Modern Tire Dealer - March 2022 by EndeavorBusinessMedia-VehicleRepairGroup

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ON WINTER TIRE SALES

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3/2/2022 9:02:10 AM

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3/2/2022 9:02:34 AM

3 QUESTIONS WITH FLYNN’S TIRE & AUTO SERVICE PRIME TIME FOR CAR PREP GET VEHICLES READY FOR SUMMER NOW

BREAKING

THE ICE

DEALERS SHARE WINTER TIRE SELLING TIPS

HOW CONSUMER FINANCING OPTIONS CAN BOOST YOUR BOTTOM LINE STRESS MANAGEMENT BEST PRACTICES FOR BUSY DEALERS

Month 2022 | Vol. 103, No. 3 | $10 | www.moderntiredealer.com

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3/10/22 9:12 AM

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2/28/2022 9:01:39 AM

The Industry’s Leading Publication March 2022, Volume 103, Number 3

44 Reno Vulcanizing Auto Care is celebrating its 100th anniversary. What are the secrets to the dealership’s success? Find out on page 44.

DEPARTMENTS 4 Editorial Don’t leave money on the table Are you fully leveraging TPMS service?

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

F E AT U R E S 22

Breaking the ice

A tool to serve more customers — and win more business

8 Industry News Nokian builds on forward momentum New products, customers are on the way in 2022

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

20 Your Marketplace

How offering more consumer financing options can boost your bottom line

Sell-out levels remain elevated Rising costs, lack of inventory could be headwinds

61 Business Insight A golden opportunity presents itself Despite ongoing challenges, there are things you can control — and fix

62 Mergers and Acquisitions More options equal more revenue Mobile tire service can be a powerful value-add for dealers

Point S dealers set another new high

A century of success

It’s OK to look out for ‘number one’

Zimmerman’s Automotive Tire Pros adapts to customers’ needs

67 USTMA targets sustainability, scrap markets and more

Nissan Rogue (Gas) – 2018-2020

72 Products 74 Ad index

Off-roading, ice cream, exercise and ‘talking shop’ Dealers tackle stress in different ways

Prime time for car prep

Better processes lead to more brake revenue

Association president outlines priorities for 2022

68 TPMS

Reno Vulcanizing Auto Care celebrates the big 100

Your own work-life balance is critical to your dealership’s success

66 Selling tires, service and cars

Focus On Industry

3 questions with Joe Flynn of Flynn’s Tire & Auto Service Dealership develops labor shortage work-arounds

Focus On Dealers 65 Doubling sales in five years

Dealers say presenting options, information key to selling winter tires

Richlonn’s Tire doesn’t wait to get vehicles ready for summer driving

Moore Tires puts Friedrich in charge of service growth

Modern Tire Dealer is a proud member of:

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

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2/28/22 3:12 PM

Editorial

Don’t leave money on the table ARE YOU FULLY LEVERAGING TPMS SERVICE? By

Mike Manges

hat’s your philosophy when it comes to tire pressure monitoring system (TPMS) service? Is it drudgery or an opportunity to grow your bottom line? Scott Flynn, director of TPMS sales for Autel, says TPMS service belongs in the latter category — if you’re willing to put in some extra time to educate customers. And by “extra time,” we’re talking minutes. In my October 2021 column, I wrote that nearly 100% of respondents to MTD’s latest Tire Dealer Automotive Service Survey offer TPMS service. (By contrast, 95% of respondents perform tire mounting and balancing. That’s how common TPMS work is.) TPMS service also can be lucrative, according to Flynn. “I think TPMS is a huge missed opportunity for some dealers,” he says. When a vehicle’s low tire pressure light comes on, “the focus for the dealer is to turn the light off and get the car back on the road. And that, of course, is important and ultimately what the customer wants.” But taking time to educate vehicle owners about TPMS sensors and their lifespans can pay big dividends, he adds. Most car owners equate the low pressure light with a lack of air in one or more tires. Fewer understand that the light also can be triggered by a TPMS sensor whose battery has died “or doesn’t work for another reason,” says Flynn. An illuminated low pressure light “is an opportunity to sell. If somebody comes in with a five- or six-year-old vehicle to buy tires from you, I believe it would be a good idea to say, ‘Your car is six years old and has its original TPMS sensors. Even though these sensors are working fine right now, the life of a sensor is usually seven to 10 years. I’m putting brand new tires on your car today. Would you like me to put brand new sensors on, so they last through the life of your new tires? We can do it all at once.’ “As a customer, I would appreciate having that option. But what I would not be happy with” is a dealer replacing only one sensor “and then the light comes back on three months later.” In a situation like that, “you could be telling the customer the truth — that they have a different sensor that’s gone bad — but the perception in the consumer’s mind is that you didn’t handle the job correctly the first time. “I believe we should always be explaining how TPMS systems work and the fact that sensors are going to go bad at some point. And there’s no date. It all depends on miles driven and environmental conditions. Extreme conditions will

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“I believe we should always be explaining how TPMS systems work,” says Scott Flynn, director of TPMS sales for Autel.

wear batteries out faster than milder conditions. That’s where education comes in. Give the consumer an option. And you can do this relatively quickly.” It takes a few minutes to explain the concept and then “it’s only going to take somewhere between 15 and 30 minutes to provide four-tire TPMS service. That’s going to save the customer from having to come back a short time later.” You also can use TPMS as a springboard into additional service work. “Anytime you can get a tire on a lift, that gives you an opportunity to do a visual inspection” and address uncovered needs, says Flynn. And make sure your technicians are up to speed on “what’s now out there” in terms of TPMS sensors and technology. “I think there are a lot of dealers who remember TPMS from 15 years ago, when it was very complicated and expensive. I would encourage all dealers to reevaluate TPMS with an open mind.” TPMS is such a prevalent part “of a tire dealer’s business that I think anyone who hasn’t (done so) needs to switch their mindset from ‘This is a necessary evil’ to ‘This is an opportunity to improve the profitability of my operation.’” You may already see it that way. Even better, you may already be doing some — or all — of the things that Scott recommends. If that’s the case, you’re ahead of the game. If not, what have you got to lose? ■ If you have any questions or comments, please email me at mmanges@10missions.com.

MTD March 2022

2/28/22 3:12 PM

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3/1/2022 1:25:32 PM

ModernTireDealer.com DIGITAL RESOURCES FOR THE INDEPENDENT TIRE DEALER

MTD website keeps you informed MTD’s website provides you with breaking news, feature articles, links to exclusive MTD research and blogs, new products and much more 24/7. Check it out today!

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eNewsletters Sign up now for Modern Tire Dealer eNewsletters. We’ll send you the latest news and most popular articles. Go to: www.moderntiredealer.com and scroll to The Modern Tire Dealer Newsletter is the Definitive Source for Tire Dealer Success.

Hit Digital Edition at the bottom of our www.moderntiredealer.com homepage.

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An exclusive interview with RoboTire’s executives was one of the most well-read articles on MTD’s website this past month. RoboTire demonstrated its automated tire installation machine during the 2021 Specialty Equipment Market Association Show.

Tire industry looks ahead to rest of 2022 Exclusive analysis from MTD columnist John Healy dominated our most-read articles during the past month. In a series of interview excerpts, Healy provided updates on the Goodyear-Cooper deal, issues facing tire dealers in 2022 and more. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

U.S. AutoForce acquires Max Finkelstein Changes from Cooper-Goodyear deal are still to come RoboTire says machine can install four tires in 20 minutes What’s ahead for tire pricing and tariffs Goodbye to Sears Auto Centers Mavis acquires Action Gator Tire’s retail stores The 3 top issues tire dealers should track in 2022 2022 could be an even bigger year for mergers/acquisitions Michelin will increase prices in April Point S has doubled sales in 5 years

HOME OFFICE 3515 Massillon Rd., Suite 350 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 Website: www.moderntiredealer.com PUBLISHER Greg Smith gsmith@10missions.com (330) 899-2200, Ext. 2212 EDITORIAL Editor: Mike Manges, ext. 2213 mmanges@10missions.com Managing Editor: Ron Ledgard, ext. 2216 rledgard@10missions.com Senior Editor & Digital Projects Editor: Joy Kopcha, ext. 2215 jkopcha@10missions.com PRODUCTION Art Director: Zach Pate Graphic Designer: Audrey Mundstock Production Manager: Karen Runion, ext. 2210 krunion@10missions.com Production Artist: Lauren Coleman MARKETING STRATEGISTS Bob Marinez bmarinez@10missions.com (330) 899-2200, ext. 2217 Marianne Dyal mdyal@10missions.com (706) 344-1388 Dan Thornton dthornton@10missions.com (734) 676-9135 Sean Thornton sthornton@10missions.com (269) 499-0257 Kyle Shaw kshaw@10missions.com (651) 846-9490 Martha Severson mseverson@10missions.com (651) 846-9452 Chad Hjellming chjellming@10missions.com (651) 846-9463 MTD READER ADVISORY BOARD Rick Benton, Black’s Tire Service Inc. Jessica Palanjian Rankin, Grand Prix Performance John McCarthy Jr., McCarthy Tire Service Co. Inc. Jamie Ward, Tire Discounters Inc. CUSTOMER/SUBSCRIPTION SERVICE (800) 260-0562 subscriptions@moderntiredealer.com

EXECUTIVE OFFICE 10 Missions Media 571 Snelling Ave. N. St. Paul, MN 55104 (651) 224-6207 CORPORATE OFFICERS President: Jay DeWitt Vice President: Chris Messer 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 © 2022 by 10 Missions Media, LLC. All rights reserved. Modern Tire Dealer content may not be photocopied, reproduced, or redistributed without the consent of the publisher. Periodicals postage paid at St Paul, MN and additional mailing offices. POSTMASTERS Send address changes to: Modern Tire Dealer, 571 Snelling Ave N, St. Paul, MN 55104.

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MTD March 2022

3/2/22 4:28 PM

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2/28/2022 9:01:08 AM

Industry News

Nokian builds on forward momentum NEW PRODUCTS, CUSTOMERS ARE ON THE WAY IN 2022

“M

omentum” might be the operative word at Nokian Tyres plc right now. Coming off a record year in which the company grew its Americas sales by nearly 40%, Nokian is aggressively expanding its product offering with the Hakkapeliitta R5 — the latest addition to its signature winter tire family — and its new Outpost line of all-terrain tires. Meanwhile, Nokian’s plant in Dayton, Tenn., is running at full throttle. And the company continues to grab additional shelf space within its customer base. Tommy Heinonen, Nokian’s vice president of sales, North America, and Steve Bourassa, director of products, discuss all of the above and more in this MTD exclusive. MTD: The North American market enjoyed a huge rebound last year. What do you attribute that to? Did Nokian’s business follow suit? Heinonen: You are absolutely right — 2021 was a great, great year for the industry in North America, as well as (for) Nokian Tyres. We can say we beat the market, so we gained market share. Our growth was double-digits in North America. We are very happy with how the year developed. Our team did a great job. Our partners — meaning our dealers — did an excellent job. MTD: Were you able to grow your dealer base last year? Heinonen: Yes. But we did not open as many new customers as (we) were planning because of the supply limitations that everyone was facing. We wanted to take care of our existing partners instead of opening up everybody we know. It’s a partnership and that means we don’t want to open customers (just) so we can say, ‘Hey, this is now open.’ We want a mutual commitment. MTD: Nokian has been extremely selective when it comes to adding dealers to its

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network. Why has this been a successful strategy for the company?

existing machinery and there are more investments coming.

Heinonen: We definitely don’t want to be over-distributed. We’re relationship-builders. We want to open long-term customer relationships. We don’t want to be the flavor of the month for somebody. That’s the way the business can be healthy and it enables our dealers to earn healthy profits.

MTD: What opportunities does Nokian see in 2022?

MTD: Are there certain parts of the U.S. where Nokian might be under-indexed in terms of its dealer presence? Heinonen: For sure. We are strong in winter tire areas and that’s easy to understand. But there are still several states in the south where we still have a lot of opportunities. MTD: Nokian has maintained a regular schedule of new product introductions. Several tires were introduced last year, including the Nokian One, and there have been more recent introductions. Why is it important to keep rolling out new products? Bourassa: Because we’re a leader in the winter tire segment, we want to keep our winter products fresh. We want to make sure we have the latest technologies to bring (to market) in that segment. We’re aiming to serve as a leader in all-season innovation, too, by using robust investment in research and development, guided by feedback from our customers and from consumers — trying to get a fairly quick turnaround on making product improvements. MTD: Can you bring us up to speed on the Dayton, Tenn., plant? Heinonen: Dayton is helping us and is contributing more and more, day after day. It’s very vital for our business. Dayton produced roughly a million tires in 2021 and we are on a growth path for this year and then ramping up production all the time, as planned. We are utilizing

Heinonen: Even though we have been growing with our existing customers, there are still a lot of things we can do with them. We are developing and deepening our relationships with existing customers and making sure we are maximizing our in-store shares with customers. And we are all the time scout- “We definitely ing opportunities to don’t want to be open new accounts over-distributed,” Tommi Heiin places where we says nonen, Nokian’s have white spots on vice president of sales, North Amerour map. ica. “We want to open long-term customer relationships. We don’t want to be the flavor of the month for somebody.”

Bourassa: 2022 will definitely be very exciting from a tire perspective. We have our new Outpost family of products, (including) an all-terrain product that comes with an improved size range and better looks that I think is going to be accepted by our customers. We have a new Outpost APT that’s diving into a new segment. And then we have the new Hakkapeliitta R5 also coming this year. MTD: Right now, demand is really good. Do you think the current demand trajectory will continue in North America? Heinonen: Our dealers are indicating strong demand and so far no dealer has been commenting that demand is declining. But of course, everyone can understand that this can’t continue forever. I’m expecting this is the year when (the market) will normalize and demand and supply will be closer to each other. MTD March 2022

3/6/22 6:41 PM

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SCAN TO WATCH

TRAINING VIDEOS

YOUTUBE

2/28/2022 9:00:41 AM

Industry News

2021 replacement tire shipments exceeded pre-pandemic levels

Bites Michelin to hike prices Michelin North America Inc. will increase prices on select Michelin, BFGoodrich and Uniroyal brand passenger and light truck winter tires up to 5% on April 1. The increase applies to both the U.S. and Canada.

Continental will raise prices Continental Tire the Americas will raise prices on select Continental and General passenger and light truck prices in the United States on April 1. The amounts will vary by product and brand.

SRNA prices go up Sumitomo Rubber North America Inc. increased prices of its Falken and Ohtsu passenger, light truck and medium truck tires on March 1. Inline adjustments will be made on a per-size basis.

Pirelli ‘growing quickly’ Pirelli & Cie SpA’s Executive Vice Chairman and CEO Marco Tronchetti Provera expects 2022 to be another strong year for the tire industry. “North America is one of our key markets and a market that is growing for us,” he recently said. “We are successful in delivering products and our clients are asking for more.”

omestic replacement tire shipments in three categories — passenger, light truck and truck and bus — outstripped prior-year numbers and exceeded prepandemic levels during 2021, according to final, full-year numbers from the U.S. Tire Manufacturers Association (USTMA). A total of 224.7 million replacement passenger tires were shipped in the U.S. during 2021, a 10.3% year-over-year increase, according to USTMA. In the light truck tire segment, 38.6 million units were shipped in the replacement channel, a 17.2% increase over full-year 2020 levels. Gains were even bigger in the truck and bus tire segment, where 22.8 million replacement units were shipped domestically, a 19.3% year-over-year jump. U.S. original equipment shipments during 2021 also exceeded full-year 2020 levels, with truck and bus tire shipments experiencing the biggest gains. Approximately 37.4 million OE passenger tires shipped domestically during 2021, a year-over-year increase of 0.7%. And 5.6 million light truck tires shipped in the OE channel last year, a year-over-year Nearly 23 million replacement truck tires were shipped in increase of 4.9%. U.S. OE truck and bus tire shipments totaled the U.S. during 2021, a 19.3% jump. (Pictured, Justin Smith nearly 5.9 million units, a 25% leap from full-year of Exit 11 Truck Tire Service in 2020 levels. Richfield, Ohio.)

Coast Tire buys out Goodyear’s share

Taylor predicts boost Titan International Inc. Chairman Morry Taylor says the forecast for the ag and OTR tire segments is bright, as a record number of acres will be planted in 2022 in the U.S. The order books of major equipment manufacturers are “nearly full,” he says.

TIA sets training dates

A four-person ownership team has bought out Goodyear’s 49% share of Coast Tire & Auto Service, which operates in the Maritimes.

The Tire Industry Association has scheduled in-person training classes for both commercial and automotive tire service technicians in 2022. Details are available at www.tireindustry.org.

David Andreoli moves up Andreoli & Associates Inc., which does business as Andreoli Software, has a new owner, David Andreoli, who has taken the helm of the point-of-sale software provider from its founder, Mike Andreoli. Most recently, David served as product manager for the company’s next-generation wholesale and e-commerce platform.

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aint John, New Brunswick-based Coast Tire & Auto Service is now 100% independently owned, having acquired 49% of its remaining shares from Goodyear Tire & Rubber Co. The 26-store dealership’s ownership team includes Ron Outerbridge, its president and CEO; John Correia, Coast Tire’s vice president of sales and marketing; Peter Coleman, vice president of finance and administration; and Gary Mott, director of retail operations. “This strategic vision has been the plan for our company for several years,” says Outerbridge, who adds that Coast Tire’s employees “have been instrumental in growing” the company’s business in the Maritimes provinces of Canada. Coast Tire — which sells both consumer and commercial tires — has locations in New Brunswick, Nova Scotia and Prince Edward Island, plus a truck tire retread plant and wheel refinishing facility in Moncton, New Brunswick. “This new phase of business opens opportunities to expand our product and service offerings and expand the retail and commercial service business,” says Correia. MTD March 2022

3/1/22 8:24 PM

A LONG WAY

TOGETHER

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2/28/2022 9:02:20 AM

Industry News

Hilltop Tire Service celebrates 95 years in business

Bites Pre-Q adds Heintschel Texarkana, Texas-based Heintschel Truck Tire Center has joined Pre-Q Galgo Corp.’s network of independent retreaders. In addition to retreads, the family-owned dealership also offers commercial truck, OTR, ag and industrial tires.

Sentury rebrands GroundSpeed Sentury Tire USA has rebranded its GroundSpeed line with a new website, groundspeedtires.com, that features an intuitive interface, as well as userfriendly search tools, including options for vehicle year, make and model, plus tire size or category.

New Right to Repair bills Three U.S. lawmakers introduced two bills in an effort to back the Right to Repair movement. The Freedom to Repair Act would reform copyright law to provide easier access to repair information. A separate bill would give consumers and independent auto repair shops equal access to vehicle data.

Bridgestone recalls tires Bridgestone Americas Inc. and Bridgestone Canada Inc. are recalling 10,380 Firestone Transforce HT and AT tires in size LT275/70R18 due to a possible problem with the inner liner rubber compound.

Tire Safety Week set The U.S. Tire Manufacturers Association’s annual consumer awareness campaign, National Tire Safety Week, will take place June 27-July 3.

RNR adds leaders RNR Tire Express has promoted Tracy Cintron to the role of franchise director. Candace Lovett was promoted to national marketing director and Susan Vice has joined the company to serve as its financial controller.

Port sets record The Port of Los Angeles set a western hemisphere record for cargo processing during 2021, moving 10.7 million twentyfoot equivalent units. The facility is the largest port in North America by container volume and cargo value.

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illtop Tire Service, a family-owned and operated dealership, is celebrating 95 years in business. Leonard Holt, the great-grandfather of present owners Wes Holt and Loren Holt, founded the company in 1927. It is the oldest tire and auto repair company in Des Moines, Iowa. “We have reached this significant milestone by staying focused on the one thing that was most important to my great-grandfather when he first started doing business – excellent customer service,” says Wes Holt, president, Hilltop Tire Service. According to Holt, the dealership started as a small gas station on the same corner of East 29th Street and Hubbell Avenue, where the company continues to thrive today. “Back then, there wasn’t much competition for the other two Marking its 95th year in business, Hilltop Tire Service prosperous gas stations remains committed to providing “excellent customer seron the same corner,” says vice,” says Wes Holt. The three-store dealership is based in Des Moines, Iowa. Holt. “So the first thing my great-grandfather did was lengthen his hours of business dramatically longer than the competition and showered his customers with exceptional customer service.” A few years later, the dealership started selling tires. “It’s pretty much all history from there,” Holt says. Hilltop Tire Service now has three locations around Des Moines.

Sears Auto Centers exits market

he coming of the final chapter has been apparent for quite some time, but it’s finally official. Every Sears Auto Centers location has closed. The last 39 locations have shut their doors since the end of 2020. At one time, Sears, Roebuck and Co. sold more than 20 million tires a year. In 2017, MTD put that number at around 3 million. At the time, there were still 650 Sears Auto Centers. That reflected a closure of about 150 stores in the previous nine years. Twenty years ago, the Sears brand held 4% of United States replacement market share in passenger tires and 3.5% share in light truck tires. By 2011, Sears had dropped to 1% market share in passenger tires and had already fallen off the light truck tire list. A year later, the Sears name disappeared from MTD’s brand market share lists. Sears was also an important part of the story for Michelin North America Inc. In 2015, Sears and Michelin celebrated 50 years in business together. In that time, Sears had sold more than 135 million Michelin-made tires — more than any other retailer. In February 2017, the company tried to reinvent its automotive story with DieHard Auto Center Driven by Sears. The stores leaned on the popular DieHard name and sold DieHard brand tires, which had been unveiled a year earlier. But the concept never grew beyond first test markets in Texas and Michigan. At the end of 2019, Advance Auto Parts Inc. acquired the DieHard name for $200 million. Independent tire dealers can sell DieHard batteries. In September 2021, Bridgestone Retail Operations stores started stocking them. MTD March 2022

3/3/22 7:37 PM

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3/3/2022 7:41:27 AM

Industry News

Bites

CTDA inducts five into new Hall of Fame

GM converts plant to EVs General Motors recently announced plans to spend nearly $7 billion to convert a factory in Michigan to electric pickup truck production and to build a new battery cell plant.

Mickey sponsors ride Mickey Thompson Tires & Wheels is again sponsoring the Great American Crawl, a series of group 4x4 trail rides to popular destinations around the country.

Big O groups buy land As part of their joint venture, Leeds West Groups and The Monteverde Group have purchased the real estate for two Big O locations in Corpus Christi, Texas. The Big O franchisees took over operations of these stores in 2019.

Linglong extends deal Shandong Linglong Tire Co. says it has renewed its sponsorship of German soccer club Vfl Wolfsburg and will remain the team’s official tire partner.

TireHub names CEO Ted Becker is TireHub LLC’s new CEO. A former Michelin North America Inc. executive, Becker joined TireHub in August 2020. Most recently he served as the company’s interim CEO after the exit of Peter Gibbons.

Ex-Goodyear exec dies Brent Copeland, former president of Goodyear Tire & Rubber Co.’s old Wingfoot Commercial Tire Systems subsidiary, died Feb. 5. He was 68. He retired from Goodyear in 2017.

Among the speakers and guests who attended the California Tire Dealers Association/1-800EveryRim New Year Luncheon, were, from left to right, Steve Swanson, national sales manager, The Carlstar Group; Chris Barry, sales director, Independent Tire Dealers Group LLC; Billy Eordekian of 1-800EveryRim OEM Wheels; Dr. Roy Littlefield, former Tire Industry Association (TIA) CEO; and TIA President Mason Hess.

he induction of five individuals into the new California Tire Dealers Association (CTDA) Hall of Fame highlighted the 2022 CTDA/1-800 EveryRim New Year Luncheon, which recently took place in Santa Fe Springs. Calif. Members of the first CTDA Hall of Fame class include: • The late Eddie Cohn, who joined his father’s business, Cohn’s Tire, in 1958 and was a longtime executive director of the CTDA (South); • Jay Goldberg, a longtime board member of the CTDA and a principal at Globe Tire who also was equally active on the national association level; • The late Tom Hanlon, a former CTDA president and board member who also ran Hanlon’s Tire Service in San Bruno, Calif; • The late Ed King, an insurance agent who helped establish the association’s primary insurance carrier. He also sat on the CTDA’s board and was a past executive director of the association, and; • Don Zavattero, long-time secretary/treasurer and board member of the CTDA.

During the event, several speakers addressed issues of importance to tire dealers. Tire Industry Association (TIA) President Mason Hess, who also serves as director of Purcell Tire & Rubber Co.’s global mining division, said the current labor shortage impacting the tire industry has put “the safety risk on steroids right now.” Dr. Roy Littlefield, retired CEO of TIA and current part-time lobbyist for the association, discussed a number of legislative issues facing the industry. Greg Smith, publisher of MTD, told dealers that merger and acquisition activities would continue in the tire industry, but the market is cyclical and there are great opportunities for smaller dealers to establish themselves within their communities and grow.

Titan, Kubota sign deal Titan International Inc. and Kubota Tractor Corp. have entered into an exclusivity agreement on certain sizes of Titan’s new Trac Loader II tires for compact and utility tractors. The tire will sport both the Titan and Kubota brands on the sidewall.

SRNA names OE director Sumitomo Rubber North America Inc. has promoted Cliff Stewart to director of original equipment sales for the company’s Falken brand.

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Record number of businesses hike wages

historic number of small businesses — 50% — raised employee compensation this past January, according to the National Federation of Independent Businesses (NFIB), which also reports that 27% of small business owners plan to raise pay within the next three months. “Reports of owners raising compensation (remain) at record-high levels to attract applicants to open positions,” says NFIB Chief Economist Bill Dunkelberg. Twenty-three percent of small business owners surveyed by the NFIB cited “labor quality” as their top challenge, while 11% said labor costs are their number one problem. MTD March 2022

3/3/22 7:38 PM

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3/2/2022 3:53:14 PM

Industry News

Purcell acquires Callender Tire in Colorado

Bites Alfa Romeo picks Pirelli Alfa Romeo has picked Pirello P Zero tires, in size 235/40R20, to be original equipment on the Tonale, the carmaker’s first mass-production electric vehicle.

Bridgestone hires Colletti Bridgestone Americas Inc. named David Colletti president of consumer original equipment tire sales in North America. He most recently led OE efforts at Sumitomo Rubber North America Inc.

East Bay Tire expands East Bay Tire Co. has acquired Brandon Tire Supply of San Rafael, Calif. John Brandon and the Brandon family operated the business for six decades. East Bay Tire has 13 locations, including nine in California.

urcell Tire & Rubber Co. has acquired Commerce City, Colo.based Callender Tire Inc., a big OTR, commercial truck and industrial tire dealership. Founded in 2000 by Tom and Anne Callender, the dealership serves the Denver, Aurora, Parker, Castle Rock, Centennial, Englewood, Littleton, Arvada, Golden, Erie, Westminster, Longmont, Loveland and Greeley, Colo., markets. In addition to new tires, Callender Tire offers 24/7 emergency Purcell Tire & Rubber Co. has expanded its roadside assistance and mobile service presence in Colorado with the purchase of to commercial customers. Callender Tire. Based in Potosi, Mo., Purcell is one of the 10 largest commercial tire dealerships in the United States, according to MTD research.

OK Tire Stores names CEO Jim Bethune has joined OK Tire Stores Inc. as president and CEO. He’ll lead the network of 325-plus locations in Canada.

Don Williams, Jay Goldberg and Bucky Stein die

McCarthy adds locations McCarthy Tire Service Co. Inc. has agreed to purchase LS Truck Tire Repair Inc., which has five locations in Philadelphia and New Jersey. LS Truck Tire offers commercial tire sales and service, wheel balancing, alignments, wheel reconditioning and road service.

Hankook is OE on Infiniti Hankook & Co. is adding to its original equipment portfolio with a fitment on the 2022 Infiniti QX60. The vehicle will drive on Dynapro HP2 tires in size 255/50R20. The tires will be produced at Hankook’s plant in Clarksville, Tenn.

Hercules marks 70 years As part of the 70th anniversary of Herculs Tire & Rubber Co., American Tire Distributors Inc. is revitalizing both the Hercules and Ironman brands with new styling, brand positioning and products.

TBC promotes Doster Geoff Doster has been promoted to president and chief operating officer of TBC Brands LLC and TBC International. He’s been with the company since 2003.

02_MTD_News-Numbers.indd 16

he industry recently lost several longtime tire dealers. Former Texas Tire & Automotive Association (TTTA) President Don Williams died at age 86 on Feb. 9. In 1973, Williams opened Williams Tire Store in Coleman, Texas. The dealership eventually expanded into other Texas towns, including San Angelo, Brady, Seguin, Brownwood and Ballinger. Williams served as TTAA president from 1997 to 1998. Jay Goldberg, former partner at Globe Tire and a member of the California Tire Dealers Association (CTDA) Hall of Fame, died on Feb. 8. He was 86. Goldberg first worked for his father’s business, Anderson Tire, a Los Angeles, Calif.-based dealership. “They were big retreaders and had a big contract with Sears Auto Centers,” says CTDA President Bill Eordekian. “They picked up all of Sears’ casings and used tires. They had distribution not only in California, but also as far east as Texas and the Midwest.” Goldberg later opened Semperit Pacific Tire and then became a principal at Globe Tire, an 18-location dealership based in east Los Angeles. He was inducted into the CTDA’s Hall of Fame this past January. Leonard “Bucky” Stein, a Tire Industry Hall of Fame member and founder of Target Tire, died Feb. 13. He was 96 years old. Stein went into the tire business with his father after World War II and later established Target Tire in Jacksonville, N.C. in 1963. He started his own tire brand, Avalon, in 1970 and grew Target Tire into one of the largest tire distributors in the southeastern United States with more than 10 distribution centers and at one time, more than 1,800 customers. In 2004, Stein was named chairman of American Car Care Centers. Later that year, he sold Target Tire to American Tire Distributors Inc. In 2012, he was inducted into the North Carolina Tire Dealers Hall of Fame. Three years later, he was inducted into the Tire Industry Hall of Fame. ■ MTD March 2022

3/8/22 9:30 AM

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3/1/2022 9:38:51 AM

NumbersThatCount

Relevant statistics from an industry in constant motion

200,000

The number of reservations that Ford Motor Co. has taken for its all-electric F-150 Lightning. Ford initially planned to make 75,000 units of the Lightning per year, but because of demand, the company is trying to double production. SOURCE: NYTIMES.COM

50%

By 2030, the Biden Administration wants half of cars that are manufactured in the United States to be electric.

The percent of new cars worldwide that are electric, up from 2.5% in 2019.

SOURCE: VOX.COM

SOURCE: INTERNATIONAL ENERGY AGENCY

SOURCE: VOX.COM

SOURCE: SOCIETY OF AUTOMOTIVE ANALYSTS

The number of automakers that used 30-second commercials to promote their electric cars during last month’s Super Bowl broadcast. They included General Motors, BMW, Kia, Polestar and Nissan.

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The number of different electric vehicles available in the U.S. during 2020. That number is expected to increase to 153 by 2025, according to General Motors.

MTD March 2022

3/1/22 8:24 PM

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2/28/2022 9:12:04 AM

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

Sell-out rates remain elevated

RISING COSTS, LACK OF INVENTORY COULD BE HEADWINDS By

John Healy

ecent dealer commentary suggests that consumer demand for replacement passenger and light truck tires during January 2022 was higher on a net basis compared to January of last year and slightly above January of 2020. However, demand declined sequentially from levels seen in December 2021. The net number of respondents to our latest survey who indicated that they saw positive demand on a year-over-year basis was 15%, which compares to December’s reading of 43%. Dealers noted a tight supply environment and inflationary pressures on raw materials and labor — as well as vehicle owners spending the bare minimum on repairs — as catalysts for the sequential decline in tire volume. We continue to hold a perspective that volumes in the long run will become more closely aligned with the current level of GDP growth, while acknowledging that rising costs and lack of inventory could be headwinds in the near-term.

REGION AND TIER REPORT

From a volume standpoint, we note that the Southeast and Midwest are exhibiting positive trends, with the Southwest and Mid-Atlantic lagging behind when compared to 2021 levels. We believe January faced headwinds from the omicron variant of COVID-19, as well as the above factors, which may make the road ahead a bit bumpier than we anticipated.

When it comes to consumer preference, our recent survey of dealers shows that tier-three consumer tire brands were extremely popular among end users during the month of January. Our contacts tell us that this is a function of price increases applied to tier-one brands, as well as dealers’ ability to source less-expensive alternatives. Now that COVID-19 infection rates are falling, resulting in a more normalized level of vehicle miles traveled, we believe some consumers will opt for more expensive brands in the long-run.

RAW MATERIAL UPDATE

The basket of raw materials needed to make a common replacement vehicle tire rose 27% on a year-over-year basis in January, while increasing on a sequential basis by 4.1% from December 2021. This continues the trend of increasing raw material price inputs on a year-overyear basis that began at the start of the year, although year-over-year increases have continued to moderate since April 2021 highs. We believe that holding current spot prices flat would yield a 23.3% year-overyear increase in input costs to build a tire during the first quarter of 2022 — up 3.6% from the fourth quarter of 2021. In assessing raw material price movements, we note carbon black has seen its price increase on a year-over-year basis for 13 months straight now, while declining 1.9%

Snapshot of Dealers’ PLT Tire Volumes (Year-Over-Year Change) Nov-20

Dec-20

Jan-21

Nov-21

Dec-21

Jan-22

Average

Increase

45%

30%

50%

64%

38%

41%

Flat

11%

20%

17%

14%

37%

28%

Decline

44%

55%

50%

33%

22%

25%

31%

Total

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

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sequentially from December 2021, as January posted a year-over-year increase of 49.7%. Crude oil prices saw extreme cost pressures at the beginning of the pandemic. But geopolitical risks have driven oil prices higher in 2022. We note that January saw a 59% yearover-year increase in the price of oil. Natural rubber prices declined 1.8% in January, marking the fourth straight month of year-over-year declines as prices moderate. Synthetic rubber costs were up 19% on a year-over-year basis in January, while up slightly less than 1% from December. Finally, price pressures on tire reinforcement items tracked higher on a year-overyear basis during the back half 2021. That trend has continued as January showed a 27.3% price increase in reinforcement items

CONSISTENCY IS KING

When examining the landscape from a longer-term view, we continue to believe that the consumer tire pricing environment in North America will remain rational and in-line with raw material costs. We expect tire manufacturers to remain disciplined in their efforts to manage the price/volume trade-off in order to maximize operating profit rather than market share. We are pleased with the disciplined approach to production schedules that we have seen at the manufacturing level. Furthermore, global tire inventory levels remain relatively lean. We also continue to observe that tire dealers and wholesalers are being tactical with their approach to inventory allocation given recent pricing actions, supply chain issues and other factors. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland. Healy covers a variety of subsectors of the automotive industry.

MTD March 2022

3/1/22 8:24 PM

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2/28/2022 9:10:55 AM

Winter tires

Ken Noble says the conversation around every tire sale — especially winter tires — at Superior Tire Inc. is focused on vehicle application. “I know a lot of tire dealers would say I’m crazy” for selling so many all-weather tires, rather than separate winter and summer sets.

Breaking the ice DEALERS SAY PRESENTING OPTIONS, INFORMATION KEY TO SELLING WINTER TIRES By

Joy Kopcha

ith some time left in the current winter season, dealers have already placed their winter tire orders for the next one. We recently talked with three tire dealers about the differing conditions in their markets and found that each one is forging a unique path to winter tire profitability.

03_MTD_Feature-3Questions.indd 22

EDUCATION IS KEY

In Great Falls, Mont., Ken Noble and his team at Superior Tire Inc. are educating a new crop of customers about the benefits of winter tires. As remote work has become the norm due to the COVID19 pandemic, the central Montana community of Great Falls has become attractive to workers on the move. Superior Tire’s consumer tire sales are growing as more people relocate to the area. And that is reflected in the dealership’s mix of products. Historically, the single-store operation has been heavily focused on commercial and farm tires. Those products are still important, as Great Falls remains a farming community. But Noble says the company’s tire sales mix has changed to 55% commercial and 45% consumer. On the consumer tire side, some of that growth has come from new residents who aren’t accustomed to winter driving conditions. “When we’re talking to people — especially new customers — we ask how they drive, where they drive and what they drive,” says Noble, who has been in business since 2000. “We try to determine how they use their vehicles to get the right tire for their application.” MTD March 2022

3/1/22 8:27 PM

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2/28/2022 9:09:29 AM

Winter tires start three stores and be profitable overnight, but I don’t have the people. “There are two towns I’d love to expand to, but I will not until I have the people” to staff them. “I can’t bring myself to open a store and not offer the quality service that I expect.” Noble says he used to operate with a crew of 12 people. “Now I have four and our business has increased 30%.” Superior Tire’s wages have tripled to ensure that its employees don’t leave. “The guys haven’t had a lunch break in two years,” he says. “Fortunately, I’ve got four people who are willing to do that and are capable of that, which has been a blessing.” Don Foshay Sr., left, started the family’s wholesale business, Summit of New England, in 1982, and then opened a retail store under the Don Foshay’s Discount Tire & Alignment banner in 1985. His sons Don Jr., center, and Mike, right, joined in 1984 and 1991, respectively.

Despite calling Maine home, Don Foshay’s Discount Tire & Alignment customers typically aren’t interested in managing two sets of tires, says Don Foshay Jr. His customers are more likely to look at the condition of their tires before winter hits and decide if they need replacements, but they won’t necessarily install a dedicated winter tire.

Though Montana allows the use of studded tires from October through May, Noble says he sells mostly studless winter tires. When he does sell a studded winter tire, it’s because the customer specifically asked for it. Noble says he’s added another product to his winter tire sales conversations — the all-weather tire. “In the last four or five years, we’ve really marketed the all-weather tire. It works extremely well in this part of the country. We started with the Toyo Celsius.” Noble says the all-weather product, which is Superior Tire’s most popular passenger tire, is a good match for the fickle winter weather in his area. The dealership also sells the Nokian WR G4 all-weather tire. Explaining the features and benefits of winter and all-weather tires is important, says Noble. And those explanations work outside of the winter tire selling season and extend to other tires, as well. Noble says he stocks about $1 million worth of tires and in the last couple of years, Superior Tire has been turning its inventory at least four times a year. Business is so brisk that “I could add stores in some outlying communities. I could

03_MTD_Feature-3Questions.indd 24

CHANGES IN MAINE

The winter tire selling season isn’t what it used to be for brothers Don and Mike Foshay, the president and vice president, respectively, of Don Foshay’s Discount Tire & Alignment, a six-store retail business in Maine, and Summit of New England, a wholesale business that serves customers in four states. They’ve both spent more than 30 years in the business that their father, Don Foshay Sr., started in 1982. “When Mike and I were first in this business, we sold a lot of snow tires — even going back as far as retreaded snow tires,” says Don Jr. “We used to bring in a very sizable inventory of retreaded snow tires. As the technology has gotten better with the design of all-terrain and all-season products — and also (as) the design’s gotten better with all-wheel-drive automobiles,” local demand for winter tires has declined. “We’re still very, very busy in that fourth quarter. It’s a lot of units — just not a lot of snow units.” Still, Mike says Summit of New England ordered about 10,000 winter tires for the season. The wholesale business serves the Foshay family’s retail stores, as well as other independent tire dealerships and some car dealerships. One thing winter tires need to have is the ability to add studs. “We are 80% studded and 20% studless,” says Don Jr. “When we’re shopping for snow tires for the next year, having a studdable product is an absolute must for us to take on a product line.” Falken and Cooper brand products make up most of the Foshays’ winter tire lineup. Thirty-five years ago, they established a relationship with Cooper Tire & Rubber Co. (Their retail stores are heavily branded with the Cooper name.) “As our (winter) inventory winds down with Cooper, we’ll fill in whatever we can get for the retail stores,” says Don Jr. “The intention on the wholesale (side) is to run out of product so you’re not carrying product forward.” Supply chain issues have prompted the Foshays to increase their overall wholesale inventory. But there was an exception this season. They ordered the same number of winter tires as they have in the past. Meanwhile, sales of other units increased. If the Foshays had increased winter units, too, Don Jr. says, “I would be storing tires on the roof. Fill rates have caused us to really bump up our inventory, which reduces our turns — which obviously reduces your profitability.” MTD March 2022

3/1/22 8:33 PM

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Winter tires SUCCESS WITH STORAGE

Nearly 2,500 miles to the west of Maine, in Woods Cross, Utah, Casey Gubler says winter weather isn’t like what he remembers from his childhood. And those changes are affecting winter tire sales at Woods Cross Point S, the retail store he owns with his father. “Winters have changed with global warming. We’re not getting as much snow at times. When I was a kid, you’d look at the Great Salt Lake and it was a lot bigger and it had more water in it. It’s definitely shrunken up in my lifetime.” Three-day snowstorms are mostly a thing of the past, he says. Now, clearing snow requires a shovel more than a snowblower and Gubler says fewer people are committing to winter tires. “That’s been the toss-up for people — should they buy snow tires? They know what (winter tires) do. They know they need them, but (the question is), are they going to need them this year?” And with higher tire prices, Gubler says plenty of consumers are willing to push the envelope. But he’s still made investments to lock in winter tire customers. Woods Cross Point S is a single-store dealership, but it’s grown to encompass a small campus of three adjacent buildings. The company’s main property has 10 service bays. A building behind it houses an alignment bay, plus one more lift. The company recently expanded into a climate-controlled, 40,000-square-foot building next door. Gubler knocked through a wall to install an 18-foot-by-18-foot garage door. One small piece of that building’s use is seasonal tire storage for customers. There are also seven more vehicle lifts inside. Seasonal tire customers start arriving around Halloween for their winter tire installs. Gubler charges $50 for each season of storage — $100 for a full year. He charges for tire installation and any related tire pressure monitoring system service. “I have 75 sets that I store for people” who lack their own space. “For them, it’s a no-brainer. We have dedicated racks. We tag (the tires,) store them and make a small income doing that.” Gubler says his family’s dealership has been in different spaces over the years. In other locations, they had no space to offer seasonal tire storage. “When people would ask, I’d have to say no because I’d

All-weather tires are becoming more popular, says Casey Gubler, co-owner of Woods Cross Point S in Woods Cross, Utah. He says all-weather tires are an especially good option for lowmileage drivers who can run up to four winter seasons on them before needing a replacement.

03_MTD_Feature-3Questions.indd 26

About 30% of overall sales at Woods Cross Point S are tires. Auto service work at the company includes everything from traditional mechanical services to lift kits and suspensions, window tinting and even storage.

One new profit stream for Woods Cross Point S has been offering climate-controlled storage for boats and campers inside its newest building. Casey Gubler says tenants pay him monthly. The service helps him find new customers for his tire and automotive service business.

just be tripping over them.” Adding a third building opened up that opportunity. “It’s really evolved,” he says. “Every year we’re storing more and more. We have the space to accommodate.” And he’s not just talking about winter tires. Woods Cross Point S is marketing space as weatherized storage for recreational vehicles. They store boats, off-road vehicles and campers. The price for storage depends on how much space a vehicle requires. “It’s just another way to set myself apart from my competitors and another way to make a profit. We’re in our second year of doing that.” The vehicle storage business helps his tire and automotive business, too. “Everyone who boats has friends with boats. A lot of people (have partner owners) with boats and one partner is our customer” and the other isn’t. “He brings his friend to me and we have a chance to help him and their vehicles. It’s another way to earn a new customer.” Gubler says most of those boat owners have four or five cars at home.“They see what we’ve built and what we’re trying to create. We try to keep a really nice facility and keep up with new technology and new equipment.” ■ MTD March 2022

3/1/22 8:33 PM

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2/28/2022 9:28:40 AM

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2/28/2022 9:28:55 AM

Consumer financing

“Not everyone can afford large transactions – such as replacing tires or a transmission – out of pocket,” says Trey McQueen, automotive account executive, American First Finance Inc. “But all consumers need to get tires, wheels or automotive repair services from time to time.”

A tool to serve more customers — and win more business HOW OFFERING MORE CONSUMER FINANCING OPTIONS CAN BOOST YOUR BOTTOM LINE By

Joy Kopcha

hen it comes to financing, consumers don’t fit into a one-size-fits-all solution. An increasing number of financial companies are offering products to help serve consumers with less-than-perfect credit. Tire dealers who have expanded their credit offerings beyond the traditional store-branded credit card have seen positive results. Dealers are no longer turning away consumers who need a new set of tires, an unexpected brake job or suspension repair because they can’t afford it. There are lease options, installment payment plans and more.

w w w. M w owdwe.rM n Toidr e D r neTai lr e r. D ce oa m l e r. c o m

03_MTD_Feature-3Questions.indd 27

Increasingly, experts recommend that retailers offer an array of financing options to capture the broadest amount of consumers. We asked those experts what tire dealers should be looking for in a finance partner, how to talk about credit with consumers and how these products and services can help close the sale. MTD: Should dealers be offering a suite of options — rather than just picking one service provider and one option — to appeal to a broader base of consumers? Trey McQueen, automotive account executive, American First Finance Inc. (AFF): Financial situations and credit

2/28/22 3:19 PM

BREAK DOWN THE

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Offer lease-to-own and help your customers see that you care about them.

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2/28/2022 9:23:50 AM

Offer your customers a no-credit required option.

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2/28/2022 9:24:02 AM

Consumer financing

“Introducing financing early and often drives more traffic,” says Brian McNamee, vice president of business development, Koalafi.

profiles can vastly vary from consumer to consumer, so dealers will get the best result by partnering with a group of lenders that understands this and can collectively cover the entire credit spectrum. A one-size-fits-all credit option simply doesn’t exist. To be able to best serve customers across the credit spectrum, a suite of complementary lenders is ideal. Not everyone can afford large transactions — such as replacing tires or a transmission — out of pocket. But all consumers need to get tires, wheels or automotive repair services from time to time. There are plenty of primary lenders that focus on approving consumers with shining credit. But options are limited for credit-challenged consumers, which can leave your business turning away customers and leave consumers feeling defeated simply because they can’t afford the cost upfront. It may be difficult for credit-challenged consumers to get approved. These consumers have either not used many

03_MTD_Feature-3Questions.indd 30

traditional forms of credit to help build their credit or have encountered life events that prevent them from being able to make on-time payments, causing their credit score to suffer. In the eyes of a primary or secondary lender, these consumers may be deemed “too risky” because of their credit profile. AFF believes that all consumers, even tertiary, should have access to the goods and services they need. Dan Bourgeois-Capozzi, director of marketing, EasyPay Finance: We think it is important for shops to understand the programs that are available and how they fit their customers’ needs. Credit is like tires — you must have the right size for the car. You wouldn’t want to put a consumer who is eligible for a prime program into a tertiary offer. That is not a good fit and doesn’t build loyalty with your customers. Therefore, we designed our program to provide tailored terms based on an individual’s credit history. MTD March 2022

2/28/22 3:19 PM

Consumer financing Orlando Zayas, CEO, Katapult Holdings Inc.: Innovative tire retailers currently offer a wide range of traditional and alternative financing options at checkout to increase transaction volume and reach new customers they haven’t been able to transact with in the past. Retailers who offer a lease-to-own option through Katapult see higher repeat transaction rates and greater customer satisfaction rates. With multiple checkout solutions available, tire retailers not offering lease-to-own or no-credit-needed financing options (are) leaving money on the table. Today, half of the adult consumers in the U.S. have a (credit) score below 700 and many have limited financing options available to them. At the same time, 47% of today’s consumers need financing to make a purchase of $400 or more. That doesn’t mean that non-prime consumers aren’t shopping. Like all of us, they need certain goods, including tires, to live their lives to the fullest. When it comes to obtaining durable goods like tires, customers must often decide between purchasing lower-quality goods or not making the purchase at all. Offering lease-to-own options helps tire retailers provide a path to ownership to this previously ignored market segment (and it allows) customers to obtain the durable goods they desire by leasing and paying over time once they qualify through a transparent and fast application process that uses Katapult’s proprietary decisioning logic. And this benefits retailers, as well. Forty-three percent of consumers say they are inspired to shop with certain merchants that offer lease-to-own payment solutions. Brian McNamee, vice president of business development, Koalafi (previously West Creek Financial Inc.): We found that tire dealers who only cater to one segment of buyers can create hidden buyers. These are potential buyers who find your service and want to work with you, but can’t afford your product or service. That’s why we highly suggest having a solution that offers multiple financing products. But the problem with offering a suite of financing options is that you risk confusing your sales associates or your customers with different terms, systems and talk tracks, which can over-complicate your checkout process. Plus, signage for three to four different companies can confuse your customers and compete with your store branding. With Koalafi, you get all of the benefits of a wide range of payment options for a wide range of customers, without the added complexity for your customers or your team. Mike Giordano, chief commercial officer, Progressive (Prog Leasing LLC): The concept of flexible payment options for consumers is increasing in importance as shopping habits and consumer behaviors continue to evolve. Customers now expect the ability to choose the most convenient checkout experience — be it in-store or online — and look for retailers that offer the opportunity to pay for goods with flexible and accessible terms, such as lease-to-own or buy-now, pay-later options. Retailers who understand that shift and adjust their checkout experience to match will continue to see an advantage over those who provide fewer payment options for customers. w w w . M o d e r n T i r e D e a l e r. c o m

03_MTD_Feature-3Questions.indd 31

For this reason, we offer “buy-now, pay-later” through Four Technologies and revolving credit through Vive Financial — in addition to our Progressive Leasing lease-to-own product — to assist in rounding out a retailer’s financial stack. Curtis Campbell, director of enterprise and small-andmedium-sized business marketing, Snap Finance LLC: At the end of the day, it is critical to a business to provide a way to close every customer. Any customer who leaves before completing a purchase is costing that business revenue. By offering secondary financing, customers can get what they need, when they need it — enabling the business to capture revenue that could have potentially been lost. All this said, merchants should vet financing providers thoroughly, making sure that (offerings) would appeal to their target demographic. It is equally important that their retail store representatives understand how to position financing. If they fail to understand it, there is no way they offer it to their customers and no way the customer signs up. There is nothing that precludes a merchant from offering unlimited, different options. But it is critical that whatever they offer complements the shopping experience and enables the business to close versus confuse the customer. Robert Nunziato, sales operations manager, Sunbit Inc.: Tire dealers often have to pick between credit cards with reasonable rates — but low approvals and slow applications — or predatory offerings that kill the customer with interest, but approve those who are declined for credit card type offerings. When you have two quarterbacks, you have no quarterbacks. Sunbit provides a solution that approves 90% of customers with fair and transparent rates, eliminating the need for multiple offerings. Curtis Howse, executive vice president and CEO, home and auto, Synchrony Financial: Dealers should lead with a consumer financing product that offers consumer-friendly terms and best fits their customers. It’s helpful to provide a secondary payment option if the consumer does not meet the qualifications for the initial product. Providing options helps dealers drive more sales to completion by enabling more consumers to finance their purchases. Synchrony provides digital capabilities for simplifying consumer financing at the point of sale. Synchrony Multisource Financing offers additional lending sources within the Synchrony Business Center, enabling more consumer financing possibilities. We enable merchant partners to quickly enroll with a secondary lender to increase their customers’ credit application approval rate with Multisource Financing. Secondary financing options in our system can streamline the credit application and lending process by offering consumers the simplicity of completing one application for use with additional lenders to find the financing option that works best for them. Vicki Turjan, president and chief operating officer, Versatile Credit Inc.: The growing trend is to offer consumers choices in how they want to pay for their purchases. The most efficient and cost-effective way to do that is to partner with lenders who

3/1/22 8:35 PM

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* We do perform a credit check on the customer as a part of our application process. No credit needed does not imply no credit check. For qualifying customers and contractors only. Koalafi offers Lease-To-Own and Lending solutions. Loans issued by The Bank of Missouri, serviced by Koalafi. Terms may vary by state.

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2/28/2022 9:23:12 AM

Consumer financing have the products and credit appetite to serve the consumers who are buying a particular retailer’s products. Versatile can help identify, introduce and integrate the right credit providers quickly and efficiently. As needs change, we can also add or change providers at the dealer’s request. Our technology has been deployed across the country in a variety of verticals, including automotive repair, home improvement, furniture, flooring, electronics and elective healthcare. We work with retailers to design and deploy a credit financing program that is easy for consumers and employees to use. Our goal is to help retailers sell more products and services through an experience that will bring customers back when a future need arises. MTD: How do you recommend a tire dealer pitch the idea of secondary financing to a consumer? And when should the conversation begin? McQueen (AFF): Customers come in all credit shapes and sizes. It’s important to be careful of putting a customer in a credit box, as age and appearance don’t drive a credit score. Using phrases like “all credit types” speaks to customers of all credit (ratings) while signaling to credit-challenged consumers that you offer solutions specific for them and their needs. Throughout the sales process, it’s helpful to remember MEMO, (which means) “mention early and mention often.” Here are some examples of how to use MEMO. During intake and prior to the diagnosis: “Here at XYZ Tire, we offer payment options for all credit types.” After the diagnosis, (you can say) “We found ‘X’ wrong, and we recommend ‘X’ be completed. With our payment options, we offer approvals up to $5,000 for all credit types.” During checkout: “Will you be taking advantage of one of our payment plans? We have options for all credit types, plus you can save 5%.” Bourgeois-Capozzi (EasyPay Finance): This is a really important question and one that is foundational to supporting a successful credit program for a merchant’s business. We spend quite a bit of time working with our merchant partners on this kind of training. What we have found is that there is a misconception that the market for financing in automotive is smaller than it is. The majority of Americans live paycheck-to-paycheck and more than 60% can’t afford a sudden expense of $400, according to a 2018 Federal Reserve Report on Economic Well-Being of U.S. Households. In many cases, your customers feel selfconscious and embarrassed about their financial position, so it is critical to treat them with kindness and be open about the financing options you have available from the start. Rather than bringing up financing options at the end of a quote or even worse, after the work has been done — when they are looking at the bill — let your customer know you have payment options available as part of the first communication. Zayas (Katapult): Today’s customers want options. When it comes to offering financing alternatives to a consumer, the process should be as simple and straightforward for the customer

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as (it is) with traditional financing solutions. Lease-to-own is just one of several options available to meet the shopping needs of a wide range of consumers. If other financial options are not available or standard (credit) scores are a factor, a lease-purchase transaction with Katapult can open doors for customers to obtain the items they need, while allowing the dealer to complete another transaction The process for applying is quick, simple and transparent and allows greater flexibility than other payment solutions. Consumers using lease-to-own can make recurring payments while having the option to purchase at any time. There is no long-term obligation to continue leasing and consumers can return the product to Katapult at any time with no further commitment other than for amounts past due. Additionally, there are several options to acquire ownership of the product that is being leased. McNamee (Koalafi): No one likes awkward conversations or extra hassle. Declines can be uncomfortable for customers and your sales person. Asking the customer to go through the effort to fill out multiple applications with multiple financing companies can put the sale at risk. There really shouldn’t be a pitch. When a customer does not qualify for primary financing, there should be a seamless transition within the credit platform or app to be considered for a lease. Giordano (Progressive): Retailers can attract and empower customers by sharing purchase options as early in the sales process as possible. If a prospective customer is not aware of a dealer’s available purchase options, they may shop elsewhere, opt for lower quality and/or lower-cost items or postpone their purchase entirely. Campbell (Snap): It all comes down to understanding your consumer. If you see that a consumer is needing a product, but experiencing stress related to the purchase, it may ease that tension by offering secondary financing. This can be done in several ways, including point-of-purchase signage, text-to-apply, email/direct mail or social media. Additionally, because Snap performs pre-approvals for financing, Snap

Defining the credit categories When it comes to credit, consumers qualify for one of three buckets of lending — primary, secondary and tertiary. What kind of financing they qualify for is dependent on their credit history and credit score. Here’s how American First Finance breaks down those three levels. Primary lenders typically serve primary consumers with a credit score of 660 or higher. Secondary lenders generally service near-prime consumers who have a credit score in the range of 620 to 659. Tertiary lenders usually serve subprime consumers with a credit score of 619 or lower. MTD March 2022

3/6/22 6:50 PM

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2/28/2022 9:22:07 AM

Consumer financing

“Financing options won’t just help you close a sale,” says Dan Bourgeois- Capozzi, director of marketing, EasyPay Finance. “They will expand your customer base and will help you develop long-lasting relationships with customers.”

can be sending customers to merchant locations with their approved amounts, encouraging them to get what they need, when they need it. Nunziato (Sunbit): Offer it early and often. Forty percent of Americans do not have $400 for an emergency expense and 58% of services are declined. Even for those not in that bucket, many people simply would prefer not to pay large sums all at once. By letting customers know they can apply for no-interest installment loans and pay less today, the business will gain customers and incremental revenue. Howse (Synchrony): Introducing the idea of financing to a customer starts well before the consumer engages with the dealer. The dealership must first train its staff to sell financing successfully. Employees must understand what financing is and what it isn’t, explain its benefits in simple, everyday language and handle customer hesitations. Synchrony Learning Center offers practical training videos, information-rich PDFs and self-paced online courses covering

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these and many other topics on how to offer financing to drive more sales and loyalty. Once a dealer engages with the customer, whether in a store or online, it’s essential to mention financing early and often. Throughout the journey, dealers should emphasize special financing offers and benefits, like making the purchase more affordable and the ability to pay over time. Dealers should also help customers understand how much they will pay each month, using tools like our monthly payment calculator and complimentary point-of-purchase promotional materials. It’s also important to note that the pandemic expedited the digital transformation of consumer financing, like most things related to commerce. Boosting awareness and accessibility to financing through online channels has helped tire dealers nationwide fuel customer engagement and business growth. Turjan (Versatile): Using our technology makes it more likely that financing options — especially secondary finance options — will be pitched to the customer at all. The transition to secondary financing has been tricky in the past and was often MTD March 2022

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Consumer financing highly dependent on employee training and comfort. Some associates can find it difficult or awkward to recommend a customer apply for a second round of financing if they’ve been declined or a customer may be embarrassed about having to start the process all over again. Versatile’s technology turns this into a seamless process where an applicant is automatically transitioned to the secondary financing provider after being declined — without needing to reenter information or speak to an associate —which reduces the fear of denial. MTD: How can financing options help a tire dealer close a sale? McQueen (AFF): Remember the rule of four. Customers prefer to get four tires at once. If the customer is short on cash and does not know payment options, they may ask to only get two tires or fewer, which presents another opportunity to plug options for all credit types. Upsell better tires with affordable payments. The tires the customer really wants may be out of their cash budget. Show them what their payments would look like if they were to upgrade and take advantage of a payment plan to get the tires they really want. And offer incentives. Using payment plan options will typically cost your business less than credit card fees. Incentivize your customers to apply for and utilize these options by giving them a percentage or flat dollar amount discount. Bourgeois-Capozzi (EasyPay Finance): Financing options won’t just help you close a sale. They will expand your customer base and will help you build long-lasting relationships with customers who need tires and services by providing them with payment plans that fit into their budget. We frequently see our partners bring in $10,000-plus a month by adding financing options and those merchants who commit to best practices around offering credit can easily double or possibly triple that number. Zayas (Katapult): When working with non-prime consumers, lease-to-own can provide a hassle-free path to ownership of a needed product and may be one of the only solutions available. For this reason, lease-to-own programs continue to grow in popularity and are helping retailers nationwide build long-term relationships with customers. In fact, Katapult’s research found that enterprising retailers offering lease-purchase options for durable goods typically see a substantial increase in both conversion rates and average order value. Providing a range of options, including lease-purchase transactions, helps all consumers feel seen and financially included. McNamee (Koalafi): Tire and auto purchases are often unplanned, so it’s important for businesses to promote financing before, during and after they provide a quote to help people feel more comfortable with this unexpected purchase. Introducing financing early and often drives more traffic to shops and can mean the difference between a customer choosing your shop over a competitor down the street. Financing gives

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customers more purchasing power, which opens up different or upgraded options for them and helps the business close sales. It’s a win-win. Giordano (Progressive): Splitting a customer’s transaction into smaller and more affordable payments may alleviate hesitations or obstacles to making a single large payment up front. Combining multiple payment options with a simple and transparent application process, flexible payment schedules and the ability to take their items home on the same day allows retailers to offer an approachable way for customers to get the things they need when they need them. Campbell (Snap): Financing can help close a sale by reducing and/or eliminating the stress related to paying for goods and getting the consumer back on the road. With that stress removed, consumers will have better shopping experiences and will often utilize said financing over and over — and recommend it to their family and friends. Nunziato (Sunbit): By approving customers before an estimate, you can encourage customers to bring in their vehicle. By mentioning that payment options exist during the inspection, you can reduce anxiety about potential unexpected expenses. And with a solution that is fast and easy to apply for — with no hard credit checks — the staff can offer Sunbit whenever pricing is mentioned to make sure no one ever declines work. Howse (Synchrony): Today’s consumer needs a way to pay for their automotive purchases, whether it’s an in-the-moment need like a damaged tire or routine maintenance. Financing enables the consumer to make the initial purchase and helps them afford it within their budget, so they can buy four tires instead of the one that may have blown out. It also allows them to have a way to pay for all their car care needs over time. There is a much higher incidence of repeat sales when they have a line of credit. We continue to see increasing financing adoption as both consumers and dealers become more sophisticated. And the pandemic has driven the need for dealers to offer a better customer experience, which includes taking the friction out of closing the sale. For example, contactless commerce like our direct-to-device application technology enables tire dealers to provide a simple, intuitive, omnichannel experience for transparent financing offer terms, real-time approvals and purchases. Turjan (Versatile): Financing can be a powerful tool for retailers, whether it’s positioned to drive the sale or save the sale. Often, the price of a repair or cost of a set of new tires can be an unexpected expense. Customers can be presented with a way to apply for financing on a self-service platform designed to maximize approvals, whether it’s while they’re browsing, waiting for service or at the point of sale. Having our platform available to all customers ensures that each of them will be offered the opportunity to apply for financing, if they so choose. Our data shows that flexibility helps close more sales at a higher average ticket price and drives repeat business. ■ MTD March 2022

2/28/22 3:20 PM

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3 Q u e s t i o n s w i t h F l y n n ’s T i r e

3 questions with Joe Flynn of Flynn’s Tire & Auto Service

DEALERSHIP DEVELOPS LABOR SHORTAGE WORK-AROUNDS By

Mike Manges

ith more than 30 locations — including retail, commercial and wholesale outlets — Flynn’s Tire & Auto Service is one of the largest and fastestgrowing independent tire dealerships in the western Pennsylvania/eastern Ohio area. In 2021 alone, the family-owned, Hermitage, Pa.-based company added three retail stores. But expansion has been accompanied by some challenges, says President Joe Flynn III. Finding new employees — particularly young technicians — is harder than ever. And negotiating with municipalities to secure approvals for new stores can be tough. Flynn discusses these and other topics — including an unexpected trend in his company’s retail tires sales last year — in this MTD exclusive. MTD: In what ways has it become tougher to open new locations versus 10 years ago and how has Flynn’s Tire adjusted? Flynn: The big thing is finding the proper staffing. We like to make sure we have the right people in our stores. You need a good

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location manager. That’s the key. We try to grow our leadership from within. Sometimes we have to hire from the outside. But the location’s leader is the most important part. Aside from that, what has gotten the most difficult is finding people who want to work in our industry who are experienced. It’s not easy in this environment. We don’t want just warm bodies because we work in the safety business. When we install tires on vehicles, we need to make sure we bolt those wheels onto the cars and that they are fastened properly. And when we’re fixing cars — whether it’s brakes, alignments or suspensions — we want to make sure we’re fixing them properly. People’s lives depend on it. Sometimes people don’t see what we do as being a life-or-death industry or a safety industry, but we really are. We need to make sure we have the right, clear-minded people doing the work. And for whatever reason, I think a lot of zoning laws are outdated. Some communities think of tire stores and auto service centers as being these old, environmentally hazardous sites with hundreds of scrap tires piled up outside in a muddy parking lot. Cities and towns prefer gas stations over

“We’re a family-oriented company,” says Joe Flynn III, president of Flynn’s Tire & Auto Service, pictured with his son, Joey. “When we look at our benefits, we want to make sure we’re taking care of our employees’ families, too.”

us. They prefer car washes over tire and auto service centers. A lot of tire stores now, including ours, are beautiful buildings that are well-groomed and marketed very well. But there’s still a stigma. There are a lot of communities that restrict tire and auto service centers from certain areas. We have to battle that. MTD: What employee recruitment and retention methods are working for you and why? Flynn: What’s working the best for us is that we’re kind of like the new trade school in the areas where we operate. If someone wants to become a technician, they can come to Flynn’s and we’ll send them to training classes. And there will be a lot of on-the-job training, working with our experienced master techs. We’ll have them change tires and oil, at first. They’ll get their air conditioning certification. They’ll get certifications in brake service and suspension systems and will gradually grow from there. And each step along the way, they make more money, so they want to grow with the company. Don’t get me wrong. We love trade MTD March 2022

2/28/22 3:20 PM

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2/28/2022 9:21:35 AM

‘We have a lot of upside’ Flynn touts benefits of working in tire industry

Flynn’s Tire opened this store in Cuyahoga Falls, Ohio, a suburb of Akron, last year. “A lot of tire stores now, including ours, are beautiful buildings that are well-groomed and marketed very well,” says Flynn, who adds that his company is looking to acquire other tire dealerships.

schools and we love what they do. There are probably four technical schools we work with. But they don’t produce enough prospects for us. And everybody is fighting over the same guys. It’s highly competitive. We find people who have the right character and work ethic and are technically minded. And we provide training for them. So we’re basically producing technicians from the ground up. Some of our best store managers started out as tire technicians. By the way, there was a shortage of technicians before the pandemic and the labor market got tight. When I was growing up, if someone was technically minded, they might be interested in fixing cars. Today, if a kid is technically minded, he may be more interested in electronics and computers. If we have an opening, we look internally and then we look externally. The best candidate gets the job. And our human resource department has done an excellent job of determining where these jobs fit into the market as far as pay goes and then making sure our people are being compensated at a generous rate. In the last four years, we’ve given more wage increases than ever before. It’s really gone up. Our guys are paid very well. We probably pay higher than the industry average. But I think it’s worth it in order to keep good people. We have excellent benefits, as well. We’re a family-oriented company. When we look at our benefits, we want to make sure we’re taking care of our employees’ families, too. We also have an orientation process for all new hires. When we hire new people, we bring them in-house. Human resources spends some time with them, going over their benefits, and I spend a few hours with them, going over the culture of Flynn’s Tire and who we are. I love it and I think they get a lot out of it. MTD: Flynn’s Tire has always been a multi-brand dealership that offers products at all price points. Over the last two years, we’ve seen a lot of customers gravitate toward tier-two, tierthree and even in some cases, tier-four products. In light of this, do you think the traditional good-better-best retail tire sales approach still works? Flynn: We sold a smaller percentage of entry-level tires during 2021 because they’ve been so difficult to source. Somebody might have been looking for the cheapest tire we had and it might have been a few more steps up than normal.

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Joe Flynn III, president of Flynn’s Tire & Auto Service, cites the hot job market as one factor that has made employee retention more challenging. “There are a lot of other opportunities out there,” he says. “Somebody might say, ‘I want to try something else.’ “If somebody is curious about what it’s like to work in other industries, this is the time to do it. They can pretty much try any industry they want, get a job and probably get the training they need.” Flynn says his company’s issues with turnover are “at the entry-level. After somebody has been here — even for a year — we don’t have a ton of turnover. We do track that. “I think once people determine this is the industry for them and they like this industry, I think they also realize Flynn’s Tire is the best place for them. “I tell our people all the time, ‘This is a great industry. It’s a secure industry. We have a lot of upside.’”

“Flynnie,” the dealership’s mascot, often pops up at store openings. Most customers are receptive to recommendations when shopping for replacement tires, says Flynn. “What we’ve noticed is that a great percentage of our customers will buy the tire we recommend to them.”

But what we’ve noticed is that a great percentage of our customers will buy the tire we recommend to them. We also have noticed there’s a certain percentage of people who just want the least expensive tire. But 80% of people are really open to our suggestions. We can make a suggestion based on what we think is the best tire for their needs, so that’s what we try to do. You have to find out what’s best for the customer. Good-betterbest is too general. Some people like a really quiet tire. Some people want good traction. Some people want a high-mileage tire. There might be a good-better-best traction tire. There might be a goodbetter-best quiet tire. So good-better-best might be different for each customer. ■ MTD March 2022

3/3/22 7:40 PM

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2/28/2022 9:31:57 AM

Reno Vulcanizing Auto Care

The Besso family is celebrating the centennial of its dealership, Reno Vulcanizing Auto Care. From left to right, Lisa Besso; her husband, Mitch Besso; Nevada Besso; Steve Besso; Cheryl Besso, Steve’s wife; Stevee Lee Besso; Salene Pecetti; and Josh Besso.

A century of success

RENO VULCANIZING AUTO CARE CELEBRATES THE BIG 100 By

Mike Manges

round 20% of new businesses close within a year of opening, according to the United States Bureau of Labor Statistics. Fewer than 35% of businesses make it to their 10th anniversary. Even a smaller number, like Reno Vulcanizing Auto Care, survive — and thrive — for 100 years. Based in Nevada’s third largest city, Reno Vulcanizing was founded in 1922 by immigrants Augustino “Gus” Besso and Frank Menante. The three-location dealership is run by third generation owners, Steve and Mitch Besso, who are preparing to hand the company to a fourth generation, Josh Besso, Mitch’s son.

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But before that, Reno Vulcanizing has a birthday to celebrate.

COMMUNITY-FOCUSED

The dealership is planning a number of activities to mark its centennial. In June, it will sponsor a charity golf tournament, “Driving Fore Diabetes,” which has raised more than $500,000 for the Nevada Diabetes Association (NDA) over the years. Later this summer, Reno Vulcanizing plans to hold a family day event for its employees and guests. And in September, the company will raffle off a restored Ford Model A pickup truck that once belonged to a former employee.“We purchased the vehicle to return to the com-

munity as a give-back,” says Steve. (See sidebar on page 46 for more.) Proceeds from the raffle will be split evenly between the NDA, the Renobased National Automobile Museum and Veterans Guest House, a local non-profit that provides veterans and their families with housing when they are receiving medical treatment.

CHANGING WITH THE TIMES

Steve and Mitch took ownership of Reno Vulcanizing in 1985 after acquiring it from their father, Lee Besso. The company, which at the time operated a retread plant, had more of a commercial tire thrust. MTD March 2022

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Reno Vulcanizing Auto Care Blast from the past Reno Vulcanizing struck gold finding vintage pickup

Reno Vulcanizing, which is a member of the Independent Tire Dealers Group LLC, will raffle off this vintage Ford Model A for charity. The truck once belonged to a former employee. Proceeds will go to three charities in the Reno, Nev., area.

Josh Besso, left, represents Reno Vulcanizing’s fourth generation. He would like to “grow in the future if the opportunities are there.”

The brothers saw opportunities to modernize some operations at the alreadyflourishing business. “We wanted to bring computers into the business, rather than having an office staff of four people with an old machine who did receivables,” Mitch explains. “We had to go through two systems” before finding one that suited the company’s needs. “From there, we looked at our retread plant and our commercial tire business.” Around the same time, Goodyear Tire & Rubber Co. moved into the Reno market “and purchased one of our competitors, so at that point, we decided to sell our plant and commercial business” to the tire manufacturer. Shifting to a heavier mix of consumer tire sales and auto service, Steve and Mitch added a second and third retail store. “When we took the business over, the challenge was just to make it an even more viable, profitable organization,” says Steve.

04_MTD_Financing-Suspension.indd 46

“Our Dad taught us in the beginning that we needed to be honest, have integrity and be fair with customers,” says Mitch.

HONEST AND FAIR

Consumer expectations and shopping habits may have changed in the ensuing years, but tire buyers still need expert advice, says Mitch. “Consumers are a lot more informed because of the Internet. In some respects, that’s good and in some respects, that’s not good. Our clients look to us to steer them in the right direction.” Other things — like honest service and teamwork — have not gone out of style either, he adds. “Our Dad taught us in the beginning that we needed to be honest, have integrity and be fair with customers and that has resonated through the years,” says Mitch. “And Steve and I have been able to get along. We have different views on how the business should be run from time to time, but we respect each other and listen to each other. There are times when Steve

In anticipation of their company’s 100th year in business, Reno Vulcanizing Auto Care’s owners, Steve and Mitch Besso, knew they wanted to raffle off a vintage vehicle. Store Manager Mike Smith, who has been with the company for 30 years, jumped into action. “After doing some research, we found that the two most sought-after vehicles for raffles were Corvettes and Ford Model A trucks,” says Smith. Not long afterwards, he received a call from a man who had recently inherited a collection of classic cars. “He asked if we wanted to look at them. We took a look at the collection, which was a museum in and of itself. Stuck back in the corner was a 1929 Model A pickup that was very similar to a pickup that the first generation (of the dealership’s) ownership had used for a delivery vehicle. It looked like it had just rolled off the factory floor.” In an unexpected twist, Smith learned that the father of the collection’s owner had worked for Reno Vulcanizing in the 1950s. Steve and Mitch bought the truck, which is on display at the National Automobile Museum in Reno and will remain there until it’s raffled off in September. Proceeds will go to three charities that serve the Reno area, says Smith. is right and I’m wrong and times when I’m right and he’s wrong. But we’ve been able to get along all these years.” The brothers also credit Reno Vulcanizing’s success to their employees. “Without them we’re nothing,” says Steve. “These are the people who are in the trenches and make it work. We have eight employees with over 20 years of service each. How fortunate can you be to have a core group like that?” Steve and Mitch plan to retire within the next few years, when they will turn the family business over to Josh “and let him run with it.” Josh, age 35, intends to “stay the course. And I would like to grow in the future if the opportunities are there.” MTD March 2022

3/9/22 8:11 AM

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3/8/22 7:46 AM

Stress management

It’s OK to look out for ‘number one’

YOUR OWN WORK-LIFE BALANCE IS CRITICAL TO YOUR DEALERSHIP’S SUCCESS By

Bill Ford

This MTD exclusive was written by Bill Ford, president of SESCO Management Consultants, a full-service human resources and employee relations consulting firm that advises tire dealers.

ince the beginning of time, business owners have carried the weight of their organizations on their backs. In addition to meeting business goals and ensuring customers are satisfied, they also have the added pressures of attracting and retaining employees. In addition, over the past two years, mental health issues of not only business owners — but also employees — have increased due to the COVID-19 pandemic. One recent study stated that eight out of 10 executives have occasionally experienced poor mental and physical health during the COVID-19 crisis. In my 32 years of consulting with entrepreneurs, I have never seen a more challenging work environment. The “great resignation,” tightening profit margins, challenges with supply chains, increased federal and state regulations, constantly changing mask and vaccine mandates, increasing wages, increased liability — the list goes on and on. In the past six months, calls from our clients concerning mental health have significantly increased. Another indication of how difficult and stressful it has been to own and operate a business in today’s environment is the number of SESCO clients in various industries who have decided to give up and simply sell their companies. In addition to the personal toll, the stress and pressure of running a business impacts an organization’s culture.

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Stress and burn-out can be a slow fizzle. Before you know it, your personal well-being—plus the well-being of your organization—is suffering, says SESCO’s Ford.

And as we all know, a positive employeremployee-customer culture is critical to the long-term success of any organization. What many business owners don’t understand is that their herculean efforts to run their companies around the clock are not only unhealthy for them. These efforts are unhealthy for their organizations, too. More time, focus and commitment to a business is not always what’s best for a business. When the leader is stressed, employees and customers see it and feel it. You may not think so, but as you are juggling balls and feel like you are being effective in ensuring your organization’s success, you are creating a rollercoaster ride for everyone else. Our surveys reveal that employees suffer directly and indirectly when owners are not mentally or physically healthy. Poor workplace culture creates low morale, which leads to poor productivity, lots of turnover and poor customer satisfaction. Working harder does not ensure a more successful organization. In fact, many times, it ensures the opposite!

MANY REASONS

Why do business owners not take care of themselves by achieving an effective balance between their work and their personal lives? Many of the common excuses we hear are: 1. “Without me, the business is nothing.” 2. “Without the business, I am nothing.” 3. “I don’t have any hobbies anyway.”

4. “Nobody can run the business as well as I can.” 5. “I love what I do.” 6. “If I’m not there, the business will fail.” Many of these excuses are just that — excuses. The reason why most business owners cannot achieve a work-life balance is they simply cannot let go and transfer some of their power. The process is harder for some than others due to their innate personality. However, all owners must let go so they can achieve a healthy work-life balance and a healthy balance sheet. Owners must ask themselves: “How can I get my business to work without me?” “How can I get my employees to perform the way that I do, but without my constant interference?” “How can I systematize my business so that it can be consistent in the delivery of services?” To answer these questions, you must ensure the following systems and processes are in place: • • • • • •

Vision/strategic plan Position descriptions Operations manual Employee handbook Compensation plans for all levels of staff Effective managers This brief, simple checklist is “a must” to MTD March 2022

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Stress management prepare businesses to attain even greater heights. At the same time, it will provide peace of mind and help owners obtain a work-life balance. To begin achieving a reasonable work-life balance, it is critical to first understand your personality profile. What is your core personality make-up? This can be easily obtained by completing the DiSC Personality Profile. It will identify strengths, as well as areas of improvement. Individual personalities vary greatly, but here is a brief checklist to help you get started: 1. Get comfortable outsourcing tasks and responsibilities. This is made easier if the necessary systems and processes are in place. Also increase your comfort level with delegating. It may mean even lowering your standards — reasonably — for you, as well as your staff. 2. Learn to take care of yourself. Plan a wellness visit with your physician. With your doctor’s assistance, establish a mental and physical improvement plan. Eating right, exercising and other simple activities are a must. We’ve all heard when traveling in an airplane, “If the oxygen mask drops in front of you, put it on yourself before you help others.” You need to take care of yourself first or you won’t be successful taking care of your business, customers or employees. 3. Give yourself permission. Burn-out is common, especially given the challenges of the last two years. To avoid burn-out, you must give yourself permission to enjoy the fruits of your labor. Avoid

comments like, “This is what my family and employees expect of me” or “This is how we’ve always done it.” 4. Evaluate and reevaluate your task list — preferably daily. Burn-out occurs when numerous tasks are not being fulfilled or when you have spent all day putting out fires. Delegating or outsourcing tasks that can be completed by someone else — many times, at a cost savings — will allow you to focus more time and energy on projects that are rewarding and meaningful to you and the success of your business. 5. Reset your priorities. Some business owners find a coach who will assist them. Others will rely on spouses, mentors and clergy. Regardless, evaluate the priorities in your life and refocus those. Burn-out can happen when we allow our lives to get out of control, blaming others for our frustrations instead of examining our own choices. 6. Reexamine your life’s intentions. Reserve time to reflect on your personal purpose and values, your bigger-picture vision and your day-to-day playbook. 7. Take a vacation. Even if you don’t think you can afford to take time off or need to take a vacation, it is always important to get away. Remember that recreation is really just “re-creation.” Taking time off is vital to not only yourself, but also your company and team. 8. Take meaningful breaks. Schedule a time for meaningful breaks, whether that is exercise, meditation, time with family, getting away from technology or simply going to lunch with a spouse, friend or co-worker. Stepping away can sometimes provide the necessary mental break to allow creativity to flow. 9. Commit. When you are committed to your goals, understand your team’s strengths, know that customers are counting on you and you have true passion for what you are doing, burn-out and stress will not be an issue. This is not to say that you will not get tired. We all do. When that happens, exercise the discipline to get more rest, eat healthy and learn how to say no. 10. Remember your personality and what motivates you. It is important when you feel stressed to take the time to reflect on what motivates you and inspires you to get up and do what you do daily. When we get lost in the day-to-day activities of our jobs, we can forget the feeling of why we chose the path we are on. 11. Find activities you enjoy. Find sources of energy. These can be family, friends, sleep, quiet time, reading, golfing, fishing or any activity or thing that brings you refreshment and renewal. In summary, don’t be the person who says, “In my role, I’m the guy who catches it all. I don’t know how much longer I can last!” Stress and burn-out can be a slow fizzle. Before you know it, your personal well being — as well as the health of your organization — is suffering. Prevention is always the best cure. You must decide whether you own simply a job and tasks that you do not enjoy or you own a prosperous business that you can enjoy — and one that promotes good physical and mental health. ■ Bill Ford is the president and CEO of SESCO Management Consultants, the oldest human resource and employee relations consulting firm in America today with many tire dealership clients. Ford can be contacted at (423) 764-4127 or bill@sescomgt.com

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Stress management

Off-roading, ice cream, exercise and ‘talking shop’ DEALERS TACKLE STRESS IN DIFFERENT WAYS By

Maggie Olson

unning an independent tire dealership is not for the faint of heart. Stress comes with the territory. From staffing and other business challenges to dealing with industry-wide disruptions, tire dealers manage constant stress on both macro and micro scales. Top of mind for many dealers are recent price increases and supply shortages. “We’re getting inventory, but it’s taking three times longer than usual,” says Heather Rowland of WNY Industrial Tire in Buffalo, N.Y. “And price increases are constant. I’ve never seen this many price increases in such a short time.” Price hikes have also impacted McMahon’s Best-One Tire, a multi-location dealership based in Fort Wayne, Ind. Co-owner Kim McMahon says that one of the company’s tire suppliers announced several price increases in a single year, citing escalating costs as reasons. Many dealers also are feeling the strain of the ongoing labor shortage. “We’re always trying to find technicians,” says Rowland. “When it comes to shop jobs, people don’t want to do that kind of work anymore.” Spencer Carruthers, owner of Kenwood Tire & Auto Service in West Bridgewater, Mass., is experiencing similar labor shortages. “I’d like to add another guy, but there’s nobody out there right now,” he says. For Carruthers and other dealers, another struggle is the evergreen pressure to keep current employees healthy and happy. “Obviously, from a business perspective, you want all your employees to come to work, but from a more personal perspective, I want them to be safe and healthy,” says McMahon.

04_MTD_Financing-Suspension.indd 52

Carruthers agrees. “I feel like I’m responsible for my employees. People have lives, partners, children and their own stuff going on. I just try to keep them happy.”

PRESSURE RELEASES

Dealers say finding ways to manage stress is important. That applies to their employees, too. Anthony Vasquez, owner of Best Value Tire & Wheel in Placentia, Calif., puts himself in his employees’ shoes. “I’m 34 years old and I’m hiring people who are 18 to 20 years old. I remember what I was like at their age. I’m an open door with them. They can share whatever they’re feeling and I’m open to ideas they have about what they need.” Though Vasquez says he has not struggled with labor shortages, he had to manage another source of stress last year — entering the tire industry with no experience. He bought Best Value Tire & Wheel from Mike Maxwell, the single-location dealership’s founder, in July after spending 15 years in banking. “Coming into this industry, I didn’t know anything,” says Vasquez. “I had to do a lot of heavy research on the products we carried and how the tire industry works.” Vasquez purchased the shop as a means of pursuing his passion for off-roading and fulfilling a lifelong dream of owning his own business. “I know the ins and out of this business now and I continue to grow my knowledge. My vision for this business is to offer more than just tires and wheels. Now we have lighting, off-road accessories and lift kits. We want to be a one-stop shop.” For Vasquez, off-roading is more than just business. It’s how he unwinds.

Anthony Vasquez, owner of Best Value Tire & Wheel in Placentia, Calif., unwinds by off-roading. “When you’re driving out in the middle of nowhere, with that adrenaline going through your body, you’re riding without worries,” he says. “Every stress level that you have — at the shop or in your personal life — just goes out the window because you’re doing something that you’re enjoying.”

He takes his four-wheel Can-Am offroading vehicle out for weekend rides as often as he can. “When you’re driving out in the middle of nowhere, with that adrenaline going through your body, you’re riding without worries,” says Vasquez. “Every stress level that you have — at the shop or in your personal life — just goes out the window .” Other dealers rely on physical activity to manage stress. McMahon was one of many Americans who bought a Peloton machine during the COVID-19 pandemic. “I used to go to a gym and work out, but then that wasn’t happening. My son had a Peloton and said, ‘You should try this.’ I’m a little addicted.” Rowland has a similar approach. “I really try to work out at least five days a week,” she says. “I go to the gym and do some stuff at home.” Her favorite exercises are weightlifting and spin class. It’s important, she says, “to make sure I’m taking care of myself.” Rowland also loves to destress in the kitchen. “I’m always making homemade treats for every occasion. I’d rather make it myself than go buy it. It’s a good stress reliever.” She often recruits her two young sons to join her. “When COVID-19 hit, we had a lot more time at home, so we worked on perfecting homemade ice cream. Now for every holiday, I make homemade ice cream in all different flavors.” MTD March 2022

3/3/22 7:42 PM

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3/7/22 1:15 PM

Stress management

Heather Rowland of WNY Industrial Tire in Buffalo, N.Y., destresses in the kitchen. “I’m always making homemade treats for every occasion. I’d rather make it myself than go buy it. It’s a good stress reliever.” She often recruits her two young sons to join her. “When COVID-19 hit, we had a lot more time at home, so we worked on perfecting homemade ice cream.”

Carruthers is passionate about the importance of stress management. “We’re business owners. We’re a passionate bunch, who are all about quality and doing it right. It’s easy to let that emotion flow over into a logical situation.

“Recognize when you start to get stressed out,” he advises. “Instead of reacting, just realize what’s happening, take a breath and come back to it. “It’s easy to let your emotions get in the way of running a business. I’ve learned to separate logic from emotion.” Carruthers also tries to not “take work home” at the end of the day. He spends some quiet time in his store after it closes before heading home. And he manages stress via what he calls “the usual suspects — eating well, sleeping well and physical activity.” McMahon recommends turning to peers for support. “When we were opening our eighth store a year ago, there was so much going on,” she recalls. “We were all dealing with different parts of the business. We needed to sit down and talk about what was going on.” Her dealership formed an executive committee, which has met once a week ever since.

“It’s been game-changing. Now we all have a clear understanding of what went on during the week and what’s coming up. Sometimes it’s just listening. Sometimes it’s problem-solving. “But having that kind of feedback is so important. You don’t have to keep it inside. It’s a really good opportunity for us to let out stress.” McMahon benefits from the diverse perspectives provided by her executive committee. “Between the five of us, there’s two of us who think the same, two others who think the opposite and then a fifth person who goes back and forth. The fact that we have different personalities and ways of looking at issues helps immensely for me. I don’t know what I’d do without that.” ■ Maggie Olson is a freelance writer and editor, with a background in automotive and tire testing. Her work has been published in Modern Tire Dealer, The Financial Diet and other publications. She can be reached at margaret.b.olson@gmail.com.

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MTD March 2022

3/3/22 7:43 PM

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3/1/2022 2/9/22 9:48:15 8:31 AM AM

Summer car care

Prime time for car prep

RICHLONN’S TIRE DOESN’T WAIT TO GET VEHICLES READY FOR SUMMER DRIVING By

Mike Manges

arch and April are ideal times to discuss vehicle maintenance with customers — using their summer driving plans as a jumping-off point, says Brett Matschke, owner of Richlonn’s Tire & Service Centers, a five-outlet dealership that’s based in

Muskego, Wis. “We’re seeing a lot more driving vacations than we’ve come across in the past. Customers want to be ready to go, rather than have to scramble at the last minute.” To help cars roll into warmer weather months, Richlonn’s Tire first focuses on steering and suspension service. Then it promotes wheel alignments. Potholes can do a number on ride control parts, says Matschke. “And we want to make sure alignments haven’t gotten out of specification” during the winter months — “whether it’s driving over potholes or driving in or over snow and ice.” His dealership ties alignments to helping customers get the most out of their tire investment. “If a customer purchases a tire from us, we offer to check wheel alignment once a year at no charge. We tell people the two best things they can do for their tires are rotate them on a regular basis and make sure alignment is checked on a regular basis.” Car care can be neglected during winter months, especially in the run-up to the holidays, notes Matschke. “We like to say that unless the weather is driving top-of-mind awareness or people are experiencing problems with their cars as the holidays approach, at some point, Santa Claus starts winning,” he says with a laugh. “People have limited resources. They’re focused on ‘How do I find the time to get stuff done, take care of my family and make sure the holidays are great?’ and not necessarily, ‘Why isn’t my car doing what it should be doing?’”

THREE CUSTOMER TYPES

To put people in the maintenance frame of mind, Richlonn’s Tire also offers discounts on vehicle inspections. “We take the wheels off. We check the brakes. We check for any play in the wheel bearings. We check shocks and struts and for any kind of corrosion issue. We’ll get underneath the hood — belts, hoses, fluids. “The customer is going to get a complete run-down of their car. We’ll let them know where things are and when maintenance might be due. We try to take a consultative approach.” When helping customers control their auto repair costs, “prevention is the first line of defense,” says Matschke. “Minimization is the second line of defense. “I tend to think there are three broad groups out there from

04_MTD_Financing-Suspension.indd 56

To put people in the maintenance frame of mind, Richlonn’s Tire offers discounts on vehicle inspections. “The customer is going to get a complete run-down of their car,” says Brett Matschke, owner of the five-store, Muskego, Wis.-based dealership.

a car maintenance standpoint. There are those who aren’t going to do any maintenance and are going to fix stuff when it breaks. “There are those who are open to preventive maintenance and doing some things along the way. It’s just a matter of us taking the time and educating those people that we can handle it. If it’s factory-scheduled maintenance, some people have it in their minds that they have to go back to the car dealership, which is not the case. “The third group comes in with their maintenance schedule and says, ‘OK, I’m due for something.’ “The biggest group is the middle group. They’re open to preventive maintenance if they understand the value. “But sometimes it’s just not the right time for the customer to do anything,” he adds. In these instances, Richlonn’s Tire takes a softer approach. “We’ll say, ‘There are things due on your car. Would you like to talk further about it?’ Some people will say yes. Other people will say, ‘I’m good for now.’” Tire dealers should seize the opportunity “anytime you have the ability to talk with customers and educate them about why vehicle maintenance is a good thing,” says Matschke. ■ MTD March 2022

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Auto service

Better processes lead to more brake revenue MOORE TIRES PUTS FRIEDRICH IN CHARGE OF SERVICE GROWTH By

Ron Ledgard

oore Tires has been in business for more than 30 years. The dealership’s owners, Jeff and Angie Moore, started with a two-bay store in Rock Falls, Ill., in 1991. The company is now in five towns and has 144 employees. A sixth store is set to open in Dixon, Ill., next month. Adding brick-and-mortar locations is one way for the dealership to grow. Another avenue is to become more proficient with auto service, including brake work. With that in mind, in November 2021, Jeff hired Jason Friedrich to be the dealership’s director of corporate sales. Friedrich is focused on developing the company’s processes, especially when it comes to auto service. Right now, Moore Tires’ overall work is skewed about 80% in favor of tires and 20% toward automotive service. He is working to grow the auto service number. “We are trying to get a higher mix,” notes Friedrich. “Right now, we are focusing on inspections, instead of just getting the vehicle in and doing what (customers) are asking (us) to do. “Sometimes we aren’t capturing everything that is on the vehicle,” he admits. “But if they are coming in for tires, we are already going to have the tires off, so we are looking at the brakes” and other items. “It is an easier sell to say, ‘Hey, we noticed this while we have your tires off.’” It’s also important to give customers more financing options, says Friedrich. “We just launched an enhancement to our credit card, so we are trying to get a customer base that can say yes more often,” This, in turn, “will allow me to start wrapping (other) promotions into our tire promotions throughout the year,”

04_MTD_Financing-Suspension.indd 58

Tony Nebinger works at Moore Tires’ store in Kewanee, Ill. The company is refining its processes, especially when it comes to auto repair services, including brake work.

he explains. “Now we are going to give them the ability with the card to get six months of no interest. It makes everything work together a little bit better.” Before Moore Tires, Friedrich worked for 10 years in tire distribution and about four years at a Firestone Complete Auto Care store. “I have been in that grind” of working directly with customers, says Friedrich. “I know where Moore Tires is trying to get to. I know how to get there. I know what it looks like. Some companies take baby steps in their growth. We are basically wanting to get in the elevator and go to the boss’ office. That is how I look at our trajectory right now.” Employee education is key to that, he notes. “Do we know what we are selling? Do we know what it does?” Moore Tires uses a universal vehicle inspection sheet at all of its locations “to get a better path from the shop to the salesperson. “If we don’t get all the information from the vehicle up to the salesperson, we can’t sell” a service, says Friedrich. His technicians look at “brakes, struts, tie rods, ball joints — that kind of stuff.” The goal is to have “more conversations with a customer. That way we can sell the inspection or we can say we noticed some things and we would like to look further.” MTD March 2022

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3/1/2022 9:45:55 AM

Auto service

Service comparisons

How brake work stacks up against other services Respondents to MTD’s latest Tire Dealer Automotive Service Study report that they perform 56 brake jobs, on average, each month for an average ticket of $286.04 and an average profit of 59%. Here’s how brake service stacks up against other auto service jobs that respondents provide. Service

Average job/month

Average ticket Average profit

Air conditioning

$458.75

62%

Alignment

$104.49

75%

Batteries/electrical

$173.48

38%

Bearings/seals

$320.45

56%

Brakes

$286.04

59%

Chassis/suspension

$404.14

52%

Chemicals (cleaners, etc.)

$121.43

60%

Cooling systems

$248.90

58%

Friedrich says it’s important to balance positive and negative news. “If we are only having negative conversations — meaning we are trying to sell something or something is always wrong with a vehicle— that can be a deterrent.”

Electronic diagnosis

$261.61

52%

Engine repair/diagnostics

$290.00

59%

Exhaust systems

$293.00

50%

Ignition/spark plugs

$257.22

48%

TEACHING THE PROCESS

Oil/lubrication

205

$57.05

32%

Shocks/struts

$521.00

45%

TPMS

120

$96.07

65%

Wipers

$27.44

49%

Jason Friedrich, director of corporate sales for Moore Tires in Illinois, says vehicle inspections generate sales opportunities. The dealership, which will open its sixth location soon, wants to increase its percentage of auto service work.

Everybody in the shop needs to be on the same page, says Friedrich. “You could have an amazing plan put in place, but if your (techs) don’t accept the information as quickly as you give it to them” or intake information “in an environment that is too much for them,” it could cost time and money. Moore Tires tries to keep things simple. “That is why we put in the inspection form. We try to elevate the things that are important, so that it’s uniform across all of our stores. That way, if (techs) have seen one inspection form, they have seen all (of our) inspection forms.” Finding employees has not been a major problem for the dealership. Despite some turnover, “we have been fortunate,” says Friedrich. “We are going to be staffed adequately enough as we open that (sixth) store that we are not going to take away any service from any of our other stores.

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And we have had some success bringing new people on on-board. Most of these people are from outside the industry, which we prefer.” Moore Tires uses an in-house recruiter, Michelle Holcomb, who has been with the company for nearly a decade. Over the years, her role has shifted to become even more focused on finding new talent. “Her ability to get people in and get them set up for interviews and to have everything set up for our managers when they come into those locations for interviews has been really helpful. Our stores are rural.

“We don’t have a huge population to pull from. So we do a lot of training internally.”

SOURCING PARTS

Parts availability can have a big impact on brake service recommendations, says Friedrich. Moore Tires is more than two hours away from Chicago, Ill. Due to this, the dealership works with limited options. But the company offers what it can to customers. “It isn’t like we are sitting in Chicago, where you can call 10 people and you have 10 different prices,” he says. “Right now, we are basically (selling) more of the economy line.” ■ MTD March 2022

3/2/22 8:56 AM

Business Insight

A golden opportunity presents itself DESPITE ONGOING CHALLENGES, THERE ARE THINGS YOU CAN CONTROL – AND FIX By

Dennis McCarron

ncreasingly, there’s a lot going on around the world. the more people you can involve, the better. Include your spouse, significant other, family, staff or a peer you trust. As we lurched toward the end of 2020, there was a lot If you find yourself fixated on the feeling of worrying and of celebration that the year was over and a great 2021 not the problem at hand, that’s your mind telling you to take was ahead. Then supply chain problems, a COVID-19 variant and a break. Go for a walk, go for a drive, go sell something — the ugly stench of inflation started coming into focus. And whatever calms you. by the end of 2021, everyone was just — well, silent about Third, don’t think you can solve all problems in one sitting. the calendar year change. Some challenges take awhile to develop good plans around. Understandably, a global pandemic doesn’t care if calendars This is also another reason to write things down. It may have changed. The same can be said for inflation, a tight labor take several days or a week or more to solve a problem and market or that nasty back-order list staring you in the face. you don’t want to forget anything by not writing it down. It’s also important to point out that often, bigger challenges Fact of the matter is, there is always some crisis — some pressing matter — to be dealt with at your store. And the like a tight labor market and inflation are not problems you last few years have been especially difficult. are going to solve, so you need to focus on the parts of those It’s easy to go down the rabbit hole and ask “What if?” after problems that are within your control. what we all have experienced. What if inflation gets worse? There’s a United States Department of Labor statistic that says mechanical labor is running at or What if tire prices continue to increase? What if my lead technician quits? What below 2% unemployment. if my customers stop coming in? None of us are going to be able to fix You are now in a window Having made it through the pandemic, that in a week or a month. However, what where you can make you’ve proven you have the smarts, skills you can control is lowering your turnover, and determination to persevere through improving the working conditions at your fundamental changes to some of the most difficult times in tire dealership, giving out pay increases to those retailing history. employees who deserve it and off-setting that how you do business. If you held it together through the last payroll increase with a labor rate increase two years, I promise that you can hold it together through One of the great things about the tire retailing business whatever is thrown at you next. is that it is very forgiving of mistakes. The key to it is taking action and not worrying. WorryIf you make a decision to act on a problem and in a few ing only gives you gray hair and wrinkles. Worrying solves weeks it appears that wasn’t the best option, you can make a new decision. The market will forgive and forget. almost nothing. The absolute worst thing any tire dealership owner can do Clinically, worrying is a reaction to a stressful situation. is nothing and ignore an issue. Retail is about opportunity It does have a purpose. It focuses the mind on the problem and taking chances. at hand. The purpose of worrying is for you to acknowledge the This year presents a golden opportunity to make positive issue, buy some time to solve the problem and then act on enhancements to your business and modernize how you operthe solution. ate. That means better pay structures, better training, cleaner showrooms, using new technologies and taking chances. But spend too much time worrying and you can develop anxiety and a fixation on problems, regardless of their impact You are now in a window where you can make fundamental on your life. Anxiety needs to be treated medically by a doctor. changes to how you do business. Worrying just needs an action plan. I hope you take action this year. In fact, I hope you take Are you worried? First, identify what you are worried about several actions. This is the year to make it happen. ■ and tackle the issues one at a time. Writing things down is often very helpful, as it assists the brain in compartmentalDennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email izing complicated problems. him at dennis@cardinalbrokers.com. Second, spend some time trying to figure out a plan — and w w w . M o d e r n T i r e D e a l e r. c o m

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3/2/22 9:05 AM

Mergers and Acquisitions

More options equal more revenue MOBILE TIRE SERVICE CAN BE A POWERFUL VALUE-ADD FOR DEALERS By

Michael McGregor

ull disclosure — I am a fan of franchised mobile tire businesses. I believe that many independent tire dealers should consider getting a mobile tire franchise because of their relatively low cost, fast entry, proven equipment and processes, customer-facing technology and back-end infrastructure. Some mobile franchisors have been working on their business models for eight years or more and they might just have the model to help you increase your tire market share. With many big players — including Discount Tire, Bridgestone Americas Inc. and Goodyear Tire & Rubber Co. — working on mobile, this is how a six- to 10-store chain or even a singlelocation “unicorn” with over $5 million in annual revenue can compete with them. A business associate of mine recently told me that “fortune favors the brave” and I believe that’s particularly true for franchised mobile tire businesses. The founders of these businesses risked careers and capital investing time and energy on a new business model. Then along came COVID-19 and the world tilted in their favor. Some tire customers avoided going to stores and being near potential virus carriers. Being contact-free, mobile tire installation took off. And inquiries from potential new franchisees also increased. I’ve found the people running these mobile installation companies have a lot of mutual respect for each other. As pioneers building an industry segment, they share ideas and seem to partner with some of the same strategic players like Tire Agent, Tire Rack and others. They also welcome Firestone Direct and Goodyear and Tire Rack’s mobile installation programs, as they believe more entrants bring more attention to the mobile tire business. Since many consumers are not even aware that tires can be installed this way, increasing awareness is a good thing for everyone in the segment. To learn more about the mobile tire business, I only had to look in my backyard here in North Carolina, where Tread Connection and Get Spiffy Inc. are based. While both are doing mobile, they operate with two different strategies. One is about focus and the other is about providing multiple customer touch points. Tread Connection was founded in 2016 by Paul Hosage, a former store supervisor with Clark Tire in Charlotte, N.C. The day that Clark Tire announced it was being acquired by Monro Inc., Hosage went out and bought a Ford Transit van and began upfitting it for mobile tire installation. His initial targets were fleets of all types and owners of high-end cars. (He marketed his new service by visiting high-end car clubs.)

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Hosage figured fleets would provide the volume and also would appreciate the convenience of mobile tire installation, while car enthusiasts who value their time wouldn’t mind spending the money. (Tread Connection is focused solely on tire installation. The company’s model is to do “only one thing very well and that’s it,” says Hosage.) Tread Connection is now seeing more consumer adoption because “people are online, they search for things and want them done at home,” says Hosage. The company sources most of its tires from American Tire Distributors Inc. (ATD), conveniently headquartered near Charlotte. That’s a partnership that continues to strengthen to this day as ATD’s distribution matches up well with Tread Connection’s franchise network. Hosage says that a Tread Connection franchisee can do quite well scheduling between four to six retail appointments per day and selling about 12 tires each day. The company’s pricing model is to charge a $50 onsite fee, plus the cost of the tires at standard industry margins and the installation of tires at $25 to $30 per tire. Hosage feels that there is so much potential in selling and installing tires that until Tread Connection fields “hundreds of

“People are online, they search for things and want them done at home,” says Paul Hosage, the founder of Tread Connection.

MTD March 2022

3/2/22 9:23 AM

WE WANT TO HEAR FROM YOU!

Nominate a candidate for MTD’s 2022 Tire Dealer of the Year Award Established in 1993, Modern Tire Dealer’s Tire Dealer of the Year Award is the oldest, most prestigious honor of its kind. Each year, Tire Dealer of the Year Award candidates are evaluated in five categories: California dreaming or new reality? Fuel efficiency ruling could have big impact On the fast track RNR Tire Express builds steam How to sell brake service

‘WE’RE JUST GETTING STARTED’ Jim and Tommy Duff - our Tire Dealer of the Year Award recipients - prepare for Southern Tire Mart’s next growth phase

1. BUSINESS SUCCESS 2. MARKETING SKILLS 3. MANAGEMENT SKILLS 4. INDUSTRY KNOWLEDGE 5. COMMUNITY INVOLVEMENT

September 2021 | Vol. 102, No. 9 | $10 | www.moderntiredealer.com

Do you know an independent tire dealer who excels in these areas? Nominate him or her today! DEADLINE FOR ENTRIES IS MAY 27, 2022. To nominate, go to: www.moderntiredealer.com/awards For more information, contact MTD Editor Mike Manges at mmanges@10missions.com

DON’T MISS YOUR CHANCE TO RECOGNIZE AN OUTSTANDING TIRE DEALER! 63_DEALER OF THE YEAR_0322.indd 63

3/1/2022 9:41:33 AM

Mergers and Acquisitions vans selling tons of tires,” he won’t be trying other services. He also believes that the future of vehicles is electric and this change is coming faster than people think. So investing in oil changes or mechanical work has obsolescence risk associated with it. He also sees mobile tire installation as being complementary with brick-and-mortar retail. “The biggest downfall of mobile is that you don’t have a fixed billboard like a store that people can see (while) driving around,” he explains. “Mobile tire guys have to be good at Facebook or Google, pay-per-click and word-of-mouth.” Busy brick-and-mortar dealerships that offer mobile service can easily switch an in-store visit to a mobile appointment, says Hosage. Offering mobile is the cheapest way, he believes, of “adding more bays to your existing operation. And you get to charge a convenience fee.” Hosage says ideal franchisees for Tread Connection might be multi-store operators who own three or more outlets. A tire dealer like that can leverage its footprint to increase tire volume and market share, he adds. Another mobile service provider, Get Spiffy, is headquartered in Durham, N.C. Its investors include Goodyear Ventures, Shell Ventures and others. Like Tread Connection, Get Spiffy also has installation agreements with Tire Rack, Tire Agent and ATD. The company was founded by Scot Wingo, a successful hightech entrepreneur who in 2003 diversified his wealth into a few car washes in the area. After taking his first Uber ride, Wingo had an epiphany that all sorts of service businesses would be going digital because “this low- friction experience becomes addictive.” One of Wingo’s core beliefs is that the American consumer is split between those who seek convenience and those who seek value. He began looking at how he could develop an Uber-like digital experience in automotive services for people seeking convenience, knowing that higher profit margins lay with these customers. With his business partner, Karl Murphy, he targeted vehicle washing and detailing to start, launched an app in 2014, got some vans, took some technicians from his car washes, trained them and launched Get Spiffy. At a physical car wash, 80% of business is done on the weekends, says Wingo. The first thing he noticed is that requests started coming in for mobile wash appointments mostly mid-week. It became apparent that convenience-seeking customers didn’t want to waste their weekend time at the car wash. The company then introduced oil changes, “really for consumers, but (it also) had this unintended consequence of unlocking fleets for us. What we found is fleets of all sorts have a huge problem with getting preventive maintenance. “And I think tires are like that. We keep it simple and walk the consumer to tires with, ‘All right, we’ve washed your car a couple of times and changed its oil. Your tire tread is low. Would you like this same experience for tires?’ “I come from the e-commerce world and one way to look at (it) is, ‘What does it cost to acquire a customer?’ And then you look at the lifetime value of that customer. When we sell and install tires, it’s just increasing our lifetime customer value. We don’t have to acquire that customer to also sell them tires. We’ve already done other services for them most of the time. But if they come to us for tires first, that’s fine, too. I want to sell them tires,

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“I come from the e-commerce world and one way to look at (it) is, ‘What does it cost to acquire a customer?’” says Scott Wingo, founder of Get Spiffy. “And then you look at the lifetime value of that customer. When we sell and install tires, it’s just increasing our lifetime customer value.”

then I want to sell them wash and oil. Because we’re providing a holistic car care experience, that math works versus spending $100 to acquire a customer, selling them tires and then not seeing them again for three or four years. “We’re touching 3,000 cars a day right now, with 250 mobile vans and 400 techs across the United States. And we grew 140% year-over-year” during 2021. Get Spiffy owns and operates its own vans in 26 markets. It also started franchising a year ago and now has 10 franchise partners. The company’s strategy on geography is that if it’s in a large metro area with well over a million people, it wants to own and operate its own vans. Get Spiffy believes there are 40 of those markets and intends to franchise in smaller metro areas. Wingo has an interesting take on where brick-and-mortar retail ends up that I believe all tire dealers need to hear. “The convenience-oriented consumer is not going to tolerate the current experience of either dropping the car off for a long period of time or coming in and waiting in a room. They’re super-busy and they will pay extra for a competing service that goes to them. “For a long time, retail stores said, ’E-commerce is a fad.’ Walmart’s first stab at e-commerce was a separate company that was just going to do its own thing. And then they realized that it is a fundamental change in how the customer operates. “There will always be a value-oriented customer. And the value-oriented consumer, I think, will continue to go to brickand-mortar (operators) because they will trade off their time for saving money.” Think about this, though. If the convenience-oriented customer gravitates to the mobile experience, some brick-and-mortar retailers could be left with a customer base slanted towards price-sensitive, value-seekers. Mobile gives brick-and-mortar dealers an opportunity to capture both. ■ Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/ automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael.mcgregor@focusbankers.com.

MTD March 2022

3/3/22 7:43 PM

Focus on Dealers

Doubling sales in five years POINT S DEALERS SET ANOTHER NEW HIGH By

Joy Kopcha

or the fifth straight year, Point S tire dealers in the U.S. recorded double-digit growth in tire unit sales. In 2021, units were up 17%. In dollars, sales increased 24% compared to 2020. Same-store sales were up and the increase reflects a full year of ownership of two more warehouses in Oregon that were previously operated by Northwest Wholesale. The group also added 20 stores in 2021. There are now 257 Point S locations in the U.S. and the footprint continues to expand in the middle of the country and eastward. Already in 2022, the first Point S store has opened in Missouri. The location, Christian Point S, is located in Poplar Bluff, Mo. Walter Lybeck, CEO of Tire Factory Inc., the cooperative that does business as Point S USA, says Point S has “doubled sales since 2016.”

A HISTORY LESSON

The cooperative was started in 1984 when the owners of six tire dealerships started pooling their orders to gain a little buying power. Klyde Thompson, owner of Del’s OK Point S in Astoria, Ore., was among those original owners. He says the six owners would meet in a parking lot in Beaverton, Ore., split up their tire orders and haul tires back to their stores in their own trucks. Eventually, those tire dealers grew and formed a cooperative. They branded their stores as Tire Factory, but retained individual ownership and control. In 2015, Tire Factory announced its plans to join Point S, a brand with an international presence. In 2016, Lybeck was promoted to the group’s top job. Point S then focused its attention and resources on helping dealers refresh and rebrand their stores. The group’s net promoter score — which, boiled down, indicates whether members are happy with Point S and would recommend it to their peers — has increased dramatically since. (In 2015, Tire Factory dealers gave the cooperative a negative net promoter score.) In 2021, Point S dealers scored the group at 70% — a record high.

least 95%. Young reports that’s 42 more stores since the last review. About a third of Point S dealers are transitioning to the group’s All-Trac Platform, a digital tool that helps with scheduling appointments, customer communication and vehicle inspection reports. In 2022, the group will add a consumer rewards program and will enhance members’ ability to communicate with consumers via text and e-mail. There’s also work underway on a new search tool so dealers can more easily search for and find the tires they need. Work on two new websites is underway. One will be used by Point S dealers’ wholesale customers and another will be rolled out for retail-facing consumers.

NEW LEADERSHIP

Point S dealers serve on the cooperative’s board of directors and after nine years, Eric Gill has stepped down as chairman of that board. Gill is the largest of all Point S tire dealers in the U.S. with 35 locations. In 2020, the Oregon-based dealer bought 10 stores in New England from Nokian Tyres plc, making his business bi-coastal, with locations in Oregon, New Hampshire, Vermont, New York and Massachusetts. Gill has handed the gavel to another veteran Point S tire dealer, Chris Cornelius, owner of Clair and Dee’s Point S Tire and Auto Service in Rexburg, Idaho. Cornelius had previously served six years as chairman of the cooperative’s board.

COMING IN 2022

Since the transition to Point S, the group has also scored individual stores on their appearance and customer service performance. Clint Young, Point S chief operations officer, says 102 stores earned the group’s “top shop Point S resumed its annual in-person dealer meeting with a recent event in Puerto honors,” with these outlets tallying scores of at Rico. COVID-19 restrictions led to a smaller crowd of about 250 people. w w w . M o d e r n T i r e D e a l e r. c o m

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2/28/22 3:30 PM

Focus on Dealers

Selling tires, service and cars ZIMMERMAN’S AUTOMOTIVE TIRE PROS ADAPTS TO CUSTOMERS’ NEEDS By

Joy Kopcha

immerman’s Automotive has undergone a few transformations in its history, with the most recent being the addition of tires to its business plan and Tire Pros to its name. Judy Zimmerman Walter’s father started the business in 1958 in Mechanicsburg, Pa.. In the decades since, it has grown to have three divisions— tire sales and automotive repairs, a quick lube and auto sales. All have faced unique and incredible challenges in the last year, from supply chain disruptions and price hikes to the unstable new car market. “We have so far been able to push through,” says Zimmerman Walter. Like other tire dealers, she’s juggled the availability of tires and automotive parts over the past year. Inside her quick lube business, the biggest issue has been the availability of some of the more unique oil products. As for car sales, prices have gone up and Zimmerman Walter says that presents risks. “You have to be careful. You have to know what your vehicle’s going to be worth. Auction prices will (move) from wholesale right into retail and keep going. We’ve had to be careful buying our vehicles.” But Zimmerman Walter says Zimmernan’s Automotive Tire Pros has navigated the bumps in the road and has found a way to keep growing. In 2022, the company’s 12 bays that install tires and provide automotive service are expected to contribute more than $2 million in overall sales. With quick lube and auto sales included, total sales are projected to be $5.5 million “We’re people who believe in looking at the big picture and looking to the future. That’s why we’re involved in a lot of things nationally. “We need to pull resources from all kinds of places — from shops in California, Oregon and the Midwest, as well as the East Coast.”

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Four things to know about Zimmerman’s Automotive Tire Pros Here are four “fast facts” about Zimmerman’s Automotive Tire Pros: Zimmerman’s Automotive Tire Pros hosts year-round events, from car seat inspections to holiday events that support a local non-profit.

Case in point is a lesson she’s learned from one of her membership associations — think of a person’s vehicle as “their biggest piece of personal protective equipment.” Carpooling and public transportation pose health risks during a pandemic and the result has energized the entire automotive market. Zimmerman’s Automotive Tire Pros has offered curbside service, texting to customers and payments by phone. The company also is marketing a disinfection service for consumers’ vehicles, using PermaSafe Protective Coatings. Even with a willingness to adopt best practices she’s picked up elsewhere, Zimmerman Walter says nothing prepared her for what turned out to be her greatest challenge in 2021 — walking the fine line of explaining the company’s rising costs to people. “Consumers don’t like it, but they understand it. People have been very gracious. They mention (prices), but they’re not really yelling at you. They’re just grousing. You do what you have to do to keep moving forward.” Even the occasional grouchy customer has taught Zimmerman Walter an important lesson. “Some people are dealing with so much stress. Talk to them. Ask them about their grandchild or kid that went back to college. It’s relationship building, which is so important in this industry.”

• Jeff and Judy Zimmerman Walter are the owners-operators of the business. Jeff is chief operating officer and Judy is CEO and chief financial officer. Their daughter, Jacquie Walter Hower, currently works as director of operations and represents the dealership’s third generation. • It’s a passenger and light truck tire business. Tires represent 25% of the company’s overall sales. • The dealership’s main repair shop has 12 service bays. There are four more dedicated to the auto sales side of the business and a two-bay quick lube on site. • For years, Zimmerman’s Automotive Tire Pros sold tires almost by accident due to required state vehicle inspections. Three years ago, the dealership boosted its buying power by joining Tire Pros and adding tires to its menu.

Judy Zimmerman Walter is a secondgeneration tire dealer, operating the business that her father started in 1958. Her daughter, Jacquie Walter Hower, left, will follow in her footsteps.

MTD March 2022

3/2/22 9:24 AM

Focus on Industry

USTMA targets sustainability, scrap markets and more ASSOCIATION PRESIDENT OUTLINES PRIORITIES FOR 2022 By

Mike Manges

ast year was a busy one for members of the U.S. Tire Manufacturers Association (USTMA), says Anne Forristall Luke, the association’s president and CEO. This year is shaping up to be just as action-packed, she explains in this interview. MTD: The domestic tire market, by all accounts, enjoyed a remarkable recovery in 2021. What do your association’s members credit that to? Forristall Luke: It’s a multi-factor situation. There was a tremendous increase in demand on the replacement side and a little less on the original equipment side, but still strong there. And of course, commercial (demand)

“Innovative strategies toward workforce development are going to be critical,” says USTMA CEO and President Anne Forristall Luke.

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

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is doing very well. We’re definitely seeing vehicle miles continue to go up. Also our members responded nimbly and quickly to the challenges they faced brought on by COVID-19 shock in 2020 in terms of productivity, managing the needs of their workforce, flexing, etc. That ability to pivot quickly has continued to improve our overall performance and I think it bodes really well for the future. Workforce (remained) a challenge across the manufacturing sector — not just in the tire industry. Innovative strategies toward workforce development are going to be critical. MTD: What are the USTMA’s top priorities in 2022? Forestall Luke: Our top priorities can be talked about as part of our whole sustainability framework. When we use the word sustainability, we talk about it from a broad perspective, which encompases environmental stewardship, economic value and social (responsibility.) We have some major regulatory and scientific issues we are managing in the area of sustainable tire materials. Another major focus is new market development for scrap tires. Our studies are showing that there is a lot of pressure on scrap tire market development because scrap tire generation — (due to tire) demand — is outpacing the (end user) market. We’re very focused on climate — energy efficiency and the potential for retreaded tire procurement policies. Obviously, working with the National Highway Traffic Safety Administration (NHTSA) to modernize performance standards (for tires) is still a top priority and looking ahead, working with NHTSA to make sure the regulatory framework

(can accommodate) future mobility. You will hear our new chairman, Paolo Ferrari, discuss platforms and issues that are important to our members and society. (Editor’s note: Ferrari, who also serves as president and CEO of Bridgestone Americas Inc., took the chair position at USTMA during October 2021) That’s an approach that we will be looking at across the board. A key partner for us will be our tire dealers in working with new leadership at the Tire Industry Association. They have tremendous networks in the states. As you know, scrap tire market development is primarily driven at the state level, so forming partnerships to help build those new frameworks is going to be important for us. There is the tire itself and the innovation that goes into a tire that will perform well on an electric vehicle. Then there is the connectivity element — how the tire talks to the vehicle and what happens to the data that’s generated. Who owns that data? Issues around data and data privacy are critical, as well. MTD: Which legislative issues are most important to USTMA’s members and which ones will you prioritize throughout the year? Forristall Luke: We got the infrastructure bill passed and now the next part of that work is to make sure those provisions we worked so hard to get are able to realize their full potential. There are provisions for technology development, where we’d like to see the federal government focus on developing a sustainable infrastructure for highways. That will continue to be a major focus for us on the federal level.

2/28/22 3:31 PM

TPMS

Nissan Rogue (Gas) – 2018-2020 lamp turns OFF (approximately five seconds); 6. Repeat steps four and five for the remaining tires in this order: right front, right rear and left rear; 7. When ID registration is complete, check the following pattern at each wheel. (See Fig. 1); 8. After the ID registration procedure for all of the wheels is complete, press “End” on the CONSULT to finish ID registration; 9. Test drive the vehicle to ensure that the tire pressure monitoring System (TPMS) lamp is OFF and no warning messages are present.

TPMS REGISTRATION WITH SIGNAL TECH II TOOL

DESCRIPTION & OPERATION

The tire pressure sensor integrated with the valve is installed in each wheel and transmits the detected tire pressure and temperature signal in the form of a radio wave. The radio signal is received by the body control module (BCM). Component parts: 1. Combination meter 2. Information display 3. Anti-lock brake system (ABS) actuator and electric unit 4. Front-wheel sensor LH 5. BCM 6. Rear wheel sensor LH (front-wheel drive) 7. Rear wheel sensor LH (all-wheel drive) 8. Tire pressure sensor

ID REGISTRATION PROCEDURE

Description This procedure must be performed after the replacement of a tire pressure sensor or BCM. Work Procedure TPMS ID registration can be performed using one of the following procedures: • Transmitter activation tool using the computerized on-board system universal tester (CONSULT) (preferred method) • Signal Tech II tool using CONSULT • Signal Tech II tool without CONSULT • CONSULT only

Note: The Signal Tech II must be updated with the newest software version in order to perform the following procedures. The Signal Tech II software updates can only be downloaded from a CONSULT unit. Other versions will not show the updates. With CONSULT 1. Adjust the tire pressure for all tires to the recommended value; 2. Turn the ignition switch ON; 3. Using CONSULT, select “Work support” in “AIR PRESSURE MONITOR.” Then, select “ID REGIST;” 4. Select “Start” on the “ID REGIST” screen; 5. Turn on the Signal Tech II tool; 6. Hold the Signal Tech II against the side of the left front tire, near the valve stem; 7. With the tool held at a zero- to 15-degree angle to the tire, select “Activate Sensor” from the main menu, then press and release the “OK” button to activate the sensor. Once the sensor is activated, the vehicle parking lamps will flash and the sensor ID will appear on the CONSULT screen; 8. Repeat steps six and seven for the remaining tires in this order: right front, right rear and left rear;

Fig. 1: When the ID registration is complete, check the following pattern at each wheel.

TPMS REGISTRATION WITH TRANSMITTER ACTIVATION TOOL

1. Turn the ignition switch ON; 2. Using CONSULT, select “Work support” in “AIR PRESSURE MONITOR.” Then, select “ID REGIST;” 3. Select “Start” on the “ID REGIST” screen; 4. Hold the transmitter activation tool against the side of the left front tire, near the valve stem; 5. With the tool held at a zero- to 15-degree angle to the tire, press and hold the transmitter activation tool button until the indicator

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Fig. 2: When doing tire pressure monitoring system (TPMS) registration by using the computerized on-board system universal tester (CONSULT) only, adjust the tire pressure for all wheels to match this chart.

MTD March 2022

3/2/22 10:36 AM

ITSTPMS+MORE IT S60 0

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COMPLETE TPMS SERVICE 4 SENSOR PROGRAMMING OPTIONS

ITS600

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

• Four Service Resets OLS, BMS, SAS and EPB • Read & Erase All System Codes • FREE Wi-Fi Software Updates for Life Of Tool

69_AUTEL_0322.indd 69

SCAN TO WATCH

TRAINING VIDEOS

YOUTUBE

3/1/2022 9:46:48 AM

TPMS 9. When ID registration is complete, check the following pattern at each wheel. 10. Once all of the sensors have been activated, select “End” on the CONSULT to finish ID registration; 11. Test drive the vehicle to ensure that the TPMS lamp is OFF and that no warning messages are present. Without CONSULT 1. Adjust the tire pressure for all tires to the recommended value; 2. Turn on the Signal Tech II tool and select “TPMS Check” from the main menu; 3. Select vehicle model and year; 4. When prompted, hold the Signal Tech II against the side of the left front tire, near the valve stem; 5. With the tool held at a zero- to 15-degree angle to the tire, press and release the “OK” button to activate the sensor. Once the sensor is activated, the tool will sound a tone, and the tire pressure will be displayed; 6. Repeat steps four and five for the remaining tires in this order: right front, right rear and left rear; 7. When prompted, connect the tool to the data link connector. The tool will connect to the BCM, read the vehicle identification number (VIN), read sensor IDs and check for TPMS diagnostic trouble codes (DTCs). Along with DTCs detected, one of the following will be displayed next to each wheel: • N/A - Not applicable because no ID was found by the tool • OK - Wheel and sensor are in the original position • NEW - New ID found compared to BCM • RT - Wheel has been rotated • Low Press - Low tire pressure 8. If no DTC is present or the repair has been completed, press the “OK” button to register the IDs and clear DTCs; 9. Test drive the vehicle to ensure that the TPMS lamp is OFF, and that no warning messages are present; 10. Print a Signal Tech II Audit Report for your records. Refer to the Signal Tech II User Guide for instructions.

TPMS REGISTRATION WITH CONSULT ONLY

1. Adjust the tire pressure for all wheels to match Fig. 2 on page 68; 2. Turn the ignition switch ON;

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3. Using CONSULT, select “Work support” in “AIR PRESSURE MONITOR”. Then, select “ID REGIST;” 4. Select “Start” on the “ID REGIST” screen; 5. Drive the vehicle at a speed greater than 25 mph for three minutes or more; 6. After ID registration for all wheels is complete, press “End” on the CONSULT to finish ID registration. (See Fig. 3); 7. Adjust the tire pressures for all tires to the recommended value; 8. Test drive the vehicle to ensure that the TPMS lamp is OFF and no warning messages are present.

TROUBLESHOOTING

• During driving, the TPMS receives the signal transmitted from the tire pressure sensor installed in each wheel. The BCM of this system has pressure judgment and trouble diagnosis functions. When the TPMS detects low inflation pressure or another unusual symptom, the low tire pressure warning lamp in the combination meter comes on. • Tire pressure varies as per the change in tire temperature. Therefore, the warning tire pressure value is varied as per the change in tire temperature. • If the tire pressure is less than the warning tire pressure value, the low tire pressure warning lamp illuminates. • Location of the wheel is specified due to the synchronism of wheel sensor position and tire pressure sensor position. • Activates the TPMS when the vehicle speed is 25 mph or more. • The TPMS has an Easy-Fill Tire alert function to aid in tire inflation.

DEMOUNTING/MOUNTING PROCEDURES

CAUTION: The tire should be demounted from the wheel using the tire changer manufacturer’s instructions. Use the following information to avoid damage during the demounting/mounting procedures.

TIRE PRESSURE SENSOR REMOVAL

1. Remove wheel and tire using a power tool. NOTE: If the tire is to be reused, apply a matching mark on the tire in line with the position of the valve stem for the purpose of wheel and tire balance adjustment after installation; 2. Remove the valve cap and valve core to deflate the tire. CAUTION: • Do not use silicone lubricant. The use

of silicone lubricant will deteriorate the tire and wheel • Be sure not to damage the wheel or the transmitter. 3. Lubricate the tire outside the bead well with a suitable non-silicone lubricant and separate the tire outside the bead from the wheel; 4. Lubricate the tire inside the bead well with a suitable non-silicone lubricant and separate the tire inside the bead from the wheel. CAUTION: Do not damage the wheel or the transmitter; 5. Carefully lift and set the wheel and tire onto the tire changer turntable so that the transmitter (1) is at the bottom. Position the wheel and tire so that the transmitter is 270 degrees from the mounting/ demounting head (2). 6. Remove the tire from the wheel; 7. Press the spring in order to unlock the clip from the valve stem; 8. Pull in the direction and remove the transmitter from the valve stem. CAUTION: Do not damage the wheel; 9. Cut the inner end of the valve stem using a suitable tool; 10. Cut the roll pin of the valve stem using a suitable tool; 11. Remove the valve stem from the wheel using Tool number: J-51980

INSTALLATION

Make sure there are no burrs, foreign substances or indications of damage to the wheel: 1. Clean the valve stem hole in the wheel. CAUTION: • Do not reuse the valve stem. • Do not use silicone lubricant. The use of silicone lubricant will deteriorate the tire and wheel. 2. Apply a suitable non-silicone lubricant to the surface of the valve stem that touches the wheel and to the valve stem hole in the wheel. CAUTION: Position part of the valve stem in the 12 o’clock position relative to the rim of the wheel; 3. Position the valve stem in the valve stem hole in the wheel. CAUTION: • Do not damage the wheel. • Install the valve stem all the way to the wheel. • Make sure the valve stem seats properly in the valve stem hole in the wheel. 4. Install the valve stem to the wheel using Tool number: J-51980. CAUTION: • Do not damage the wheel. MTD March 2022

3/3/22 7:50 PM

TPMS • Make sure the position of part of the valve stem is in the 12 o’clock position relative to the rim of the wheel. • If the position is not correct, rotate the valve stem to the correct position using Tool number: J-51980. 5. Inspect the position of the valve stem relative to the wheel. CAUTION: • Do not drop or strike the transmitter. Replace the transmitter if it has been dropped from higher than one meter. • Replace the transmitter if the transmitter shows cracks or damage. 6. Position the transmitter on the roll pin of the valve stem; 7. Press and hold the spring in order to unlock the clip inside the transmitter. CAUTION: Install transmitter all the way to the valve stem; 8. Push in the direction and install the transmitter to the valve stem. CAUTION: Gently pull on the transmitter and make sure that the tire pressure sensor is correctly locked on the valve stem; 9. Release the spring in order to lock the clip onto the valve stem. CAUTION: Make sure the transmitter fully contacts the valve stem; 10. Inspect the position of the transmitter relative to the valve stem. CAUTION: • Make sure the surface of the valve stem seats properly in the valve stem hole in the wheel. • Make sure the surface of the valve stem has a convex shape on the outboard side of the wheel. 11. Inspect the position of the transmitter relative to the wheel. CAUTION: Make sure the roll pin is in the correct position as shown; 12. Inspect the position of the roll pin relative to the transmitter. CAUTION: • Do not use silicone lubricant. The

Fig. 3: After ID registration for all wheels is complete, press “End” on the CONSULT to finish ID registration.

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use of silicone lubricant will deteriorate the tire and wheel. • Do not allow lubricant to make contact with the transmitter. 13. Apply a suitable non-silicone lubricant to the tire inside the bead. CAUTION: Do not damage the wheel or the transmitter; 14. Install the tire inside the bead onto the wheel in the position shown below. CAUTION: Do not touch the transmitter with the mounting head; 15. Place the wheel on the turntable of the tire machine. Make sure that the transmitter is 270 degrees from the mounting/demounting head. CAUTION: • Do not use silicone lubricant. The use of silicone lubricant will deteriorate the tire and wheel. • Do not allow lubricant to make contact with the transmitter. 16. Apply a suitable non-silicone lubricant to the tire outside the bead. CAUTION: When installing, make sure that the tire does not rotate relative to the wheel. If the tire is being reused, align the matching mark applied on the tire with the position of the valve stem for the purpose of wheel and tire balance adjustment after installation; 17. Install the tire outside the bead on the wheel as normal. CAUTION: Do not reuse the valve core; 18. Install the valve core and inflate the tire. CAUTION: Do not reuse the valve cap; 19. Install the valve cap; 20. Balance the wheel and tire; 21. Install the wheel and tire in the appropriate position on the vehicle. CAUTION: If replacing the transmitter, then the ID registration procedure must be performed; 22. Perform the ID registration procedure.

TBE200

INDEPTH TIRE SERVICE

LASER TBE200 INTELLIGENT MEASUREMENTS TIRE TREAD DEPTH MEASUREMENT

BRAKE DISC WEAR MEASUREMENT 0.1MM LASER ACCURACY TOUCHSCREEN DISPLAY

DISPOSAL

CAUTION: Dispose of the transmitter and the battery, according to the law and local regulations. The battery is lithium ion. Dispose of the transmitter and the battery as an assembly. ■ Information for this column comes from the tire pressure monitoring systems data in ProDemandR, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com.

Phone: (855) 288-3587 • USSUPPORT@AUTEL.COM

3/3/22 7:50 PM

Products Hankook Dynapro XT is for rugged terrain use The Dynapro XT signals Hankook Tire North America’s entry into the rugged-terrain tire market and is part of the company’s larger lineup of tires designed for off-roading applications. It comes in 30 sizes and has rigid polygonal blocks and wide zig-zag grooves that perform double duty in providing an aggressive-looking sidewall, while delivering off-road traction. The tire has earned the 3-Peak Mountain Snowflake rating. HANKOOK TIRE NORTH AMERICA www.hankooktire.com

Carlstar updates UTV tires The Carlstar Group LLC has expanded its powersports line with a pair of tires designed for UTVs that need to work hard while carrying heavy loads. The bias-ply 489 XD tire has a V-shaped lug design to provide a smooth ride, while providing good clean-out characteristics. The tire features the company’s 489 tread pattern, combined with an eight-ply construction. CARLSTAR GROUP LLC www.CarlisleBrandTires.com

Nokian designs Outpost for all terrains The Outpost family of all-terrain tires from Nokian is designed to be rugged enough for any weather, surface or situation. The tires help drivers extend their terrain, toughness and travel, thanks to the technology in their design and construction, plus 3-Peak Mountain Snowflake certification. The Outpost AT is an all-terrain tire with an aggressive tread pattern and puncture-resistant Aramid fibers embedded beneath the tread and sidewalls. The Outpost APT is an all-purpose-terrain tire that lets drivers travel in all conditions, thanks to Aramid sidewalls and an adaptable tread compound. Both come with Nokian’s Pothole Protection — a guarantee to replace the tire in its first year if it suffers road hazard damage beyond repair. NOKIAN TYRES INC. www.nokiantires.com

Yokohama drive tire made for the last mile Yokohama Tire Corp. has added to its commercial truck tire lineup with a drive tire, the 720R. The Yokohama 720R is designed for last-mile and pickup truck applications. It is available in the United States in size 225/70R19.5. Other features include an all-new casing design; N speed rating, which allows speeds of up to 87 miles per hour; wide lateral grooves that run diagonally across the center rib for improved wet and snow traction; deep open shoulder lug grooves for enhanced traction; and more. YOKOHAMA TIRE CORP. www.yokohamatire.com

Titan adds flotation sizes to AgraEdge Titan has added four flotation sizes — 710/70R38, 710/70R42, 800/65R32 and 800/70R38 — to its Titan AgraEdge line, which targets mechanical front-wheel drive tractors, combines and other machines. Titan introduced the AgraEdge line in 2021 with 17 tires in 14 sizes, and the newest sizes feature a modern design, better compounds, materials and construction. The lug angles offer optimum selfcleaning and traction, while the tire’s footprint minimizes soil compaction. Each tire is D-speed rated to match the application. The expansion gives AgraEdge 18 total sizes. Titan plans to continue to expand the line in the coming months with additional row crop and flotation sizes. Titan International LLC www.titan-intl.com

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Products

Track brake lathe use with HunterNet 2 Hunter Engineering Co. has added its AutoComp Elite brake lathes to the list of Hunter equipment connected to HunterNet 2, the company’s portal that lets customers monitor lathe usage and track their dealership’s return on investment. Users can also view equipment results and reports, including how many brake jobs were done in a day, month or year. The portal also maintains records of services performed. HUNTER ENGINEERING CO. www.hunter.com

Cooper Endeavor promotes tread life The Cooper Endeavor for passenger cars and the Cooper Endeavor Plus for SUVs offer consumers a 65,000-mile warranty. Both tires feature a new silica tread compound and are made to perform in all seasons.They also feature a nylon overlay that evenly distributes pressure across the tread area for enhanced tread life. A new inner construction is designed to enhance handling and provide drivers with a predictable driving experience, in both wet and dry conditions. GOODYEAR TIRE & RUBBER CO. www.coopertire.com

Continental Redi-Sensor offers broad coverage BendPak updates lift lineup The QuickJack TL line of portable vehicle lifts has been updated to provide greater lighting height and versatility. The compact lifts feature an open-center design to provide full access to a vehicle’s undercarriage. The latest model offers three extra inches of lighting height over previous models, which provides at least two feet of ground clearance. BENDPAK INC. www.quickjack.com

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Continental’s latest line of Redi-Sensor multi-application tire pressure monitoring systems (TPMS) sensors were specifically developed in response to a growing demand in the aftermarket to make TPMS service simpler, faster and easier. Continental says dealers can stock four REDI-Sensor SKUs to replace more than 290 different original equipment sensors on more than 150 million vehicles in operation, from model years 2002 through 2021. CONTINENTAL COMMERCIAL VEHICLES & AFTERMARKET www.redi-sensor.com

2/28/22 3:35 PM

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

PAGE

WEBSITE

1-800EveryRim OEM Wheels

www.everyrim.com/MTD

Accu-Turn BASE USA

www.baseusa.com

Aftermarket Auto Parts Alliance Inc.

www.aftermarketjackpot.com/vip

American First Finance

www.americanfirstfinance.com

Autel

9, 69, 71

www.autel.com

BKT USA Inc.

www.bkt-tires.com

Centric Parts

www.centricparts.com

Deestone

www.deestone.com

Easypay Finance

enrollment.easypayfinance.com/tiredealers

Falken Tires

www.falkentire.com

General Tire

www.generaltire.com

GT Radial

www.gtradial.com

Hunter Engineering Company

www.hunter.com/tire-changers

K & M Tire Inc.

www.kmtire.com/mrtire

Katapult

28-29

www.katapult.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Koalafi

32-33

www.koalafi.com

Kumho Tire USA Inc.

26 A-B

www.kumhotire.com

Linglong Americas Inc.

www.linglongtire.com

Maxxix Tires

www.maxxis.com

Mighty Auto Parts

www.mightyautoparts.com/vs7

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Nokian Tyres Inc.

www.nokiantires.com/winterlegend

Raybestos

www.raybestos.com

Sentury Tire

www.senturytireusa.com

Sunbit

auto.sunbit.com/learnmore

Tireco Inc.

www.milestartires.com

Transamerica Tire Company Ltd.

IFC

www.transamericatire.com

Wrenchers LLC

www.wrenchers.com

Yokohama Off-Highway Tires America Inc.

www.yokohama-oht.com

ZC Rubber America Inc.

www.arisuntires.com

06_MTD_Products.indd 74

MTD March 2022

3/2/22 10:41 AM

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