Commercial Tire Dealer™
Tariffs and time are helping dealers compete against low-cost import tires By Ann Neal
T
he crisis for retreaders created by high volumes of low-cost tires from China seems to be easing. Respondents to Modern Tire Dealer’s annual survey of the nation’s largest commercial tire dealers expect tariffs on medium truck tires, which have gained preliminary approvals from the federal government, to provide some relief. Parkhouse Tire Inc. has had about a 5% growth in retreading business in the last year. “It could be better if the Chinese thing was resolved,” says CEO Jim Parkhouse. “Once the tariffs are established, the pricing will level off and it should help increase our retread business.” Based in Bell Gardens, Calif., Parkhouse Tire holds the No. 11 spot in MTD’s top 25 commercial tire dealer rankings. Steve Theissen, an owner of T&W Tire Inc., which holds the No. 20 spot, also feels tariffs will improve the operating environment. “The tariffs help us increase our retreading business. It’s going to make retreads much more cost effective,” he says. T&W Tire is based in Oklahoma City, Okla. Anti-dumping tariffs on truck and bus tires received preliminary approval in August, and countervailing tariffs were preliminarily approved in June. The U.S. Department of Commerce is expected to issue its final ruling on Chinese truck and bus tires on Jan. 17, 2017. Earl Colvard, president of Earl W. Colvard Inc., which does business as Boulevard Tire Center, feels tariffs are a short-term fix. “Tariffs are a temporary solution. It really should be a value proposition: price versus performance.” Deland, Fla.-based Boulevard Tire Center holds the No. 9 spot.
Service Inc. is seeing customers choose better quality tires, according to Bob Majewski, chief technical officer. “Customers think it’s a new tire, so it’s good. Then we have to show them their mileage and tell them they’re actually buying two to one so how good is it at that cheap price? And the casing isn’t worth anything when they’re done with it. They’ve got to look at all that,” says Majewski. “Some of the smarter users are figuring it out. They say that tire didn’t last four months, that tire didn’t last six months. Your retread lasted a year. But they don’t believe you in the beginning.” Jason Lightbody says his core customers did not buy low-cost Chinese tires. Lightbody is manager of the tire Three generations of the Houska family are and oil division at Houska pictured (from left) LJ, vice president, and Dennis, stand by a portrait of Chuck Houska, Automotive Inc., a single store president, founder of Houska Automotive. The dealership’s offering retail and commercial commercial business grew 15% last year. services in Fort Collins, Colo. But Lightbody says his customers who to Brad Raben, vice president of comchose low-cost imports did not realize mercial sales at Raben Tire Co. LLC, the savings they expected. which holds the No. 17 spot. “We had some customers that put on “These products have a higher margin some lower cost Chinese import tires, and rate, but in the end cost us margin dolthey didn’t perform very well,” he says. lars. It has had some effect on retread “We’re talking flat repairs, irregularities margins but in most cases where they’ve in the tires, problems capping them. competed, the customers perceive the They found out pretty quickly that the new tire to be better. In many cases we initial $150 or $200 savings in the tire couldn’t get low enough with a retread is causing them some problems on the and casing to offer savings.” backside. Obviously, we’re not going to give them near the same kind of price for their casings. Over time, they weren’t providing the cost per mile.” The top 25 U.S. commercial tire dealers in 2016 . . . 48
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