s too late. If a multi-location tire dealer is breaking even, I’ll look at their books and give them ways to improve their performance. I speak at industry conferences to help educate tire dealers. I write this column to hopefully make you more aware of the private capital markets — and your options. All of that is without getting paid. Now don’t get me wrong. I make a great living as an investment banker helping people in the automotive business. But it’s my mission that drives profit and not the other way around. I urge you to find your mission. It will benefit you and your business. And it will benefit your employees — giving them a higher purpose to rally around. ■ Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael. mcgregor@focusbankers.com.

MTD June 2022

5/31/22 2:17 PM

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5/24/2022 9:21:16 AM

Business Insight

The pros and cons of tracking productivity NO SYSTEM IS PERFECT, BUT THESE TIPS WILL HELP YOU GET STARTED By

Dennis McCarron

n the tire and auto service industry, profit margins are relatively small and business is still highly driven by on-demand services. That means one day can be busy and the next day can be slow. Most dealerships only schedule a handful of jobs a day and try to manage the chaos of 12 to 18 surprise customers a day who may only need a basic service or may end up being a very large service ticket. This environment creates a very unpredictable payroll, especially if many people are hourly or salary. This causes most dealerships to favor some form of variable, productivity-based compensation for their people who work on vehicles. Here are some basic steps to implement a tracking system of productivity and the positives and negatives that usually go along with tracking employees’ progress: 1. Set a baseline. Each dealership needs to start somewhere. For technicians already on a productivity-based pay program, simply track the hours they clock in for the week and track the number of billable hours they produce. Take the billable hours and divide by clock hours. This equals the technician’s productivity rate. A tech with more billable hours than clock hours will have a plus-100% productivity. A tech with more clock hours will be below 100%. Track this ratio individually and as a group for several weeks. Find patterns and after a few weeks, average the numbers individually and as a group. This will become your baseline. 2. Set goals. This is not a time to criticize. It’s a time to lead and to listen. At this point, we haven’t done any analysis of the data yet. In my experience, an aftermarket service shop — as a collective — should be at minimum 80% productive, with the lowest- performing

05_MTD_Columns.indd 60

technician averaging 70% productivity. Set goals higher than baseline for both individuals and your team. 3. Remove obstacles. As a leader, you must go out into the shop and observe. There are thousands of reasons why a tech’s productivity may be low. They may be good mechanics, but not good at multitasking. Maybe the tech multitasks too quickly and creates comebacks or the work isn’t being delegated properly, the parts take too long to arrive, vehicle inspections aren’t being done prior to original requested work, etc. Go out into your service bays, observe and talk to your people. Listen to learn — not to respond. Then remove the obstacles. 4. Provide rewards to keep your staff motivated and focused. Every productivitybased system needs rewards to keep employees motivated. Those rewards can’t be “set it and forget it,” nor can they be externally based-only. External rewards need to change minimally every quarter. Keep it simple, but don’t let it get stale. Internal rewards — the true motivational factor — are the accolades you provide for a job well done. No system is perfect. If it were, there would be no variety, no challenges and everything would be boring. Profitability also would plummet. The cons of tracking productivity are largely two-fold. First, employees instinctively know that pressure is coming. Pressure often creates stress, which hurts productivity. Make sure to include your employees in as many steps and solutions as possible. They are on the front lines and know best, but usually will prioritize their comfort over tension. But tension is good. Tension creates productivity.

The second thing any owner or leader needs to fight is using productivity as a weapon. Nothing kills morale more quickly than introducing a new tool and weaponizing it. Tracking productivity needs to be used to solve problems — not as a blunt force object. If you are tracking productivity and not getting the results you want, go out, observe and listen. Yes, sometimes the solution to low productivity is to release an employee.

Every productivity-based system needs rewards to keep employees motivated. Maybe there’s not enough work to go around. Maybe after trying for months, it’s just not clicking. But many times, the solution is education — for the owner, the tech or both. The pros of tracking productivity are also mainly two-fold. First, it means more opportunity for you and your employees to earn money. If it only helps one but not the other, you have a very bad program. Second, tracking productivity should allow the core values of your company to shine through. Do you value correct diagnosis over speed? Do you hold employees accountable for labor mistakes and seek reimbursement from parts houses for parts failures? In the end, by following a few rules, tracking productivity at a simple, fast and easy level will be very helpful to your dealership and will provide an opportunity for your employees to earn more and not be locked to a clock. ■ Dennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email him at dennis@cardinalbrokers.com.

MTD June 2022

5/31/22 2:18 PM

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5/31/2022 7:16:57 AM

Focus on Industry

Sailun sees ‘big opportunity’ in EV tires CONTINUED ‘FLIGHT TO VALUE’ ALSO BENEFITS COMPANY AND ITS DEALERS By

Mike Manges

“I

f you look at the electric vehicle (EV) tire space, there aren’t too many choices right now,” says Mark Pereira, director of marketing for Sailun Tire Americas. Sailun is making a run at the burgeoning EV market with a new tire, ERANGE EV, and a new mixing technology, EcoPoint3, which allows rubber compounding materials to be mixed in a fully uniform way, under continuous liquid phase conditions. The Sailun ERANGE EV — which will be available in more than 30 sizes — has been specifically designed for EVs and will be the company’s first product that benefits from EcoPoint3, which Pereira says has been in development “for the better part of almost a decade.” “We’re focused on getting the ERANGE EV into the market later this year — towards the end of 2022,” Pereira told MTD during a recent track day event at Miami (Fla.) Homestead Speedway. The ERANGE EV will be distributed through TBC Corp., which will use National Tire Wholesale (NTW) “as the conduit to the U.S. market. “We’ll make sure we load up retailers

06_MTD_FocusOn_TPMS.indd 62

“We’re focused on getting the ERANGE EV into the market later this year — towards the end of 2022,” says Mark Pereira, director of marketing for Sailun Tire Americas.

across the U.S. going into the spring of 2023.” The tire, which will be made at Sailun’s plant in Cambodia, also will be available in Canada. “And as demand ramps up, we’ll continue to work with TBC on where (else) it makes sense to place this product.”

GETTING DIALED IN

Sailun says that by the year 2035, 34% of vehicles on roads will be EVs. “We saw a big opportunity with EVs coming,” says Pereira. And that opportunity brings design, construction and manufacturing challenges for tiremakers. “The demands (placed on EV tires) are completely different than a traditional tire. Rolling resistance has to be (low). Many EVs have a ton of torque. Grip for emergency braking has to be there. And the tire has to last. “We’re hearing from a lot of EV drivers who are realizing that their vehicles are going through tires at a higher rate than (tires on) traditional internal combustion engine cars. That’s a cost they hadn’t expected. Now they’re changing tires a year earlier than they thought.

“So we had to make sure our technology caught up with what the market’s demanding,” says Pereira. “If you look at what’s happening with EVs, it’s a cultural shift as well as a product shift and it made so much sense to create a flagship product that would address those challenges and enhance the performance of those vehicles. “Once we get EcoPoint3 dialed in right, which we will with the ERANGE EV lineup, where else can this technology help us? There are a couple of different things we’re looking at that are brand new” applications for EcoPoint3. Sailun is looking to infuse EcoPoint3 into “some of our best-selling products in the market. As we invest in factories that use liquid phase mixing machines, it’s only natural that the other tires we have — in a phased approach — will be built that way.”

‘FLIGHT TO VALUE’ CONTINUES

Sailun is developing tools to help its dealers sell the ERANGE EV and explain EcoPoint3 technology to consumers. And the company will continue to push its traditional value proposition. MTD June 2022

5/31/22 2:18 PM

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5/24/2022 10:48:54 AM

Focus on Industry

“If you look at what’s happening with EVs, it’s a cultural shift as well as a product shift and it made so much sense to create a flagship product that would address those challenges,” says Pereira.

Randy Kirksey, sales director for Harold’s Tire in Topeka, Kan. (foreground, with Chris Weir, regional sales director at National Tire Warehouse’s Austin, Texas, location) says his dealership has nearly tripled its sales of Sailun brand products.

Elvis Herra, store manager at Gutierrez Tire, a single-location dealership in Reno. Nev., says Sailun’s timing couldn’t be better. “Value brands are coming up. Their quality sometimes outperforms premium tires.” Herra, who runs Sailun tires on his personal vehicle, a Volkswagen Jetta, says his store is seeing “a lot more Teslas,” partially due to a nearby Tesla battery and component factory. “We’re going to promote the ERANGE EV.” End users continue to gravitate to less expensive tires, notes Chris Weir, regional sales director at NTW’s Austin, Texas, location. “Sailun is the brand we push when our dealers’ customers aren’t looking to pay a premium price, but want a solid,

06_MTD_FocusOn_TPMS.indd 64

well-rounded tire,” he says. “I consider Sailun to be a premium tire without the premium price.” Randy Kirksey, sales director for Harold’s Tire, a two-location dealership in Topeka, Kan., has been selling Sailun tires for the past two years. “We were looking for another tire that people could afford that’s a good tire. It’s been great.” The company has nearly tripled its sales of Sailun brand products within the last year. Kirksey says it is part of a greater trend. “You still have die-hard people who want higher-end (tires) for their pickups and trucks, but with fuel prices being what they are,” more consumers are buying value products. Sticker shock has contributed to this, he adds. “We had a customer come in who bought tires from us a year ago and the tires were $88 a piece. That tire now is $130. People are like, ‘Why?’ We tell them we don’t control that end of the market with the price increases” that are happening. “There’s been a flight to value that I think got a shot in the arm” during COVID-19, says Pereira. “Speaking with some of our retailers and the guys behind the counter, you hear there’s a lot of optimism now, (demand) is growing and business has picked up again. But a lot of consumers have had to tighten their belts over the last two years.

“I think consumers right now are more open to trying a brand that might not have the same equity of other brands they have heard of. “But they still do their homework. We want to make sure we provide education to (tire dealerships’) counter staff so they can inform consumers. “We need to be in touch with the end user. Someone might walk into a tire store looking for an original equipment replacement, then see the price and wince a little bit. If they can save a few hundred dollars on a set of tires that can do the same thing” as a more expensive product, “it’s a no-brainer” for many consumers.

MORE TO COME

During the Miami event, Sailun officials also previewed other new products, including the Sailun SH408, an all-season tire that offers enhanced ice and snow traction. It will go into production later in 2022. Another tire, the Sailun Terramax RT, will be available next year in 36 sizes. The 3-Peak Mountain Snowflake-certified product “will be similar to the Terramax AT,” says Jared Lynch, Sailun’s vice president of sales. Sailun will provide additional dealer support, including track events, product training videos and digital marketing initiatives focused on social media and search engine optimization. MTD June 2022

5/26/22 7:51 PM

MODERN TIRE DEALER

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5/31/2022 5/23/22 8:48:51 1:47 AMPM

Focus on Dealers

ITDG members celebrate big wins GROUP IS APPROACHING ‘MAGIC NUMBER’ OF 1,000 LOCATIONS By

More than 300 people attended the Independent Tire Dealers Group LLC’s recent meeting in Nashville, Tenn. The group has 163 members, who together represent 987 locations throughout 44 states.

Greg Smith

“I

t only took us over two years to meet face-to-face again, but it is sure worth it,” Dave Marks, president and CEO of the Independent Tire Dealers Group LLC (ITDG), said during its annual meeting and trade show, which recently took place in Nashville, Tenn. Dealers and vendors who attended the event all shared the same sentiment. Being together again to discuss business and network was highly important to them. The meeting was structured with one main general session, a trade show and individual breakout meetings that allowed dealers to meet and discuss programs with their vendors face-to-face. Marks said that ITDG, like all businesses and groups, needed to adapt and change as it worked its way through the past two years of the COVID-19 pandemic. He told the assembled group of 317 members, suppliers and spouses that “nobody knew what was going to come at us two years ago.” Through it all, he found “our board to be the most astute people I’ve ever worked with.” In fact, Marks said he was proud of the diversity of the current board, which includes seven different members from seven different states.

NUMBERS ARE CLIMBING

Marks compared how ITDG looked in 2016 versus where it stood at the end of 2021. From 2016 through 2021, the group grew from 106 shareholders to 122 shareholders, despite a number of members who were acquired by other companies and left the organization. Also from 2016 through the end of last year, ITDG increased

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its total number of members from 143 to 158, which increased its total number of locations from 609 to 843. Marks said ITDG lost 12 shareholders since its 2019 meeting, but replaced those with 15 new shareholders. In just the last four months, the group has added eight new members, accounting for 66 more locations. ITDG today has 163 members representing 987 locations in 44 states. The only states without locations are Delaware, Indiana, Kentucky, Rhode Island, Vermont and West Virginia. A goal of hitting “the magic number of 1,000 locations” was mentioned several times during the meeting. Marks pointed out that the group has seen tremendous growth in the eastern part of the U.S. From a financial standpoint, ITDG had gross purchases of more than $211.1 million for 2016, increasing to $344.7 million during 2021. Average eligible purchases per shareholder grew substantially, as well — far outpacing inflation, said Marks. (He joked that his hand shook as he wrote out shareholder payout checks, with the average check increasing from $78,000 in 2016 to almost $121,000 in 2021.) All of this happened while ITDG trimmed back the number of partnervendors it used. The group decreased from 89 to 75 partner-vendors, said Marks.

NEW INSURANCE PLAN

ITDG also provided an update of its Cell ITDG Captive Insurance Plan, which replaced the original IICIC Captive Insurance that was established in 2005. Just a few of the new plan’s enhancements are lower cost of entry, reduced captive operating

expenses, better control of members’ workers comp insurance costs and members also can recognize a return of some of their premiums for good performance. Marks is the current president of Cell ITDG. During the meeting, Wes Tatum from Leete Tire & Auto Center in Virginia, chairman of ITDG’s NextGen group, and his co-chairman, Colton Miller, from Main Street Tire USA in Colorado Springs, Colo., gave an overview of the group. The purpose of NextGen is to discuss best practices, including social media, computer systems, shop operations and more. ITDG’s NextGen group meets via video conference quarterly, with each meeting lasting roughly an hour. Members recently discovered their pay rates and labor rates were very similar in nature, which allowed them to make sure they were following market trends. Since ITDG was not able to hold its event in 2020 and 2021, three ITDG Dealer of the Year awards were presented to Begg’s Tire of Philomath, Ore. (2019); Montana Tire of Billings, Mont. (2020); and Jack’s Tire & Oil, which is based in North Logan, Utah (2021). Current board members of ITDG are Chairman Rob Slagle of Affordable Tire USA, which is based in Glendale, Ariz.; Vice Chairman Clay Miller of Mainstreet Tire; Secretary Peter Greenberg of City Tire in Springfield, Mass.; and Treasurer Jay Limbaugh of Jack’s OK Tire in Algona, Iowa. Directors include Jessica Palanjian Rankin of Grand Prix Performance from Costa Mesa, Calif.; Eric Ostendorf of Tiremaxx Service Center in St. Joseph, Minn.; and Dan Pearson of Northwest Tire, which is based in Bismarck, ND. MTD June 2022

5/26/22 7:51 PM

Focus on Industry

Kenda touts new products, faster ‘cycle time’

COMPANY CELEBRATES 60TH ANNIVERSARY WITH OPEN HOUSE By

Mike Manges

Equipment at Kenda’s North American Technical Center helps the company “predict how tires will perform on the road,” says Caitlyn Williams, senior chemist, Kenda.

FASTER DEVELOPMENT

“On the PLT side, we’ve turned our product screen over completely in seven years,” says Brandon Stotsenburg, vice president, automotive division, American Kenda Rubber Co. Ltd. (far left), with Trevor Cody, senior chemist (center), and Jimmy Yang, chairman of Kenda Rubber Industrial Co. Ltd.

enda Rubber Industrial Co. Ltd. recently celebrated its 60th anniversary by hosting an open house at its North American Technical Center near Akron, Ohio. The facility is one of four research and development centers that the manufacturer of passenger, light truck, bicycle and other tires operates. The others are located in Taiwan, Kenda’s native country; China; and Europe. (The company also has seven manufacturing plants, including one in Taiwan, one in Indonesia, two in Vietnam and three in China.) Kenda has invested more than $20 million in its North American Technical Center. (Forty-six people currently work at the location. Kenda employs 13,000 people globally.) w w w . M o d e r n T i r e D e a l e r. c o m

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“Kenda is a global leader in tire development and manufacturing,” Jimmy Yang, chairman of Kenda Rubber Industrial, told guests during the open house event. The company’s North American Technical Center has developed numerous products for the North American market, including the Klever M/T2 KR629, an off-road light truck tire that was unveiled last November during the 2021 Specialty Equipment Market Association Show. The tire will be available this summer in 30 sizes, fitting wheels ranging from 15 inches to 22 inches in diameter. More sizes are in the works. The center also is developing a new lawn and garden tire for zero-turn mowers. “Kenda is really excited about the growth of this market space,” said Yang.

“Our cycle time on new products” has been significantly reduced, said Brandon Stotsenburg, vice president, automotive division, American Kenda Rubber Co. “On the PLT side, we’ve turned our product screen over completely in seven years.” He adds that “all of the new products in the second generation of our product screen were developed” at the North American Technical Center. “These products constitute over 90% of our sales in North America.” During the event, Kenda unveiled its new, digital E-University education portal, which will provide “self-paced” e-learning courses for Kenda dealers. It will include a training library and will notify dealers when new content is available. The goal “is to provide you with key information to make your job easier,” Stotsenburg told dealers in attendance. The portal’s introduction was followed by a tour of the facility. Guests met with Kenda research and development officials and observed various tire testing stations. “We design our test centers to be responsible for the markets they’re in,” said Yang.

5/26/22 7:51 PM

TPMS

Infiniti Q50 — 2018-20 TPMS RESET PROCEDURES

If a tire pressure sensor is replaced, it will need to be initiated. The tire pressure monitoring system (TPMS) is not affected by wheel and tire rotation.

TIRE PRESSURE SENSOR ID REGISTRATION

TPMS ID registration can be performed using one of the following procedures: • Tire pressure sensor Activation tool (J-45295-A) with CONSULT (preferred method); • Signal Tech II tool (J-50190) with CONSULT (preferred method); • Signal Tech II tool (J-50190) without CONSULT

Here’s a schematic description of the TPMS system and operation • Wheel (A) • View with instrument panel removed (B) • Behind of combination meter (C) • Part of outside door handle grip (D) • View with rear bumper fascia removed (E) 1. Outside Key Antenna (Passenger Side) - For vehicles equipped with individual tire pressure display in the combination meter, the outside key antennas (driver side, passenger side and rear bumper) are used by the BCM to identify the location of the tire pressure sensor. 2. Abs Actuator and Electric Unit (Control Unit) - Mainly transmits the following signals to BCM via CAN communication. • Vehicle speed signal 3. Combination Meter - Mainly receives the following signals from

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BCM via CAN communication. • Low tire pressure warning lamp signal • TPMS malfunction warning lamp signal - The combination meter will display the low tire pressure warning lamp when a low tire pressure or system malfunction is detected by the BCM. A warning message will also be displayed in the information display. 4. Tire Pressure Sensor - A tire pressure sensor integrated with a valve is installed in each wheel, and transmits a detected air pressure signal in the form of a radio wave. The radio signal is received by the remote keyless entry receiver (tire pressure receiver). 5. Remote Keyless Entry Receiver (tire

pressure receiver) - The remote keyless entry receiver receives the tire pressure signal transmitted by the tire pressure sensor in each wheel. 6. BCM - The BCM reads the tire pressure signal received by the remote keyless entry receiver. In addition, the BCM also uses the outside key antennas (driver side, passenger side and rear bumper) to identify the location of the tire pressure sensors. 7. Outside Key Antenna (Driver Side and Passenger Side) - The outside key antenna on both the driver and passenger sides is installed in the outside handle. 8. Outside Key Antenna (Rear Bumper) - Another outside key antenna is installed in the rear of the rear bumper.

MTD June 2022

5/30/22 10:14 AM

C O M B I N E B OT H F R E Q U E N C I E S

PRESS RELEASE

ORIGINAL EQUIPMENT FIT FORM & FUNCTION

RUBBER >

INTERCHANGEABLE VALVE STEMS

315MHZ + 433MHZ

PROGRAMMABLE UNIVERSAL TPMS 1-SKU SENSOR INVENTORY MAX SIGNAL STRENGTH SUPERIOR BATTERY LIFE

VEHICLE COVERAGE ALUMINUM >

COMBINES 314.9, 315 & 433MHZ APPLICATIONS INTO ONE SENSOR

COMPLETE

OE QUALITY SENSORS UPDATES POWERED BY

SOLUTION POWERFUL SCAN TOOLS DIAGNOSTICS

ITS600

TS508

• 5.5” Touchscreen Tablet with Android 9.0 OS • Optical Scanner Identifies VIN / MMY

• 4 MX-Sensor Programming Methods • Exclusive TPMS Status Screen

DIAGNOSTICS & SERVICE

TPMS SERVICE TOOL

SUPPORT: 1.855.288.3587 EMAIL: USSUPPORT@AUTEL.COM | WEB: AUTEL.COM VIEW MARKETING MATERIAL: ISSUU.COM/AUTEL2 FOLLOW US @AUTELTOOLS

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5/26/2022 11:52:55 AM

TPMS TPMS REGISTRATION WITH TIRE PRESSURE SENSOR ACTIVATION TOOL (J-45295-A) With CONSULT: 1. Turn the ignition switch ON; 2. Using CONSULT, select “WORK SUPPORT” in AIR PRESSURE MONITOR. Then select “ID REGIST;” 3. Select “start” on “ID REGIST” screen.; 4. Hold the tire pressure sensor activation tool (J-45295-A) against the side of the left front tire, near the valve stem; 5. With the tool held at a zero-to-15-degree angle to the tire, press and hold the tire pressure sensor activation tool button until the indicator lamp turns OFF (approximately five seconds); 6. Repeat steps four and five for the remaining tires in this order: right front, right rear and left rear; 7. When ID registration is complete, check the following pattern at each wheel: left front tire, right front tire, right rear tire and left rear tire; • Turn signal lamp: two blinks • CONSULT: “Yet (red)” • “Done (green)” 8. After the ID registration procedure for all wheels is complete, press “end” on the CONSULT to finish ID registration.

With the tool held at a 0 to 15 degree angle to the tire, select “Activate Sensor” from the main menu, then press and release the “OK” button to activate the sensor.

TPMS REGISTRATION WITH SIGNAL TECH II TOOL (J-50190) NOTE: The Signal Tech II must be

These two diagrams show the two types of tire pressure sensors, and their assemblies. The marked components are: 1. Tire pressure sensor; 2. Washer/Seal; 3. Valve nut; 4. Valve core; 5. Valve cap; and 6. Valve stem assembly. The pieces marked with an (X) should be replaced after every disassembly. The parts marked with are replaced as a set when the tire is replaced.

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MTD June 2022

5/30/22 10:16 AM

TPMS updated with software version 1.1.48 or newer in order to perform the below procedures. The Signal Tech II software updates can only be downloaded from a CONSULT unit with ASIST. Other versions of ASIST will not show the updates. With CONSULT 1. Adjust the tire pressure for all tires to the recommended value; 2. Turn the ignition switch ON; 3. Using CONSULT, select “WORK SUPPORT” in AIR PRESSURE MONITOR. Then select “ID REGIST;” 4. Select “start” on “ID REGIST” screen; 5. Turn on the Signal Tech II tool (J-50190); 6. Hold the Signal Tech II against the side of the left front tire, near the valve stem; 7. With the tool held at a zero-to-15-degree angle to the tire, select “Activate Sensor” from the main menu, then press and release the “OK” button to activate the sensor. Once the sensor is activated, the vehicle parking lamps will flash and the sensor ID will appear on the CONSULT screen; 8. Repeat steps six and seven for the remaining tires in this order: right front, right rear and left rear; 9. When ID registration is complete, check the following pattern at each wheel: left front tire, right front tire, right rear tire and left rear tire; • Turn signal lamp: two blinks • CONSULT: “Yet (red)” • “Done (green)” 10. Once all sensors have been activated, select “End” on the CONSULT to finish ID registration. Without CONSULT 1. Adjust the tire pressure for all tires to the recommended value; 2. Turn on the Signal Tech II tool (J-50190) and select “TPMS Check” from the main menu. 3. Select vehicle model and year. 4. When prompted, hold the Signal Tech II against the side of the left front tire, near the valve stem; 5. With the tool held at a zero-to15-degree angle to the tire, press and release the “OK” button to activate the sensor. Once the sensor is activated, the tool will sound a tone and the tire pressure will be displayed. w w w . M o d e r n T i r e D e a l e r. c o m

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6. Repeat steps four and five for the remaining tires in this order: right front, right rear and left rear; 7. When prompted, connect the tool to the data link connector. The tool will connect to the TPMS, read the VIN, read sensor IDs and check for TPMS DTCs. Along with DTCs detected, one of the following will be displayed next to each wheel: • N/A - Not applicable because no ID found by the tool • OK - Wheel and sensor are in original position • NEW - New ID found compared to TPMS • RT - Wheel has been rotated • Low Press - Low tire pressure 8. If no DTC is present or the repair has been completed, press the “OK” button to register the IDs and clear DTCs. 9. Print a Signal Tech II Audit Report for your records. Refer to the Signal Tech II User Guide for instructions.

TBE200

INDEPTH TIRE SERVICE

LASER TBE200 INTELLIGENT MEASUREMENTS TIRE TREAD DEPTH MEASUREMENT

BRAKE DISC WEAR MEASUREMENT 0.1MM LASER ACCURACY TOUCHSCREEN DISPLAY

DEMOUNTING/MOUNTING PROCEDURES

CAUTION: The tire should be demounted from the wheel using the tire changer manufacturer’s instructions. Use the following information to avoid damage during the demounting/mounting procedures. Ensure that the wheel to be fitted is designed for sensor mount. There should normally be a mark to indicate this.

TIRE PRESSURE SENSOR REMOVAL

1. Remove tire assembly. NOTE: If the tire is reused, apply a matching mark to the position of the tire road wheel valve hole for the purpose of wheel balance adjustment after installation; 2. Remove valve cap and valve core and then deflate tire; 3. Remove valve nut retaining tire pressure sensor and allow tire pressure sensor to fall into tire. CAUTION: • Verify that the tire pressure sensor is at the bottom of the tire while disengaging the tire beads; • Be sure not to damage the road wheel or tire pressure sensor. 1. Use the tire changer and disengage the tire beads;

5/30/22 10:16 AM

TPMS CAUTION: • Direction of the seal is checked. • The cut part of the washer becomes in the center of the valve stem. b. Check the condition of the valve stem before installing tire pressure sensor to the road wheel. CAUTION: The base of valve stem must be positioned in the groove of the metal plate as shown in the figure to the left: c. Hold tire pressure sensor as detailed below, and press the sensor in the direction shown by the arrow to bring it into absolute contact with the road wheel. After this, tighten the valve nut to the specified torque. CAUTION: • Never reuse valve core and valve cap; When removing the tire pressure sensor, turn the tire so the valve hole is at bot• Check that the grommet seal is free tom and bounce so the tire pressure sensor (1) is near the valve hole. Carefully lift of foreign matter; the tire onto the turntable and position valve hole (and tire pressure sensor) 270 • Check that the grommet seal contacts degrees from mounting/demounting head (2). horizontally with the road wheel; 2. Apply bead cream or an equivalent to the tire beads; • Check again that the base of the valve stem is positioned in the groove of the metal plate; 3. Set tire onto the tire changer turntable so that the tire pressure sensor inside the tire is located close to the road • Manually tighten the valve nut all the way to the wheel. wheel valve hole; (Never use a power tool to avoid impact.) 4. Turn tire so the valve hole is at bottom and bounce so the tire pressure sensor is near the valve hole. Carefully lift tire 6. Set the tire onto the turntable so that the tire changer arm onto the turntable and position valve hole(and tire pressure is at a position approximately 270 degress from the tire sensor 270 degrees from the mounting/demounting head. pressure sensor. CAUTION: Be sure that the arm does not CAUTION: Be sure not to damage the road wheel and tire contact the tire pressure sensor; pressure sensor; 7. Install the tire outer side beads onto the road wheel. CAUTION: When installing, check that the tire does not 5. Remove tire pressure sensor from tire; turn together with the road wheel; 6. Remove the grommet seal; 8. Check the tire pressure for all wheels and adjust to the 7. Remove the valve stem. specified value. NOTE: Before adding air, align the tire INSTALLATION with the position of the matching mark applied at the CAUTION: Replace valve stem assembly if the valve stem time of removal; has deformations, cracks, damage or corrosion: 9. Install the tire to the vehicle; 10. Perform tire pressure sensor ID registration. ■ 1. Apply bead cream or an equivalent to the tire beads; Information for this column comes from the tire pressure monitoring systems data in 2. Install the tire inside beads onto the road wheel; ProDemandR, Mitchell 1’s auto repair information software for domestic and import vehicles. 3. Install valve stem to tire pressure sensor. Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to CAUTION: • Never reuse grommet seal; • Insert grommet seal all the way to the base. 4. Install grommet seal to the tire pressure sensor assembly; 5. Follow the procedure below and install the tire pressure sensor to the road wheel. a. When valve stem assembly is replaced: 2. Set valve stem in the tire pressure sensor; 3. Install the washer in the valve stem, and then install seal in the valve stem. (TYPE 2 only)

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the automotive industry since 1918. For more information, visit www.mitchell1.com

TORQUE SPECIFICATIONS Component Wheel nut INCH lbs Tire Pressure Sensor Nut

Ft.-lbs.

(N.m)

80 lbs 68

(108) (N.m) (7.7)

MTD June 2022

5/30/22 10:16 AM

Products Bridgestone launches next-gen run-flat Bridgestone Americas Inc. has introduced the Bridgestone DriveGuard Plus premium touring tire, which targets popular sedans and CUVs and is available in both the United States and Canada. The tire features run-flat technology that “ensures vehicles can continue up to 50 miles at up to 50 mph after a puncture,” according to Bridgestone officials. It also contains 3D full-depth sipe technology for year-round performance and more. BRIDGESTONE AMERICAS INC. www.bridgestoneamericas.com

Continental pads cover European vehicles New Sailun tire targets EVs Sailun Tire Americas’ new Sailun ERANGE EV tire, which has been specifically designed for electric vehicles, will be available in 32 sizes when it hits the market in late-2022. The tire will fit wheels ranging from 15 inches to 22 inches in diameter, “covering 80% of electrified vehicles,” say Sailun officials. The ERANGE EV also represents the first application of Sailun’s new EcoPoint3 mixing technology. SAILUN TIRE AMERICAS www.sailuntire.com

Continental Commercial Vehicles & Aftermarket ATE brake pads cover in excess of 95% of European vehicles with 300-plus part numbers. The brake pads are “formulated to original equipment friction specifications, tested to meet OE manufacturers’ quality standards and designed to deliver improved performance response,” says Continental officials. CONTINENTAL COMMERCIAL VEHICLES & AFTERMARKET www.ate-brakes.com

Hunter unveils new tire changers New TC33 tire changers from Hunter Engineering Co. have been designed for tire dealerships that have limited space or offer mobile service. The machine’s tank has been relocated to create a small footprint, “fitting any truck or van platform, while allowing easy loading and unloading,” according to Hunter officials. All units in the series clamp hubs instead of wheel edges and come with plastic protectors for an extra degree of protection. HUNTER ENGINEERING CO. www.hunter.com

Wegmann unveils Alligator TPMS sensor Wegmann automotive USA Inc. has introduced its new Alligator Sens.ir RS+ tire pressure monitoring system (TPMS) sensor, which is made “for 99.98% of all vehicle models.” The sensor has “dual-frequency for both 315 MHz and 433MHz, 100% OEM functionality and 30% improved battery life.” The sensor will help technicians reduce the “risk of installing the wrong sensor,” according to Wegmann officials. WEGMANN AUTOMOTIVE USA INC. www.wegmann-automotive.com w w w . M o d e r n T i r e D e a l e r. c o m

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Norbar adds EvoTorque2 battery Norbar Torque Tools Inc. adds an 18-volt battery option to its EBT Evotorque Battery Tool. The company’s EvoLog software is compatible with both EvoTorque2 options. The EBT is built with a brushless motor and “a durable accurate Norbar gearbox and a built-in transducer with an accuracy of plus or minus 3%,” according to Norbar officials. NORBAR TORQUE TOOLS INC. www.norbar.com

5/31/22 2:19 PM

Ad Index WHEN YOU CONTACT ONE OF OUR ADVERTISERS PLEASE BE SURE TO MENTION YOU SAW THEIR AD IN MODERN TIRE DEALER ADVERTISER

PAGE

WEBSITE

Aftermarket Auto Parts Alliance Inc.

www.perfectstopsummerpromo.com

American Express

www.americanexpress.com/business-solutions

American Omni Trading

www.vercellitires.com

Anyline Inc.

www.anyline.com

Apollo Vredestein Tires Inc.

www.vredestein.com

Autel

31, 69, 71

www.autel.com

BKT USA Inc.

www.bkt-tires.com

Centric Parts

www.centricparts.com

Continental Tire

www.continentaltire.com/offers

Deestone

www.deestone.com

EasyPay Finance

enrollment.easypayfinance.com/tiredealers

Falken Tires

www.falkentire.com

GT Radial

www.gtradial.com

Hunter Engineering Company

www.hunter.com/qcc

K & M Tire Inc.

www.kmtire.com/mrtire

Ken-Tool

www.kentool.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Kontio Tyres Ltd.

www.kontiotyres.com

Kumho Tire USA Inc.

26A-B

www.kumhotire.com

Linglong Americas Inc.

www.linglongtire.com

Maxxis Tires

www.maxxis.com

Mr. Tire/Big 3 Tire

www.mrtirebig3tirectd.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

North American Bancard

www.nynab.com

Pre-Q Galgo Corporation

www.pre-q.com

Prinx Tire North America Inc.

www.prinxtire.com

Raybestos

www.raybestos.com

Sailun Tire Americas

www.gosailun.com

Sentury Tire USA

www.groundspeedtires.com

Sumitomo Tires

www.sumitomotrucktires.com

Sunbit

auto.sunbit.com/learnmore

Tireco Inc.

www.milestartires.com

Transamerica Tire Company Ltd.

IFC

www.predatortires.com

Tyres International

www.tyresinternational.com

Wrenchers LLC

www.wrenchers.com

Yokohama Off-Highway Tires America Inc.

www.yokohama-oht.com

Yokohama Tire

www.yokohamatruck.com

ZC Rubber America Inc.

www.arisuntires.com

07_MTD_Products.indd 74

MTD June 2022

6/1/22 12:42 PM

TRACTION SPEAKS LOUDER THAN WORDS.

Dig in with the new and improved Kenda Traction Program in 2022 – bringing dealers one of the strongest rewards programs in the industry with even more benefits. Earn Quarterly Cash-Back Rewards

Full Product Screen: Ohio-Designed for North American Market

Dealer Locator on KendaTire.com

US-Based Sales Support & Warranty Team

Enhanced Dealer Performance Dashboard

Trade Area Management for Dealer Success

‘Double Dollar’ Promotions

Realistic MAP Policy

Flexible Payment Options

Premium Performance at a Value Price for Consumers

Improved Mobile Access

Strong Margin Opportunities for Dealers

New Dealer Promo – purchase only 75 units in first quarter of enrollment to achieve Tier 1 status

Learn more about becoming a Kenda Traction associate dealer at KendaTractionRewards.com.

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