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Who are the top 25 commercial tire dealers? Customized and complex: SUV/CUV tire options expand How to raise your labor rate Boost your market share — now!
PEOPLE, CASH AND SUPPLY
COMMERCIAL DEALERS FACE CHALLENGES OF 2020 HEAD-ON October 2020 | Vol. 101, No. 10 | $10 | www.moderntiredealer.com
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DRIVING SALES FOR OUR NEXT LEVEL DEALERS
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The Industry’s Leading Publication October 2020, Volume 101, Number 10
36 Find out how leading commercial tire dealers are managing people, cash and tire supply, starting on page 36.
DEPARTMENTS 4 Editorial Now’s the time to boost your market share: Dealer channel continues to gain ground
6 moderntiredealer.com News and navigation tools for MTD’s website 8 News/Views Retail expansion, brand growth and dealer partnerships: Ball outlines Cooper’s priorities in North America 16 Your Marketplace Sell-out levels start to regress: Spike in COVID-19 cases hurts demand
18 Numbers That Count Relevant statistics from an industry in constant motion
52 DSP Insight Have you considered raising your labor rate? A little can go a long way, so charge what you’re worth
56 Business Insight Land mines and hand grenades: Eliminate them from your business — before they hurt you
F E AT U R E S 20
Customized and complex CUV and SUV tire options will continue to expand, say manufacturers
Commercial Tire Dealer™
36
Managing people, cash and tire supply
2020 calls for strategy among top commercial tire dealers
40
Top 25 independent commercial tire dealers in the U.S.
44
GRI looks to expand dealer network Next stop: the West Coast
46
AG Tire Talk
50
Commercially Viable
Bigger and better: Why implement tires are moving to larger diameters
58 Mergers and Acquisitions ESOPs, buyouts, trusts or debt recap? A look at alternative exit strategies
FOCUS ON INDUSTRY 60 All-weather forecast is bright, says Brison: Hankook invests in growing segment 62 Digital tools, tire supply and going green:
8
20
62
Convenience is key, says ATD’s Hancock
64 TPMS GM/Chevrolet Camaro — 2010-2019
69 Power Products 81 Ad index 82 Classified ON THE COVER: ©GETTYIMAGES.COM
Modern Tire Dealer is a proud member of:
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Editorial
Now’s the time to boost your market share
DEALER CHANNEL CONTINUES TO GAIN GROUND By
Mike Manges
W
hen’s the last time you took a good, hard look at what your competitors are doing? And when I say “competitors,” in this case, I’m not referring to other independent tire dealers. I’m talking about mass merchandisers, warehouse clubs, auto dealerships and tire manufacturer-owned stores. These entities have always been part of the competitive landscape. (Remember when Montgomery Ward sold tires? I wonder how many people even remember brick-and-mortar Montgomery Ward stores?) It’s easy to take these competitive channels for granted, if for no other reason than simply because they have always “been there.” And I’m sure you probably have done an excellent job of neutralizing their impact on your business. This factor probably explains why these alternate channels’ collective grip on the market seems to be waning. In 2010, mass merchandisers made up 14.5% of the United States replacement consumer tire sales channel, according to MTD research. Warehouse clubs made up 9.5%. Tire company-owned stores accounted for 7%. (Back then, three tire manufacturers — Bridgestone Americas Inc., Goodyear Tire & Rubber Co. and Nokian Tyres plc — owned and operated retail outlets in the U.S. Nokian recently exited this space by selling 10 Vianor Tire Center locations to an independent tire dealership, Gills Point S Tire & Auto Service.) Car dealerships had 6% of the market roughly 10 years ago. Service stations comprised 1.5%. And what we call “miscellaneous” outlets made up 1.5%. Which group comprised the biggest distribution channel? Independent tire dealers, who, together, enjoyed 60% market share at that time. Fast forward to 2019, the latest year for which we have statistics. (The next edition of the MTD Facts Issue, available this January, will feature updated numbers for 2020.) Last year, independent tire dealerships made up a whopping 63% of the market — the only channel, other than auto dealerships (9.5%) and miscellaneous outlets (2.5%), to have gained ground over the last decade. Mass merchandisers’ share of the U.S. market fell to 10.5%. Warehouse clubs dropped to 8.5%. And tire manufacturer-owned stores experienced a 1% decline from 2010 to around 6% of the market. Service stations fell off the list. Of course, since 2010, the e-commerce channel has gained momentum. Many of you have capitalized on this by either offering your own, proprietary e-commerce portal or by using existing platforms to generate incremental revenue. While we’re on the topic of competitive channels, I would be remiss if I didn’t mention the great opportunity at Walmart right now. On March 18, Walmart announced that it would temporarily
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Is your local Walmart Auto Care Center open for business? Don’t be so sure. More than 1,000 Walmart Auto Care Centers in the U.S. are still closed, as of this writing.
shutter its 2,584 Auto Care Centers throughout the U.S. in response to COVID-19. A Walmart spokesperson recently confirmed that only around 1,500 of those centers have reopened. Does that number include your neighborhood Walmart? It certainly can’t hurt to check. If you do business in Canada, you already have the reassurance that Walmart is in the process of permanently closing more than 100 Tire, Lube and Express locations in your country, as reported in MTD earlier this summer. Before I wrap up this look at competitive replacement tire sales channels, I thought it would be interesting to examine their respective positions some 20 years ago. Mass merchandisers made up 16.5% of the market. Tire companyowned stores and warehouse clubs were tied at 8% each. Service stations comprised 4% of the market. Auto dealerships made up 2.5%. Miscellaneous outlets had 1.5% share. And independent tire dealers still dominated at 59.5%. Will we eventually see a time when independent tire dealers make up 65% of the U.S. replacement tire market? How about 70%? I wouldn’t bet against it. Now more than ever, tire buyers want to do business with sellers whom they trust — sellers who take a genuine interest in their needs and go out of their way to deliver consistently exceptional service. This is where you excel. And I will wager that this is how you will continue to capture even more share of your own, local market. ■ If you have any questions or comments, please email me at mmanges@10missions.com.
MTD October 2020 9/23/20 12:30 PM
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Heated debate: politics and the tire industry A lot of attention was paid over the past month to the Trump versus Goodyear news items posted on our website, www.moderntiredealer.com. The uproar was due to a tweet sent out by the president that said “Don’t buy Goodyear tires....” following the presentation of a slide during a meeting at a Goodyear plant. Goodyear Tire & Rubber Co. Chairman, CEO and President Rich Kramer issued a statement to clarify the company’s position. In addition, a feature-length article about MTD’s latest Tire Dealer of the Year award recipient, Chip Wood, was very well-read. And an update on efforts to place tariffs on consumer tires from South Korea, Taiwan, Thailand and Vietnam received many views. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Trump calls for Goodyear boycott Rich Kramer seeks to clarify Goodyear’s position Tire Dealer of the Year Chip Wood leads Tire Discounters into the future ITC: Imported tires have had ‘significant adverse price effects’ Titan comments on Trump’s call to boycott Goodyear MTD Exclusive: Bridgestone’s Ferrari talks tire demand, future mobility Michelin previews its ‘most advanced’ passenger tire Being ‘busy’ doesn’t equate to being profitable Point S dealer acquires 10 stores ATD exec talks digital tools, tire supply and going green
HOME OFFICE 3515 Massillon Rd., Suite 350 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 Website: www.moderntiredealer.com PUBLISHER Greg Smith, ext. 2212 gsmith@10missions.com EDITORIAL Editor: Mike Manges, ext. 2213 mmanges@10missions.com Managing Editor: Lori L. Mavrigian, ext. 2216 lmavrigian@10missions.com Senior Editor & Digital Projects Editor: Joy Kopcha, ext. 2215 jkopcha@10missions.com PRODUCTION Art Director: Zach Pate Graphic Designer: Olivia Curti Production Artist: Lauren Coleman Production Manager: Karen Runion, ext. 2210 krunion@10missions.com SALES Publisher: Greg Smith gsmith@10missions.com (330) 899-2200, ext. 2212 Midwest: Bob Marinez bmarinez@10missions.com (330) 899-2200, ext. 2217 West Coast: Marianne Dyal /The Dyal Company mdyal@10missions.com (706) 344-1388, mobile (619) 990-5536 Automotive Aftermarket: Dan Thornton dthornton@10missions.com (734) 676-9135, mobile (734) 626-4950 Classified Sales: Bob Marinez bmarinez@10missions.com (330) 899-2200, ext. 2217 Reprint Sales: Karen Runion krunion@10missions.com (330) 899-2200, ext. 2210 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 Vice President, Content & Events: Bryce Evans
Modern Tire Dealer (ISSN: 0026-8496) is published monthly by 10 Missions Media, LLC, 571 Snelling Ave N, St. Paul, MN 55104-1804. Copyright © 2020 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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Industry News
RETAIL EXPANSION, BRAND GROWTH AND DEALER PARTNERSHIPS BALL OUTLINES COOPER’S PRIORITIES IN NORTH AMERICA
A
s president of Cooper Tire & Rubber Co.’s Americas region, Chris Ball is focusing on three areas: retail expansion, “which is aimed at getting our products exposed to more consumers across the marketplace;” communicating Cooper’s brand message to a wider audience; and “building out our partnerships with our distributors and getting access through our retailers, whether they are large nationals or independent retailers.” In this exclusive interview, Ball elaborates on the above initiatives. He also discusses Cooper’s original equipment business, how emerging vehicle technologies could impact Cooper’s product development, the role that tire dealers will continue to play in the company’s growth and more. “As we’ve framed up our strategy over the last couple of years, one of our core tenets has been making sure we’re building upon the great work the (Cooper) team has done,” he says. “All of our North American team is focused on enhancing our capabilities and building off this fantastic base.” MTD: You mentioned retail expansion as a core initiative. Can you elaborate on what you’re doing there? Ball: When we talk about that term, what it really is is making sure consumers — no matter where they choose to buy tires or how they choose to buy tires — have access to Cooper. That strategy encompasses everything from how we look at our distribution footprint — both the Cooper facilities we have, as well as our retailers and distributors — and how we make sure they have the right tires in stock and make sure they are ready to supply, and also looking at it geographically and across the marketplace: where do we have great access and where do we not have strong access? MTD: Is the independent dealer channel still your biggest replacement channel?
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“Our dealers are doing a fantastic job of guiding consumers to the right tire,” says Chris Ball, president of Cooper Tire & Rubber Co.’s Americas region.
Ball: The way our business has been built has been, in large part, with independent tire dealers. Our business is a lot more diverse than where we originally started, but I will tell you that we are absolutely committed to — and have an orientation toward — our associate dealer programs. The thing I also will say is we were really pioneers in the Cooper Medallion and Mastercraft Century programs. That’s something we continue to invest in. Within that retail expansion strategy, a large number of increases have actually come from independent dealers who look at Cooper as a great solution. Independent tire dealers are absolutely part of our retail expansion strategy, as we look at other types of channels. MTD: Cooper brand tires are available via several e-commerce platforms. Can you talk about what you’re doing in the e-commerce space? Has that been a successful channel for Cooper? Ball: I view e-commerce as one piece of a larger strategy around making sure we understand all elements of what we call the
consumer purchase journey and making sure that we’re bringing solutions not only for the consumer, but also making sure our partners — who might be e-commerce, a website and a brick-and-mortar store or just purely brick-and-mortar — have some of the best tools we can develop. MTD: There’s been a flight to value-tier products in the wake of the economic shock of COVID-19. How does that play into Cooper’s brand proposition and what you’re trying to accomplish at the retail level? Ball: We think our products provide a great value, regardless of the economic situation. Cooper is always a great value and always something we think is a good choice. We have more and more consumers who, we think, might be looking for that great product at a great value, and that’s the sweet spot we occupy. MTD: Cooper recently picked up space at Max Finkelstein Inc., which is a big development given that distributor’s size and reach. Are you planning on signing any other major, regional distributors? MTD October 2020 9/23/20 1:17 PM
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Industry News Ball: We’re very fortunate that the Cooper value proposition — whether it’s our Cooper brand, our Mastercraft brand or our Starfire brand, from a more entry-level type of product — has a great solution for any partner. Generally speaking, we’re very pleased with the partnerships we already have. And there are markets where I think we have the opportunity to invest and grow. It’s part of our larger focus on how we make sure we’re always watching the marketplace. You may see changes, but really, it’s driven by the consumer — not by picking somewhere to go, just to go there. MTD: On the original equipment side, Cooper has been very selective in the fitments it pursues. Will you continue along those lines? Ball: OE is going to continue to be a key part of our technology and development process. We still — within the North American market — will primarily be a replacement business. That really is where we’re centered. Our value proposition works very well in the replacement market. But we will continue to invest with our strategic partners, from an OE standpoint, and look at that, not only as a brand-building and technology-building opportunity, but also as a way to make sure that we’re having an eye on what’s happening in the automotive market and the new changes that are coming. MTD: What are you hearing from your OE customers and how does that inform the technology you’re infusing into your products? Ball: I can tell you there’s a lot of big vehicle trends being discussed right now. There’s fleet and ride sharing. Electric vehicles (EV) are a big topic. Feedback we get from our OE partners, from our field and even from our own testing — all of that goes into how we develop our next generation of tires. I really view tire development as part of an ecosystem that we’re building, with the consumer at the center. The input we get from any one source is put through the consumer filter. MTD: How do you feel electric vehicles will change the landscape of the tire industry? Ball: It will be interesting to see how
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fast they’re adopted. There’s no question there’s going to be a move toward the EV market. But what we really see is that the performance requirements — as you look at how the tire handles and the types of attributes the consumer is looking for — does change a bit within the EV product. As the market starts to shift, I think EV (tire design and performance) demands are going to be variants of what we have with internal combustion engine vehicles, and we will have options for both.
‘Independent tire dealers are absolutely part of our retail expansion strategy, as we look at other types of channels.’ MTD: Dealers are telling us that business has rebounded versus six months ago. Can you tell us what you’re hearing from dealers, in terms of demand at the consumer level? Ball: Demand has begun to return. There’s more demand out there. And there’s also likely some pent-up demand that might have been delayed during the second quarter. Generally speaking, I think we’re in a better position now. And I think we’re in a spot where — depending on how much consumers return to the road — there could be some underlying trends that could help give us a more stable demand, if not a little bit of growth, as we go into next year. MTD: How’s the production ramp-up at Cooper’s plants coming along? Ball: We have ramped up some facilities. We’re still in the process of ramping up others. But we are back in production at all of our manufacturing facilities right now and we continue to look at demand to make sure we’re meeting that. MTD: Are you introducing any new products in the near future? Ball: At the SEMA Show last year, we introduced the EnduraMax, which is a very innovative product that takes a lot of our off-road technology and combines it with on-road performance. We think it speaks
to some consumer needs that are out there. As we talk about our new product launches, you’re going to see more and more focus on how we can take these consumer insights and bring them to the market in a way that really surprises and delights consumers, on top of providing solid performance. We have new products planned every year, so we have new products coming. MTD: You clearly have a vision of where you want Cooper to be. How do you want the brand and company to be perceived and do you think Cooper is there at this point? Ball: I’m very proud to be part of this organization. We have great people. I feel like I’m working with a group of people and an organization that deserves to win in the marketplace. I think we’re at a moment right now where a lot of the additive work we’re doing is starting to open up the beginnings of opportunity as a company. Being a great manufacturing organization with great partnerships provides a great foundation and that’s a gift we appreciate every single day. With that being said, our story hasn’t been told in enough ways to get enough people to understand what an incredible company Cooper is and what incredible products we offer. How do we make sure that this great legacy will continue to grow and get into more people’s minds and homes than before? That’s what keeps me motivated every day. MTD: What role will independent tire dealers play in Cooper’s future success and helping the company capitalize on the opportunities that are ahead? Ball: They absolutely will continue to be a cornerstone of our business. At the end of the day, consumers will choose the way they are going to shop and we believe a significant number of consumers will continue to go to independent dealers who have built long relationships with them, who will always steer them right and will always be there for them. “I think one thing we can’t underestimate is the opportunity to reduce the friction from the (buying) process. There are a lot of dealers who do a fantastic job (of this) and those who do it well will win.” — Mike Manges MTD October 2020 9/23/20 12:27 PM
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Industry News
Bites Tire Discounters opens store Tire Discounters has opened a store in the Hampton Cove area of Huntsville, Ala., near the Blevins Gap Nature Preserve. Based in Cincinnati, Ohio, Tire Discounters has more than 135 locations throughout six states. The dealership’s founder and chairman, Chip Wood, is MTD’s 2020 Tire Dealer of the Year.
Tireco revamps Milestar site Tireco Inc. has unveiled a refreshed website for its Milestar tire brand. The site features a sleek, modern design with easy navigation, search tools and additional resources and is part of the company’s ongoing efforts to provide quick, current information about Milestar products.
Trump calls for Goodyear boycott
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oodyear Tire & Rubber Co. recently found itself at the center of a national controversy when President Donald Trump called for a boycott of the company’s products after a slide from an employee training session at its Topeka, Kan., factory made the news. The slide designated attire featuring Trump’s “Make America Great Again” slogan — as well as “Blue Lives Matter,” “All Lives Matter,” and “political affiliated slogans or material” — as being “unacceptable.” In the “acceptable” category were these slogans and categories: “Black Lives Matter” and “Lesbian, Gay, Bisexual, Transgender Pride (LGBT).” An employee at the Topeka plant took a photo of the slide and shared it with a local TV station. The employee told the station that the information was presented by an area manager, who said it came from Goodyear’s corporate headquarters in Akron, Ohio.
Nexen app supports dealers Nexen Tire America Inc.’s new mobile app is designed to provide added support to the company’s nationwide dealer network. The app features a lead-generation tool to help Nexen’s associate dealers connect with consumers, who can make service appointments with dealerships directly through it.
Leeds West adds location Leeds West Groups (LWG) has added another Midas shop to its portfolio, giving the company 105 outlets in the United States. The store is in Oklahoma City, Okla., and is the company’s fifth outlet in that state. Midas franchise stores make up the bulk of LWG’s locations, which operate throughout 18 states.
Nokian to focus on growth Nokian Tyres plc says “driving top-line growth” will be its main priority. “We want to ensure that the innovation pipeline in passenger car tires and heavy tires is strong and that we continuously launch new tires that meet consumer and customer needs,” says Nokian President and CEO Jukka Moisio.
RNR to open 47 locations After opening seven locations during the first half of 2020, RNR Tire Express says it is planning to open 47 more stores in seven states, including Ohio, Indiana, Kentucky, Colorado, Arkansas, Arizona and New York.
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President Trump called for a boycott of Goodyear Tire & Rubber Co.
Goodyear released the following statement in response to Trump’s tweet: “Yesterday, Goodyear became the focus of a conversation that created some misconceptions about our policies and our company. For those not aware, a widely circulated image sparked a strong reaction, and we wanted to take the opportunity to provide some important context to the visual and our policies. “First, the visual in question was not created or distributed by Goodyear corporate, nor was it part of a diversity training class. To be clear on our long-standing corporate policy, Goodyear has zero tolerance for any forms of harassment or discrimination. To enable a work environment free of those, we ask that associates refrain from workplace expressions in support of political campaigning or any candidate or political party, as well as similar forms of advocacy that fall outside the scope of racial justice and equity issues. “Second, we appreciate the diverse viewpoints of all of our more than 60,000 associates, which are at the heart of many of the policies we establish. Fostering an inclusive, respectful workplace is important to establish teamwork and build culture, which is another reason we ask associates to not engage in political campaigning of any kind in the workplace — for any candidate, party or political organization. “Third and finally, Goodyear has always wholeheartedly supported both equality and law enforcement and will continue to do so. These are not mutually exclusive. We have heard from some of you that believe Goodyear is anti-police after reacting to the visual. Nothing could be further from the truth and we have the utmost appreciation for the vital work police do on behalf of our shared communities. This can’t be said strongly enough.” The next day, Rich Kramer, Goodyear’s chairman, CEO and president, issued a statement, saying that the slide in question “was not approved or distributed by Goodyear corporate or anyone outside of that facility.” He added that Goodyear “does not endorse any political organization, party or candidate” and that the company “strongly supports our law enforcement partners.” Kramer also mentioned that Goodyear had “clarified our policy to make it clear associates can express support for law enforcement through apparel at Goodyear facilities.” As was the case with Goodyear’s previous statement, Kramer’s statement did not address Trump or the boycott he demanded. MTD October 2020 9/23/20 12:28 PM
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Industry News
Bites GoMobile will add 50 vans Portland, Ore.-based mobile tire installation provider GoMobile Tires says it will deploy an additional 50 mobile tire installation vans as part of its expansion plan. The vans will operate out of the company’s new, 20,000-square-foot facility in Jacksonville, Fla., which also features a training center for mobile tire installation technicians.
TBC continues to help charity TBC Corp. has extended the original agreement that makes its 24,000-squarefoot warehouse in Pembroke Park, Fla., available to non-profit Feeding South Florida. “We’re proud to continue to provide this much-needed resource,” says TBC President and CEO Erik Olsen.
Tech unveils online training Tech Tire Repairs has launched its new online training portal, Tech University Online, which will be offered in six modules. Tech University training can be accessed 24/7 and is optimized for all mobile devices, allowing tire technicians to locate relevant content, when needed.
Sullivan Tire honors techs Sullivan Tire Co. Inc. recently honored two of its newest National Institute for Automotive Service Excellence World Class Technicians, Alfred “Buddy” Hayden and Nick Rose. Hayden is the production manager and site safety representative at the dealership’s Boston, Mass., location. Rose is the production manager at Sullivan Tire’s store in Sandwich, Mass.
MTD updates website Modern Tire Dealer has unveiled an allnew website at www.moderntiredealer. com to provide readers with an enhanced user experience. The site features news; MTD’s exclusive, industry-leading research; trending stories and other content, all designed to help independent tire dealers operate more efficiently.
TireHub taps Becker as VP TireHub LLC has hired Ted Becker to serve as its vice president of sales. The appointment marks Becker’s return to the tire industry. Before his previous role, he had spent 21 years working for Michelin North America Inc. He will oversee all of TireHub’s sales functions.
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SEMA to host SEMA360 event
he Speciality Equipment Market Association (SEMA) is offering an online alternative to the recently canceled 2020 SEMA Show in the form of SEMA360, which the association bills as “an online marketplace” that allows “manufacturers and resellers in the specialty automotive segment to connect and conduct business.” SEMA360, which will take place Nov. 2-6, will feature a simplified platform for manufacturers to showcase new products and innovations; an educational component that will focus on professional development and other topics; and more. “The platform allows qualified buyers to interact with manufacturers, see innovative new products, check out top SEMA Show builds and take in industry-leading educational offerings,” say SEMA officials. “SEMA360 is the ideal solution to bring the industry together at a time when we’ve all been kept apart,” says SEMA CEO and President Chris Kersting. Attendee registration is free to qualifying buyers who are SEMA members. For more information, visit www.sema360.com.
T
Nokian sells Vianor stores to Point S dealer
he Dalles, Ore.-based Gills Point S Tire & Auto Service, the largest Point S dealer in the country, has acquired 10 Vianor Tire Center locations throughout New Hampshire, Vermont, New York and Massachusetts from Nokian Tyres plc. The stores will operate under the Gills Point S Tire & Auto Service name. The acquisition gives Gills Point S 27 locations, including 17 in Oregon and 10 in New England. “Point S has a great and growing relationship with Nokian Tyres,” says Eric Gill, the dealership’s president. (He also is the chairman of Point S’ board in the United States.) “When the opportunity arose to take over the Vianor stores, we thought it would be the perfect time to bring the Point S Tire & Auto name into a new market.” Gill’s purchase of the Vianor stores, which Nokian had owned since 2007, marks the latest move in the eastward expansion of Portland, Ore.-based Point S, which recently added dealers and locations in Oklahoma and Tennessee. “We are looking forward to the opportunities this growth creates for other independents who Eric Gill recently added 10 former wish to join Point S in the northeast,” says Point S Vianor Tire Center outlets to his dealership, Gills Point S Tire & USA CEO Walter Lybeck. Auto Service.
I
Dobbs opens 41st location, plans next store
n the span of one week, Dobbs Tire & Auto Centers Inc. opened its 41st store, a nine-bay operation in Eureka, Mo., (right) and broke ground on its 42nd location, which will open next spring in Edwardsville, Ill. The Edwardsville store will be Dobbs Tire’s eighth location in southern Illinois. Dobbs is the 30th largest independent tire dealership in the U.S., according to the 2020 MTD 100. ■ MTD October 2020 9/23/20 12:28 PM
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Yo u r M a r k e t p l a c e
Sell-out levels start to regress SPIKE IN COVID-19 CASES HURTS DEMAND By
John Healy
R
ecent commentary from dealers suggests that consumer demand for passenger and light truck replacement tires was down in August compared to last year, while also showing a stronger decline versus levels seen during July. The net number of respondents to our latest survey reported that they experienced a 30.8% decrease year-over-year. We also note that our tire demand index was down 31.5% in August on a yearover-year basis. Our contacts believe that the decline in consumer tire demand can be attributed to spikes in COVID-19 cases that happened in July and August, which have caused many states to reconsider the pace at which they attempt to reopen their economies. Back in June, the reopening of states seemed to be in “full steam ahead” mode. However, recent infection rates have forced states to be more cautious in terms of making too many changes at the same time. This is reflected in miles driven, which declined by 6.8%, year-over-year, in August. In addition, dealers believe that the selling calendar has been impacted by COVID-19. This has pushed business back into later months, bringing some degree of optimism for the near-term as winter approaches. We continue to hold the perspective that volumes — at least in the long run — will be more closely aligned with the current level of GDP growth, with the months ahead likely showing mixed trends that will parallel the rate at which states reopen.
CONTINUED DISCIPLINE
Our latest survey reveals that the tier-two segment experienced the most significant amount of growth in August, which is a reversion from July’s trend. This is relatively unsurprising, as the recent spike in COVID-19 infections in some states, the realities of the long-term economic backdrop and the upcoming presidential election have caused increased uncertainty in recent weeks. This uncertainty has generally been reflected throughout the COVID-19 crisis, as our tire tier rankings have not experienced month-to-month consistency since the pandemic started in March and continued into April. We believe that this inconsistency is a function of changing thoughts on when the pandemic will end and when the world will get back to some sense of normalcy. Looking past this, we believe that stayat-home restrictions will continue to be lifted and a possible COVID-19 vaccine in the coming months will lead to a more confident consumer. In the meantime, we expect that tire manufacturers will remain disciplined in their efforts to manage the price/volume trade-off in order to maximize operating profit, rather than market share. We have been very pleased with manufacturers’ disciplined approach to production schedules. And global inventory levels remain relatively lean. Moreover, as noted in last month’s col-
Snapshot of dealers’ PLT tire volumes (year-over-year change) Jun-19
Jul-19
Aug-19
Jun-20
Jul-20
Aug-20
Average
Increase
54%
56%
64%
22%
75%
38%
41%
Flat
25%
19%
29%
22%
13%
31%
29%
Decline
21%
25%
7%
56%
12%
31%
30%
Total
100%
100%
100%
100%
100%
100%
100%
SOURCE: NORTHCOAST RESEARCH ESTIMATES
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umn, tire dealers and wholesale-distributors are being more tactical with their approach to inventory allocations, given legislative moves, recent pricing actions and raw material prices.
Our contacts believe that the decline in consumer tire demand can be attributed to spikes in COVID-19 cases that happened in July and August. NATURAL RUBBER PRICES CLIMB
Looking closely at raw material costs, the “basket” of raw materials needed to build a common replacement consumer tire fell 6.6% on a year-over-year basis last month, continuing the trend of declining raw material price inputs we have observed. We note that while significant cost pressures in raw material prices remain, some are starting to ease upwards sequentially. For example, natural rubber prices rose 17.6% on a year-over-year basis last month, marking the first time this has happened since the end of 2019. Other raw material prices have experienced declines. Carbon black yet again is seeing a reduction in cost pressures. Crude oil prices, which have been pressured over the last six months, are down 44% year-over-year, on average. We also note that synthetic rubber costs remain negative. Price pressures on cord, fabric and other tire reinforcement items continue to track negative at a mid-single-digit rate. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland, Ohio. Healy covers a variety of subsectors of the automotive industry.
MTD October 2020 9/23/20 12:28 PM
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NumbersThatCount
Relevant statistics from an industry in constant motion
$6.9 BILLION
Estimated total sales of medium/heavy truck tires in the United States during 2019. Passenger tires accounted for the most sales in 2019 at $28.2 billion. Light truck tires accounted for $5.7 billion in sales last year. SOURCE: 2020 MTD FACTS ISSUE
15.4%
37.4 MILLION
Average medium/heavy truck tire sales margin in the United States last year. SOURCE: 2020 MTD FACTS ISSUE
Number of passenger tires imported from Thailand in 2019, an increase of 10.6% from previousyear levels. Thailand is now the largest importer of passenger car tires to the United States. SOURCE: 2020 MTD FACTS ISSUE
2,200
Number of Bridgestone company-owned retail stores in the United States at the end of 2019. By contrast, Goodyear had 580 company-owned stores in the U.S. at that time. SOURCE: 2020 MTD FACTS ISSUE
650
Estimated number of operational retread plants in the United States. SOURCE: 2020 MTD FACTS ISSUE
106
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Number of Tire, Lube and Express stores that Walmart said it will close in Canada. SOURCE: MTD NEWS
MTD October 2020 9/23/20 12:29 PM
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CUV & SUV Tires
CUSTOMIZED AND COMPLEX CUV AND SUV TIRE OPTIONS WILL CONTINUE TO EXPAND, SAY MANUFACTURERS
Cooper’s Andrea Berryman says the Discoverer AT3 4S tire is designed to meet the needs of consumers who expect flexibility from their vehicle from the work day to the weekend. “They want confidence,” she says.
By
Joy Kopcha
W
hen customers arrive at your tire dealership ready to buy replacement tires for a CUV or SUV, guiding them through the selection process might seem akin to searching for a needle in a haystack. Just as there is not a one-size-fits-all solution for sedans and coupes, the CUV and SUV tire markets are becoming more segmented and specialized. Does the customer want a touring tire with long tread life or an all-weather tire that provides grip, regardless of road surface? Does the driver need an all-terrain tire to occasionally take his or her vehicle off-road on the weekends? Maybe the customer hauls a trailer regularly and needs tires that match the vehicle’s power? Or maybe the driver is accustomed to switching between a dedicated winter tire and a performance-tuned, summer tire as the seasons change?
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Tiremakers are customizing products for all of these uses and situations, and many more. CUV and SUV tire size offerings are increasing too. And because these vehicles run on a mix of P-metric and light truck tires, their sizes are becoming more complicated. Andrew Hoit, vice president of sales and marketing for Tireco Inc., was blunt in his assessment. “The evolution of CUV tires is coming at a much faster rate than it did for passenger cars. Changes are happening fast and dealers need to adapt to the market.” Hoit was among the 21 experts we talked to about the most important CUV and SUV tire trends for independent tire dealers to watch for the future.
Among the features important to drivers of SUVs and CUVs, Apollo says, is year-round performance, and the Vredestein Hypertrac provides allweather assurances.
Abhishek Bisht, assistant vice president, Americas, Apollo Tyres Ltd.: Given the long and daily distances which are covered with these kinds of vehicles, the following aspects turn into the most relevant tire features for the end user: noise and comfort, as CUV and SUV owners prioritize a quiet
and comfortable ride; tire mileage, as a tire with a long lifespan is important, but convenience and price also play a role in their decision; and all-season performance, as end users want to ensure they are covered in all conditions and have a sporty-looking tire to represent the vehicle’s capabilities. MTD October 2020 9/23/20 12:16 PM
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CUV & SUV Tires Michael Mathis, president, Atturo Tire Corp.: The most important trend for independent dealers to watch in the CUV and SUV market is customization. These vehicles are now becoming the platforms for all kinds of aftermarket customization, which usually starts with an upgrade to the tires. The SUV market is already wellestablished for upgrades, from lowered for street performance to lifted for off-road use. There is a rapidly growing trend in the CUV segment to upgrade these vehicles for off-road use. Their small size and nimble all-wheel drive systems make for great trail vehicles, when equipped with the correct tires. There are even lift kits available to help fit larger sizes of tires. Will Robbins, senior product manager for the U.S. and Canada, Bridgestone Americas Tire Operations LLC: The single largest trend in the CUV/SUV space most likely to impact dealers is the increasing diversity of sizes being applied to new vehicles. Historically, there has been a concentrated number of key sizes, such as 225/65R17 or 275/55R20, that had broad application on new vehicles, reducing the complexity of stocking decisions. Similar to the trend impacting sedans in the early 2000s, CUVs and SUVs have now started to see applications of sizes that did not previously exist anywhere in the industry, including higher, 20- and 21-inch wheel diameters. This trend means that more sizes will be needed to cover the same number of vehicles requiring a more diverse inventory. In addition to the expansion of size offerings, the types of products available for CUVs and SUVs are also becoming more diverse. Historically, these vehicles featured either touring/highway patterns or winter products. However, an increasing number of vehicles now feature all-terrain, performance and all-weather patterns. These factors together could create a significant amount of complexity for dealers in their inventory decisions. Travis Roffler, director of marketing, Continental Tire the Americas LLC: This market is expanding rapidly and tire performance criteria in this category is changing from year to year as car manufacturers continue to adapt their vehicles to changing consumer demand. Many
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Top: Customization is the keyword for CUV and SUV drivers, says Atturo’s Michael Mathis. Drivers are upgrading their vehicles for more off-road use. Middle: While there have been tire sizes that have applied to a broad spectrum of SUVs and CUVs, Bridgestone says diversification is coming — with sizes never before seen in the industry. Bottom: Drivers may have stepped up from a sedan to a CUV or SUV, but Continental says they still want and expect a car-like ride.
MTD October 2020 9/23/20 12:17 PM
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CUV & SUV Tires
Luxury utility vehicles are growing more popular, and Falken believes it has combined the necessary robust tire construction with a stylish, low-aspect ratio tire in the Azenis FK510 SUV.
Left: Toyo launched the Open Country A/T III in March of this year and says it is growing in popularity with hardcore off-roaders, as well as customers Toyo calls “soft-roaders,” who drive small SUVs, wagons and CUVs. Right: To meet the growing needs of luxury SUV drivers, Federal offers the Couragia F/X in sizes for 17-inch to 24-inch wheels. “The sport function of the original luxury SUVs has also been gradually transferred to (current) SUV models,” say Federal officials.
owners of CUVs and SUVs are looking for car-like manners in their tires. These consumers are looking for a quiet and comfortable ride, great all-season on-road traction and long mileage in their tires. Andrea Berryman, director of product management, Cooper Tire & Rubber Co.: Trends for the SUV/CUV market include improved fuel economy, with more hybrid and electric vehicles available for sale, as well as more efficient internal combustion engines. Drivers today can watch their miles per gallon on their dashboard. It’s a billboard for fuel efficiency. Paying attention to miles
24 03_MTD_CUV_SUV.indd 24
per gallon will be promoted by more tire companies over time. Another trend is the slight lift in horsepower with turbo options replacing V6 engines, in some cases. Handling capability in tires will need to align to the higher performance now being demonstrated by some vehicles. Tires need to allow the vehicle to perform as promised, and improved handling will be required of new tires entering the market. A third trend is consumer desire for increased flexibility in capability. Drivers want comfortable highway manners, with some off-roading capability. Cooper understands that drivers spend more of
their time doing everyday driving, but on those occasions when drivers want to go off the beaten path, they want confidence knowing their tire is durable enough to handle rough roads. Durability is a common need or theme heard from drivers on trails or poor city roads. Jenny Chu, marketing section manager, Federal Tire North America LLC: The CUV market has grown rapidly in recent years. In the early days, many specifications were shared with high-chassis cars. Slowly, products corresponding to this market will be incorporated into the SUV product line. The sport function of the original luxury MTD October 2020 9/28/20 3:36 PM
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CUV & SUV Tires
Michelin’s Tom Carter says the complexity of the safety systems in CUVs and SUVs is something dealers need to keep in mind when recommending tires. Those systems demand tires that can match their capabilities.
are trending toward wheel diameters of 18 inches and 19 inches. Top: The Klever A/T2 KR628 from Kenda meets the needs of SUV drivers who want the look and off-road performance of an all-terrain tire, plus towing capability and a quiet ride. Bottom: Consumers often choose to buy a CUV or SUV because they feel safe and secure with the view offered in a larger vehicle. Vogue says it’s important for dealers to discuss those same safety aspects when recommending replacement tires.
SUVs has also been gradually transferred to (current) SUV models, so performance will increase in the SUV market, and the tire product line will also be adjusted. From our observation of the automotive market, our prediction for tire trends is that there will be an obvious diversion of touring and performance tires. Curtis Brison, vice president of passenger and light truck tire sales, Hankook Tire America Corp.: Research has shown that by 2025, SUVs and light trucks are expected to reach 69% of all vehicles sold in the U.S. CUVs will be a significant part of this SUV growth. Another trend we’re seeing is that consumers are seeking out more premium performance tires for their SUVs and CUVs. Popular sizes for SUV and CUV tires in North America
26 03_MTD_CUV_SUV.indd 26
Brandon Stotsenburg, vice president of automotive, American Kenda Rubber Co. Ltd.: The CUV segment will continue to be strong, with growing 18-inch and larger diameters over-indexing moving forward. Vehicle manufacturers are betting on continuing consumer demand for CUVs, with many replacing cars. There will be an expansion of options, with smaller, entry-level models growing, in addition to mid-level and premium platforms. Kenda anticipates a growing trend for allweather tires that have reasonable mileage expectations and are 3-Peak Mountain Snowflake-certified. In the near term, more H-, V- and some W-rated tires will expand as CUVs — built on sedan platforms — need the performance associated with premium, grand touring-type tires. The SUV segment will also grow, with 18-inch and larger tire applications. As SUVs are heavier and larger than CUVs, market demand will depend on economic drivers, including gas pricing. For tires, most of these vehicles will utilize P-metric tires, with an increase in H-plus speed ratings to accommodate platform modifications. Again, there will be growing demand for improved mileage and a push (for) all-weather tires. Kenda anticipates that both segments will see growth in hybrid and electric
options globally. As this increases, the demand for good rolling resistance and extended mileage will continue to expand. With almost all-new platforms requiring 17-inch and larger fitments, the retailer needs to understand the end user’s driving style and application needs. Do they need to have an LT tire for towing? Will they want a highway-terrain or an all-terrain tire for primary use? How will they prioritize price versus performance? Chris Han, marketing manager, Kumho Tire USA Inc.: The CUV/SUV markets are still steadily growing and with this growth, you will continue to see size proliferation of aftermarket tire offerings. Just like what we have seen from vehicle manufacturers with changes to traditional passenger cars and original equipment fitments moving towards more high performance products, we should see CUV/SUV vehicles continue to evolve towards being equipped with 18-inch through 21-inch and larger sizes, with H,V and some W speed ratings. You should also see more demand coming from consumers with CUVs who prefer an all-terrain tire that fits better into their lifestyles over the typical highway product, and also a push coming through for all-weather tires that are severe-snow rated. With these continued changes, independent tire dealers will need to adapt to the increased product and size offerings that they will need to stock. MTD October 2020 9/28/20 3:32 PM
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The demands of CUV and SUV drivers are diverse, and that’s why Steve Bourassa says Nokian offers CUV and SUV fitments within all its product groups.
Tom Carter, technical communications director for product marketing, Michelin North America Inc.: Safety systems need good tires, as modern CUVs/SUVs are often equipped with sophisticated safety systems like dynamic stability control and automatic emergency braking. These systems rely on tires and need good tires to perform well. Many SUV/CUV purchases are first-time owners of all-wheel drive (vehicles). Allwheel drive gives added starting traction, but stopping traction is only as good as the tires in wet, dry and snow. In many ways, all-wheel drive increases, not decreases, the need for tires with good traction to better manage/balance the vehicle’s starting, stopping, and lateral traction capabilities. This is a good discussion for the tire dealer to have with the consumer. SUV and CUV owners want it all: space, economy, good looks, good handling and quiet, good traction. Many want the ruggedness of a capable off-road vehicle and the quietness of a luxury sedan. They want the space of a conversion van and the economy of a small hybrid. Good tires help SUVs and CUVs deliver on many of the attributes that are important to consumers. Jay Lee, director of product planning, Nexen Tire America Inc.: Consumers are increasingly choosing CUVs and SUVs over traditional passenger sedans. These vehicles prioritize comfort and versatility. w w w . M o d e r n T i r e D e a l e r. c o m 03_MTD_CUV_SUV.indd 27
Consumers look for the same attributes in their tires. We have found that consumers are looking for a high-mileage, comfortable and low-noise tire. Consumers are also driven by value and the availability of a warranty, especially a mileage warranty. Steve Bourassa, director of products and pricing, Nokian Tyres plc: With the proliferation of CUV and SUV options for drivers, the tire industry has responded with more and more tire options for these vehicles. Depending on the required size, many more consumers can now select between a passenger tire, an SUV touring (tire) or an all-terrain application for many vehicles. Tire manufacturers are further increasing the selection for consumers by offering all-season, all-weather and winter variants for most vehicle applications. Opportunities for consumers to customize their driving experience with their preferred tire selection have never been better, which is a great opportunity for independent tire dealers to work with their customers to find the right solution to get the most out of their CUV or SUV. Gaetano Trezza, vice president of marketing, Pirelli Tire North America: CUVs and SUVs are becoming lighter and faster, with more advanced materials, technology and parts. Consumers now expect the same level of performance in their CUVs and SUVs as they did historically
Consumers have high expectations, and Nexen says among the qualities on their list are tires that offer value, as well as a mileage warranty.
on passenger sedans and coupes. Tires are a critical part of the performance story in the latest generation of SUVs and CUVs, and Pirelli is supplying more ultra-high performance original equipment tires to vehicle manufacturers. We also see larger rim sizes continuing to grow with the latest wave of SUVs and CUVs in the market. We also see more consumers purchasing all-terrain tires as they seek to upgrade the off-road capability of their light trucks and SUVs. Maxwell Wee, executive vice president, Sentury Tire USA: A trend that we see in the SUV segment is that consumers are enjoying modifying their SUVs. From extreme to light modifications, both include aftermarket wheels and all-terrain tires. However, the tires must meet the true needs of the customer and most drivers will not want to surrender the comfort and quality in large, luxury SUVs. This new trend can be seen everywhere, from urban to rural settings. The same is true for CUVs, from the Toyota RAV4 to the Subaru Outback. Consumers want light off-road capabilities and a modified look. As these vehicles begin to age and as attractive, new models come out, we expect to see continued growth in all-terrain replacement tires for the SUV/ CUV segment.
27 9/23/20 12:18 PM
CUV & SUV Tires SUVs and CUVs will be the most popular vehicles for the foreseeable future, with many exciting models coming out from both fuel and eclectic OEMs alike. This market will grow for quality highway-terrain and all-terrain tire manufacturers.
Pirelli’s Scorpion Verde All Season Plus II touring tire features improved wet performance, a quiet and comfortable ride, and a 65,000-mile limited warranty.
Tsuyoshi Johnson, product planning for the Falken brand, Sumitomo Rubber North America: We’re keeping tabs on two main trends in the CUV/SUV market: The growth of luxury CUVs and SUVs, and more and more trim options. According to IHS Markit, from 2015 to 2019, premium price crossover sales have grown more than 42%, with most of that growth coming from the compact CUV segment. Think the Audi Q5, the Lexus NX, and the BMW X3, which sold more than 70,000 units last year. Plus, full-size luxury CUV sales have nearly doubled in the same time period. These vehicles are becoming more and more popular, and we expect the trend to continue into the foreseeable future. In regards to tire technology, we believe these luxury vehicles demand three main
attributes from the tires they ride on: XL load index, durable outside shoulder ribs and a combination of large rim sizes and low aspect ratios. This is because luxury crossovers, built with bigger engines and sound dampening features, are not only heavier than their non-luxury counterparts. They’re also more top-heavy than a traditional sedan. With a higher center of gravity, this additional weight not only requires tires with an XL load index. It also calls for strong outside shoulder construction. Plus, when you consider the fact that luxury SUV owners want to ride in style, all this robust tire construction has to be built into stylish, low aspect ratio/large rim diameter sizes. As sales figures increase, additional (vehicle) trim options will follow. In fact, they already have. Toyota’s getting into the off-road game with their RAV4 TRD model, while ultra-high performance trims, like the Mercedes AMG GLC63, cater to those who truly want their crossover to perform like a sports car. An enhanced focus on CUVs and
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CUV & SUV Tires SUVs has already resulted in increased demand for trim options that deliver a precise driving experience for a wide range of consumers. In a lot of ways, CUVs and SUVs are taking over. And while traditional sedans won’t be going away anytime soon — the Toyota Corolla and Camry and the Honda Accord are all still among the top 10 in sales — it’s crucial that we, as an industry, are up-to-date with everything OEMs are doing.
With growing demand and continued expansion of sizes — especially on 18-inch and larger wheels — Kumho says tire dealers need to remain flexible and expect to add more sizes to their inventories.
30 03_MTD_CUV_SUV.indd 30
Jon Vance, senior vice president of product marketing, TBC Corp.: The most important trend is the exploding proliferation of fitments for this category and the need to ensure expedited, localized availability, while minimizing back room stocking levels. Fitments in this booming segment are higher rim diameter, larger tires that require more inventory space and are more expensive to carry than passenger tires. Partnering with local wholesale distributors that carry the breadth and depth to properly service this segment is essential for dealers.
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CUV & SUV Tires Also, not all SUV/CUV tires are created equal. Just as with sedans and coupes, crossovers and sport utility tire fitments are also increasingly being tuned to multiple vehicle applications and driver performance requirements. Understanding these differences will allow dealers to properly fit the right tire to the right application and meet the performance needs of the consumer,
whether it be a preference for a quiet, smooth highway ride or the desire for a more high performance-oriented driving experience, with a focus on handling and high-speed stability. Andrew Hoit, vice president of sales and marketing, Tireco Inc.: When gas prices began to climb, consumers did not want to
downgrade from SUVs. Instead, consumers turned to CUVs to retain comfort, more accessible seating and (larger) cargo areas. Lighter design contributes to better fuel economy than minivans and full-size SUVs. CUVs also test safer in crashes and offer better road visibility than passenger cars. CUVs account for over 30% of the vehicles on the road today and SUVs
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Top: Andrew Hoit says Tireco has expanded CUV and SUV tire sizes in the MS932 Sport, MS932 XP+ and Weatherguard AW365 lines from Milestar, as well as the pictured Patagonia H/T line. Bottom: Curtis Brison says Hankook sees a trend of consumers searching for more premium performance tires for their CUVs and SUVs. Hankook is working to develop products to meet that demand.
MTD October 2020 9/23/20 12:24 PM
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CUV & SUV Tires account for about 10%. Understanding where the growth is will be key in making the right tires available when the vehicle’s tire is due for replacement. Of the CUV segments, the non-luxury compact and mid-size segment remains the largest and that is over 80% of the CUVs on the road today. On top of that, CUVs are equipped with bigger, wider, higher
speed-rated tire sizes. In 2015, about 40% of CUVs came (with) 18- inch to 22-inch diameter wheel sizes. Five years later, about half of all CUVs come with those sizes. The evolution of CUV tires is coming at a much faster rate than it did for passenger cars. Changes are happening fast and dealers need to adapt to the market. The total number of SUVs on the road
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has stayed relatively flat the last five years, but we are seeing growth in the luxury SUV segment. Similar to CUVs, SUVs are also equipped with larger tire sizes. Five years ago, about 25% of SUVs came OE with 18- inch to 22-inch diameter wheel sizes. Now, around 40% of SUVs come with 18-inch to 22-inch rim diameters as OE. Furthermore, one out of five SUVs on the road has H-rated and above tires. Todd Bergeson, senior manager of light truck tires, Toyo Tire U.S.A. Corp.: Small SUV and crossover vehicles lead automobile sales in the US. Within this buying trend, it has also become trendy to replace OE tires with a more capable off-road tire to make better use of the excellent four-wheel drive and all-wheel drive drivetrains these modern vehicles offer. Crossovers, SUVs and half-ton pickups are usually equipped from the factory with a P-metric tire. A vehicle’s maximum load carrying capacity must be matched by the load carrying capacity of the tire at the OEM-prescribed inflation pressure. A common misconception is that installing an LT-metric tire increases the load carrying or towing capacity of the vehicle. This is simply not true. The tire is only one factor that goes into the load rating of a vehicle. The suspension spring rate, the capacity of
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In the changing market, ZC Rubber says it is prioritizing SUV tires and creating products to fill all niche segments, including HT, AT and MT. 1
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MTD October 2020 9/23/20 12:25 PM
Sentury says even though consumers want custom tire options, they also want to maintain vehicle comfort. Yokohama says model year 2020 and 2021 CUVs are coming with original fitments that range from ultra-high performance tires and touring tires to all-terrain tires. Tire dealers need to be prepared with a diverse offering of replacement options.
the braking system, the design and rated strength of the suspension components and more all factor into the vehicle’s load rating. Of course, LT-metric tires can be installed on half-ton and smaller vehicles and there are durability and strength advantages, along with the trade-offs of increased weight, higher required inflation pressures and higher purchase price. Understanding the difference is the key to making the best decision. Brian Fjeldsted, vice president of marketing, Vogue Tyre & Rubber Co.: One of the main drivers of the growth of crossovers and SUVs is the sense of safety and security they provide. Consumers are becoming accustomed to the feeling of safety from a larger vehicle and the commanding view a crossover or SUV provides. Independent tire dealers need to keep this in consideration as they are presenting tires to their prospects. While price and durability will be high on the list of needs, discussing the safety aspects of the replacement tire will align with one of the core reasons consumers are switching to SUVs and crossovers. Bob Abram, senior manager of product planning, Yokohama Tire Corp.: The CUV segment has grown steadily and aggressively for a decade or more. This growth has led the CUV segment to sprout important sub-segments like subcompact CUVs that are smaller and even more car-like, and luxury performance CUVs w w w . M o d e r n T i r e D e a l e r. c o m 03_MTD_CUV_SUV.indd 35
that often feature powerful engines and enhanced handling capabilities. To effectively cover the most popular vehicles on the road, you need to think about stocking a wider range of tires than a standard good-better-best product screen. This has a direct impact on the second trend: tire type. For CUVs with 2020-2021 model years, ultra-high performance summer, ultra-high performance all-season, touring all-season, crossover all-season and all-terrain tire types are all standard fitments at OE. You need to be prepared for these different tire types to satisfy the coming consumer demand. Large diameter tires have found their way to popular mainstream CUVs. A few years ago, it was only common to find 20-inch to 22-inch wheel diameters on high-end brands like Land Rover, Porsche and BMW, but 20s and 21s are coming to the mainstream in a big way. Consider that the new Chevy Blazer, Ford Explorer and Volkswagen Atlas all have 21-inch OE options. The Explorer by itself should provide more than four times the opportunity for 275/45R21s than the Land Rover Discovery and Range Rover Sport combined. When you add the Lincoln Aviator to the mix, now you have five times the opportunity. The same trend continues with 265/45R21, which in 2020, now (offers) three times the opportunity (from) just a couple years ago, and that is thanks to the mainstream vehicles entering the market.
Jon Vance of TBC says it’s critical for retail tire dealers to partner with local wholesale distributors that stock the breadth of inventory needed.
Richard Li, marketing director, Zhongce Rubber Group Co. Ltd. (ZC Rubber): We realized that SUVs are the fastest growing segment, especially in the U.S. Most people buy SUVs for commute and recreation, and expect tires (that offer) comfort. Consumers are seeking an SUV tire with low noise, fuel savings, long life, short braking distance and, most importantly, a competitive price. The heavy vehicle weight of SUVs brings high fuel consumption, meaning consumers will be more sensitive about the fuel efficiency of SUV tires. The market expects that the electric SUV (will become) more popular, so new-generation tires must have outstanding performance, in both fuel efficiency and long tire life.
35 9/28/20 3:29 PM
Commercial Tire Dealer™
MANAGING PEOPLE, CASH AND TIRE SUPPLY 2020 CALLS FOR STRATEGY AMONG TOP COMMERCIAL TIRE DEALERS
Southern Tire Mart LLC maintains its status as the largest independent commercial tire dealer in the country. The company added 24 locations to its portfolio in the last year and nearly three-quarters of those stores are commercial-only operations.
By
Joy Kopcha
T
he challenges of 2020 have been immense, and commercial tire dealers are doing their best to weather the storm. As Bob Berlin, president of Orange, Mass.-based Pete’s Tire Barns Inc., put it, “We’re pretty much flat for the year — and we’re happy.” That’s not to be mistaken for complacency. Despite the shutdowns and uncertain economic climate, Pete’s Tire Barns and other independent commercial tire dealers are hungry for growth. Berlin says his company is breaking ground on its third retread shop. It will be located adjacent to an existing truck service location in South Windsor, Conn., and the future Bandag plant will have the capacity to build 220 medium truck tire retreads a day. The plant is expected to open during the first quarter of 2021. Berlin says the current climate “does pres-
Also in CTD Top 25 independent commercial tire dealers in the U.S. ..............................40 GRI looks to expand its dealer network ................................................44 AG Tire Talk: Why implement tires are moving to larger diameters .......46 Commercially Viable .........................50
36 04_MTD_CTD-CommerciallyViable.indd 36
ent some opportunities” on the acquisition front. Pete’s Tire Barns has plans to acquire another business in New England before the end of 2020, but it was too early for Berlin to divulge any other details. It was another acquisition that pulled one dealer from this year’s rankings. Raben Tire Co. Inc. no longer qualifies for the list since it was acquired by Goodyear Tire & Rubber Co. in December 2019. A year ago, Raben was ranked No. 17. It had held a spot on the list for eight of the last 10 years. Technically, the buyout of Raben made room for a new commercial dealer to join the rankings. But Jack’s Tire and Oil Management Co. Inc. would have leapfrogged other dealers onto the list, no matter what. In early March, Jack’s Tire & Oil merged its 12 locations with the five locations of A&E Tire Inc., based in Denver, Colo. Combined, the new company operates 80 road service trucks, plus six Michelin retread plants, in five western states. Massillon, Ohio-based Ziegler Tire & Supply Co. opened three new commercial centers in early 2020 — in Bowling Green and Greenville, Ky., and in Evansville, Ind., says John Ziegler, the company’s vice president. Another one will open soon in Louisville, Ky., he says, as the company wants to expand its footprint for regional customers, and also serve the agricultural needs in these markets.
“Despite the difficult times, the new locations have done pretty well, which is mostly attributable to the great teams there,” says Ziegler. This past August, Bethlehem, Pa.-based Service Tire Truck Centers Inc. (STTC) acquired the commercial assets of Highlands Tire & Service, including three commercial locations, plus a Michelin Retread Technologies plant, in Carlisle, Pa. Walt Dealtrey, CEO and president of STTC, says the acquisition aligns with his company’s growth strategy and will allow the dealership to provide customers with better turnaround time on retreads. While STTC is adding to its retreading capabilities, five of the 25 largest commercial tire dealers have divested of at least one retread plant in the last year. Les Schwab Tire Centers Inc. has consolidated its retread operations from three locations into a single facility in Prineville, Ore. Scott Robbins, manager of fleet tire systems for the Bend, Ore.-based dealership, says the Les Schwab retread shops in Spokane, Wash., and Rupert, Idaho, have closed.
FACING UNIQUE HARDSHIPS
It’s no secret that people are the backbone of the nation’s commercial tire dealerships. And in the first half of 2020, the COVID-19 pandemic created a huge people problem. On one hand, it was customers who were MTD October 2020 9/28/20 2:46 PM
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affected, but tire dealers also had to manage their own people in a new way. The balancing act was the greatest challenge for Ziegler Tire, says John Ziegler. “We kept all of our commercial service people throughout the slow times as they are the backbone of our commercial business.” Bob Majewski, CEO and chief technical officer at Sumerel Tire Service Inc., says it’s been difficult to keep track of customers who were closed while trying to call on them, and also keeping employees safe. “We can’t make cold calls in many places due to restrictions.” For Wilkes-Barre, Pa.-based McCarthy Tire Service Co. Inc., the decline in business has been just one part of this year’s story. The pandemic’s lingering effects on the company’s employees have been just as severe. John McCarthy Jr., president, says the “safety and well-being of our teammates has been our primary concern,” and “the ongoing uncertainty of the situation” has proven to be their greatest challenge. “This has been exacerbated by hot weather, staffing issues and the demands of our busy season. We have provided ongoing counseling and support, both informally by our management team and through our health care benefits provider. Our human resources team has been actively reaching out to teammates who are struggling to offer support and assistance.” Dealtrey at STTC says COVID-19 caused a lot of “side effects” for employees, and that resulted in personnel issues that the dealership had to manage as it also adjusted due to sales declines. One bit of good news, Dealtrey says, is that “surprisingly few customers have filed bankruptcy due to COVID-19, which is great for many reasons.” Even with locations in Nebraska and South Dakota — two states that enacted fewer stay-at-home restrictions than most others — David Mickelson, CEO and president of Graham Tire Co., says supporting the company’s staff was its primary priority. “The biggest challenges were helping our employees navigate through all of the uncertainties, and (we) did so by trying to provide regular communications,” he says. “We were fortunate we did not have government shutdowns in the communities that we operate. However, (the pandemic) did certainly impact business. We were also fortunate that our commercial tire business has remained strong during this time.” With 19 commercial locations in five states, plus four retread shops, Larry Jeffries, CEO of Elk Grove Village, Ill.-based
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Valley Tire Co. Inc. opened a larger commercial facility near Pittsburgh, Pa. President Jim Stankiewicz says the 60,000-square-foot space allows the company to offer commercial truck repair under its TruxTex brand. It has nine such locations.
Tredroc Tire Services Inc., says managing the various rules and limitations in every jurisdiction was a behemoth task. It was particularly difficult in Michigan, with “the draconian approach” there. “We did not furlough or lay anyone off,” says Jeffries. “However, we did manage other variable expenses accordingly.”
MAKING PRUDENT INVESTMENTS
When it came to balancing the books, many dealers took a similar approach. They tapped, or slammed the brakes, on capital investments in the first half of 2020, but have eased up slowly. Brian Chase, regional sales manager of Rice Tire Co., says the Frederick, Md.-based commercial dealership has been “strategic with our investments by investing in trucks and retread equipment to make sure we are able to best service our customers.” The company has 11 commercial locations, plus two retread plants. “As stressful as the business environment is right now, the last thing our customers need is to have their truck sitting for several hours or a long turn time on retreads because we ran equipment past its useful date.” Mike Weber, vice president of operations and manufacturing at Durand, Wis.-based Bauer Built Inc., says, “We continue to invest where it makes sense.” Right now, that amounts to a warehouse addition and shop upgrade at the company’s tire center in Fremont, Neb. It is being expanded with a new showroom and more space for tire and mechanical services, plus upgrades to furniture and tire equipment. “The new addition is 6,000 square feet, which will allow us to improve our commercial tire services (and) add commercial alignment and mechanical services to the Fremont market,” says Weber.
At Sumerel Tire Service, Majewski says the company has kept its capital expenditures going, and has added six new trucks, two new tread lines and 17 molds for its AcuTread line. McCarthy Tire Service has been “very cautious” with cash flow and watching expenses on a daily basis. McCarthy says his company followed through with orders it had placed before the pandemic for service vehicles and boom trucks. “Our equipment purchases are decided on a case-by-case basis. If the need is critical, we buy the item. If the request is not urgent, we are deferring the purchase to a later date.”
MANAGING TIRE SUPPLY
The shutdown of most commercial truck tire factories in the U.S. didn’t immediately cause problems for tire dealers, but the situation changed for some in July. Early on, Ziegler Tire reduced its commercial inventory to maintain good cash flow, but John Ziegler says it’s now “a huge issue as most of our major manufacturers are experiencing shortages on many key replacement tires.” Bauer Built’s Weber describes supply as “very tight across the board,” while Majewski at Sumerel Tire Service says the first shortages have been in steer tires in size 295/75R22.5. At Tredroc, Jeffries says his company followed what seems to have been a common approach. It scaled back during the early days of uncertainty, then “flexed accordingly” as demand rebounded. Rice Tire, so far, has avoided serious supply troubles, says Chase. “While there have been shortfalls here and there, we’ve been lucky to work with great partners and stock enough of our major movers that the factory shutdowns did not turn into a large shortfall on our end.” MTD October 2020 9/23/20 12:34 PM
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Commercial Tire Dealer™
1
SERVICE TRUCKS
RANK BASED ON 2019 ESTIMATED COMMERCIAL SALES (IN MILLIONS)
POINTS BASED ON NUMBER OF OUTLETS
900
$1,400
294
Bridgestone, Firestone, Mastercraft, Roadmas- 17 ter, Continental, General, Michelin, Goodyear, BFGoodrich, Uniroyal, Yokohama, Toyo
600plus
$467
239
John Snider, 76/2 chairman and CEO
BFGoodrich, Continental, General, Longmarch, Michelin, Hankook, Uniroyal, Yokohama, Sumitomo
9
300
$431
163
Jim Wochinske, CEO
41/78
Bridgestone, Firestone, Dayton, Continental, General, Goodyear, Michelin, Yokohama, Kelly, Hankook
16
500
$398
215
5. McCarthy Tire Service Co. Inc.; John McCarthy Jr., Wilkes-Barre, Pa.; president mccarthytire.com
37/15
Bridgestone, Firestone, Continental, General, Yokohama, Hankook
10
950
$387
113
6. Les Schwab Tire Centers Inc.; Bend, Ore.; lesschwab.com1
Jack Cuniff, CEO
0/443
Toyo, Continental, Double Coin, Falken, Michelin, Bridgestone, Firestone
1
1,500
$331
178
7. Bauer Built Inc., dba Bauer Built Tire & Service; Durand, Wis.; bauerbuilt.com
Jerry Bauer, 23/12 chairman and CEO
BFGoodrich, Continental, General, Hercules, Kumho, Michelin, Uniroyal, Ameristeel, Constellation
6
115
$269
69
8. Service Tire Truck Centers Inc.; Bethlehem, Pa.; sttc.com
Walter Dealtrey, 50/3 CEO and president
Michelin, Yokohama, BFGoodrich, Cooper, Goodyear, Kelly, Roadmaster
5
265
$257
100
1. Southern Tire Mart LLC; Columbia, Miss.; stmtires.com
Thomas and James Duff, owners
101/38
Bridgestone, Firestone, Continental, General, Yokohama, Toyo, Double Coin, Gladiator, Dayton
2. Best-One Tire Group; Monroe, Ind.; bestonetire.com
Larry Zurcher and Mark Zurcher, CEOs
91/59
3. Snider Tire Inc., dba Snider Fleet Solutions; Greensboro, N.C.; sniderfleet.com 4. Pomp’s Tire Service Inc.; Green Bay, Wis.; pompstire.com
TRUCK TIRE BRANDS
CHIEF OFFICER
24
COMPANY AND RANK
RETREAD PLANTS
COMMERCIAL ONLY OUTLETS/ COMBINATION COMMERCIAL & RETAIL OUTLETS
2020 Top 25 Independent Commercial Tire Dealers in the U.S.
9. Purcell Tire & Rubber Co.; Roger Lucas, dba Purcell Tire & Service Centers; CEO Potosi, Mo.; purcelltire.com
38/30
BFGoodrich, Continental, Dunlop, General, Goodyear, Hankook, Michelin, Yokohama
5
248
$189
129
10. Earl W. Colvard Inc., dba Boulevard Tire Center; Deland, Fla.; boulevardtire.com
Earl Colvard, president
28/4
BFGoodrich, Bridgestone, Continental, Firestone, General, Michelin, Roadmaster, Yokohama, Gladiator, Dayton, Uniroyal
4
277
$186
64
11. Parkhouse Tire Inc.; Bell Gardens, Calif.; parkhousetire.com
Jim Parkhouse, CEO
14/0
Bridgestone, Michelin, Yokohama, Firestone, BFGoodrich, General, Continental, Double Coin, Triangle
3
140
$185
31
12. Jack’s Tire and Oil Management Co. Inc.; Logan, Utah; jackstireandoil.com
Bob Feldbauer, 4/12 CEO and president
Michelin, BFGoodrich, Uniroyal, Goodyear, Yokohama, Hankook, Sumitomo, Sailun, Continental, General
6
80
$150
36
13. T&W Tire LLC; Oklahoma City, Okla.; tandwtire.com
Kane Russell, John Theissen and Steve Theissen, owners
BFGoodrich, Michelin, Hankook, Yokohama, Uniroyal, Continental
4
60
$149
49
0/28
Les Schwab store total does not include member-dealer stores.
40 04_MTD_CTD-CommerciallyViable.indd 40
MTD October 2020 9/23/20 12:35 PM
COMMERCIAL ONLY OUTLETS/ COMBINATION COMMERCIAL & RETAIL OUTLETS
RETREAD PLANTS
SERVICE TRUCKS
RANK BASED ON 2019 ESTIMATED COMMERCIAL SALES (IN MILLIONS)
POINTS BASED ON NUMBER OF OUTLETS
19/0
Bridgestone, Continental, General, Firestone, Yokohama, Roadmaster, Falken, Dayton, Goodyear, Cooper, Hankook
4
185
$130
42
15. Redburn Tire Co.; Phoenix, Ariz.; redburntireco.com
J.D. Chastain, president
13/0
Bridgestone, Continental, Firestone, General, Michelin, Yokohama, BFGoodrich, Cooper, Roadmaster, Uniroyal, Gladiator, Falken
5
105
$129
32
16. Bob Sumerel Tire Co. Inc.; Erlanger, Ky.; bobsumereltire.com
Bob Sumerel, CEO
15/9
Bridgestone, Firestone, Continental, Goodyear, General, Roadmaster, Yokohama
6
91
$125
45
17. McGriff Tire Co. Inc., dba McGriff Tire; Cullman, Ala.; mcgrifftire.com
Barry McGriff, president
12/0
BFGoodrich, Bridgestone, Continental, Dayton, Firestone, General, Michelin, Yokohama, Uniroyal, Roadlux, Cooper, Roadmaster
2
80
$117
26
18. Ziegler Tire & Supply Co., dba Ziegler Tire; Massillon, Ohio; zieglertire.com
William Ziegler, president
0/21
Michelin, BFGoodrich, Bridgestone, Firestone, Dayton, Continental, General, Samsun, Uniroyal, Sumitomo, RoadX, Yokohama, Hankook
2
140
$104
41
19. Pete’s Tire Barns Inc.; Orange, Mass.; petestire.com
Peter Gerry, CEO
0/23
Bridgestone, Firestone, Michelin, Continental, Double Coin, General, Ameristeel, Nokian
2
145
$101
37
20. Commercial Tire Inc.; Meridian, Idaho; commercialtire.com
Bob Schwenkfelder, CEO
9/28
Bridgestone, Firestone, Dayton, Yokohama, Roadmaster, General, Continental, RoadX
3
147
$90
57
21. Black’s Tire Service Inc.; Whiteville, N.C.; blackstire.com
Ricky Benton president
0/47
Goodyear, Dunlop, Kelly, Continental, Roadmaster, Double Coin, Hankook, Falken
1
150
$84
47
22. Nebraskaland Tire Co. Inc.; dba Nebraskaland Tire, Kansasland Tire and Coloradoland tire; Lexington, Neb.; thetirestore.com
Gary Wright, president
5/24
Goodyear, Dunlop, Kelly, Roadmaster, Aeolus
3
64
$79
47
23. Sullivan Tire Co. Inc.; Norwell, Mass.; sullivantire.com
Robert Sullivan, president
15/1
Bridgestone, Firestone, Goodyear, Dunlop, Kelly, Double Coin, API
2
90
$72
33
24. Royal Tire Inc.; St. Cloud, Minn.; royaltire.com
Mick Pickens, president
15/0
Bridgestone, Firestone, Michelin, Continental, Double Coin, General
3
121
$66
33
25. Valley Tire Co. Inc.; Charleroi, Pa.; valleytire.com
Jim Stankiewicz, president
8/8
Michelin, BFGoodrich, Continental, General, Yokohama, Sumitomo, Uniroyal
1
55
$64
31
HOW THE RANKINGS ARE DETERMINED: To be ranked on the MTD Top 25 Independent Commercial Tire Dealers in the U.S. list, a dealer has to: sell truck tires, have at least one retreading plant and offer 24/7 road service. Points are tabulated based on number of outlets. Each commercial-only outlet receives two points and each retread plant receives one point. The number of combination commercial/ retail stores is multiplied by the estimated percentage of commercial sales and then multiplied by two. The highest 25 point totals make up the list, and then the dealers are ranked based on estimated commercial sales.
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TRUCK TIRE BRANDS
CHIEF OFFICER Larry Jeffries, CEO
COMPANY AND RANK 14. Tredroc Tire Services Inc.; Elk Grove Village, Ill.; tredroc.com
COMPANY-OWNED NETWORK UPDATE: In addition to independent tire dealers, commercial truck tires and, in some cases, truck mechanical services also are available through tire manufacturer-owned networks and truck stop chains. As of Sept. 15, in the United States: • Continental Tire the Americas LLC operates an estimated 31 BestDrive locations throughout the U.S. • Goodyear Tire & Rubber Co. operates around 200 Goodyear Commercial Tire & Service Center locations • Bridgestone Americas Inc. confirmed that it operates 72 GCR Tires & Service locations throughout both the U.S. and Canada.
Truck stop chains continue to add locations. At press time, Pilot Travel Centers operated 801 Pilot Flying J Truck Care locations throughout 44 states and also in Canada. (The October 2019 issue of MTD listed Pilot as having “more than 750” locations.) Love’s Travel Stops & Country Stores Inc. currently operates 390 truck service centers in the U.S. versus 366 as reported in the October 2019 MTD. (Love’s also owns the Speedco brand.) TravelCenters of America Inc. operates 271 TA Truck Service Commercial Tire Network locations in the U.S., up from 245 locations, as reported last year in MTD.
41 9/23/20 12:35 PM
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43 9/22/2010:45 4:10AM PM 9/28/20
CTD Executive Interview
GRI LOOKS TO EXPAND DEALER NETWORK NEXT STOP: THE WEST COAST
By
Mike Manges
P
rabhash Subasinghe oversees all operations of Global Rubber Industries (Pvt.) Ltd. (GRI), from product development and manufacturing to the Sri Lanka-based company’s sales operations, which span 50 countries. In this exclusive interview with MTD, Subasinghe, who is GRI’s managing director, discusses the company’s plans for the North American market, how it has weathered the COVID-19 crisis and more. “It’s very important for us to build our footprint across the U.S.,” he says. MTD: When we talked with GRI in late-2019, it was mentioned that the company had two distributors in the U.S. It also was mentioned that GRI wanted to have regional dealers in every U.S. state. Can you provide an update on how this is progressing? Subasinghe: In our material handling business, we have operated in 14 different states for the last 15 to 20 years. In our newer business, which is our (ag tire) business, our plan is to be successful at the regional level. We’ve increased the number of dealers we work with to almost 10. All of them are more localized and are operating more at the local level. We’re still predominantly operating in the Midwest, the Northeast and the South. Our ambition is to move toward California, which will become an important point for us. We feel the way we can build business is by working with regional dealers, where they can build value in the supply chain and we can create solutions for the farming community. We’re also building a very strong sales team that can work with customers to understand their needs at the ground level. We believe in long-term relationships and partnerships. That’s our philosophy. MTD: How has COVID-19 impacted GRI’s business? Subasinghe: The impact of COVID-19 on GRI was extremely minimal. The Sri Lankan government took very strong action with a very strong lockdown for almost two months. The government stepped up to manage the situation. They also allowed several industries to operate as essential services. Everything from the plantation side to the manufacturing side… we were able to operate. MTD: What steps did GRI take during the early days of the pandemic to help ensure a steady stream of supply to customers? Subasinghe: By the time Sri Lanka was affected by COVID-19, which was almost in March, we (had taken) action all the way back to January, in terms of securing our supply chain. We were ahead of the curve to make sure whatever material we needed was available to us. We also found alternate suppliers and got them on-board. And we also had a very large (inventory) of raw materials. GRI never closed, even during the time that Sri Lanka was shut down.
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“We feel the way we can build business is by working with regional dealers, where they can build value in the supply chain and we can create solutions for the farming community,” says Prabhash Subasinghe, GRI’s managing director.
MTD: GRI has maintained a robust new product roll-out schedule. Has the pandemic impacted your product introduction plans in any way? Subasinghe: We have two different product lines at GRI: the material handling side, and then our newest (line), which is on the agricultural and construction (tire) side. (Editor’s note: Gary Stevens is president of GRI’s material handling tire business unit in the U.S.) All the product development planned for 2020 is already planned in advance. Our product development is quite focused to make sure we are able to (maintain) our progress — especially in the ag tire sector, which we consider to be a game-changer. MTD: What are GRI’s priorities in North America for the rest of the year? Subasinghe: Number one, we want to be able to tell our North American customers that they are guaranteed in terms of supply chain, especially with the COVID-19 situation. That’s the comfort we want to be able to give our customer base. Number two, we want to also build a very strong sales team, with more people. Along with that, we want to build a stronger dealer network. Of course, bringing new sizes and products into the market goes without saying. But I think when I look at the next six months to a year, supply continuity, being able to support customers and working with them as true partners is our vision. MTD October 2020 9/23/20 12:36 PM
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A G T i r e Ta l k
BIGGER AND BETTER WHY IMPLEMENT TIRES ARE MOVING TO LARGER DIAMETERS
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.
QUESTION: Why are implement tires gravitating toward larger overall diameters with more varied tread — including higher void ratios — and how will this segment evolve further? NICK PHILLIPPI, national product manager, Alliance Tire Americas Inc.: The growth in the outer diameter size of implement tires is being driven by several forces. The primary one is that equipment keeps getting heavier and faster, which requires a bigger air cushion and new manufacturing technology. For decades, we addressed that challenge by building wider tires, getting into larger flotation sizes. But tires have to fit in wheel wells, and farm machinery itself is also getting wider, so now we’re coming up against limits on how wide a machine and its tires can be and still be legal. If we can’t increase tire width to create a bigger air chamber, the only way to grow is up. A taller tire creates a longer footprint. This maximizes the total number of square inches of rubber we can put in contact with the ground at any time. Just as importantly, steel belts create a wider overall footprint, especially as equipment speed increases. This is an impact that’s even more dramatic when you combine a high outer diameter and steel belts with flexible, very-high flexion (VF)
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sidewalls. The result is a large, rectangular footprint that maximizes both length and width, and distributes load very evenly across the contact patch. We’re also seeing significant improvements in tread patterns, even though some of them can be pretty subtle to the casual observer. I expect to see these trends continue. Advances in compound formulation, tread design and manufacturing technologies will drive further improvements in tires for towed implements. DAVE PAULK, manager, field technical services, BKT USA Inc.: Implement tires have gone through quite a transformation over the past several years. Farm equipment is getting heavier and bigger all of the time. Since most farmers must travel from field to field on the highway, tires must be able to hold the weight of the equipment with wings folded up. Most tractors will run at least 30 miles per hour, but some of the new high-speed tractors will run up to 45 miles per hour. Therefore, not only must implement tires carry heavier weights, they must do so while running at faster speeds. Since these tires are being used more and more on the highway, tread patterns must be designed to allow for even and long-term wear. Most implement tires are MTD October 2020 9/23/20 12:36 PM
2M0 o1d9e rMn o Td ier ren DTei ar el e Dr e1a0l e0 r 1 0 0 Swentzel. “The other factor is people. We’ve some. And we’ve had to look free-rolling, so they don’t necessarily need the traction that well as in section width.furloughed This increase is due to the increasing size at howattachments we deliver tires to our equipment. customers, drive tires demand. of equipment and additional to existing – onhave the wholesale havebeen beena Radial implement tires have been introduced over the past As equipment size andwho weights increased, side there– has fantastic. several years and are beginning to gain acceptance in the market. need to increase weight carrying capacity to minimize tire failures. “We’ve width spent increases the last several months They have the weight carrying capacity needed, are easier to mount Increasing diameter and section the size of the putting measurements plans on wheels and have the necessary speed ratings. Because of their tire’s air chamber and can boostmetrics, a tire’s weight carryingand capacity. in farmers place toare make sure that asconcerned we come construction, they generally wear better when Also, becoming more back, come back healthier than we used for transporting equipment on the road. with soil we compaction. They are looking for were,topre-COVID. By that, I mean truck Radials also can be used in the field at lower options minimize compaction during all By necessity, implement utilization, route utilization, operations, operations in their fields. Implement tires are air pressures than bias-ply tires, which helps tires have grown larger – we’re looking at everything.” nowsales in their sights. minimize soil compaction. There are some IF and VF implement tires Implement tire sizes continue to get larger, in diameter, as well as in ‘A marketplace GREAT DEAL OFand COMMON with bigger wheel diameters to handle the weight in the now this trendSENSE’ will grow section width. Tire Service Inc., which has 67 locaof the equipment. There are often size constraints duePlaza to increased load carrying capacities and the S&S Tire Service focused gettingflexion its recently opened distribution center in Tulsa, need tions and holds the 19th spot this year’s to consider. This isisleading to on increased to minimize compaction. Weon may even see Okla., up and running. “We’ve spent the last several months putting metrics, measureMTD 100, is applying extra scrutiny to (IF) and VF technology being used on implement tires, which allows some manufacturers increase the envelope for tires, where possible, ments and plans in place to make sure that as we come back, we come back healthier everything it does, according themwe to stay within size constraints and stillSwentzel, carry the required weight. president. to enable larger, more adequately suited implement tires toto beMark fitted. than were, pre-COVID,” says Brooks the dealership’s Rhodes, the Cape Girardeau, Mo.-based Since implement tires also are being used more on the highway, into year.must “Webe have programs with sometimes an election year,GILLAND, things can vicedealership’s “Instead ofprogram, monthly treadnext patterns designed to allow for even, long-terminwear. GREG president, president. global agricultural all the top-tier manufacturers, ” he notes. go crazy. There are so many factors. ” goals, we’re doing two-week sales goals – With the many changes in implement tires, tire manufacturers must Maxam Tire International: Over the last 20 years, we have seen “I think a lot will beproducts predicated whatdiameters, With no plans or build more just to keep everybody focused, ” he says. keep up to provide withon larger higher speedto acquire tire technology evolve from primarily bias-ply tires to radial tires they doand during the second half. I hope the locations during the second half of 2020, The COVID-19 and resultratings special tread patterns. that are capable of greater loads and finally topandemic IF or VF technology, rebound will be shaped like a V-curve. But S&S Tire will focus on controlling costs. ing drop in business the company which hasitsfundamentally changed tire loadforced capability without my ball is broken. Imanager, don’t haveCEAT the Specialty “We have three big expenses: warehouses, alter how it does other has things. JIMcrystal ENYART, technical Tires Inc.: changing tire geometry.toThe agricultural industry been“We’ve quick answer. Plus, this is an election year –grown and larger a lotinofdiameter, trucks and of inventory, ” says changed theabove way we pay our guys. We’ve By necessity, implement tires have as a lot to see the value and benefits of the technology in powered
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MTD July 2020
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Untitle
A G T i r e Ta l k equipment, but has been reticent to adopt the same solutions for the non-powered, towed implements that carry out work in the field. As a result, some of the benefits that could have been achieved with new tire technology on the powered equipment that impacts soil compaction have been negated by using old tire technology on implements. Radial tires, by design, provide a larger footprint that distributes the tread evenly across the ground, which reduces soil compaction while simultaneously increasing traction. As implements are becoming larger and heavier, their traditionally small tire wheelbases are evolving to allow larger tires that can carry more load and reduce soil compaction. This trend has opened the door for radial tires to deliver performance solutions with new designs that can incorporate either wider lug designs for greater road traction or larger lug-tovoid ratios to increase field traction, all the while helping to reduce soil compaction. The need for greater yields is driving original equipment manufacturers to design and build larger, heavier implements that can work more quickly. Radial tires present a flexible solution for use on these implements. Therefore, the greatest trend in the evolution of implement tires is the transition to radial tires that will eventually employ IF or VF technology to carry increased loads while minimizing soil compaction, ensuring improved crop yields and increased profits.
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DAVID GRADEN, operational market manager, agriculture, Michelin North America Inc.: On a constant basis, producers are looking for ways to cut costs and increase productivity. As a result, machines are getting longer, wider, heavier and faster. Manufacturers of implement tires are working feverishly to keep up with this equipment growth. When we look at why tires are growing in size to meet the needs of larger equipment, we first must understand the basic construction of tires and how they carry weight. The larger its air chamber, the more weight a tire can carry. Additionally, if we change the flex point in the sidewall of that tire, we can spread its footprint and carry even more weight. This is referred to as IF or VF technology. With regard to implement tires having more varied tread designs, including a higher void ratio, larger tires have a higher capacity to carry mud and dirt with them. In fact, in Europe, producers are required, by law, to clean all mud off the road after their machines have left the field. By outfitting customers’ machines with tires that have a larger lug-to-void ratio, the ability for that tire to clean out is improved. In summary, implement tires are evolving with the needs of producers, who are seeking to cut input costs and increase their productivity. PAT SHELBY, ag specialist, Titan International Inc.: With compaction becoming an ever-increasing concern among growers, specifically pertaining to agricultural tires, there are common approaches being taken to combat this issue. These include conversion to radial from bias-ply construction, the use of flotation tires, the use of duals and triples, operating tires at the minimum inflation pressure levels need to perform certain tasks, the use of tires that feature IF and VF technologies, the selection of tires with larger diameters and more. Similar to the shift from bias to radial drive tires, implement tires are now moving to radial construction, providing one more layer of defense against soil compaction. It’s no secret that radial tires result in a flatter tread profile, which is a key factor in achieving footprints with maximum square-inch results. Combined with this radial shift, technologies that improve deflection by allowing lower inflation pressures, such as IF and VF technology, Similar to the shift from are materializing, enabling bias to radial drive tires, more square inches in tire implement tires are footprints than ever before. now moving to radial Tires with IF technology can operate at 20% lower construction. inflation pressure than their counterparts with standard construction. VF technology increases allowances to 40%. With implements following the same trends as other agricultural equipment — becoming larger, heavier and faster — IF construction and VF construction are helping carry the extra load at lower inflation pressure levels. This equates to less damage to the soil profile. Tread patterns on implement tires play an important role, as well. Tread patterns in this segment have traditionally been straight rib designs, only with low void ratios. Straight rib designs have more of a tendency to skid or push soil, which is detrimental to soil health. MTD October 2020
9/21/20 9:07 AM 9/23/20 12:44 PM
A G T i r e Ta l k Designs that incorporate more variation in tread elements with higher lug-to-void ratios not only promote better roll but also aid in cleaning of the tire. As field working windows decrease and weather conditions become more unpredictable, improved efficiencies are of utmost importance. This can be enhanced with better yields and reduced inputs by maximizing the use of implement tire technology, maximizing footprint and promoting roll. NORBERTO HERBENER, OE applications engineer, Trelleborg Wheel Systems: Globally, implement equipment sizes are increasing because growers want to work more efficiently. This is now possible with the availability of larger, higher-horsepower tractors. To accommodate these demands, the North American market is starting to incorporate higher-technology tires that are capable of holding higher loads, following the trend seen in Europe. The primary functions of implement tires are to carry the load on the piece of equipment during transport and to serve as depth control during field work. Previously, when specifying tires for implements, the only requirements were how much load they could carry, whether they would fit in a tight space and if the tires would not get stuck. Cost was a factor, too. Compaction mediation and self-cleaning capabilities were not as much of a requirement, but now they are, thanks to increases in the size and weight of equipment.
NEVER DOWN
With these new requirements, tire specifications need to be upgraded, as well. Radial implement tire constructions have started to become more common and needed. Radial tires allow for higher loads and more sidewall flexibility, and provide a larger footprint for the same tire width and outside diameter. Unfortunately, some new equipment has grown too large for a simple changeover from bias to radial tires. In this case, an increase in tire diameter to support higher loads is required. New tread patterns also are shifting away from the traditional rib-type, F2 design — with no traction and limited cleaning — to I-3 or HF-2 tread designs, which provide some traction but more importantly, excellent self-cleaning and flotation capabilities. This trend will continue as we are now seeing smaller bailing machines arriving from Europe that are equipped with higher technology tires. In time, we will see this change happen in North America as manufacturers change from traditional, “balloon” rib tires to tires that address the new requirements of producers. Producers are demanding larger, faster equipment to get more work done in less time. Tires that feature newer technologies and capabilities are being incorporated into new implement designs. These new tires may require new rim designs and this will have an impact on implement cost. However, this increase in price is offset by improved performance that will allow for less time spent in the field and less damage to the soil structure. ■
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Commercially Viable TBC expands Harvest King line
Vipal unveils snow and mud tread
TBC Brands LLC has expanded its Harvest King ag tire line with the recent introduction of the Harvest King Field Pro R-Gator and the Harvest King Field Pro R-Gator ND. The products “are engineered with a stronger, lighter-weight construction than their predecessors,” say TBC officials. “With the addition of design enhancements focused on improving overall performance, including less slippage and improved cleaning capabilities, these new tires will provide an exceptional product for irrigation equipment.” Both tires are tubeless and contain special anti-ozone compounds. TBC BRANDS LLC www.tbccommercialtires.com
Vipal Rubber Corp. has designed the VT250 tread to provide enhanced performance in snow and mud conditions. Available in both the United States and Canada, the VT250 features a special compound, plus a tread pattern that Vipal says increases traction and offers self-cleaning properties for superior grip. The VT250 also features Vipal’s Eye Control system, which helps end users monitor wear levels. VIPAL RUBBER CORP. www.vipal-usa.com
Continental updates steer tire BKT introduces Agrimax RT 818 The new Agrimax RT 818 from Balkrishna Industries Ltd. (BKT) is designed for irrigation machines. The tire is able to run lower air pressure levels for enhanced flotation, which minimizes soil compaction and the creation of ruts. Its tread pattern features self-cleaning capabilities, while its directional pattern provides increased traction, especially on hillsides. The Agrimax RT 818 is available in two sizes: 280/85R24 and 320/85R38. Products in the latter size feature a deeper lug than traditional irrigation tires, according to BKT officials. BALKRISHNA INDUSTRIES LTD. www.bkt-tires.com
Tianli OTR tires debut in North America Tianli brand OTR tires, including the G306 skid steer tire, are now available in North America. The radial G306 features a non-directional tread pattern and solid block design, providing a strong footprint that delivers superior traction, puncture resistance and even weight distribution. The tire is ideal for demolition, hard surfaces, rental equipment and multi-purpose use. CMA LLC www.tianlitires.com
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Continental Tire the Americas LLC’s updated Conti EcoPlus HS3+ steer and all-position tire is SmartWay-verified and offers 27% better mileage than its predecessor. Designed for longhaul applications, it features an advanced cap compound to provide improved cut and tear resistance for enhanced mileage, while delivering other performance benefits. The Conti EcoPlus HS3+ comes in four sizes: 11R22.5 (Load Ranges G and H); 295/75R22.5 (Load Ranges G and H); 11R24.5 (Load Range H); and 285/75R24.5 (Load Range H.) It also can be pre-equipped with a tire pressure monitoring system, upon customer request. CONTINENTAL TIRE THE AMERICAS LLC www.continental-truck.com
Keter adds NeoTerra truck tires Keter Tire USA has added two tires to its NeoTerra brand: the MS231, a mixedservice, all-position tire, and the MS321, a mixed-service drive tire. Both products, which are available in sizes 11R22.5 (Load Range H) and 11R24.5 (Load Range H), “are specifically engineered to stand up to and perform in extreme and severe applications,” say Keter officials, and feature an extra-wide footprint and advanced tread compounds for enhanced cut and chip resistance. They are built on Keter’s premium NeoTerra casing, which features a four-belt package, as well as a six-year retread warranty. KETER TIRE USA www.neoterratireusa.com
MTD October 2020 9/28/20 2:46 PM
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DSP Insight
Have you considered raising your labor rate?
A LITTLE CAN GO A LONG WAY, SO CHARGE WHAT YOU’RE WORTH By
Jeff Morgan
F
all has arrived. The change of seasons means a change to business for many dealers. This also is the time when many start thinking ahead strategically for the next year. However, with still more uncertainty in our path, thoughts for planning get even more complex: “When will we be impacted by another downturn? How can we keep our business moving forward?” One question that always seems to be top of mind with dealers is what to do with your labor rate. This seems even more perplexing when considering the current business climate and the effect that COVID-19 has had on business in general. “Is this the wrong time to make adjustments?” you might be asking. “Do the risks outweigh the gain?” I am going to suggest that the answer to both of those questions is no. There are so many misconceptions about labor rate that cause too many dealers to leave money on the table. One of the first misconceptions is the need to be the cheapest in your area to be considered competitive. Being the cheapest does not make you competitive. It makes you cheap. Cheap and competitive are not the same thing. The best way to help customers grasp this is to think of food. Let’s say, for example, I have a craving for a burger. I have so many options. Besides, a burger is just a burger, right? All of you burger aficionados out there are screaming, “No!” Let’s compare. I can get a half-pound burger at a fast food location, at a local bar and grill or at a high-end restaurant. Would these burgers be the same? No. The one at the bar and grill is likely more seasoned, has better accompaniments and the location has a better atmosphere. If you order the burger at a high-end restaurant, all of these are even greater, likely with better-quality ingredients.
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If you are confident enough in what your business delivers, do not be afraid to enact a slight raise in your labor rate right now, particularly if it has been a while since the last time you did so. Your business deserves it and so do your customers.
You might be thinking, “But a burger is a product. We’re talking about labor rate and that is very different.” Well, yes and no. In the fast food world, there are many places that have half-pound burgers, with the prices varying a bit, but all fairly close. The same could be said of the other levels I mentioned. But have you ever seen a good, high-quality neighborhood grill with a great atmosphere price their burgers to compete with the fast food places? Probably not. If they did, it was probably not that great of a place to begin with because their quality could not compete with the other neighborhood grills. You see, your prices give an indication of the quality work that you do. If the quality and experience that you provide are better, you can charge more. The same thing applies with your labor rate. If you insist on being the cheapest around, you are basically telling customers that your quality and the experience that they receive will be the same as the other cheap places. That is also a self-fulfilling prophecy, as you will likely not have the
revenue to invest back into the business to keep it up-to-date. Being competitive means offering a fair price for what you deliver, in terms of quality and customer experience. While you will likely not be able to charge what a new car dealership in your area charges, there is no reason you cannot be close, if you offer a similar level of service. When considering your labor rate, consider the competitors around you who are offering the closest to what you provide. This is who you want to be compared against. Do not think that your labor rate needs to be the same or a little lower than them, either. If you are confident that what you offer is better than the competition, don’t be afraid to charge a little more for it. Let’s go back to our burger analogy. If there are two neighborhood grills that you are considering, are you willing to pay an extra dollar at the one that offers superior quality, plus a better atmosphere and a better overall experience? Most likely, the answer will be yes. MTD October 2020 9/23/20 12:49 PM
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Let’s examine another big misconception, we like it or not, these increased operating which is that your customers will push back expenses are not going to go away. if you raise your labor rate. I hear this one Our business does not have the flexibility a lot. However, once owners actually do that other businesses have enjoyed in order raise rates, they recognize that the only to keep going. Many of you are already push-back they experienced was from short-handed or are just at your optimum internal sources, not customers. staffing model. What typically happens is that employees Laying a number of people off to save express concern that customers will go some money is just not possible to keep elsewhere if the labor rate is raised. They providing the service your customers need. push so hard that the owner will back off Also, you cannot have employees work from and keep rates where they were. home to save on office expenses. You need The problem is that while your rate people on-site to take care of customer needs. has remained the same, your cost of doing That small increase in your labor rate business has gone up. The cost of labor alone may be just what the doctor ordered to is a strong reason to evaluate and increase keep your business moving forward. Your customers rely on your business to keep your labor rate. Throughout the year, you are likely to them moving. That doesn’t change. Paying give raises to those employees who stay a couple dollars more for that, knowing that with you. If you have to replace someone, you are as committed to them as they are I am willing to bet that the new person did to you, is well worth it. not come in cheaper than the one who left. The fact that you are there when they The other reality here is that a small need you is important. Ours is considered bump in labor rate, while potentially having an “essential business” for a reason. This a strong effect on your is why we need to business, would have little do what we can to impact on your customer. keep our businesses Let me give you an If you are delivering operating well. example. Let’s say your service and an experience This brings me to labor rate is $100 and that you feel are topmy final and most you want to raise it 5% to important point: Is notch, are you charging $105. If you have a job that your business worth totals $400, and the labor appropriately? an increase in labor portion was two hours, rate? Only you can you billed $200 in labor. That same job, answer that question, but I want you to after the labor rate increase, is now $410. seriously consider everything that was It is extremely unlikely that anyone discussed here. would push back on that, particularly if If you are delivering service and an the service and experience for the customer experience that you feel are top-notch, was exceptional. If you bill 6,500 hours are you charging appropriately? If you are in labor in a year, that same $5 increase confident enough in what your business would equate to an additional $32,500 in delivers, do not be afraid to enact a slight additional gross profit! raise in your labor rate right now, particularly That goes straight to the bottom line, if it has been a while since the last time you even if you did nothing else to manage did so. You deserve it. your business. In a sense, although your customers will most likely not even know it, they deserve it, The final misconception that I want to address is risk. I’ve had dealers state that it too. They get to continue to do business with is “just too risky” to raise their labor rates, a continually growing and improving service especially now. I would counter that it may be provider that is committed to delivering an too risky not to consider it, particularly now. outstanding level of value. The harsh reality is that all of you have Don’t be afraid to get what you’re worth. seen operating expenses go up as a result Now is the time to decide. ■ of COVID-19. Tire industry veteran Jeff Morgan is the executive director You have had to add additional service protocols, invest in more personal protective of Dealer Strategic Planning, the DSP Group. He can be equipment and constantly purchase more reached at jeff.morgan@20dsp.com or (651) 846-9871. sanitizer and other cleaning agents. Whether See the website www.20DSP.com. MTD October 2020 9/23/20 12:53 PM
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9/28/20 9:36 AM
Business Insight
Land mines and hand grenades
ELIMINATE THEM FROM YOUR BUSINESS — BEFORE THEY HURT YOU By
Dennis McCarron
I
n this column, I often talk about processes and their importance. Sticking to a routine is important in how you and your employees:
1. Greet the customer; 2. Record the customer’s initial request; 3. Probe for understanding; 4. Send out the ticket to the shop; 5. Perform a vehicle “health check” of some kind, if approved; 6. Get the customer to act upon or not act upon your recommendation; 7. Perform all approved work, and; 8. Cash out the customer while expressing thanks. It all seems so simple, right? How hard can this be? Apparently, it can be really, really, really hard. If you’ve ever spent time in a shop, those simple eight steps can seem like climbing a mountain. The reason I believe it seems that way is because of land mines and hand grenades. Land mines are the biggest issue, because they are embedded in your process, whatever that may be. Maybe you don’t have a process and it’s a free-for-all? That’s just a giant land mine and one that blows up 12 to 20 times a day. Not having a process means that every service advisor has his or her own unique way of handling calls, appointments and initiating a ticket. This also means it’s highly likely that each tech has developed a unique way of dealing with tickets. Some shuffle through and cherry-pick good jobs. Some pick the jobs they like to do first and delay bringing in “tough” ones. Some write notes on the back of paper tickets. It can be chaos. Smaller land mines are ones built within your process that simply make work harder. Sometimes a land mine is cutting corners when things get busy. This is a common one. Maybe the land mine is not confirming a cell phone number or a good time to contact
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a customer? People are busy. People change phone numbers all the time. “Can I call your cell?” is not an adequate question anymore. It’s better to say, “Is this the best number to reach you at around 11:30 a.m.?” Not asking that way is a land mine. Now we have a car, eight feet in the air, with the wheels off, and no way to contact the customer or any idea when they may call back, asking, “Is my car done yet?” Land mines are implanted into your process. Hand grenades are thrown by customers. Hand grenades, by their very nature, are dangerous. Sometimes, people will throw themselves onto a hand grenade to protect the greater good. Sometimes, the grenade goes off in the trenches, doing maximum damage.
Land mines are implanted into your process. Hand grenades are thrown by customers. A hand grenade, at least in the movies, makes a metallic noise (“tink!”) when the pin is pulled. It’s subtle. But you now have just a few seconds to do something before the grenade goes off. You need to listen for the pin noise up at the sales counter and while on the phone: “Hi, I just had four tires installed somewhere else and now I have a slow leak I’d like you to try and fix.” (tink!) First-time customer: “Hi, I’d like to get a tune-up.” (tink!) “Whatever you do, do not lower my driver side window,” says the customer on the hottest day of the year.” (tink!) Sometimes, there is a hand grenade/ land mine combo. “Hi, this is my first time here. I’d like an
Not having a process means that your technicians could have different ways of dealing with tickets.
alignment.” And then the service advisor doesn’t ask why. Hand grenades are often best dealt with via thorough, probing questions. It may take time to ask these questions. Inevitably, hand grenade throwers arrive when there’s a rush at the counter or the phone is ringing off the hook. But don’t fall for it. Three to five minutes spent asking questions may save you literally an hour or more of work in the shop. Do yourself and your business a favor. Review your process and sweep for land mines. Start removing them permanently, especially the famous “we’re too busy to follow the rules” land mine. And learn to see hand grenades long before the pin is pulled. As an owner, do not be afraid to intervene, even as the keys are being handed to the service advisor, and put up a temporary roadblock. It is far healthier for your dealership, employee morale and the success of your business to handle potential hand grenades before they make it into the shop. ■ Dennis McCarron is a partner at Cardinal Brokers Inc., one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email him at dennis@cardinalbrokers.com.
MTD October 2020 9/23/20 12:55 PM
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9/16/20 2:36 9/28/20 4:59 PM
Mergers and Acquisitions
ESOPs, buyouts, trusts or debt recapitalization? A LOOK AT ALTERNATIVE EXIT STRATEGIES By
Michael McGregor
M
any tire dealers are fortunate in having children who work in their business and plan to take over when they retire. I run across second generation tire dealerships all the time, and occasionally find a third generation still running the business. But sometimes that second generation wants neither the burden of ownership nor the debt that the parent is expecting the kid to take on to buy them out. That’s when a tire dealer needs to start examining alternative exit options. If the decision is made to bypass family and go outside, a strategic sale or a private equity recapitalization may be options for some tire dealers, if their business is attractive enough. If so, this usually results in the biggest payday. But not every tire dealer has those big payday options and not every tire dealer is motivated solely by a big payday. For some, rewarding employees, taking care of the management team or giving to charity are more important. Everyone is different and like my mom used to say, “If everyone was the same, the world would be a boring place.” Here are some of the most common alternatives to a strategic sale or a private equity recap:
certain tax deferrals by reinvesting the proceeds into more liquid and marketable securities. Second, the ESOP can use its pre-tax earnings to pay off principal and interest, both of which are tax deductible, eventually paying off the loan or loans. Lastly, a business owned by an ESOP can effectively pay no federal or state income taxes on the profits of the business by contributing cash into the ESOP annually. The investment bank I’m with became an ESOP two years ago in order to buy out our majority shareholders. Our primary motivation was not money. We simply liked our independence, how we were set up and how the business meshed with our lifestyles. We did not want those to change.
Employee Stock Ownership Plans (ESOPs) are employee benefit plans originally created to motivate and reward employees. They are now primarily used by private business owners to exit their businesses. While ESOPs are highly regulated entities by both the IRS and the U.S. Department of Labor, there are significant tax advantages to an ESOP. First, an ESOP can borrow money from banks and other lenders to buy out the owner, who can then take advantage of
Management buyouts happen when an owner wants to sell to the management team that is already running the business. The great thing about having key managers buy the business is that you bypass the exhaustive due diligence process that accompanies an outside sale process. The transaction becomes an exercise in negotiating the price with the selling owner and then figuring out how to pay for it. It’s important that the management team contributes some equity into the deal to have some skin in the game.
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Not all businesses transfer to the next generation of owners and not all businesses will find a strategic or private equity buyer. ESOPs are not without expense to set up and maintain. They cost about $75,000 initially to set up, not including bank fees, and ongoing expenses are about $35,000 per year.
Managers can tap their savings and other sources. And most management buyouts incorporate leverage of some kind. Larger transactions may involve senior bank debt, mezzanine debt and sometimes private equity. Smaller companies get bank loans, along with seller notes receivable. Charitable trusts can be used to shield against capital gains taxes, get an income stream for life and give to charity. An owner can donate a business to a charitable remainder trust and get a tax deduction that can be used to offset a capital gain on something like the sale of the real estate of that business. Once inside the trust, the business can be sold and no tax is paid on the sale of that business. Then the owner gets an annual distribution from the charitable trust, with 5% of the trust’s assets distributed annually being the typical minimum. In a debt recapitalization, you simply go out and load up the business on debt and use it on yourself. Most business acquisitions involve debt. Senior bank debt can be as much as 60% of a buyer’s capital structure, mezzanine debt can make up another 20% and equity from the buyer makes up the last 20%. But I’ve been involved in a private equity deal where all of the purchase price was sourced in debt. The private equity buyer didn’t put up a penny. Not all businesses transfer to the next generation of owners and not all businesses will find a strategic or private equity buyer. Understanding the alternative exit options and planning years in advance will contribute towards having a successful outcome. ■ 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.
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9/28/20 9:33 AM
Focus on Industry
All-weather forecast is bright, says Brison HANKOOK INVESTS IN GROWING SEGMENT By
Mike Manges
H
ankook Tire America Corp. is investing to boost its presence in the growing all-weather tire segment by bringing the Hankook Kinergy 4S2 all-weather product to the United States. All-weather tires currently make up around 5% to 10% of the traditional all-season segment, according to Curtis Brison, Hankook’s vice president of passenger and light truck tire sales. Hankook believes that percentage will grow and is positioning the Kinergy 4S2 as a premium offering.
GEARED TOWARD THE U.S.
The all-weather tire value proposition for both consumers and tire dealers is straightforward, says Brison. “We’re finding that consumers in areas that don’t require a full-time winter product still want” winter tire capabilities “without having to change out tires every winter.” Available in the U.S. in 45 sizes, the Kinergy 4S2 features a V-shaped tread design and has earned 3-Peak Mountain Snowflake Certification. It also boasts All-weather tires serrated edge grooves and “a slush present “another edge that improves digging force and opportunity for our dealers,” says enhances cornering in snow,” according Curtis Brison, to Hankook officials. Hankook’s vice Hankook introduced the Kinergy 4S2 president of passenger and light to the European market in 2018. The tire truck tire sales. also has been available in Canada. “They now have “We now have a tread pattern and comanother tool in pound that have been optimized for the their belt.” U.S. marketplace,” says Brison, who adds that Hankook changed the tire’s original compound “to meet the higher-mileage needs” of U.S. consumers.
ANOTHER OPTION
All-weather tires also give dealers “another option” when talking with customers, says Brison. “They now have another tool in their belt. It’s also helpful for dealers. Winter tires can be stressful for dealers,” in terms of inventory. “You’re getting a bunch of tires early. You’re keeping your fingers crossed that the weather will cooperate. Sometimes you’re left short. Sometimes you have a lot (of units) that you can’t sell, moving into the next season. “A product like this is great because you can sell it year-round,” he adds.
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KINERGY INVESTMENT
Hankook has made significant investments in its Kinergy product line during 2020. In April, it announced size additions to the Kinergy PT (H737) and the Kinergy ST (H735.) Two months later, Hankook revealed that it will supply the 2021 Chevrolet Trailblazer with the Kinergy (H436), an all-season product. These developments are on top of the company securing a Kinergy original equipment fitment on the 2020 Toyota Available in 45 sizes, the all-weather Hankook Kinergy Corolla and launching a Kin- 4S2 is new to the U.S. market. ergy touring all-season tire. Its tread compound has been “We consider Kinergy to be optimized for the demands of a premium, grand touring all- U.S. motorists. season product for passenger cars and crossovers,” says Brison.“As those fitments become more popular, we’re going to meet that demand with Kinergy. We are investing in that line.” Dealers also can expect more investment in Hankook’s Laufenn brand, which he calls a “nice complement to the Hankook brand and something we’re excited about.”
PRODUCTION UPDATE
Brison also provided an update on the production ramp-up at Hankook’s consumer tire plant in Clarksville, Tenn., which shut down for three weeks earlier in the year due to COVID-19. “We’re running all shifts. We’re wide-open, as they say. Our Tennessee plant has been performing very well — operating all shifts and continuing to meet the demands of our customers. We intend to increase the capabilities of the facility as much as we can.” The plant — which can produce 13,900 units per day at full capacity, according to MTD research — will take on more production for the company’s U.S.-based OE customers. “We have a large global footprint of manufacturing. In general, the company is always looking at ways to optimize that. One of those ways is to move production here for domestically manufactured vehicles. “It makes sense for us and certainly makes sense for those (vehicle) manufacturers. So when and where it makes sense, we will continue to do that. We do produce some OE product at the plant today and we will continue down that path.” ■ MTD October 2020 9/23/20 12:56 PM
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9/28/20 9:33 AM
Focus on Industry
Digital tools, tire supply and going green CONVENIENCE IS KEY, SAYS ATD’S HANCOCK By
Mike Manges
A
merican Tire Distributors Inc. (ATD) is ramping up its investment in digital tools to give customers more visibility into the status of orders. “One exciting tool that we launched as a free, value-added service is something we call Traction, a mobile transaction app that provides all of our customers with real-time delivery alerts, routing details, order details and more,” says Bill Hancock, senior vice president, supply chain operations, ATD. “Once a delivery driver shows up at their location, they can have credit processing in real time, they can get their accounts reconciled, they can cancel an order, they can build onto an order, they can process a return, they can process a warranty — and once our driver leaves, it’s all up-to-date. “We can text or email an invoice directly to the customer and their books can be reflective of that,” he says. “It’s exciting for our customers, but it’s also exciting for our drivers and warehouse workers. It prepares them with tools and technologies to really take care of our customers’ needs.” ATD also is heavily promoting its “We are constantly tirebuyer.com e-commerce portal. assessing the health “If you have a customer who wants of our network — where we are seeing to do business with your company, we pockets of growth can be that fulfillment provider and and where we are make sure they have great access to that seeing pockets of product and very fast shipping times,” opportunity,” says Bill Hancock, senior says Hancock. vice president, He notes that ATD has “leveraged supply chain our advanced analytics platform to take operations, ATD. historical data that’s coming from our suppliers, retailers and manufacturers” in order to “create a very accurate forecast of what the future will look like. “Over the last year to two years, we’ve (improved) our in-stock rates by 3% to 4% by reducing inventory levels by as much as 30% in some of our key categories. That’s a game-changer when you look at the return on capital.”
THE LATEST ON SUPPLY
Hancock says ATD is “starting to see in-stock rates recover as tire manufacturers continue to ramp-up production. “When it comes to inventory availability, we clearly saw an impact back in March, when we saw manufacturers go off-line for a period of time.
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“Over the last year to two years, we’ve (improved) our in-stock rates by 3% to 4%,” notes Hancock.
“We saw some retail customers close their locations to protect themselves, their teams and their customers. And no doubt there has been supply disruption as part of those manufacturers going off-line. “We are confident that as we continue to provide our manufacturers with demand signals, rates will continue to improve,” he explains. “Because of the work of our frontline teams, we have been able to maintain operations at all of our facilities, with only minimal impact to our customers. We know COVID-19 is not done and we need to be sure we are continually conscious of how we operate. “We are constantly assessing the health of our network — where we are seeing pockets of growth and where we are seeing pockets of opportunity,” he explains.
‘A MORE EFFICIENT PLATFORM’
ATD also is placing emphasis on reducing its greenhouse gas emissions. The company wants to cut its greenhouse gas output by 25% within the next 10 years, according to Hancock. “We’re looking at our distribution center operations. We’re assessing everything, from route optimization to reducing the miles we drive. We’re looking at fleet electrification and making sure we’re up-to-date on the latest technology. It’s all about creating a more efficient platform” and “making sure we’re creating a good, sustainable environment for our team and the communities we service.” ■ MTD October 2020 9/23/20 12:56 PM
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9/28/20 9:32 AM
TPMS
GM/Chevrolet Camaro — 2010-2019
T
he tire pressure monitoring system (TPMS) on a 2010-2019 Chevrolet Camaro warns the driver when a significant change of tire pressure occurs in any of the four tires, and allows the driver to display the individual tire pressures and their locations on the driver information center (DIC) while the vehicle is being driven. The TPMS uses the body control module (BCM), instrument panel cluster (IPC), DIC, a radio frequency (RF) transmitting pressure sensor in each wheel/tire assembly, and the serial data circuit to perform the system functions. When the vehicle is stationary and the sensor’s accelerometer internal is inactive, the sensors go into stationary mode. In this mode, the sensors sample tire pressure once every 30 seconds and transmit a stationary mode transmission only if
IS THE ONLY
COMPLETE
the air pressure changes. As vehicle speed increases, centrifugal force activates the internal accelerometer, causing the sensors to go into rolling mode. In this mode, the sensors sample tire pressure once every 30 seconds and transmit a rolling mode transmission once every 60 seconds. The BCM receives and translates the data contained in each sensor RF transmission into sensor presence, sensor mode and tire pressure. The BCM then sends the tire pressure and tire location data to the DIC via the serial data circuit, where they are displayed. The sensors continuously compare their current pressure sample with their last pressure sample and will transmit in re-measure mode whenever a 1.2 psi change in tire pressure has occurred. When the TPMS detects a significant loss or gain of tire pressure, the “CHECK TIRE
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PRESSURE” message is displayed on the DIC and the low tire pressure indicator is displayed on the IPC. Both the DIC message and IPC indicator can be cleared by adjusting the tire pressure to the recommended pressure and driving the vehicle above 25 mph (40 km/h) for at least two minutes. The BCM has the ability to detect malfunctions within the TPMS. Any malfunction detected will cause the DIC to display the “SERVICE TIRE MONITOR” message and flash the TPMS IPC bulb for one minute before illuminating it continuously each time the ignition is turned ON until the malfunction is corrected.
TIRE PRESSURE MONITOR WARNING INDICATORS
When the TPMS detects a significant loss of tire pressure, the “CHECK TIRE PRESSURE” message is displayed on the DIC and the low tire pressure indicator is displayed on the instrument panel. Both the message and indicator can be cleared by adjusting the tires to their recommended pressures, and driving the vehicle above 25 mph (40 km/h) for at least two minutes. The tire pressure monitor indicator icon on the IPC will flash for one minute and then remain illuminated and the DIC will display the “SERVICE TIRE MONITOR SYSTEM” message if one or more of the tire pressure sensors or other system components has malfunctioned or if all of the sensors have not been programmed successfully. If warning indicators are still on, there is a problem in the TPMS. See appropriate manufacturer service information.
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NOTE: When the wheels have been rotated, or a tire pressure sensor has been replaced, relearn the tire pressure sensors. When the TPMS detects a significant loss of tire pressure, the “CHECK TIRE PRESSURE” message is displayed on the DIC and the low tire pressure indicator is displayed on the instrument panel. Both the message and indicator can be cleared by adjusting the tires to their recommended pressures, and driving the vehicle above 25 mph (40 km/h) for at least two minutes. MTD October 2020 9/28/20 2:41 PM
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TPMS TIRE PRESSURE SENSOR RELEARN
NOTE: Once the TPMS learn mode has been enabled, each of the sensor unique identification (ID) codes can be learned into the BCM memory. When a sensor ID has been learned, the BCM sounds a horn chirp. This verifies the sensor has transmitted the ID and the BCM has received and learned it. The BCM must learn the sensor IDs in the proper order to determine correct sensor location. The first learned ID is assigned to the left front, the second to right front, the third to right rear and the fourth to left rear. NOTE: Sensor functions using scan tool: Each sensor has an internal low frequency (LF) coil. When the tool is used in activate mode it produces an LF transmission that activates the sensor. The sensor responds to a LF activation by transmitting in learn mode. When the BCM receives a learn mode transmission while in TPMS learn mode, it will assign that sensor ID to the location on the vehicle relative to the order in which it was learned. NOTE: Sensor functions using Pressure Increase/Decrease Method: Each sensor
takes a pressure measurement sample once every 30 seconds while in stationary mode. If the tire pressure increases, or decreases by more than 8.3 kPa (1.2 psi) from the last pressure measurement, another measurement will occur immediately to verify the change in pressure. If a pressure change has indeed occurred, the sensor transmits in learn mode. When the BCM receives a learn mode transmission while in TPMS learn mode, it will assign that sensor ID to the location on the vehicle relative to the order in which it was learned. NOTE: Learn Mode Cancellation: The learn mode will cancel if the ignition is cycled to OFF or if more than two minutes have elapsed for any sensor that has not been learned. If the learn mode is cancelled before the first sensor is learned, the original sensor IDs will be maintained. If the learn mode is canceled for any reason after the first sensor is learned, all IDs are erased from the BCM memory and if equipped, the DIC will display dashes for tire pressures. WARNING: If not utilizing a scan tool
to initiate the relearn procedure, stray signals from other TPMS-equipped vehicles just driving by can be inadvertently learned. If any random horn chirps are heard from the vehicle while performing the learn procedure, most likely a stray sensor has been learned and the procedure will need to be cancelled and repeated. Under these circumstances, performing the TPMS learn procedure away from other vehicles would be highly recommended. In the event a particular sensor activation does not cause the horn to chirp, it may be necessary to rotate the wheel valve stem to a different position because the sensor signal is being blocked by another component. Before proceeding with the following steps, verify the following: No other sensor learn procedure is being performed simultaneously within close proximity; tire pressures are not being adjusted on another TPMS-equipped vehicle nearby; and park brake switch input parameters are functioning correctly. 1) Apply the parking brake (manual transmission only).
Get best-in-class vehicle coverage and the ability to perform TPMS service with virtually any OE or aftermarket TPMS sensor. Choose the enhanced features of the Autodiagnos TPMS D Tool or the
Autodiagnos™ TPMS Tools Maximize your TPMS and tire service efficiency – for two bays or twenty.
efficient Autodiagnos TPMS SE Tool. Or, choose both to optimize your investment and meet all the service requirements of your customers. Autodiagnos TPMS D Tool Diagnostics, TPMS service and tire service in one unit.
Autodiagnos TPMS SE Tool Full-featured TPMS service.
Autodiagnos TPMS – A Trademark of the Continental Corporation
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Learn more: www.AutodiagnosTPMS.com
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THE
GO STRONG. OFF-ROAD LINEUP
© 2020 Yokohama Tire Corporation
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TPMS KITS Ask Your Autel Distributor for Details
TS508/TS508WF PLUS
TPMS 2) Turn ON the ignition, with the engine OFF. NOTE: The DIC is accessed through the five-way controls on the right side of the steering wheel. Scroll to the tire pressure screen. Make sure the tire pressure information display option is turned on. The information displays on the DIC can be turned on and off through the Options menu. 3) Using a scan tool or the DIC, select Tire Pressure Sensor Relearn. A double horn chirp will sound and the left front turn signal will be illuminated. 4) Starting with the left front tire, learn the tire pressure using one of the following methods: Method 1: Hold the antenna of the TPMS tool against the tire sidewall close to the wheel rim at the valve stem location, and then press and release the activate button and wait for a horn chirp. Method 2: Increase/decrease the tire pressure for 8-10 seconds, then wait for a horn chirp. The horn chirp may occur before or up to 30 seconds after the 8-10 second pressure increase/ decrease time period has been reached. 5) After the horn chirp has sounded, repeat procedure for the remaining three sensors in the following order: right front, right rear, left rear. 6) After the LR sensor has been learned, a double horn chirp will sound indicating all sensors have been learned. 7) Turn OFF the ignition to exit the learn mode. 8) After the learn mode has been exited, adjust all tires to the recommended pressures.
DEMOUNTING/MOUNTING PROCEDURES
COMPLETE
SOLUTION
Phone: (855) 288-3587 • USSUPPORT@AUTEL.COM AUTEL.COM • MAXITPMS.COM • MAXISYSADAS.COM
© 2020 Autel U.S. Inc., All Rights Reserved
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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 dismounting/mounting procedures. NOTE: If the vehicle’s tires are replaced with those not having a TPC Spec number, the TPMS may give an inaccurate low pressure warning. Non-TPC Spec tires may give a low pressure warning that is higher or lower than the proper warning level achieved by TPC Spec numbered tires. NOTE: When the wheels have been rotated, or a tire pressure sensor has been
Fig. 1: Here’s an exploded view of a tire pressure sensor assembly installation.
replaced, retrain tire pressure sensor. See “Reset procedures.”
TIRE PRESSURE SENSOR
Removal 1) Raise the vehicle on a suitable support. Remove the tire/wheel assembly from the vehicle. 2) Demount the tire from the wheel following the tire changer manufacturer’s instructions. 3) Remove the Torx screw (1) from the tire pressure sensor (2) and pull it straight off the tire pressure valve stem (3). See Figure 1. 4) Remove the tire pressure valve stem by pulling it through the rim. NOTE: When servicing the tire pressure sensor, always use a new tire pressure monitor and a new Torx screw during installation. Installation 1) Assemble the tire pressure sensor (2) to the valve stem and install the new Torx screw (3). TPMS valves and Torx screws are one-time use only. 2) Apply tire soap to the rubber portion of the valve stem (1). 3) Using a tire valve stem mounting tool, pull the valve stem through in a direction parallel to the valve hole on the rim. 4) Mount the tire to the rim. 5) Install the tire on the wheel. Install the tire/wheel assembly on the vehicle. Retrain the tire pressure sensor. ■ Information for this column comes from the tire pressure monitoring systems data in ProDemand®, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in Poway, Calif., Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com. To read archived TPMS articles, visit www.moderntiredealer.com.
DIAGRAM COURTESY OF GENERAL MOTORS CORP.
AUTOMOTIVE INTELLIGENCE
MTD October 2020 9/28/20 2:42 PM
POWER PRODUCT
GALAXY HITS THE OPEN ROAD WITH A NEW LINE OF MEDIUM TRUCK TIRES
F
or decades, Galaxy off-the-road tires have helped build America's roads and highways, working in mines and quarries, hauling rock, excavating, pushing dirt, laying pavement. Now, Galaxy tires are running on those same roads and highways, bringing the brand's Application Specific, Purpose Built commitment—and Alliance Tire Americas' commitment to dealer success—to medium commercial truck tires.
Born with the R&D, design and industrial engineering resources of truck tire giant Yokohama and manufactured in the state-of-the-art Galaxy factory, every Galaxy truck tire reflects our focus on quality. We source top-quality raw materials and store them in climate-controlled warehouses. Our R&D team innovates new designs and engineers every detail. Our highly trained manufacturing team uses state-of-the-art, computer-controlled machinery on the factory floor.
In short, every Galaxy truck tire is not just Purpose Built, it is precisely built. Each Galaxy truck tire features all-steel radial construction for superior performance, enhanced heat dissipation and longer service life. And every Galaxy truck tire is backed by a 5-year, 2-retread warranty to deliver more miles and lower cost per hour. When Alliance Tire Americas says Application Specific, we mean it. The Galaxy truck tire line includes tires for every position: steer, drive and trailer, as well as just about any challenge on or off the road.
New tires in the Galaxy truck and bus radial line include: SR211-G Regional Steer Tire, with its high-stability tread pattern and durable casing for demanding regional hauls and excellent retreadability DH241-G Long-Haul Drive Tire, with a special compound to improve fuel economy and wear resistance AC271-G All-Position Construction Tire for on-and off-highway applications, manufactured with cut and chip resistant compound for excellent durability and traction in adverse conditions These, along with others, help dealers meet the demands their customers face.
Every Galaxy truck tire also undergoes physical, x-ray and radial roll-out (RRO) testing before it leaves our factory. That attention to detail is reflected in our many U.S. Environmental Protection Agency's SmartWay verified products, as well as our compliance with ISO, BH OSAS and VCA standards.
TRUCK TIRES
APPLICATION SPECIFIC, PURPOSE BUILT.
Galaxy truck tires turn Application Specific, Purpose Built into performance, reliability and low cost per mile—tires that keep owner operators and fleets rolling profitably. If you have questions, contact your Galaxy tire dealer, visit www.GalaxyTruckTires.com or call 1 (800) 343-3276.
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POWER PRODUCT AZ850
AZ800
AZ610
AW730 ICE
A STEP UP WITHOUT THE PRICE LEAP
TRAIL BLADE BOSS
TRAIL BLADE M/T
TRAIL BLADE X/T
TRAIL BLADE A/T
FOR INDEPENDENT DEALERS, ATTURO HITS THE SWEET SPOTS. At Atturo Tires, we mind the gaps for independent dealers like you with a lineup that hits all the sweet spots. By becoming an Atturo dealer, you can offer your customers top-tier off-road, hybrid and performance tires at more affordable prices, in larger sizes, and for more unique fitments than many of our competitors. Plus, you’ll enjoy support from an independent, no-nonsense manufacturer that truly allows you to Go Your Own Way. Learn more about our full lineup of tires at ATTURO.COM and email us at DEALER@ATTURO.COM to learn how you can join our growing dealer network.
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9/29/20 9:42 AM
POWER PRODUCT
Tire Dealers And Farmers Agree – The Ceat Quality/ Price Equation Is Hard To Beat! CEAT Ag tires were introduced to North America three years ago. Since then, tire dealers and farmers have come to appreciate the product quality in relation to the competitive acquisition price.
On The Road Again at Catalpadale Dairy Farm
Asking for CEAT by name at Millersburg Tire Service We’ve done really well with the CEAT line. New sizes coming out all the time, the size mixture is good, and farmers like ‘em! What makes me feel really good is when they call in on the phone and they want that CEAT tire. That’s how you make in roads in the market . . . have a tire that people ask for by name.
- Brad Schmucker, owner of Millersburg Tire Service in Millersburg, OH
With radial tires, sometimes when you go from asphalt to concrete the ride can be like night and day. With CEAT, the ride is smooth the entire time . . . it doesn’t matter if you are carrying a big load or no load, or what the speed is.
- Josh Zimmerly, farm manager at Catalpadale Dairy Farm
Today’s American farmer is more economically and environmentally conscious than ever before. They expect their equipment to work as hard as they do, and CEAT tires do just that with the “Power of CTR.”
Compaction To achieve a larger footprint, CEAT FARMAX Ag radials have larger inner volume, higher tread arc and flexible sidewalls. The larger footprint helps with soil compaction.
Traction Reducing Downtime at Clover Patch Dairy Farm I've run a lot of different tires on a lot of different tractors over my years and this tire is very reliable. We've never had a flat on the CEAT tires. They are very durable. We’re anticipating 10,000 hours on a current set. In the past, with other tires I've run on other tractors, we've gotten about half that life and they were also radials.
- Jarad Sage,
operations manager at Clover Patch Dairy Farm
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Armed with unique dual-angle lugs, with a lower angle at the shoulder and more lugs in the footprint, FARMAX tires deliver superior traction in the field and on the road.
Roadability CEAT tires are packed with features like higher lug overlap and higher lug continuity to provide stability and comfort for a smooth ride on paved surfaces.
9/29/20 9:42 AM
POWER PRODUCT
ExtremeContact™ Sport
ContiSportContact™ 5P
ExtremeContact™ DWS06
Continental built the ExtremeContact™ Sport tire with you, the car enthusiast, in mind. This dynamic, ultra-high performance street tire is engineered for extreme grip in dry and wet conditions. Our SportPlus™ Technology delivers you improved tread life, enhanced grip on wet roads, and precise steering for maximum control… a tire For What You Do.
A combination of responsive handling and improved grip, allowing for additional steering response, faster cornering, shorter braking distances, and better wet grip.
If you’re seeking true, year-round traction, the ExtremeContact™ DWS 06 is the perfect all-season tire For What You Do. This ultra-high performance tire comes complete with SportPlus™ Technology which provides you precise handling; security on wet, slippery roads; and excellent tread life no matter the weather.
PureContact™ LS
TrueContact™ Tour
CrossContact™ LX25
The PureContact™ LS is a skillful balance of luxury and all-season performance designed for long wear, a comfortable ride, and best-in-class wet braking. Whether you’re driving to work, taking the kids to soccer, or going on a family vacation, this tire is built For What You Do.
A touring performance tire, the TrueContact™ Tour has all-season traction combined with fuel efficiency, long-wear and best-in-class wet braking. That makes this tire a confident choice For What You Do.
If you need a tire that provides fuel efficiency, long tread life, and a quiet, comfortable ride, then the CrossContact™ LX25 with EcoPlus™ Technology is For What You Do. This secondgeneration premium SUV and CUV all-season tire delivers excellent wet braking, reduced noise, and snow performance.
TerrainContact™ H/T
TerrainContact™ A/T
VikingContact™ 7
Whether you’re headed to work or out for fun, the TerrainContact™ H/T is the premium highway terrain tire designed For What You Do. It is strong, durable, and quiet, with a focus on long tread life and exceptional wet braking. With TractionPlus™ Technology, it offers the perfect balance between on-road durability and on-road manners.
At the job site, farm or in the woods, the TerrainContact™ A/T is the perfect tire For What You Do. It is the ideal all-terrain tire for CUV, SUV and light trucks with the durability to conquer dirt, gravel and grass while providing a quiet, comfortable ride on pavement. This tire strikes the perfect balance between off-road traction and on-road manners.
Does the temperature regularly stay below 45 degrees Fahrenheit? Does it snow? Do your roads have a wintry mix of ice and slush? Then the VikingContact™ 7 directional winter tire is the tire For What You Do. Flexibility for those slippery road conditions with the stiffness you want for long life. It carries the symbol for severe winter conditions.
VISIT CONTINENTALTIRE.COM FOR COMPLETE DETAILS.
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POWER PRODUCT
COUNTRY HUNTER M/T2
COUNTRY HUNTER M/T
The flagship Country Hunter M/T aggressive bold pa�ern and non-direc�onal tread design feature deep lugs with a center zone for a truly excep�onal off-road experience.
Presen�ng the new Country Hunter M/T 2. Mul� shaped tread block pa�ern effec�vely decreases road noise and increase trac�on.
COUNTRY HUNTER UTV
COUNTRY HUNTER R/T
Country Hunter R/T mul�-direc�onal hybrid tread block pa�ern is quiet on the road, but wild when off-road. It is the perfect combina�on of a all terrain and mud terrain �re.
The Country Hunter UTV is a semi-block design, that offers outstanding trac�on in mud and has rock solid stability on the most difficult terrains.
www.FURYTIRES.com
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POWER PRODUCT
G-MAX ™ RS
G-MAX ™ AS05
AltiMAX ™ RT 43
Ultra-high performance tire designed for maximum grip on dry and wet roads giving you the inspiring performance you’re looking for. Smart Technologies make anywhere possible by providing exceptional handling rain or shine.
A bold ultra-high performance tire offering all-season traction. Smart technologies provide visual wear alerts, performance in all seasons and longer tread life. A smarter tire for a smarter driver.
This touring tire is a stylish, all-season tire but also supplies a quiet, comfortable ride. Combine this with year-round traction and extended tread life and you have an ideal tire for day-to-day driving.
Grabber ™ UHP
Grabber ™ HTS 60
Grabber ™ APT
Bold, ultra-high performance all-season light truck, crossover and SUV tire designed to give you excellent handling and traction in both wet and dry conditions.
The tough highway-terrain, all-season tire that provides the perfect synergy of comfort, durability and performance for light trucks, SUVs and crossovers.
A strong and durable all-purpose-terrain tire providing a balance of off-road performance and on-road comfort while also giving you snow traction for confident driving in all weather conditions.
Grabber ™ A/T X
Grabber ™ X3
Grabber ™ HD
An aggressive all-terrain tire that provides exceptional off-road capability and durability, balanced with impressive on-road performance. Three-Peak Mountain Snowflake and studdability deliver confident driving in all weather conditions.
A bold mud-terrain tire that delivers extreme off-road performance in mud, dirt and rock covered terrain. Comes with 3-ply durability and balanced with impressive on-road performance.
A heavy duty all-season tire for commercial light trucks and vans that delivers long even tread life, durability, confident traction and handling, on and off the work site.
GENER ALTIRE .COM
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POWER PRODUCT
Black Card Rewards Earn monetary rewards quarterly on a Kenda Traction Black Card.
CO-OP Rewards/Point-Of-Sale Support
Gain co-op rewards that you can use for in-store advertising or promotional giveaways via the online Kenda Store.
Marketing Portal
Receive access to Kenda branding tools such as product images, logos and our digital catalog.
Dealer Locator
Customers using the dealer locator on KendaTire.com will be guided to your store.
Global Brand with Local Support
New products are being designed for North America in our state-of-theart technical center located in Akron, OH. We also have a full team of experienced support staff to help you with any product questions at Kenda USA headquarters in Columbus, OH.
In-Demand Products
Our passenger and light truck tires are designed to give your customers solid performance at a great price. Associate Dealers also have access to branded specialty products with many O.E. fitments such as trailer tires, ATV, golf, and lawn and garden tires.
Learn how you can become a Kenda Traction Associate Dealer at KendaTraction.com or visit us at SEMA Booth #40027.
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Earn More in 2021!
Associate Dealer Program
9/29/20 9:44 AM
POWER PRODUCT
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POWER PRODUCT
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POWER PRODUCT
www.travelstartires.com info@travelstartires.com
UN106
UN99
UN33
UN66
“Whitewall”
“Passenger”
“High Performance”
“Crossover/CUV”
ECOPATH HT
ECOPATH AT
ECOPATH MT
HF288
“Hwy LT/SUV”
“All-terrain LT/SUV”
“Mud-terrain LT”
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“Specialty/ST”
9/29/20 9:50 AM
POWER PRODUCT
Launching - VT850 tread Introducing the new VT850 tread, the first of Vipamold line recommended for vehicles such as motorgraders, wood grabber loader and loaders. In addition to excellent performance in extreme driving conditions, its design allows excellent traction power and self-cleaning, essential off-road applications. characteristics for o
Grooves designed to enable self-cleaning of the tread. Blocks designed to provide excellent mileage performance in extreme driving conditions, excellent traction power, and self-cleaning tread. Wear indicator that identiďŹ es when it is recommended to remove the tire aiming for casing preservation.
info@vipal-usa.com Facebook: Vipal Rubber Corp
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www.vipal-usa.com
9/29/20 9:51 AM
POWER PRODUCT
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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
1-800EveryRim OEM Wheels
28
www.everyrim.com/MTD
Aftermarket Auto Parts Alliance Inc.
42-43
www.partsmastersynthetic.com
Alliance Tire Group
15
www.galaxytrucktires.com
American Omni Trading
29
www.thunderertireusa.com
American Omni Trading
63
www.veneziatires.com
Atlas Automotive Equipment
59
www.atlasautoequipment.com
Atturo Tires
57
www.atturo.com
AUTEL
55, 64, 68
www.autel.com
AutoNation
31
www.autonation.com
BendPak Inc. Ranger Products
45
www.mybendpak.com
BKT USA Inc.
11
www.bkt-tires.com
Blackburn OEM Wheel Solutions
65
www.blackburnwheels.com
Bridgestone Affiliated Retailer Nationwide Network
9
www.affiliatedretailer.net
CEAT Specialty Tires Inc.
47
www.ceatspecialty.com/us
Continental Automotive Systems Inc.
66
www.autodiagnostpms.com
Continental Corporation/ATE
34
www.ate-na.com
Continental Tire
13
www.continentaltire.com
Cooper Tires
33
www.coopertire.com
Falken Tires
17
www.falkentire.com
Fury Tires
21
www.furytires.com
General Tire
53
www.generaltire.com
Hunter Engineering Company
32
www.hunter.com
K & M Tire Inc.
61
www.kmtire.com
Ken-Tool
48
www.kentool.com
Kenda Tires USA
IBC
www.kendatraction.com
Kumho Tire USA Inc.
26 A-B
www.kumhotireusa.com
Linglong Americas Inc.
7
www.linglongtire.com
Maxxis Tires
25
www.maxxisaccelerate.com
Nexen Tire America Inc.
IFC
www.nexentireusa.com
Nitto Tire U.S.A. Inc.
OBC
www.nittotire.com
Nokian Tyres Inc.
51
www.nokiantires.com
Opus IVS
23
www.opusivs.com
OTR Wheel Engineering Inc.
49
www.otrwheel.com/neverdown
Sentury Tire
19
www.landsailtires.com/dealer-inquiries
Tire Profiles
54
www.tireprofiles.com
Toyo Tires
5
www.toyotires.com
Travelstar Tires
30
www.travelstartires.com
Vipal Rubber Corporation
37
www.vipal-usa.com
Yokohama Tire Corporation
67
www.yokohamatire.com
ZC Rubber America Inc.
39
www.arisuntires.com
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Advertising information (330) 899-2200 ext. 2217
MTD Classifieds USED TIRES FOR SALE
SOFTWARE
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MAKE THE DRIVE TO GRANDMA’S HOUSE MORE REWARDING
SNOWFLAKE CERTIFIED
Klever A/T2 KR628 Developed to offer premium, all-terrain performance, this 2nd generation tire delivers a smooth, quiet ride without sacrificing traction, durability or an aggressive styling.
DOUBLE DOLLARS IN NOVEMBER on the Klever A/T2 KR628
*Double points applies to all sizes of the KR628 tread pattern. Promotion is for dealers enrolled in the Kenda Traction program. The Kenda Traction program is free to enroll at KendaTraction.com. Through Kenda purchases earn cash back and Traction Black Card rewards. Contact your local distributor for more details.
KendaTraction.com
Traction
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