Modern Tire Dealer - May 2023

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DO ELECTRIC VEHICLES ALWAYS NEED EV TIRES? THE TRUE COST OF A BAD CUSTOMER EXPERIENCE MEET ‘THE GRAND POOBAH’ OF RETREADING

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HOW TO...

• TURN SALESPEOPLE INTO SUPERHEROES

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DEPARTMENTS 4 Editorial

The Slinky Effect Expert advice on how to ‘spring back’ your inventory levels

6 moderntiredealer.com

News and navigation tools for MTD’s website

8 Industry News

‘Having 250 to 300 stores would be great’ New CEO Wessels says future is bright for Leeds West Groups

16 Numbers That Count

Relevant statistics for an industry in constant motion

18 Your Marketplace

Signs of a turnaround Spring ushers in miles driven rebound

59 Business Insight

Slow down to move faster Don’t skip critical steps when servicing customers

60 Mergers and Acquisitions

It’s gonna be ACES Electric vehicle growth is only part of what’s coming

61 Dealer Development

Know the cost The fallout of poor customer service

64 EV Intelligence

How to attract hybrid and electric vehicle customers Hint: their needs are the same as other car owners

65 Focus On Dealers

‘That’s a huge milestone’ Ted Wiens Tire celebrates 75th anniversary

67 Focus On Dealers

‘The Grand Poobah’ of retreading After 64 years on the job, Fay Kapke still loves what he does

68 Focus On Dealers

Barnwell House of Tires educates firefighters Event covered new tires and training

69 Focus On Dealers

New decal honors OTR tire technicians Purcell Tire’s Mason Hess wants to see them ‘on everything’

70 TPMS

Ford Edge - 2023

73 Products 74 Ad index

The Industry’s Leading Publication May 2023, Volume 104, Number 5

F E AT U R E S 20 Do electric vehicles always require EV tires?

The answer isn’t as clear-cut as you might think

30 Kent Coleman – the man

behind 11 Big O Tires superstores Big revenue comes from putting people first

34 Selling undercar service starts with prevention

Thomas Tire uses DVI, other tools to keep customers informed

36 No meme feat

How Iowa City Tire uses digital marketing to grow its business

Tire Dealer Survival Guide

42 Tire Dealer Survival Guide intro 43 How to turn your salespeople into superheroes

The secret? Getting out of the ‘comfort zone’

46 How to build a winning culture Why it starts with employee engagement

49 How to boost sales through digital marketing

Why digital marketing is as important as your P&L

51 How to navigate high inventory levels

Four strategies to keep stock moving

54 How to drive more business through texting

Getting started, creating campaigns and more

Cover images: 165907071 | bubaone, 993738528 | -VICTOR- | Getty Images 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

57 How to drive the leadership bus It’s important to capitalize on the first small win

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Editorial

The Slinky Effect

EXPERT ADVICE ON HOW TO ‘SPRING BACK’ YOUR INVENTORY LEVELS By

Mike Manges

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Photo: 15888224 © Andrei Stanciulescu | Dreamstime.com

T

hink back to when you were a kid. Remember the Slinky, that famous metal spring toy that “walks downstairs, alone or in pairs and makes a ‘slink-ity’ sound?”

There’s a “Slinky Effect” that’s happening in our industry. And you are most likely dealing with it as I write this editorial.

Here’s Jon Zurcher, chief operating officer of Monroe, Ind.-based Best-One Tire Group, which encompasses 285 locations, with some insight.

“When using the Slinky analogy, we’re looking at the quantity of tires on-hand,” he says.

“When demand exceeds supply, the Slinky gets stretched out. Inventory levels get thin because tires are literally going out the door as soon as they come in.

“The last two years, inventory was stretched thin through the supply chain. In November and December 2022, we felt inventories compress. Months of back orders all shipped at the same time. Multiple containers of tires suddenly appeared at once.”

Does this sound familiar?

At the beginning of the Slinky Effect, Zurcher continues, dealers — particularly those who sell commercial truck and ag tires — felt compelled to place larger orders, while ordering inventory “several months out, to make sure they had tires in the queue.

“Some manufacturers were even taking and asking for orders as far as 12 months out, so they could plan production. Some dealers placed larger-than-normal orders to communicate need and demand. They also put orders further out in the queue than normal, hoping to lock their place in line.

“When supply caught back up at the end of the fourth quarter, all those back orders shipped at once,” says Zurcher. “It literally flooded dealers with inventory.

“According to P&L statements, most tire dealers performed very well this past year. Net profits were strong. The challenge is that much of the paper profits have not equated to cash.”

Now I bet that sounds familiar!

So what is his advice to you and other dealers who find themselves in a supply imbalance situation? Make sellout your priority.

Here, programming becomes important, “as does service.”

If you’re struggling with commercial tire sellout, exercise caution when extending credit, he advises, as “some trucking companies are going to feel a crunch.”

Another piece of advice is to manage your buying with a careful eye. “Prior to the pandemic, we set minimum and maximum stocking levels by article number and we ordered accordingly.

We got away from this practice the past two years and we’ve circled back to it now.”

Are you grappling with the Slinky Effect at your dealership?

And benchmarking inventory will be more important than ever, he says. “We’re measuring in days, instead of turns.”

Twelve months ago — when inventory was stretched thin like a Slinky — dealers had little cash tied up in stock.

“Because of payment terms offered by manufacturers, a dealer could purchase a tire, receive it and sell it before the payable date became due. For most dealers, this is no longer the case.

“Because inventory compressed in such a strong manner during the fourth quarter, the number of days of inventory on-hand is by far exceeding payment terms offered by suppliers.”

He recommends running an inventory report to see how much money is tied up in stock and then “compare that to accounts payable. This will help answer the question of how much of your cash” is frozen in inventory.

“Right now, dealers should focus on getting quantity carrying values back to normal levels — having the right quantity of tires on the floor and in stock,” says Zurcher.

“Due to the series of price increases over the last two years, even if we see some price corrections, the carrying cost of inventory will still be high.

“I’ve seen some dealers’ inventory as much as double when comparing prior-year to current-year carrying value. This will level out. But the new baseline will be higher due to the price increases we’ve absorbed into inventory over the past few years.”

The good news is that we’re heading into summer, which should help alleviate pressure on inventories. And if we’re lucky, the Slinky will bounce back again.

Wouldn’t that be nice for a change? Q If you have any questions or comments, please email me at mmanges@endeavorb2b.com.

MTD May 2023

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An April 1 tornado damaged a Goodyear Tire & Rubber Co. consumer tire plant in Tupelo, Miss. The factory has the capacity to produce 42,000 passenger tires a day, according to MTD research.

Photo: MTD

Emergencies prompt worries about tire supply Having steady access to tires is an around-the-clock concern for tire dealers and unexpected disruptions to supply can be a real nightmare. Dealers learned a lot about the intricacies of the supply chain as a result of the COVID-19 pandemic, but now emergencies and Mother Nature are causing additional issues at plants operated by Hankook Tire & Technology and Goodyear Tire & Rubber Co. MTD readers are tracking the developments.

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Southern Tire Mart acquires Friend Tire from Yokohama Photos: An inside look at ATD’s newest warehouse Fire at Hankook plant under investigation Goodyear plant shut down due to tornado Marijuana in the workplace: what you need to know More on Southern Tire Mart’s latest acquisition Photos: Ted Wiens Tire celebrates 75th anniversary A look at Goodyear’s Tupelo plant Pomp’s Tire Service acquires Royal Tire Podcast: Marijuana regulations 101

DIGITAL EDITION Check out MTD’s digital edition at the top of our website’s homepage.

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3515 Massillon Rd., Suite 200 Uniontown, OH 44685 (330) 899-2200 www.moderntiredealer.com PUBLISHER Greg Smith gsmith@endeavorb2b.com (330) 598-0375 EDITORIAL Editor: Mike Manges, (330) 598-0368, mmanges@endeavorb2b.com Managing Editor: Joy Kopcha, (330) 598-0338, jkopcha@endeavorb2b.com Associate Editor: Madison Gehring, (330) 598-0308, mgehring@endeavorb2b.com PRODUCTION Art Director: Erica Paquette Production Manager: Karen Runion, (330) 736-1291, krunion@endeavorb2b.com MARKETING STRATEGISTS Bob Marinez rmarinez@endeavorb2b.com (330) 736-1229 Marianne Dyal mdyal@endeavorb2b.com (706) 344-1388 Dan Thornton dthornton@endeavorb2b.com (734) 676-9135 Sean Thornton sthornton@endeavorb2b.com (269) 499-0257 Kyle Shaw kshaw@endeavorb2b.com (651) 846-9490 Martha Severson mseverson@endeavorb2b.com (651) 846-9452 Chad Hjellming chjellming@endeavorb2b.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 ENDEAVOR BUSINESS MEDIA, LLC CEO: Chris Ferrell President: June Griffin CFO: Mark Zadell COO: Patrick Rains CRO: Reggie Lawrence Chief Administrative and Legal Officer: Tracy Kane EVP Transportation: Kylie Hirko VP Vehicle Repair: Chris Messer

Modern Tire Dealer (USPS Permit 369170), (ISSN 0026-8496 print) is published monthly by Endeavor Business Media, LLC.1233 Janesville Ave., Fort Atkinson, WI 53538. Periodical postage paid at Fort Atkinson, WI, and additional mailing offices. POSTMASTER: Send address changes to Modern Tire Dealer, PO Box 3257, Northbrook, IL 60065-3257. SUBSCRIPTIONS: Publisher reserves the right to reject non-qualified subscriptions. Subscription prices: U.S. ($81.25 per year). All subscriptions are payable in U.S. funds. Send subscription inquiries to Modern Tire Dealer, PO Box 3257, Northbrook, IL 600653257. Customer service can be reached toll-free at 877-382-9187 or at moderntiredealer@omeda.com for magazine subscription assistance or questions.

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MTD May 2023

Industry News

‘Having 250 to 300 stores would be great’

NEW CEO WESSELS SAYS FUTURE IS BRIGHT FOR LEEDS WEST GROUPS

D

erek Wessels, recently appointed CEO of Leeds West Groups (LWG), has big plans for the company, which has grown to encompass more than 120 retail locations across 18 states — most of them acquired Big O Tires and/or Midas franchise stores.

Wessels — who has more than two decades of automotive retail management experience, including 13 years with Bridgestone Retail Operations before he joined LWG in 2019 — steps into the role of longtime LWG CEO Judd Shader, who was named executive chairman of the Greenwood Village, Colo.-based firm this past January.

In this MTD exclusive, Wessels discusses LWG’s strategy, why he thinks the market for tire store acquisitions will remain healthy, where LWG could be five years down the road and more.

MTD: LWG has evolved into one of the largest independently owned and operated tire chains in the country — primarily through the acquisitions of single-store Big O and Midas locations.

That’s an interesting approach to growth.

Why are you picking up Big O and Midas locations rather than engaging in larger acquisitions?

Wessels: We look at a lot of opportunities when it comes to growth. Obviously, the easiest is a current Big O or Midas location. That enables us to quickly drop in operations and we’re ready to go. That’s very easy for us to do. We’ve done it a lot.

And we’re still excited about it. There are still a lot of opportunities that exist within those two groups.

And we do have a greenfield program.

We have four projects in the works right now. We started that last year. We also have picked up other properties. We’ve picked up some Tires Plus locations. We

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purchased, here in Colorado, a Tires Plus location. They vacacted and we bought it. It’s now a Midas. I just did one in Broken Arrow, Okla. It was a Tires Plus that’s now operating as a Midas. We did a three-store acquisition in Des Moines, Iowa, and added a fourth store just south of Des Moines. It was a Goodyear store.

We took on that property and reimaged it and it’s now a Big O. I’m very open-minded when it comes to growth, but it has to be smart growth, It has to fit our model. We have to see the opportunity to either add to an existing market or grow a new market. Putting one store somewhere doesn’t really excite me. But putting in one store with plans of adding five, 10, 15 or 20 — that’s exciting.

MTD: Why pursue acquisitions through TBC Corp. rather than picking up more traditionally independent tire dealerships? Is that due to LWG’s familiarity with TBC and its programs?

Wessels: TBC works hand in hand with us. They bring opportunities to us. We’re looking at opportunities they present to me all the time. I also have brokers bringing deals to us (from) all over the U.S. But again, we’re only going to do deals that are smart, fit our model and we’re excited about. We don’t have to just increase store count. We want to increase store count with stores that are profitable. It has to fit our DNA and who we are.

MTD: A lot of LWG’s acquisitions tend to take place in the western U.S. Any plans to move east or north?

Wessels: Absolutely. We’re looking at every and any opportunity that we’re presented with. We have big plans for growth and expansion. Anything that fits our model, we’re going to pursue it.

Derek Wessels is LWG’s new CEO. Photo: Leeds West Groups

MTD: What do you look for when considering acquiring a potential location, other than geography? Can you tell us about some of LWG’s criteria?

Wessels: One of the first things we look at is, ‘Do we have an existing footprint and how does it complement our core business?’ If it complements our core business, it’s a no-brainer. If it doesn’t complement our current business or footprint, but I feel like we can expand and grow the market, then we’ll pursue it.

MTD: What’s your take on all the M&A activity that’s happening in the market?

It didn’t slow down last year. We’re still seeing deals made. Do you think this is something that will continue?

Wessels: I think it will. The automotive business is a great business to be in and a lot of people are entering this space.

I think we’ll continue to see the major players within our industry expand.

I’m excited about it. We’re going to be expanding. I’m sure a lot of other people are looking at the business through the same lens we look at it.

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Industry News

Bites SRNA hikes prices Sumitomo Rubber North America Inc. (SRNA) increased prices on Falken brand passenger, light truck and medium truck tires up to 7%, effective May 1. The increase applied to tires sold in the U.S. and Canada.

Hankook plant off-line At press time, most of Hankook Tire & Technology’s plant in Daejon, South Korea, remained shut down nearly two months after a fire broke out there.

The multi-day fire was extinguished on March 15. Hankook said one production line wasn’t affected by the fire and was undergoing test runs. Sixty-five percent of the 20 million tires produced each year at the plant are shipped overseas.

Goodyear plant shuts down Goodyear Tire & Rubber Co.’s consumer tire plant in Tupelo, Miss., remains shut down after being struck by a tornado on April 1. From a production capacity standpoint, the Tupelo plant is the second biggest factory in Goodyear’s U.S. manufacturing network.

ATD opens Louisville D/C American Tire Distributors Inc. has opened a new distribution center in Louisville, Ky., that is bigger than its previous warehouse in that city.

Waldron leads Goodyear PLT Goodyear Tire & Rubber Co. has named Ryan Waldron president of its North America consumer tire business. He replaces Mike Dwyer, who has left the company. Waldron most recently served as vice president of Goodyear’s global off-highway tire business unit.

Continental hires Sinclair Continental Tire the Americas LLC has hired former American Tire Distributors Inc. executive Ron Sinclair to serve as director of sales, distribution. In his new role, Sinclair also will lead Continental’s Gold Retailer program.

Nokian breaks ground on D/C Construction on Nokian Tyres Inc.’s new distribution center in Dayton, Tenn., has begun. When it opens next year, the warehouse will span 350,000 square feet and will sit next to Nokian’s U.S. plant.

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MTD: What’s your take on retail tire demand in the U.S. right now? What are some of the challenges you see?

What are some of the bright spots? Do you think demand will remain robust throughout the rest of 2023?

Wessels: I think demand will be strong throughout the rest of the year. It’s all about operations and people. Those who are staffed and have good, strong operations — those who are ready to do business — will be successful and those who aren’t will not.

A lot of the challenges I hear about and see across the industry revolve around staffing. Do they have the staffing? Do they have the talent? Do they have the training? That’s where we’re focused. That’s where operations wins.

You have to have that talent and staffing.

It’s not (only about) demand. It’s about everyone’s ability to attract and retain talent. We can have plenty of demand, but if you don’t have the capability to do the work, you can’t capitalize on the opportunities.

MTD: Having a wealth of experience in tire retail, including nearly four years at LWG and your tenure at Bridgestone Retail Operations, what opportunities do you see for LWG? Do you see any similarities between what you accomplished at Bridgestone and what you want to accomplish at Leeds?

Wessels: I’m focusing on our culture.

I’m focusing on our talent. I’m focusing on our ability to execute on our plans.

When we call a play, we can run the play.

You can have the best plans in the world, but if you can’t execute on those plans, it’s hard to be successful.

I stay close to our stores. I work very closely with our vice presidents, our board of directors and our field operations. I’m very dialed in on our bench strength across the organization.

Our teams are excited about working for our organization. We’re providing lots of opportunities for growth. And that’s what employees want. They want to be part of an organization that values them. Our teammates in the stores and our teammates here at our office really make the difference day in and day out.

They determine our success.

MTD: How will you work with Judd in your new capacity and his new capacity?

Wessels: Judd and I work hand in hand.

We have for the past four years. Our relationship has not really changed.

We’ve always talked a lot. We’re both focused on growing the company and our company’s culture. That’s how we spend our time when we meet and talk.

Where are we at? What are we doing to make our company a great place to work?

What are we doing to capitalize on our opportunities?

“We’ve always looked at 10% growth annually from a store count standpoint,” says Derek Wessels, CEO of Leeds West Groups.

Photo: Leeds West Groups

MTD: Where do you see LWG five years down the road? Do you have a store count goal?

Wessels: We’ve always looked at 10% growth annually from a store count standpoint. We’re very comfortable at that level, so that’s one of our goals. But we look at all deals. And we’re going to do the deals that work for us. We’re in this business for the long term. Every acquisition and every new store has to make good sense and fit our long-term 10-, 15- and 20-year goals as an organization.

If I had to look five years down the road, having 250 to 300 stores would be great. We also could be significantly larger. It all depends on the opportunities. We don’t have any capital restraints, so we’re able to do pretty much any deal that we look at. It’s just, ‘Does it make sense on a 10-, 15- and 20-year timeframe?’ We’re not building store count to sell stores. We’re building store count to complement our core business and drive the growth of our company. Q MTD May 2023

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Industry News

Bites Monro promotes Welsh Monro Inc. has promoted Russ Welsh to senior vice president of retail operations for its North Division. Welsh will be responsible for developing and executing Monro’s retail operations strategy, as well as its long-range implementation plan.

He’s been with Monro since 2014.

RNR honors Raffo RNR Tire Express presented its Lifetime Achievement award to longtime franchisee Tony Raffo. He has been with RNR for nearly 20 years and was one of its first franchisees. Raffo has 24 RNR Tire Express locations and plans to add three more in 2023.

Support for Right to Repair Twenty-eight bipartisan attorneys general have sent a letter to Congress expressing support for Right to Repair legislation. The letter specifically mentioned the REPAIR (Right to Equitable and Professional Auto Industry Repair) Act, which was introduced in February.

D

ustin Dobbs, a fourth-generation tire dealer, has been named president and chief operating officer of Dobbs Tire & Auto Centers Inc. His appointment was effective March 15. He replaces his father, David Dobbs, as president, who was appointed chairman of the board and CEO. David Dobbs says, “Dustin represents the fourth generation of our family to take the reins as head of the company.

As his father, I couldn’t be prouder of him, as he has earned his stripes working hard in various positions and levels Dustin Dobbs is the of management since first joining the company as a store fourth generation of the Dobbs family to associate more than 25 years ago. take over leadership “His proven leadership serving on the company’s executive of Dobbs Tire & team during the past five years and skill sets, experience, Auto Centers. He vision and enthusiasm will definitely take Dobbs Tire & replaces his father as president.

Auto Centers to the next level.”

Photo: Dobbs Tire & Auto Dobbs Tire & Auto Centers was founded as a single store Centers in 1976 in south St. Louis, Mo. The company has grown to encompass a team of more than 600 employees and 43 locations in the St. Louis metro area and beyond. The company was tied for No. 27 on the MTD 100 in 2022.

Southern Tire Mart acquires Friend Tire

Hunter releases ROI tools Hunter Engineering Co.’s website now provides equipment-specific calculators to help tire dealers determine return on investment. Each calculator is tailored to specific equipment and allows for the adjustment of multiple inputs.

Owners cite concerns Locating affordable parts and qualified technicians are independent auto repair shops’ two top concerns, according to a January survey by IMR Inc. Finding affordable parts was the top worry of 45% of shop owners, while 33% listed finding qualified/responsible technicians as their biggest worry.

Bartec releases software Bartec USA LLC has released new software for its Tech550Pro, Tech600Pro and TechRITEPro TPMS tools, giving techs the ability to test the battery status of TPMS sensors on the vehicle.

Dustin Dobbs named Dobbs Tire president

S

outhern Tire Mart LLC has acquired Friend Tire Co. from Yokohama Tire Corp.

The transaction gives Southern Tire Mart nine additional distribution centers.

The facilities are located in Albuquerque, N.M.; Memphis, Tenn.; Belton, Texas; Davenport, Fla.; Monett, Mo.; St. Charles, Mo.; Shreveport, La.; Oklahoma City, Okla.; and Salt Lake City, Utah.

Effective April 3, all nine locations began operating as Southern Tire Mart locations. (The agreement was finalized on April 1.)

All sales of the Yokohama brand through Friend Tire were transferred to Southern Tire Mart, Yokohama said in a statement.

“Yokohama and Southern Tire Mart have enjoyed a long-term relationship in the U.S. market,” says Jeff Barna, president and CEO of Yokohama Tire Corp.

“We are proud to have completed this agreement with a trusted partner and one that is certain to improve upon Friend Tire’s legacy.”

“Yokohama has been a long-standing, valued partner,” says Southern Tire Mart Co-owner Jim Duff. “We’ve known about Friend Tire’s solid reputation for a long time and this agreement will definitely help expand our strategic footprint.”

Friend Tire was established in 1956 in Monett, Mo., and was a wholly owned subsidiary of Yokohama.

Southern Tire Mart is the largest independent commercial tire dealership in the U.S., according to MTD research. Terms of the deal were not disclosed.

Stox to buy North Country Distribution Stox will acquire Edmonton, Alberta-based North Country Tire Distributors, which has warehouses in three Canadian provinces.

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Plant capacity correction Correcting figures cited in an article in the April issue of MTD, Prinx Chengshan’s plant in Thailand has the capacity to produce more than two million TBR tires and more than eight million PLT tires annually. Four million of those PLT tires and 800,000 of those TBR units are earmarked for the North American market.

MTD May 2023

Charge less and go further.

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Industry News

Bites BFGoodrich inflates tires Michelin North America Inc. has introduced BFGoodrich ActivAir, a fully integrated tire inflation system for off-roaders. Drivers can adjust tire pressures to precise specifications for different surfaces. The system includes a display and control unit.

NETSA welcomes 700 The New England Tire and Service Association (NETSA) brought together a crowd of about 700 attendees and vendors for the group’s 2023 trade show and convention. Two new members were inducted into the NETSA Hall of Fame: Jim Melvin Jr., from Melvin’s Tire Pros, and Brian McGeoghegan, the former owner of Mohawk Rubber Sales of New England Inc.

Yokohama-Trelleborg is on Yokohama Rubber Co. Ltd. received needed regulatory approval to acquire Trelleborg Wheel Systems. The company said the transaction received the required approval in all jurisdictions as required by anti-trust laws.

Trail Tire expands Kirks Tire has merged with Trail Tire. Kirks Tire adds 20 locations and three retread plants to the Trail Tire network in Western Canada. Trail Tire has 55 locations, which are a mix of corporate and associate stores, as well as fi ve distribution centers.

Nexen joined auto show Nexen Tire America Inc. sponsored the Never Ride Stock (NRS) Experience at the New York International Auto Show. Nexen was one of four premier sponsors of the NRS Experience and is an exclusive rally sponsor this year.

OTR Wheel gets new name OTR Wheel Engineering Inc. has a new trade name: OTR Engineered Solutions, plus a new logo, tagline and website. The elements were rolled out to showcase the company’s full breadth of solutions.

Bridgestone wins fitment The new Lamborghini Revuelto will roll on tailor-made Bridgestone Potenza high performance tires. The car is also available with Bridgestone’s Blizzak LM005 winter tires as an option.

14

Pomp’s Tire Service buys Royal Tire

G

reen Bay, Wis.-based Pomp’s Tire Service Inc. has expanded its footprint in Minnesota and North Dakota with the purchase of Royal Tire Inc. — adding 17 outlets and three retread plants to the dealership’s network.

Terms of the deal were not disclosed.

The acquisition “is a very good fit for both companies,” says Paul Wochinske, president of Pomp’s Tire Service.

“Both Royal and Pomp’s have very strong service cultures.

"On paper — internal financial reporting — we combined a few retail locations with the attached commercial Pomp’s Tire Service Inc. has bought Royal Tire Inc. and added more locations, plus three retread center," he adds. shops, to its growing footprint.

"We (now) have 17 points Photo: Royal Tire website of sale and three retread shops" that were owned by Royal Tire. (Pomp’s Tire Service is one of the five largest commercial tire dealerships and retreaders in the United States and was listed as the 10th largest independent tire dealership in the country in the 2023 MTD 100.)

Pomp's Tire Service has not closed any Royal Tire locations and continues "to operate all the facilities that Royal had. We will keep all of the locations open and they will be operated as Pomp's locations."

Approximately 220 employees joined Pomp's Tire Service via the acquisition.

"The quality" of Royal Tire made it an attractive business to acquire, according to Wochinske.

"Royal Tire was a well-run organization with a great service culture. We are looking forward to leveraging the combined strengths of both companies to provide best-in-class service and products in the Minnesota and North Dakota markets."

Short-term plans for Royal Tire include continuing "to grow our tire and retread sales and service opportunities for our customers."

The deal is the latest in a line of strategic acquisitions made by Pomp’s Tire Service, which has grown to more than 160 locations. In 2022, the company acquired Tredroc Tire Services Inc., Whalen Tire and Dale’s Tire & Retreading, as well as 23 GCR Tires & Service locations and five GCR retread plants from Bridgestone Americas Inc.

Tariffs on OTR tires from India remain

T

he U.S. International Trade Commission (ITC) has decided to keep tariffs on OTR tires from India in place.

The five-person commission voted unanimously on April 7 to continue the tariffs.

Over the past year, the ITC has gathered evidence to determine whether revoking the tariff orders on off-the-road tires from India — originally implemented in March 2017 — would likely lead to harm of the domestic tire industry “within a reasonably foreseeable time.” (The agency conducts reviews of tariffs five years after they are initially implemented.)

Parties both in favor of the tariffs — namely, domestic OTR tiremakers such as Titan International Inc., — and those who want them lifted — tire manufacturers and importers from India, including Balkrishna Industries Ltd. (BKT) and Yokohama Off-Highway Tires America Inc. — submitted data and participated in a hearing to present their arguments.

The details of which arguments might have been the most persuasive to commissioners won’t be available until a follow-up report is released in late-May. Q MTD May 2023

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NumbersThatCount

Relevant statistics from an industry in constant motion

28%

Percentage of custom wheel sales designed for pickups Source: 2022 SEMA Market Report Photo: Specialty Equipment Market Association

16

$16.84

Increase in the average price of a major brand tire in size 205/55R16 from 2017 to 2022

56.2%

Representation of CUVs and SUVs among all new vehicle registrations in 2022

Source: MTD Facts Issue archives

Source: Experian Automotive Market Trends

Photo: General Motors

Photo: Honda Motor Co.

$60,000

One out of four vehicles sold in the U.S. in December 2022 had a price tag above this amount. (This figure exceeds the annual income of the average American.)

60.9%

Percentage of automotive repair shops with at least eight bays that indicate finding affordable parts is their top challenge in 2023

Source: Cox Automotive Inc.

Source: IMR Inc.

Photo: South Carolina Ports Authority, English Purcell

Photo: 63883906 © Nejron | Dreamstime.com

MTD May 2023

PROFITS UP,

COSTS DOWN

GS

VS01 IN STOCK

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Yo u r M a r ket p l a ce

Signs of a turnaround

SPRING USHERS IN MILES DRIVEN REBOUND By

John Healy

F

or the fourth straight month, our recent industry checks with dealers leave us with a view that retail sellout trends continue to show softness on a year-over-year basis.

Regionally, no regions showed positive growth during the month of March. The Southwest region fared the best, with an average unit decline just above 1%, while the Midwest and Northeast regions were the weakest, with volumes falling 6.9% and 6.3%, respectively.

Looking at the bigger picture, in the first quarter of 2023, average units declined approximately 2%.

While milder winter weather was called out as a drag on sales early in the quarter, dealer contacts indicate that the impact of the overall inflationary environment for consumers has been the key driver of lackluster sales as a whole.

GOOD NEWS IN MILES DRIVEN

There were good signs in miles driven data from March, as the trends turned positive for the first time since one year prior. The improvement was driven by a robust increase in miles driven during the last week of the month.

The rebound in miles driven in March came despite gasoline prices, which were the highest of any month thus far in 2023.

Still, prices have declined significantly from year-ago levels when the Russian invasion of Ukraine sent gasoline prices soaring.

While gasoline prices are still slightly elevated from pre-conflict prices, we see this recent decline as a key catalyst to the increase in miles driven. Our miles driven momentum index showed a year-overyear increase of 1.3% in March, compared to declines of 0.3% in February and 5.4% in January.

We note miles driven through the first week of April grew 6.5% year-over-year.

Should gasoline prices abate further, we expect miles driven to return and benefit sectors related to passenger tires and aftermarket auto parts.

RAW MATERIAL COSTS DROP

There’s more good news in raw materials. For the first quarter of 2023, the basket of raw materials needed to build a basic replacement vehicle tire fell 8.2% year-over-year. For the first three months of 2023, the costs have dropped sequentially, with a 0.6% decline in January, an 8.6% drop in February and a 14.6% decrease in March.

Looking forward, holding current spot prices flat would equate to a 13.2% yearover-year drop in input costs in the second quarter. This recent shift to year-overyear declines — coupled with sequential monthly declines — is expected to be a welcome sign for both tire manufacturers and dealers as price increases, on top of overall inflationary impacts, have severely hampered retail sellout.

Snapshot of Dealer’s PLT Tire Volumes (Year-Over-Year Change) Feb22 57%

Mar22 60%

Jan23 44%

Feb23 40%

Mar23 0%

Average

Increase

Jan22 38%

Flat

38%

0%

10%

12%

20%

29%

18%

Decline

24%

43%

30%

44%

40%

71%

42%

Total

100%

100%

100%

100%

100%

100%

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

18

40%

DEALER SELLING TRENDS

Those good indicators will come as welcome news to our independent dealer contacts, who experienced low demand for replacement passenger and light truck tires in March 2023. A net 71% of our contacts saw negative demand during the month.

While trends in tire retailing are always a bit finicky, our recent survey results continue to paint a cloudy picture and dealers are struggling to pinpoint one cause for the slowdown.

From a historical basis, we need to go back to February of 2021 to see a month in which no independent dealer contact saw a year-over-year increase in demand. We have long been of the view that volumes in the long run will become closely aligned with the current level of GDP growth.

However, with macroeconomists expecting slight GDP growth in 2023 and some fearing a mild recession, we look for tire retailing trends to remain soft until general economic conditions improve.

Given that dealers indicated tire demand was at its weakest point in nearly two years during March 2023, we are not surprised to see consumers traded down to tier-three brands. Those brands were the best performers in March, just as they were in December 2022 and January 2023.

Tier-one tires were in second place in March, while tier-two tires were the least in-demand of all.

Tier-two tires typically take the top spot in our survey rankings. But with inf lation hurting the wallets of the low-end consumer the most and macro worries sparking the most fear in high-end consumers, we see it as logical and rational that tire buyers would turn to the least expensive brands. Q 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. If you would like to participate in the monthly dealer discussions, contact him at john.healy@northcoastresearch.com.

MTD May 2023

EV tires

Do electric vehicles always require EV tires?

THE ANSWER ISN’T AS CLEAR-CUT AS YOU MIGHT THINK

“There will be EV owners who prefer tires that were specifically designed for their vehicle if their driving habits align with those tires’ main performance attributes,” says Tsuyoshi Johnson, product manager, PCR tires, Falken Tires, Sumitomo Rubber North America Inc. Photo: Sumitomo Rubber North America Inc.

By

Mike Manges

D

o electric vehicles (EVs) require tires that are specifically designed and built for EV applications or can existing tires with the correct attributes perform just as well on EVs? It’s a question that’s on the minds of many tire dealers and consumers. In this MTD exclusive, tire manufacturers and suppliers weigh in and explain why. (Hint: it’s complicated.)

Brandon Stotsenburg, vice president, automotive, American Kenda Rubber Industrial Co. Ltd.: Vehicle application specifics determine the answer to this question, with some specific consumer preferences or needs further defining the answer. Specifically, the following application elements are the drivers in this decision:

20

Load/heavier weight. Based on the weight of the vehicle, primarily affected by the battery, this may require a tire with a higher rating, including XL or HL for non-LT designations. This also affects the expected wear of the tire.

Torque. The higher performance and torque of most EVs requires V- or W-rated tires that affect the wear of tires on EV applications. To improve the grip needed from stronger initial acceleration and higher output, this may require both mechanical and compounding changes for the tires.

Noise reduction. As EVs are inherently quieter than internal combustion engine (ICE) vehicles, tire noise from non-EV tires will be more noticeable.

There are noise reduction technologies available to improve this issue, but it does

require potentially more costly changes to the tire. This issue is important for most consumers, particularly in initial replacement cycles Rolling resistance. EV range is affected by the rolling resistance of the tire. There are trade-offs to offering enhanced rolling resistance, which may affect wear.

Dry/wet/winter traction and braking.

Currently, many EV applications are provided with tires that have limitations related to four-season performance.

Depending on the application, summer performance has been prioritized. Many consumers require four-season capability.

As always, the load and speed rating requirement as defined by the vehicle application cannot be compromised. The other elements likely affect performance and benefits that consumers need to MTD May 2023

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2

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EV tires understand relative to trade-offs. The most obvious one that everyone is seeing relates to wear, as most EV tires currently have shorter expected wear primarily due to the vehicle design and use but also related to the design decisions from the tire manufacturer or vehicle manufacturer.

Although Kenda is not currently offering EV options in North America, we are accelerating the analysis in the rapidly evolving market. Kenda is developing the technologies to enable EV tire designs that balance the trade-offs to support the vehicle application requirements.

Steven Liu, vice president, product development, proprietary brands, American Tire Distributors Inc.: The short answer is yes — you can put regular tires with the correct specs (example: load index) on EVs and (they) will perform from a safety standpoint. However, from the performance attribute aspect, regular, ICE car tires on EVs are likely to produce reduced mileage/tread life and higher noise level versus an EV-designated tire.

by over 20%. Since tires are specified through industry standard guidelines to meet certain load requirements, there is really no difference between the tire requirements of an EV versus ICE vehicle.

This excludes the new standard of tires designated as high load (HL), which must

an identical situation that consumers face with ICE vehicles as OEMs require efficient tires in order to achieve government CAFE requirements. Consumers would experience similar percentage decreases in their fuel economy (ICE) or range (EV) with a standard replacement tire.

“While tire and vehicle efficiency can be more top of mind for an electric vehicle or hybrid vehicle customer, these needs exist similarly for vehicles with combustion engines,” says Travis Roffler, director of marketing, Continental Tire the Americas LLC. Proper load capacity restrictions must always be observed, he adds.

Photo: Continental Tire the Americas LLC

Travis Roffler, director of marketing, Continental Tire the Americas LLC: I can only speak for Continental products, but in simple terms, no — as long as the proper load capacity restrictions are observed. All Continental tire product lines are EV-ready and (are) designed to meet consumer needs, whether they drive an EV or ICE vehicle.

While tire and vehicle efficiency can be more top of mind for an electric vehicle or hybrid vehicle customer, these needs exist similarly for vehicles with combustion engines. As a result, Continental ensures a high level of efficiency, as well as long tread life and a high level of grip and comfort.

David Poling, director of tire development and product marketing, Giti Tire (USA) Ltd.: The answer is yes and no.

Although EVs are designed around specific requirements and have attributes that differ from some vehicles, the requirements of the tires are still the same — to support the load of the vehicle and provide traction to transfer the car’s power to the road. In that sense, any tire that meets these requirements can be used on EVs. However, things are never as simple as they seem. Vehicle weight is generally higher for EVs due mainly to the battery pack weight, which can increase the weight

22

be designed to carry higher loads and is an evolving and separate discussion since at this time they are an insignificant volume.

The massive amounts of horsepower and torque generated by EVs far exceed their ICE counterparts. However, most EVs have advanced systems to properly manage and deliver the horsepower and torque to the wheels. But this doesn’t mean that the system can’t deliver high levels of torque.

Noise is a critical component for tires fitted to EVs, (which) are more sensitive to tire noise due to several factors, such as no combustion engine noise and vehicle platforms that may have less ability to dampen out noise. Some OE tires come with a foam ring inside of them, but this only reduces noise around a small frequency spectrum.

A well-designed replacement tire without the foam can deliver similar low noise results that many times will be indistinguishable to most consumers.

The range of the vehicle will be influenced by the energy efficiency of a tire — commonly referred to as the rolling resistance. The tire designed as OE on the vehicle will generally provide the range specified by the OEM. But this range comes at a trade-off to other tire performance attributes — generally treadwear. This is

The issue is the sensitivity of people to the vehicle range of an EV. So yes — a regular replacement tire can be used with the understanding that the range will decrease depending on the tire. A replacement tire can be fitted to an EV and perform well, with the tradeoffs previously listed. If the consumer’s focus is vehicle range, then a standard replacement tire that is designed for long mileage will not deliver a similar range to the OE tire. Giti has the technology to design highly efficient tires, as we do for many OEMs around the world, but in North America, most consumers have opted for higher mileage over energy efficiency and that is what we have been focused on in the replacement market.

The key to success in the EV market will be developing the proper strategy to best suit the needs of consumers.

Dave Reese, vice president, product development, Americas, Goodyear Tire & Rubber Co.: While technically nonEV-specific tires may fit select electric vehicles, not all are engineered to address performance needs that are specific to EVs and therefore, would likely not provide the driver with the same driving experience traditionally expected.

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EV tires The added weight and torque associated with EVs can impact several factors when it comes to tire performance — most importantly, load capacity, treadwear and vehicle range. In addition, noise from the road is often more noticeable when considering the quiet ride usually found with EVs. Goodyear is developing many products for commercial, consumer and off-highway segments that are equipped for the demanding needs of electric vehicles and balance the performance requirements desired from a growing audience of adopters.

Moonk i Cho, product manager, Hankook Tire America Corp.: EVs require tires developed specifically for this vehicle type as there are key technical demands that an EV places on its tires — heavier weight, battery efficiency, road noise and traction.

EVs have heavier lithium-ion battery packs that can add 10% to 20% more weight and stress to load-bearing components across the chassis compared to their ICE-powered equivalent. The increased weight of EVs causes tires to wear out approximately 20% faster than ICE vehicles. To account for this additional weight, an EV tire must be built with new materials, such as a new tread compound or a reinforcement belt applied with Aramid fiber. EV tires are designed to bear the heavy weight of an EV, as well as extend tire life in a more sustainable way.

“EVs do not require specific tires,” says Russell Shepherd, technical communications director, Michelin North America Inc. “As with all vehicles, Michelin’s first recommendation is the OE tire designed for the specific vehicle.”

Photo: Michelin North America Inc.

An EV must maximize its battery life and a key component of this is reducing rolling resistance. A more rigid tread pattern and prominent center section can compensate for weight distribution and higher friction contact point with the road, providing a more streamlined, efficient design — and thus lower rolling resistance to increase an EV’s battery range.

As the car’s powertrain changes from engine to electric motor, the cabin noise inside EVs can be noticeably louder than in ICE vehicles. EV tires are designed to reduce this noise. Knurling technology inside the tire grooves reduces tread pattern noise, while an absorbing foam material inside the tire helps further reduce resonance.

“EVs require tires developed specifically for this vehicle type as there are key technical demands that an EV places on its tires — heavier weight, battery efficiency, road noise, and traction,” says Moonki Cho, product manager, Hankook Tire America Corp.

Photo: Hankook Tire America Corp.

24

With a high instant torque, EVs provide ultimate power delivery. That means EV tires need improved traction, steering and braking performance to handle the vehicle’s output and high acceleration.

Our iON product portfolio is tailored for high-end electric vehicles.

Walter Chen, product planning specialist, Maxxis International-USA: Although not required, using tires specifically developed for EV applications is recommended. These tires are designed to handle the weight of the battery pack, reduce noise and increase driving range.

Ultra-high performance EV tires are capable of handling the heavier vehicleweight, electric motor high-torque output and provide excellent cornering grip. Grand touring EV tires prioritize comfort, range, noise reduction and longer tread wear.

Maxxis’ Victra Sport EV, a UHP summer tire, has a footprint shape that is optimized for the higher inflation pressure of EVs. If the tire’s footprint is not ideal, tread wear and performance can be negatively affected.

Russell Shepherd, technical communications director, Michelin North America Inc.: EVs do not require specific tires. As with all vehicles, Michelin’s first recommendation is the OE tire designed for the vehicle.

However, many consumers find that other tires in the market provide a balance of performance for their needs and driving styles. Even in the case of EVs, this is true and perfectly acceptable, as long as the tire size and attributes — such as load index — are respected.

MTD May 2023

EV tires A very common example is the use of winter tires on electric vehicles, in locations where there are significant winter accumulations or due to regulations. Another example can be seen with consumers who choose an all-season tire compared to the summer tires which come OE on certain EVs. Aaron Neumann, product development manager, Nexen Tire America Inc.: The OE tires on EVs are specifically designed to meet the car manufacturer’s targets.

Normally, they are looking for the lowest rolling resistance so they can get the range as high as possible and be competitive in the wider EV market. But we also have to watch treadwear and noise very closely.

EVs are heavier and have more torque, which creates more tire wear.

When an EV owner comes in for their first (tire) change, they can put on a suitable replacement tire of their choice. But they should be prepared to see a drop in range because most likely the replacement tire will have higher rolling resistance and there could be other trade-offs in handling and comfort, as well. On the positive side, they may get longer tread life with the replacement tire.

Ian Coke, chief technology officer, Pirelli Tire North America Inc.: Pirelli advocates putting EV tires on EVs because those tires have been designed for the

“Many tiremakers are introducing dedicated EV tires that are adept at meeting the demands of electric vehicles and the needs of drivers,” says Steve Bourassa, director of products, Nokian Tyres Inc. Photo: Nokian Tyres Inc.

26

“Pirelli advocates putting EV tires on EVs because those tires have been designed for the attributes of an EV,” says Ian Coke, chief technology officer, Pirelli Tire North America Inc. Photo: Pirelli Tire North America Inc.

attributes of an EV. If you put a higher rolling resistance tire on that vehicle, you will lose range. We know that. And you would never put a tire that has an incorrect load rating on a heavier vehicle.

If you put the wrong tire on an EV, you will see the difference.

One of the biggest things we are seeing in the EV world is that because of the load and higher amount of torque, the wear rate increases quite dramatically. EVs tend to eat tires. As EVs become normal and the majority of the market, it is necessary to write ‘EV’ on the sidewall because these tires are developed to cope with rolling resistance requirements and heavier loads.

By definition, we design tires to cope with all of those attributes. But an ICE vehicle doesn’t necessarily have all the requirements of an EV. The market is going EV. It’s inevitable now. And it’s not just the front end that’s been pushed along, but also the back end.

The EV world moves much faster than the ICE world. It’s the biggest revolution in the tire industry since (the invention of) the radial.

Steve Bourassa, director of products, Nokian Tyres Inc.: Many tiremakers, including Nokian, are introducing dedicated EV tires that are adept at meeting the demands of electric vehicles and the needs of drivers. Those needs include a sturdy structure built to withstand the added weight and torque of EVs; technology aimed at minimizing cabin noise; and low-rolling-resistance rubber compounds that increase range. Our EV-specific winter tires, the Nokian Hakkapeliitta 10 EV and R5 EV, were tailored to acutely

meet those specific demands. There is a segment of drivers within the EV market that values these tailored benefits, such as added efficiency and range.

However, it is certainly possible for already-existing tires to meet these needs.

As a Scandinavian company that makes tires in an area of the world where EVs are very popular, we have factored the needs of EV drivers into our product development process for several years.

We formulate our rubber compounds to maximize comfort and efficiency. More than 90% of our tires are in the lowest categories of rolling resistance. We construct our tires to withstand heavier loads.

Jack McClure, segment manager, PLT, Sailun Tire Americas: Although traditional tires with correct attributes and specifications can be used on EVs, there are many benefits when fitting an electric vehicle with EV-specific tires. This is a similar discussion to the old debate of choosing between dedicated winter tires versus all-season tires. If you are looking for the best performance and driving experience, the answer is yes — go with winter tires. Ideally, the answer should also be yes — go with EV-specific tires if you want to get the most out of your electric vehicle. When roads are covered with snow and ice, winter tires are appreciated by those that have them and the same applies to EV drivers with dedicated EV tires.

Overall, every car, crossover, truck or SUV needs to have tires with the correct load index, speed rating, etc., and all traditional tires can be sourced to meet those basic requirements for an EV, too.

However, EVs have major factors to consider when it comes to choosing tires, such as additional weight, additional torque and the fact that EV drivers want to avoid unwanted road noise from tires as they have nearly silent operation. EV tires help address those needs and in the instance of Sailun ERANGE EV tires, they have been specifically designed, constructed and tested for EV applications.

As more and more vehicle manufacturers offer additional electric car, truck and SUV options, the need for tires that specifically enhance EV performance, help increase range and also deliver a quiet and comfortable driver experience has never been greater.

MTD May 2023

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EV tires Tsuyoshi Johnson, product manager, PCR tires, Falken Tires, Sumitomo Rubber North America Inc.: As long as a tire meets the standard criteria (load index, speed rating, etc.) for a vehicle, previously existing tires will provide the basic services they provide for non-EV vehicles. It’s when you ask vehicle owners what they expect from a set of tires that you should consider whether certain products can deliver on their expectations.

Every driver has their own set of priorities when it comes to tire expectations. This was true before EVs and with the introduction of EVs comes a new set of expectations.

Whether their main priority is a quiet ride, maximizing range, better wear characteristics to hold up to the immediate torque output of EVs or a balance of all the above — (this) will determine if a tire will meet expectations. It all really comes down to personal preference.

So in short, no — EVs don’t require tires that were specifically designed and manufactured for EV applications. However, there will be EV owners who prefer tires that were specifically designed for their vehicle if their driving habits align with those tires’ main performance attributes.

Mike Park, assistant director of marketing, brand division, Tireco: EVs are heavier and have more torque than vehicles powered by internal combustion engines, so there’s more pressure being put on the tires. EVs are quiet and their range can be impacted by the tire’s rolling resistance. In theory, EVs require a quiet, low rolling resistance tire that doesn’t compromise performance when it’s driven on heavier vehicles with more torque, but they do not require a specific EV tire.

The EV market is growing fast, but the total market volume is still relatively small and there are very few tire manufacturers that have developed EV-specific tires. For now, having the right sizes, load indexes and speed applications that meet the EV OE specs is most important.

Joaquin Gonzalez Jr., president, Tire Group International LLC: EVs as a specialty car segment have their uniqueness.

For instance, because of EVs’ heavy battery weight, they require tires with higher UTQG and stronger sidewalls. With the lack of special tire designs to match the launch of the EVs, auto manufacturers are

28

currently using existing tires compatible with safety requirements as a quick fix.

For example, the Tesla Model 3 is using Michelin Pilot Sport all-season tire with 540 AA A and the Bridgestone Potenza Sport 700 AA A as its OE tire.

However, since last year, more and more tire manufacturers have launched budget EV specialty tires with 600 AA ratings. Going forward, with the standardization of EV tire requirements, the EV auto manufacturers would be more inclined to use EV specialty tires as their standard OE tires. They are currently waiting for the major brand manufacturers to launch new product lines for the

In general, EVs are much heavier than their ICE counterparts because of the massive batteries that power them. EVs accelerate faster and have more torque, leading to faster wear on conventional tires. It is still common to see 25% faster wear on tires designed for EVs than comparable ICE vehicles with conventional tires.

Chris Tolbert, director of sales, Trimax Tire Corp.: The big three challenges are vehicle weight, tire noise and rolling resistance. The original thought was that (a tire) must be (designated) XL to handle additional weight requirements.

“Although traditional tires with correct attributes and specifications can be used on EVs, there are many benefits when fitting an electric vehicle with EV-specific tires,” says Jack McClure, segment manager, PLT, Sailun Tire Americas.

Photo: Sailun Tire Americas

EV space. Therefore, we can reasonably predict that more tire manufacturers will push out EV specialty tires into the OE and replacement markets in the future.

TGI currently offers EV-compatible tire programs for our consumers. Furthermore, TGI has partnered with private brand OE manufacturers and exclusive brand manufacturers both in Asia and in Europe to develop EV specialty tires. We are well positioned in the EV specialty tire segment, with an estimated launching time in 2024.

Roman Racela, marketing director, Transamerica Tires: EVs require specialized tires. Conventional tires made for ICE vehicles typically would not be able to handle the performance requirements of specialized EV tires.

As electric vehicles are expanding from sedans to bigger CUVs, SUVs and light trucks, advanced technology is transitioning to high load capacity.

With quieter vehicles, tire noise becomes a bigger factor to ensure quietness. Lastly, rolling resistance affects the number of miles that (EVs can) go between an electric charging station.

Advanced technology with different compounds will need to be developed to handle the performance characteristics.

Manufacturers are projecting EV sales to be over 10% by 2030. For this to happen, the infrastructure of high-speed charging stations must be in place.

Retail stores will also need to adjust service requirements to handle the different service needs of electric vehicles. Q MTD May 2023

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Retail management

Kent Coleman – the man behind 11 Big O Tires superstores BIG REVENUE COMES FROM PUTTING PEOPLE FIRST By

Joy Kopcha

S

eventeen years ago, when Kent Coleman bought his first Big O Tires store, he admits he knew nothing about tires or automotive repair.

“I literally didn’t know the difference between a tire and a wheel.”

He’s come a long way.

Of the 11 Big O Tires stores he now owns in Utah, five are ranked in the top 10 sales leaders for all Big O Tires locations in the country.

In 2021, one of his stores was the first Big O Tires store to ever eclipse $10 million in sales in a single year. (The store came close to hitting $10.5 million.)

Coleman’s smallest store rings up $3 million a year. He says an average Big O Tires location does about $2 million in annual revenue.

It hasn’t been a smooth ride to get to this point, however. Coleman nearly failed the introductory training for new franchisees. There were times he was borrowing money from a line of credit so he could make payroll and pay other bills.

He’s hired and fired the wrong people.

But eventually, he and his team found their groove. And, he says, he’s learned the difference between a tire and a wheel.

PERSONALITY OVER EXPERIENCE

Coleman is a serial businessman. He’s sold stickers in the scrapbooking industry, owned an online sporting goods business, picked cherries and in college cleaned and delivered garbage containers. Along the way, he’s developed a shrewd eye for sales.

And that’s been intentional. He hires, searches for and trains salespeople.

“We want them focused on sales.”

As part of that, he’s not afraid to train non-automotive types, like himself.

Coleman says his organization avoids the “merry-go-round” of workers who float from one tire dealership to the next.

“We hire from the outside as often as

30

Kent Coleman has grown his single-store Big O Tires franchise into an 11-location network of some of the top producing stores in the country. Five of his locations are among the top 10 stores for sales in the entire Big O Tires organization.

Photo: Kent Coleman

possible. Some of our top salespeople have been in the industry for five years or less.

They’ve worked in construction, installed glass and been janitorial workers.”

His current team includes salespeople from lots of unrelated fields — cell phones, solar panels and even insurance.

“We’re always on the hunt for these certain personality types who are good with people.”

One day, Coleman was at a local mall and encountered a cell phone salesman.

“He was awesome — dynamic, not overbearing, but also not shy. He was this perfect little blend (and had me) wanting to talk to him.

“Within 90 days, he was a top producer” at Coleman’s company — with zero automotive experience.

“He had a degree in marketing from the University of Utah.”

Coleman says dynamic employees with a knack for connecting with people also have a knack for selling more.

MTD May 2023

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Retail management STAFFING SOLUTIONS

If the bottleneck is not seeing enough cars, Coleman says the solution isn’t to hire more people. It’s to focus on a marketing plan.

He knows some will insist it’s impossible to find and hire the right staff. “I’ve heard that a million times,” and it’s the question he’s asked most frequently. But it’s also a huge focus for his organization and a daily, never-ending task.

As a missionary with his church, the Church of Jesus Christ of Latter Day Saints, Coleman spent two years in Spain. He now speaks Spanish fluently and says he tries to have bilingual employees available to help with customer interactions.

He has workers who are more comfortable speaking Spanish, too, and says he’s happy to provide those employees a place where they can work comfortably.

Photo: Kent Coleman

That’s not meant to downplay the need for automotive expertise, but Coleman says he’s found that it works to pair an automotive specialist with a dynamic salesperson at the counter.

There are a minimum of four people working the sales counter at each of Coleman’s outlets. The biggest stores are staffed by eight salespeople up front.

He prefers this high-volume approach and when searching for stores to acquire, he looks for bigger outlets with more service bays. The general plan is to have one salesperson for about three service bays, says Coleman.

“We do $6 million to $7 million out of six bays. I want to crank volume. We do want bigger stores. If the sales process is set up properly, there’s almost no limit to

Coleman has worn a lot of different hats in his path to becoming a tire dealer. Immediately before buying a Big O Tires franchise, he and his sister were in the scrapbooking business.

Photo: Kent Coleman

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what a location can produce. We’re still testing those limits, I suppose.”

When his top-producing store was selling $8 million a year, he said “we’re going to do $10 million.”

Even his staff said this was impossible.

But they crossed that threshold last year and Coleman says, “We’re up 15% this year. I don’t know what the limit is that a store can do.”

He credits the “amazing people” on his team for the success of his stores.

“When we do an acquisition, if we buy a store that’s doing $2 million in sales, we assume we can double it within six months,” says Coleman.

“It’s all systems and people.”

Last fall, he acquired another store and by all accounts, it “was doing great — $6 million a year.”

Thirty days after buying the location, Coleman says its sales were up 50%.

“One thing that I will look for is, ‘What is the constraint in the system?’ If you can identify and relieve the bottleneck,” business improves.

This store he acquired last fall already had a high car count. “The constraint was they didn’t have enough techs to get the work done. So we hired five people and taught the salespeople a few principles.

“We inspected vehicles better. That’s a huge one. And by doing that, we were able to relieve the bottleneck and output skyrocketed.”

Coleman first learned about Big O Tires after his brother, Kory, met a dealer who had a franchise for sale.

The brothers entered the business as partners, but Kory has always maintained a behind-the-scenes role, says Kent, who is now in the process of buying out Kory’s share of the operation.

Photo: Kent Coleman

“We’ve added 20% to our staff and they’re talented people. It can be done.

We’re obsessed with it.

“People wait for the merry-go-round and for people to pop into their store to come and work for them. We don’t rely on the merry-go-round. We spend money on recruiting. We recruit at tech schools.

We bring in young people and train them.

“We recruit expensive people and pay them a lot to come (work for us.) We don’t let it be by chance. We don’t just hope people pop in.

“We’ll hire three salespeople for our company, having no spots for them. We always want to have a small bank of people that can step in as the holes open up.”

Coleman realizes that’s a luxury afforded to someone with 11 stores and that a single-store operator couldn’t have MTD May 2023

Retail management a bank of salespeople on staff waiting in the wings. But he encourages other tire dealers to think about staffing differently.

His company has produced a recruitment video and it’s available in both English and Spanish. He’s posted it on his own website, www.tireguykent.com, and elsewhere online to provide people with a glimpse into the company and perhaps a reason to join the team.

Coleman says his company spends “thousands of dollars a month on recruiting.

“We invest in people like we invest in equipment. We try to be ahead.”

‘A HUGE LEAP OF FAITH’

Even with nearly 20 years of success behind him, Coleman says he knows that his business has to continue to grow. But he also thinks there’s a right way to go about that.

“We want to add locations,” he explains. “But we don’t just add locations for the sake of it. We are very measured.

I want a location I know can be a highvolume location. We also want to have continual growth at existing locations.”

“I don’t know what the limit is that a store can do.”

Kent Coleman, Big O Tires franchisee

As Coleman has pieced together his successful tire business, he’s also become a published author. He put the lessons he learned on paper, writing a book called “It’s Not About the Mangos: Organizational Success Means Putting People First.”

And without giving away the story behind the title, it’s fair to say Coleman has learned how to prioritize the people who work for him.

It’s a common refrain that the tire industry isn’t about tires and that it’s a people business instead. Coleman learned that lesson early, especially as it pertained to the people who work for him.

When his business was struggling, he looked for ways to cut expenses and ultimately settled on eliminating the most expensive staffers on his payroll.

“I thought I was a genius for saving on payroll,” he says.

The cost savings effort bit him and bit him hard, he admits.

He was left with apathetic employees who didn’t care that the boat was sinking.

His “genius” move resulted in even poorer results. He then had a lightbulb moment.

If inexperienced people were cheap, but resulted in poor results, maybe it was worth it to pay premium wages for the best and most talented people. He considers himself lucky that he recognized his mistake.

“That was a huge leap of faith. But none of it works if the people don’t care. That’s really the foundation.” Q

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33

Auto service

Selling undercar service starts with prevention

THOMAS TIRE USES DVI, OTHER TOOLS TO KEEP CUSTOMERS INFORMED By

Madison Gehring

M

any tire dealers would probably agree that tire and brake services are some of the easiest sells to customers. However, suspension and undercar services are a more difficult sell — especially when it comes to maintenance and upkeep.

Glenn Williamson, head of training at J.P. Thomas & Co. Inc. dba Thomas Tire and Automotive, an eight-location dealership headquartered in Asheboro, N.C., agrees.

“Most customers don’t know how a shock or strut affects their ride until they bring it in and we tell them,” says Williamson. “It’s harder to sell because the concept isn’t as familiar with customers as brake and tire services are.”

When it comes to marketing undercar service, Thomas Tire and Automotive “has its hands in just about everything” — from social media and email blasts to radio ads.

But the dealership sees the most success in getting customers in for undercar service by keeping them informed.

KEEPING CUSTOMERS INFORMED

Sally Thomas, co-owner of Thomas Tire, says that an educated customer typically makes better decisions when it comes to their vehicles and because customers don’t understand the undercar and suspension concept, customers will sometimes delay getting undercar repairs done.

According to Thomas, this is where she and her team come in.

“If it is a good customer who comes in for oil changes and things like that, we tell them in advance, ‘Hey, your brakes look good,’ or ‘A couple hundred more miles and we will need to replace your shocks and struts.’

“I say to my salespeople, ‘If a frequent customer comes in and we find a service we need to perform on their vehicle, it

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Many customers have difficulty understanding the importance of undercar service, which is why it is important for dealers to keep them educated, says Sally Thomas, co-owner of Asheboro, N.C.-based Thomas Tire and Automotive, which has eight locations.

Photo: Thomas Tire and Automotive

should not be coming as a surprise to the customer. We should’ve been giving them a heads up.’”

The majority of customers want to invest in their tires and brakes “because they’re the most important safety function,” says Thomas.

Cost is a factor, too.

Williamson says suspension repairs are typically more expensive because the parts are becoming so varied.

START WITH ALIGNMENT

An undercar service that customers are more familiar with is alignment because they can “comprehend the importance of an alignment,” says Thomas.

She says when trying to approach selling undercar service, it might be best to start here.

“We have always been historically strong in alignment sales because we have a total belief in getting the alignment done, especially when you are putting on

Thomas Tire and Automotive uses social media, email blasts, radio ads and “pretty much everything but television commercials” to market undercar work, says Glenn Williamson, the dealership’s head of training.

Photo: Thomas Tire and Automotive

new tires. We do free alignment checks every time a customer gets new tires.”

Williamson says customers are more fuel-conscious because of high gas prices.

He reminds customers that poor alignment affects fuel economy — making a car burn through gas faster.

MTD May 2023

Auto service TRENDS IN UNDERCAR SERVICE

Thomas says that she notices an uptick in undercar service around March each year or when “tax returns start coming in.”

Summer is another hot time for customers to get undercar work because more people are driving during this time and going on vacations.

“Fifteen to 20 years ago, parts wore out a lot quicker and nowadays they are lasting a lot longer,” she says.

Williamson explains that people used to bring their vehicles in to get new brakes every 3,500 miles. Now customers don’t need to come in for new brakes until about 7,500 miles. “That’s almost double.”

Interval times between oil changes have also become longer. “When I was growing up, it was every 3,000 miles and now it’s about 5,000 miles and upward,” she says.

“So you’re just not getting to see and inspect vehicles as often. Shops that do a good job of educating customers about preventive maintenance based on manufacturers’ recommendations are the ones that are going to be ahead of the curve.”

Williamson says that the introduction of more electric vehicles (EVs) and hybrid vehicles is going to change the undercar/ suspension market.

“As we shift slowly towards these types of vehicles, I’m looking to see how much this will affect suspension and how much of a torque difference there is from gas-powered vehicles to electric-powered vehicles,” he says.

“I think we are going to see an increase in suspension maintenance with the rise of EVs and these cars needing (undercar and suspension parts) replaced more often.”

DVI MAGIC

Thomas Tire also performs digital vehicle inspections (DVI) on customers’ vehicles so it can “do a good job educating customers on preventative maintenance,” says Thomas.

“It is a fantastic tool for consumers, salespeople, technicians and business owners,” she says.

Conducting DVIs and being able to send those results digitally to the customer lets her salespeople spend less time on the phone waiting for a call back.

“Our technicians can document what is going on with the vehicle with either photo or video and show the current state of maintenance items to customers for w w w . M o d e r n T i r e D e a l e r. c o m

better understanding. I think DVIs are a really good investment and it’s definitely a value-added service that we provide to our customers.”

Williamson adds that DVIs provide protection for business owners, as well.

He says when a customer brings their car in for a problem, they are usually only focusing on that one problem.

With DVIs, before a technician even

begins working on the vehicle, they can inspect it for existing wear and tear and document items that should be addressed.

Thomas says it is “very hard” to implement a DVI process if you have never done it before.

“It takes a lot of patience, but the payoff is worth it. The customers appreciate that we can keep them ahead of their maintenance issues.” Q

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35

Digital marketing

No meme feat HOW IOWA CITY TIRE USES DIGITAL MARKETING TO GROW ITS BUSINESS By

Madison Gehring

M

any tire dealers are using social media to gain customers’ attention as radio, TV and newspaper ads are quickly becoming things of the past.

Andy Miller, owner of Iowa City Tire & Service, which is headquartered in Iowa City, Iowa, says his company is enjoying great success using social media platforms and other digital tools — including memes — to reach new customers and maintain a presence within his community.

A NEW WAY TO MARKET

The single-location dealership, which is part of the Goodyear Tire & Service Network, will celebrate 42 years in business this October.

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The company sells passenger and light truck tires and offers all automotive services, except transmission replacements.

Sixty percent of its revenue comes from auto maintenance and repair. Tire sales make up the rest.

The dealership started to dabble in digital marketing three years ago.

“We started to go into the digital transition in 2020,” says Miller. “COVID-19 made me realize that we had to make a lot of changes.”

“We did some things internally here to make it easier for contactless payment and contactless drop-off/ pick-up, but it really had us looking at all aspects of the business and where our marketing dollars were going.”

Miller and his team had experimented

Although Iowa City Tire & Service has turned to more modern marketing campaigns and doesn’t do television ads anymore, customers can still see old commercials from the 1980s and 1990s (above) on the company’s website.

Photos: Iowa City Tire & Service

with social media for some years before COVID-19 hit, just because of its popularity.

Miller says he realized that TV commercials — once a mainstay for Iowa City Tire & Service — and newspaper ads were going away and that digital marketing was the “only way to spend our money that was going to have an impact on our business.

“People simply aren’t watching live television anymore or picking up the MTD May 2023

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CAPTURING THE EV TIRE CUSTOMER HOW SAILUN CAN HELP YOU BECOME THE ‘GO-TO’ SOURCE FOR EV TIRES IN YOUR MARKET

L

ast year was a down market for new car sales. Electric vehicles (EVs), however, were a notable exception. More than 750,000 new all-electric cars were registered in the U.S. during 2022, according to EV Insights.

Experian reports that “EVs comprised 5.32% of new vehicle financing” last year, “marking a notable increase compared to 3.09% in 2021, 1.69% in 2020 and 1.46% in 2019.”

The EV revolution is clearly underway.

This means more profit opportunities for dealers who partner with a supplier that can provide the right tire at the right price point — plus the support needed to help make the retail sale.

That’s where Sailun Tire Americas — with its industry-leading EV tire, technology and infrastructure — comes in.

“This is a great time to get on the ground floor of EV tire sales,” says Ron Dolan, president of Sailun Tire Americas.

“EVs have entered the mainstream — making up more than 5% of the market.

And the replacement tire market is in full swing as EV owners cycle through their first sets of tires.

“We want to help dealers establish themselves as the go-to source for EV tires in their respective areas by giving them a high-quality, premium product that will not only add value to the consumer, but also the dealer’s enterprise.”

That tire is the Sailun ERANGE EV, which has been exclusively designed to optimize the performance of EVs. Available in more than 30 sizes, the ERANGE EV enjoys 80% coverage of the North American EV and hybrid vehicle market — making it an ideal fit for most models that roll onto dealers’ lots.

The product of many years of painstaking research and development, the ERANGE EV features Sailun’s proprietary EcoPoint³ Technology.

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This one-of-a-kind process gives Sailun the ability to mix rubber compound materials in a way that achieves the ideal balance of rolling resistance, long wear, traction and low rolling resistance — while minimizing the performance trade-offs often seen in other tires.

The ERANGE EV, which also sports an attractive, high-end sidewall design, is distributed throughout the U.S. by TBC Corp. and in Canada by Dynamic Tire, Distribution Stox, Fountain Tire and Market Tire — giving dealers easy access to the tire via efficient, no-hassle, on-time, regular deliveries, as well as full logistical support.

“We launched the ERANGE EV last year and it’s been incredibly successful,” says Dolan.

“The feedback from dealers and consumers that we have received — in

“This is a great time to get on the ground floor of EV tire sales,” says Ron Dolan, president of Sailun Tire Americas.

“EVs have entered the mainstream — making up more than 5% of the market.

And the replacement tire market is in full swing as EV owners cycle through their first sets of tires.”

Photo: Sailun Tire Americas

terms of both product performance and delivery of the tire’s overall value proposition — has been overwhelmingly positive.

“We’re hearing about how longlasting the tire is. EV owners who are running the tire are getting more range. And they are telling us that the stopping ability of the ERANGE EV is second-to-none.”

“This is a fairly priced, premium EV tire,” says Mark Pereira, director of marketing, Sailun.

“Some brands are taking an alreadyexpensive product and are marking it up even more for the EV audience.

MTD May 2023

“We’ve taken the opposite approach.

The ERANGE EV has been specifically designed, engineered and manufactured to meet the performance demands of EVs and the high expectations of these vehicles’ owners.

“Bar none, this is the best bang-foryour-buck EV tire on the market.”

“We want to support and educate our dealers as much as we can, so they understand how to properly sell the ERANGE EV and make money — knowing it’s a product they can stand behind,” says James McIntyre, vice president of sales, Sailun.

SUPPORT TO MAKE THE SALE

Photo: Sailun Tire Americas

In addition to providing a premiumquality, industry-leading, smartly priced product, Sailun is making the ERANGE EV sale easy by offering dealers a comprehensive support package that includes educational materials and advertising.

“We’ve put together a kit for our dealers to help educate themselves and their customers about EV tires and the growing EV market,” says Pereira.

“We’re also doing a ton of advertising to connect directly with EV owners and send them to our dealer network, which has the product in-stock and ready to go.”

“We want dealers to understand the features and benefits that make an EV tire an EV tire — and what makes the ERANGE EV such an attractive

educate themselves and their customers about what the ERANGE EV and Sailun can deliver.”

ON THE GROUND FLOOR Dealers will see more EVs and hybrids in the months and years to come. That’s why it’s critical to capture EV owners now, according to Pereira.

“This is a fairly priced, premium EV tire,” says Mark Pereira, director of marketing, Sailun.

Photo: Sailun Tire Americas

Photo: Sailun Tire Americas

“We want them to understand the size of the EV market, the growth of the market and the potential that exists — and also how we can help fill the needs they have within their own business and product screen.”

Sailun invests a substantial amount of capital, time and energy on market intelligence, according to Dolan.

“We look at EV registrations by vehicle in particular areas,” he says.

“We suggest to dealers what to stock in their markets, which also ensures we have the proper product for their needs. And we pass the insights we’ve gained along to our dealers to help them become EV tire experts. w w w . M o d e r n T i r e D e a l e r. c o m

product,” says James McIntyre, vice president of sales, Sailun.

“We’ve invested in training videos.

We’ve made welcome kits and booklets. We’ve created other tools to help educate dealers and their customers.

“We want to support and educate our dealers as much as we can, so they understand how to properly sell the ERANGE EV and make money — knowing it’s a product they can stand behind, backed by the full support of Sailun and some of North America’s biggest, most well-established tire distributors,” he continues.

“It’s all about arming our dealers with the right information so they can

“You have to earn that EV owner’s business and find a way to keep it. And you want to earn that business as early as possible by partnering with the right tire supplier that offers the right product.

“EV drivers expect a different kind of experience than traditional motorists.”

They want a product that helps their vehicles achieve top performance, while delivering an enjoyable driving experience, at a price point that makes sense, he explains.

“We offer the unique value proposition that consumers are searching for right now. We want to give dealers the product and the support that will help them secure — and grow — that business.”

39

Digital marketing “I know what gets my attention as a consumer and that means timely, funny and unique memes,” says Andy Miller, owner of Iowa City Tire & Service.

newspapers like they used to.” (Iowa City Tire still pays homage to its TV spots that aired in the 1980s and ‘90s by displaying them on its website for customers to watch.)

He says that Iowa City Tire’s location and environment were other factors that pushed the company into doing more digital marketing.

The dealership is located in a college town — home to the University of Iowa.

Miller and his team are trying to reach the college-age customer. The goal is to be “the first one they think of” when it’s time for new tires or auto repair work.

“It’s just a matter of figuring out what they are on,” he says about students and the social media platforms they use.

“Are they on Instagram? Facebook?

If we mention Facebook to college-age kids, they look at us like we are ancient!”

Right now, Iowa City Tire is active on Facebook and Instagram, with a less active Twitter account.

Miller says that as he and his team expand their social media marketing knowledge, they hope to create a following on TikTok as well.

“We really just want to get into the college kids’ wheelhouse because it’s a huge segment of our population.”

Photo: Iowa City Tire & Service

THE POWER OF MEMES

Miller says that when thinking about what he wanted his company’s social media presence to be like, he thought about fast food chain Wendy’s Twitter page.

“Wendy’s on Twitter just kind of roasts everyone and makes these sassy comments.

Everyone loves it and finds it hilarious.”

Iowa City Tire partners with Shop Marketing Pros, an automotive repair marketing service provider, and Miller told the company about his vision to emulate Wendy’s Twitter account.

“Shop Marketing Pros shares our vision and that is communication,” says Miller. “It is 100% back and forth as well.

They listen as much as they talk.”

The company and Miller landed on a theme that “works for me as a consumer,” says Miller — advertising through memes, which are images, videos or pieces of text, typically humorous in nature, that are spread rapidly by Internet users.

“I know what gets my attention as a consumer and that means timely, funny and unique memes,” he says.

40

“We started to go into the digital transition in 2020,” says Miller.

“COVID-19 made me realize that we had to make a lot of changes.”

Photo: Iowa City Tire & Service

“If we can get someone to stop and engage with a post because they think it is funny or for whatever reason, that is the main goal in all of this.”

Miller says that he will spend hours going through an online app, Meme Generator, to create his next social media advertisement.

If he has a phrase that he thinks is funny, he will plug that into different photos and create a number of memes that he then sends to his marketing team for feedback. Sometimes he will find a photo he thinks is funny and will spend time crafting a phrase to go along with it.

“If we can get someone to stop and engage with a post because they think it is funny or for whatever reason, that is the main goal in all of this,” says Miller.

Photo: Iowa City Tire & Service

“I think Iowa City Tire advertises differently than most places. We don’t take a photo of a car and say, ‘If you have this car, you might need this service,’ or ‘This dashboard light could mean this problem.’

We just take funny memes and funny pictures and put our slapstick humor on it.”

Miller refrains from posting generic car or tire photos and doesn’t follow any type of schedule — just “when inspiration hits.”

This approach has doubled Iowa City Tire’s social media following. Q MTD May 2023

Tire Dealer Survival Guide

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B

etween constrained nstrained consumer budgets, high interest stt rates, rattes, supply supplly imbalances imb b allances and other factors, ctor ct orss, aachieving chie ch ievi ving ng — aand nd mainmai ainn taining — profitability lity as an independent tire dealer remains a challenging hallenging prospect.

Any edge you can gain will help, which is why MTD — for the third year in a row — brings to you its Tire Dealer Survival Guide.

In this edition, experts share with you best practices designed to help your employees get out of their comfort zones so they can

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sell more effectively, how you as a business lleader eader d can cre create ate t a winni winning i ing cult culture lture th that att lleads ead ds tto o eenhanced n h a n ce d p profitability, r of itabilit y, h how ow yyou ou ccan an b boost oost revenue through digital marketing, how your team can use text messaging to communicate with customers more effectively, how to manage high inventory levels and how you can help your organization grow and thrive by “driving the leadership bus.”

This information is only available through MTD’s Tire Dealer Survival Guide!

Images: 165907071 | bubaone, 993738528 | -VICTOR- | Getty Images

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MTD May 2023

Tire Dealer Survival Guide

How to turn your salespeople into superheroes THE SECRET? GETTING OUT OF THE ‘COMFORT ZONE’ By

Mike Townsend

You can turn your salespeople into superheroes like these sales representatives by helping them escape their comfort zone, says Townsend.

Photo: MTD

Y

ou’ve heard the term “comfort zone.” What exactly is it? One of the best definitions I have read is the comfort zone is a psychological state in which a person feels at ease because they are not being tested.

When business is booming, it is very easy to not know whether you or your sales team is in the “comfort zone.”

People tend to stay in their comfort zone because they want to avoid the anxiety that comes with change. Furthermore, anything outside of their comfort zone creates uncertainty and loss of control.

As humans, we are wired this way. It’s a normal and acceptable behavioral trait.

However, exterior conditions such as inflation, higher interest rates and a challenging job market demand that we explore different ways to engage customers, as well as our employees. w w w . M o d e r n T i r e D e a l e r. c o m

We have found that most businesses that are in their respective comfort zones are treading on thin ice. When numbers are good, most salespeople and managers are unaware of the serious challenges they will create down the road.

Dan Cathey, chairman of fast food chain Chick-fil-A, says his company had to change internally to keep up with all the external changes going on around it.

Refusing to step out of your comfort zone leads to greater financial challenge down the road, he says.

WHY STAY THERE?

People stay in their comfort zone because they think it is safer. Nothing could be farther from the truth. Unaware that fear and uncertainty keep them in their unchangeable state, they end up getting passed by a competitor.

Fear and uncertainty are the root causes of most people never changing. Often, we hear excuses from people, saying, “I can’t do that” or “I’m not good at that.” Many tire dealership owners and managers get so caught up in the whirlwind of day-to-day operations — as well as the perfect storm of unprecedented times of profitability — they never consider that they are in a comfort zone until it’s too late or until getting out of their comfort zone becomes a more labor-intensive change project.

How do you get out of your comfort zone? Two psychologists performed an experiment and found there was an interesting relationship between performance and anxiety. They found that too much pressure has the opposite effect and can cause many to panic.

This being said, changing behavior sometimes requires a professional trainer from an outside company who knows and understands behavioral change processes.

Most of the time, they can create a “sweet spot” of stress based on how the individual responds to change and/or their willingness to move out of their comfort zone. For example, once someone experiences increased performance in a small area, they are more willing to try other techniques that are being recommended or challenged.

Here are five simple ways you can get out of your comfort zone: 1. Do something new that you always wanted to do; 2. Start a fitness challenge; 3. Change your daily routine; 4. Invest in professional growth; 5. Face a fear of anything that could hinder you.

Do something new. Virtually everyone has some kind of bucket list goal they want to accomplish. Many people want

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Tire Dealer Survival Guide to run a marathon, learn to play the piano or travel to a destination that others have visited and told them about. We recommend following the slogan “just do it” and making the commitment. Believe it or not, when it is fi nished there is a sense of accomplishment, but it will also condition you to try something greater.

Start a fitness challenge. After running several half marathons and achieving a time of one hour and 49 minutes, I decided — at my chiropractor’s recommendation — to start road cycling. After my first 62-mile race, I was hooked. Our riding group is now training for a 115mile ride that has 10,000 feet of climbing mixed in. We are now less than 60 days away and progressing toward our goal of being ready. As daunting as this endeavor seemed when we signed up, we knew we would benefit in many ways. The people you become affiliated with and are accountable to can speak to many areas of your life and help you in more areas than just becoming healthier. For example, my chiropractor introduced me to a new client. Th rough him, I have secured a

future deal as a paid brand ambassador for a great product. Good things happen when you commit to getting out of your comfort zone.

Change your daily routine. Even though having a daily routine helps us get more done and builds stability in our lives, we can deviate on many things. For the independent tire dealer, moving to a different counter or computer from time to time will help keep you on your toes and many times moving to a different store may test your sales team’s abilities.

Depending on the distance between stores, you could have a store with an entirely different market selling to a different demographic.

Invest in professional growth. Comfort zones get in the way of professional growth. I had a successful client once say, “Training is not something you did. It’s something you do.” We must also see training as an investment with a quantifiable return. Michael Spencer, chief operating officer of TireSouth, a rapidly growing independent tire dealership in the Atlanta, Ga., area, said,

GETTING OUT OF YOUR COMFORT ZONE CAN BOOST SALES BUT WATCH WHAT YOU SAY AND SHOW EMPATHY Getting out of your comfort zone can help your salespeople and managers get to a new level of service and customer engagement, as well as improve how your managers engage employees. This almost always leads to happier customers, as well as greater sales profi tability. Salespeople can engage customers in the following three meaningful ways, but should avoid verbal mistakes and other pitfalls: 1. As a trusted advisor. Building trust takes time, but it can be accelerated with many psychological techniques. I have seen many salespeople think they have this figured out, only to lose the customer’s trust by saying “to be honest with you” or making another verbal gaffe.

2. As a hero. Being an A-plus problem solver involves showing empathy at the right time without sounding less than authentic. (The catch? Not many people know how to show empathy.)

3. As a companion. Salespeople who excel at this approach know how to connect with the customer for a greater level of emotional and rational connection. But remember — the good ol’ boy approach doesn’t work like it used to.

During my nearly 20 years of mystery shopping tire dealerships and auto service providers, only about fi ve or six of the salespeople I have observed have mastered all three of the above.

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“I have noticed that when sales people and/or managers get out of their comfort zones and try new techniques, their sales increase and we receive more positive Google reviews.” I am amazed at how many people will hire a professional trainer to help them get into shape physically, but will not employ a coach to help them professionally. Both trainers are equally important because they see things we cannot see. As a coach, I have a coach who helps and advises me in multiple areas professionally. If you do not invest in professional growth, you can get stuck in the status quo and never move to a higher level of achievement.

Face your fears. Everyone has fears.

Facing a fear doesn’t mean it will go away.

Fear is always present when I speak in front of 100 or more people. However, only my wife can spot it and even now it’s sometimes hard for her to see. Why? Because I have learned how to overcome the outward signs of fear. There is a lot of satisfaction when you learn to overcome your fears and move freely to help others.

The best way to overcome fear is to pick one and by trial and error — you will most likely fail a few times — do something to move through it. If you are afraid of change, walk through a change process with an expert by setting up a proof of concept to determine what the change would look like. Th is will help you see the long-term and short-term benefits and challenges associated with the fear/ change that you want to face.

One of the biggest comfort zone challenges in this consumer-led economy is inspiring others to do more than they get paid to do. A good leader can always pull extra effort from their followers the same way a salesperson can pull extra sales — by recommending needed products and services — from a customer without making the customer feel pressured.

When salespeople get out of their comfort zone and try new techniques, customers are engaged in a more meaningful and memorable way. This sounds easy, but the execution is difficult and for many impossible, unless you go where the magic is located — outside your comfort zone. Q Mike Townsend is the owner of Townsend Strategies, a sales and leadership training and marketing company that advises independent tire dealerships. To contact Townsend, email him at mike@townsendstrategies.com.

MTD May 2023

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Tire Dealer Survival Guide

How to build a winning culture WHY IT STARTS WITH EMPLOYEE ENGAGEMENT By

Greg Ring

T

here are times when you’ve experienced something new and it takes a while to understand what it was and how it became important in your life. Lessons come in so many different ways and sometimes in very unexpected ways.

It was a very hot day in August many summers ago. I had just landed a great job at UPS unloading 53-foot trailers that would feed a sorting conveyor belt manned by about 12 people.

The pace of my work was important, as the rate was extremely specific — 1,200 pieces an hour or one parcel every three seconds.

It was a demanding, yet well-paid production position and while it was the bottom of the ladder, I was grateful to have it to help me get through college and start on my journey.

One day our shift manager, only about 10 years older than me at the time, asked when I could clear my schedule to have lunch or breakfast with him for what was called a “TLA,” which stood for “talk, listen and act.” He explained that he wanted to get to know me better and wanted to explain more about the company and how we could make it even better.

He really took time to get to know me and other team members on a personal basis. He scheduled regular TLAs to keep up to date with each of us. He knew where we were attending college and what our majors were. He knew about our families. He knew our hobbies and favorite sports teams. He also knew what we liked about our jobs and the parts that we found challenging.

He knew that several team members were only there for a short while, knew others would stick around for a few years and yes, knew that some, like him, would make a career at UPS. He asked for our opinions and ideas for improvements. He also was not shy about asking us to make

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Culture creates the experience that both employees and customers feel when they interact with a business or organization.

Photo: J. Ennis Kirkland

some changes to improve our efficiency and productivity. He encouraged us to bring our best each day.

He knew all of this because he took the time to ask, invest and act. And he was intentional in building a culture and not just settling for what he got.

In later years, I learned that he did this on his own budget. He personally spent his time and his money on each of us. Other managers at that location did not make this effort. And out of all three shifts, he had the best production and accuracy numbers and the least turnover.

He had built a winning culture.

I have borrowed this TLA concept during my career and continue to share it often. If you want more and better, you must do more and better. Winning cultures are a real strategic advantage in any business or organization. But where do you start?

Like with any important journey, the first step is to clearly understand where you are and then chart your course. Often

simple questions can yield the most helpful information. The power of asking relevant questions and truly listening — not just waiting to respond — can unlock incredible value to your business.

WHAT IS YOUR CULTURE?

When I ask business leaders the simple question, “What is your culture?” I’m often met with hesitation or vague responses such as “We work hard, put in long hours and try to do the right thing.”

While those are fair and honest responses, they do reveal that culture is often something left on the back burner and not clearly defined.

A definition I like is “Culture is what we do, what we don’t do and how we do it.”

In my business coaching conversations with tire dealership owners and leaders, some describe culture work as “soft skills” or “touchy-feely.” As you might guess, some of those types of business leaders represent the largest opportunity for improvement! Everything counts.

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Tire Dealer Survival Guide Some recent conversations with clients have started with them telling me, “We want help in developing a culture.” My response is always direct. I share that all business and organizations already have a culture in place.

It develops either with intention, purpose and skill or simply by default or culture-on-autopilot.

Culture creates the experience that both employees and customers feel when they interact with a business or organization. As you think about the businesses you interact with, there is a good chance the ones you enjoy the most are also the businesses with the best culture. Employees who don’t like what they are doing or are disengaged will carry that over to the customer experience. You own your culture, like it or not.

Since this is your culture, you can decide to change it. The choice is up to you.

The automotive segment, like all businesses, is facing some economic factors somewhat out of your control, like inflation, labor pool, cost of borrowing, price increases, supply chain challenges and changing customer needs and behaviors.

While these factors do indeed create some unique challenges, the good news is that the issues are all about the same for your competition. How you choose to respond can create a real strategic advantage for your business that takes the challenges head-on and creates solutions instead of excuses. How you prepare and execute will have a dramatic impact on the results you get.

BUILD TO WIN

What you do is 10 times more valuable than what you were going to do. But where do you start? Here are six steps to building a winning culture that delivers exceptional value to employees and customers: 1. Accept the reality of where you currently are and decide to change it. Leaders are responsible for setting the culture their teams follow. While culture is everybody’s responsibility to support and execute, leaders have the ultimate responsibility to set it and chart the course. Leaders also have the most influence and responsibility to model the right culture. If you ask for behavior and actions that are not supported by your culture, you will be challenged to deliver on them. In

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a recent article in “Inc. Magazine,” Chip Conley writes that in terms of priorities, customers actually come in second behind employees as the employees create customers’ experiences. Some may disagree with this, but it is hard to overestimate the importance of engaged employees driving a successful culture.

sincere and consistent. A few effective formats include team meetings before work starts to keep everyone on track; after-work dinners to celebrate achievements; company picnics for all; TLAs with one-on-one development discussions; a written survey to all employees; and spur-of-the-moment discussions during the course of

WHILE BUILDING CULTURE, GETTING THERE CAN BE INFORMAL AS LONG AS IT IS SINCERE AND CONSISTENT. 2. Drive responsibly for business changes.

An April 2022 Gallup survey revealed t hat employee engagement has dropped from 36% in 2020 to 34% in 2022. And to even make this more challenging, Gallup reported that 17% of employees are “actively disengaged.”

Again, this is across many business segments and the playing field may be fairly even. Business leaders who drive change to develop a winning culture will have a measurable advantage over the competition. The power of getting 1% better each day is dramatic. Even 1% better each week will produce market-leading results.

3. Be consistent, committed, provide clarity and be patient. This process takes patience as you need to ask your employees and team members some very direct questions and be prepared to listen to the results. Building a better culture starts with how well you understand your team. Do your teams clearly understand what is required of them? Lack of clarity creates confusion and lack of execution. Employees need to understand what is important to the business, but what is important to them? Why is it important and what can you do as a leader to address it? Stephen Covey supports this in his book, “The Seven Habits of Highly Effective People.” Habit number five, according to Covey, is to seek first to understand and then to be understood.

4. Connect frequently, ask, listen and act. While building culture, getting there can be informal as long as it is

general business. Just having the conversation is a great start and is a competitive advantage.

5. Ask relevant questions and listen.

Gallup asked some straightforward questions of their study participants: Do you have clarity of expectations?

Do your opinions count? Do you have opportunities for development and advancement? Do you feel valued and does your work have value? Are you enthusiastic about coming to work?

How do you feel about the workplace culture? Would you recommend your employer to a friend? What would you like to change?

Evaluate and implement. Once you have your team’s feedback, review and implement the suggestions and ideas that work. Be candid about the ideas that are not in alignment without being critical. Some organizations offer rewards, such as a gift card or lunch, for the entire team to celebrate the implementation of a new process or idea.

A simple thank you also goes a long way. Continue to encourage candid and open feedback from your team.

By deciding to improve your culture and adopting these steps, you will be well on your way to inspiring your team and achieving better results. Q Greg Ring is an accomplished, executive-level professional with more than 20 years of tire industry experience in operational development, sales, management, leadership and public speaking. He has worked with all levels of organizations, including C-suite executives at Fortune 100 and Fortune 500 companies. Ring can be reached at GR Consulting LLC via h.greg.ring@gmail.com.

MTD May 2023

Tire Dealer Survival Guide

How to boost sales through digital marketing WHY DIGITAL MARKETING IS AS IMPORTANT AS YOUR P&L By

Mike Edge

D

igital marketing will not affect whether you sell quality tires and services. Digital marketing will not improve your workflow processes. But what digital marketing will do is promote your business’ brand, products and services where consumers look for information — in the digital space.

Consumers seek information via digital technology and primarily through search engines like Google. If you need to be convinced of the power of search and the need for search engine optimization (SEO) and pay-per-click (PPC), you are already behind.

Being found when a consumer is looking for tires or services that your shop provides in your geographic market is paramount. It is similar to the old adage in real estate: “Location, location, location!” The same goes for the digital space.

You have to be found when the consumer is making generic product or service searches — not when the consumer is looking for you by name.

Digital marketing is effective for profits and transparent when executed properly. Digital marketing also is directly related to your profits and losses and some dealers don’t fully understand the impact, including multi-store operations.

Today, digital marketing is the major factor in driving new revenue. It reaffirms your position in the marketplace to your current customers when they can see your position in a search engine like Google.

Most tire dealers consider digital marketing relatively important, but not paramount like their P&L statement. Your Google business profile (GBP) page and

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

You have to be found when the consumer is making generic product or service searches — not when the consumer is looking for you by name.

Image: 1284549946 | anyaberkut | Getty Images

website are your most important sales representatives, since this is usually where the new customer encounters your tire store first.

This first impression is critical to whether your counter sales rep receives a call or email inquiry. Your GBP page and website create a perception of your dealership to the customer before you meet.

Given this important opportunity, why not make it better than the competition?

Your goal is to build trust immediately.

Answering questions that your customer may have before contacting you builds this trust quickly.

Your effectiveness with SEO and PPC can either increase or decrease your sales.

SEO is a long-term required strategy,

while PPC is both immediate and longterm. However, PPC is where your direct expense with Google can be way off and you might not be aware of it.

MEASURING YOUR SUCCESS

The entire customer buying process — from getting found to making contact with your shop — has to be measured accurately to know that you are receiving the necessary data to determine profits and losses. Digital marketing is more measurable and adjustable in real time than other forms of traditional marketing, such as billboards, TV or radio.

In order to measure your success, can you answer the following questions with confidence?

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Tire Dealer Survival Guide 1. Do you know your cost per acquisition for a new customer?

2. Do you know your return on investment (ROI) for your PPC adwords budget?

3. Do you know your ROI for each keyword (phrase)?

4. Do you know your ROI for each of your locations?

5. Do you have negative keywords established so that you don’t spend on keywords that you don’t want to pay for?

(For example, “motorcycle tires” is a waste if you don’t sell motorcycle tires.)

6. Do you know what your ROI is for your SEO budget?

7. Do you know if your website is easy to navigate? Have you tested it?

8. What are your click-through rates?

9. Do your visitors have clear calls to action? How do you know? Have you measured them?

10. Do you have a digital customer reengagement program to reconnect to lost customers beyond emails and texts, like IP targeting, and if so, what is your ROI on this? (We have seen this generate a ROI averaging 14X dollars spent.)

When you look at your profit and loss statement, you are determining whether you are profitable or not. You are looking for information that you need to know to make good, informed decisions. These numbers are critical to your business’ very existence. How do you know how much you can spend to grow your business without looking at accounts receivable and accounts payable, profits and losses?

Did you know that 95% of tire dealers, when it comes to PPC, spend inefficiently?

They either spend way too much money, which burns through the adwords budget, causing much smaller returns, or they spend too little because they do not understand how to target their market.

PPC FOR ROI

Your data and analytics are critical to knowing whether you’re winning or losing with your dollars spent. Your digital marketing strategy should be dialed in so tightly that you know how to crank it up and lower it to generate predictable results. This builds confidence and helps ensure profit. Digital marketing is always evolving, but it should become manageable and predictable because it is easier to

50

measure than other forms of marketing.

However, that can only happen if you understand the important data points and which key performance indicators (KPIs) to evaluate. The proper evaluations will allow you to monitor behavior by looking at bounce rates on websites, click-through rates and calls to action. When we see these rates go in favorable directions, we can create a baseline reflected in revenues and determine if our efforts are paying off with car counts and new profits. Just like you should have a knowledgeable certified public accountant on your list of required “tools” of professionals, you

be the fastest way to spend money without receiving your due return because you or your digital marketing agency do not understand the industry well enough to profit. We have seen operations hire knowledgeable digital agencies that are general practitioners, but they fail to understand the nuances within the tire industry and thereby miss low-hanging fruit while wasting real dollars on PPC. It is also important to make sure you are limiting your PPC budget geographically. Why would you want to bid on adwords 50 miles away when the likelihood of converting that click to a

PAY-PER-CLICK IS THE FASTEST WAY TO SEE A RETURN ON INVESTMENT. need a knowledgeable digital marketing agency. Tire industry knowledge is critical when it comes to your PPC budget with Google. It is even more critical if you are a multi-store operator.

We have seen multi-store tire dealers overspend in excess of $9,000 per month and larger organizations that have overspent in excess of $18,000 per month. It is critical to rein this excessive spending in and instead spend at optimal levels. However, if you have one budget for all locations, the wrong adwords, no negative adwords and each location without geographic boundaries within Google, you will bleed to death or only see marginal profits.

There are so many variables with your PPC budget alone that it can zap your overall budget quickly. If you have a general practitioner of digital marketing, regardless of reputation, who does not specifically specialize in tires and automotive repair, it is very likely you are wasting money.

Having an agency with extensive knowledge of the tire industry and the science behind PPC will help your profit and losses immensely. Knowing which adwords to bid on as well as the proper list of negative adwords is critical to efficiently spend your budget and maximize the ROI. PPC is the fastest way to see a return on investment and it can simultaneously

customer is zero? For multi-store operations, each store must be treated independently or one store will steal budget from another. Each account must be set up with individual buckets of adwords, along with negative adwords and a defined geographic market area.

WHAT SUCCESS LOOKS LIKE

What is an example of success? Let’s say that through your digital marketing efforts, you only brought in one more additional customer a day and your average ticket was $400. If you are open six days a week, that is $2,400 additional per week. That translates to more than $124,000 per year for one additional customer per day. This doesn’t take into consideration the repeat business the customer will do with you.

It is absolutely amazing to me what happens when tire dealers and auto repair shops take digital marketing seriously and hire industry-specific tire digital marketing agencies. The success is exponential when you operate multiple locations. Don’t leave your digital marketing to chance. Q Mike Edge is business development director at Tread Partners, a leading tire and automotive repair digital marketing agency, (www.treadpartners.com). Mike is also a host on The Gain Traction Podcast, a leading industry podcast dedicated to the tire and automotive repair industry. To contact Edge, email him at mike@treadpartners.com or call him at (270) 570-2375.

MTD May 2023

Tire Dealer Survival Guide

How to navigate high inventory levels FOUR STRATEGIES TO KEEP STOCK MOVING By

Barry Neal, Neury Freitas

A

s the retail tire industry transitions to a post-pandemic business environment with a cooling economy and recovering supply-chains, it needs to re-evaluate its approach to inventory management.

During the peak of the pandemic, retailers increased inventory levels to build safety stocks and ensure access to products during a period of supply chain disruption and strong demand, as onsite availability — or lack thereof — is one of the key drivers of lost sales opportunities.

However, over the past year, supply chains have started to stabilize and continued inflation has eroded consumer purchasing power. In this complex scenario, retailers and distributors are facing growing concerns over managing rising inventory levels. Unlike many aftermarket products, these concerns are exacerbated by tires’ useful life, growing consumer education on tire aging and the high price transparency of these products.

Retailers face pressure to push sales through discounting, which offers shortterm relief, but undermines retailers in two ways. In the short term, tire discounts primarily work by pulling forward demand and do very little in the way of increasing the overall quantity demanded.

This means that nearly all the sales driven by a discount are cannibalizing future full-price sales. In the long term, discounts reset pricing expectations and reduce a consumer’s willingness to pay in a category already beset by high pricing transparency.

Consumers typically respond to these lower expectations by either extending their purchase intervals in hopes of waiting for the next discount opportunity or deciding to downgrade tire quality to maintain their expected pricing level.

Both customer responses have negative long-term effects for retailers.

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

Better aligning stocking strategy to future demand requirements and dynamically directing pull-through to the consumer requires an integrated approach.

Photo: Butler Tires and Wheels

Retailers should instead employ a set of near- and mid-term tools to address the inventory challenge, while limiting the near- and mid-term financial damage.

These include: Increase sales opportunities (short-term).

At its most fundamental level, excess inventory is best addressed by accelerating sales growth through increased opportunities. Non-price promotions like financing and loyalty programs, fleet/ referral partners and online-to-offline partnerships help to get more customers in the store and reduce purchasing friction.

Additional approaches include training and tool-based techniques to increase tire inspection and improve the quality of customer interactions. Automated tire inspection equipment is particularly useful in helping retailers convert additional cross-selling opportunities for

customers seeking adjacent products (TPMS, balancing, alignment, etc.) or broader maintenance and repair services.

Furthermore, targeted use of enhanced spiffs is an effective way to accelerate sales without reducing the price to the customer.

Leverage “non-destructive” pricing and promotion techniques (short-term).

While blanket pricing and promotion initiatives can lead to an extended hangover in terms of pricing expectations, targeted promotions can still increase tire sales without cannibalizing your loyal customer base. These come in two types which can be used in tandem or individually. The first are promotions targeted at non-traditional, new or lost customers. Examples include new customer promotions, expired tire outreaches, deferred service pushes, fleet and community safety events, etc. In the instance of expired tire outreach,

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Tire Dealer Survival Guide many people’s driving diminished during COVID-19 and/or their driving patterns have changed and there is an unserviced glut of aging tires.

The second set of “non-destructive” pricing and promotion techniques are bundled promotions and/or promotions not directly tied to the price per tire.

Improve inventory management and focus tire sell-through (mid-term). Better aligning stocking strategy to future demand requirements and dynamically directing pull-through to the consumer requires an integrated approach. This includes technology (forecasting, inventory/assortment management, advisorand consumer-directed sales tools, etc.); advisor training and rewards alignment; and in-store tire and promotion management. Retailers who react to forward demand signals versus ordering based on historic consumption can better manage inventory levels and optimize assortment and sell through. By leveraging advanced supply chain planning software, retailers

can evolve from forecasting purely on historical data. By pursuing the integration of local driving statistics, demographics and economic indicators with existing internal customer data, retailers can better optimize inventory planning.

Implement cross-location sharing and virtual inventory practices (mid-term).

Multi-store operators and buying group members can further leverage inventory through cross-store/virtual inventory sharing to promote sell-through of slower velocity tires and improve the inventory availability equation. While multi-location retailers can execute these strategies with independent “milk runs” and/or reverse supply chain initiatives supported by dynamic inventory calls, individual operators should also demand this level of service from their buying groups and distributor partners.

Although some of the primary drivers for retailers to join a purchasing group are access to a complete product portfolio, better pricing and attractive commercial

terms, these organizations should also support their members’ inventory planning, management, resale, and reciprocal inventory sharing agreements. Within a purchasing group, for example, retailers could agree to set terms that would facilitate selling excess inventory among local retailers.

This approach would help members maintain lower inventory levels on average, provide faster access to in-demand products and avoid discounted sales to consumers.

These four strategies will help retailers address the near-term inventory challenge, while preserving long-term financial performance and better positioning them for future market and supply chain volatility. Q Barry Neal is a senior partner and member of Roland Berger’s North American management team. Neury Freitas is a partner at Roland Berger. For more information, contact Neal at barry.neal@rolandberger.com and contact Freitas at neury.freitas@rolandberger.com.

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MTD May 2023

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Tire Dealer Survival Guide

How to drive more business through texting GETTING STARTED, CREATING CAMPAIGNS AND MORE By

Baker Ghanim

T

ext messaging has been a game changer for our eight-location tire dealership. And it could be a gamechanger for your business, too.

In the tire industry, we’re fortunate to have our customers’ phone numbers — unlike many other industries that need to incentivize customers to share their numbers to communicate directly with them about new products, services and marketing campaigns or to drive business on certain days or at specific times.

Over the years, we have found that there are several built-in advantages to communicating with customers via text messages.

First, texting is inherently personal.

It’s a casual form of communication that allows individuals to use emoticons, use informal grammar and more, thus making customers feel more comfortable.

And since text messages are more personal and less formal, they are more likely to be read than emails. According to TechJury, nearly 100% of people who receive marketing text messages are likely to open them. In contrast, only 20% of email recipients may read them.

Secondly, text messaging allows customers to control the pace of the conversation. They can respond when they have a moment — whether they are at work, completing a task or engaged in another conversation. When communicating with customers by text, we always ask them to call us at their convenience, especially if we know they are busy. Text messaging also does not require formal greetings, perfect grammar or long paragraphs. The casual writing style makes it easier and faster for both you and your customer.

And text messages are automatically saved and easily accessible for future reference.

Lastly, text messaging is cost-effective.

You can start today by simply using a personal phone.

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Although text messaging is a tool that can help you achieve great and open communication with your customers, it is important to use the appropriate text messaging method that caters to your shop’s unique requirements.

Photo: 163219018 | Geber86 | Getty Images

GETTING STARTED

Although text messaging is a tool that can help you achieve great and open communication with your customers, it is important to use the appropriate text messaging method that caters to your shop’s unique requirements.

And it is vital to keep in mind the principles of building trust with your customers, while providing them with valuable information and maintaining a personalized conversation. Here’s a look at the advantages and in some cases, disadvantages of various options.

The first option is to use your personal number to send text messages to your customers. While this may seem like a convenient option, it can be problematic because it means sharing your personal number with customers, which can lead to after-hours interruptions and difficulties separating work from personal life.

A second option is to download the Google Voice app on your personal phone,

which provides a free dedicated phone number for text messaging and calling customers without sharing your personal number. This option is more secure than sharing your personal number, but it has two main issues. First, messages sent and received cannot be seen by the rest of your team and they are not sent from your shop phone number.

A third option is upgrading your landline to a digital line, which can provide you with a more versatile solution. With this option, you and your team can make and receive calls and text messages from the same number using either a traditional phone or a mobile device. Additionally, you’ll have access to features such as automatic call recording, call transferring and internet faxing.

RingCentral, for example, offers a digital line service for less than $50 per month.

By switching to a digital line, you may be able to offset the cost by canceling your current landline.

MTD May 2023

The best option for text messaging customers is to use a shop management system that offers this functionality. This eliminates the need to manually type phone numbers and allows you to set up preloaded messages. With a shop management system, like our system, oTo Grip, your team can easily communicate with customers in a seamless manner. You can send and receive text messages and ensure that the right message is sent at the right time — improving your overall customer satisfaction and retention

TEXT MESSAGE CAMPAIGNS

Effective communication with customers is essential for any service-oriented business. We break down text communication into four categories: pre-service, during service, after service and campaigns.

In pre-service, we use text messaging to engage customers and make it easier for them to do business with us. We send them the shop address and our name to help them find us easily. We also use text messaging to share tire options and prices and to let customers know when their tires have arrived. And we use text messaging to follow up with customers if they don’t show up for their appointment.

During service, text messaging helps us maintain an open line of communication with our customers. We can send quick updates about work in progress, let customers know when their vehicle is ready for pick up or send them a picture of an issue spotted during inspection.

After service is where we have the opportunity to follow up with our customers. Our system, oTo Grip, suggests sending an “after-sale message” to thank customers for choosing our tire store and asking for their feedback. This message includes a link to our Google review page and a phone number to contact our district manager to discuss any concerns. This simple message has doubled our rate of five-star Google reviews and has given us the chance to rectify any negative experiences, while improving our overall customer experience, business process and business success. oTo Grip keeps track of these messages, so that we don’t overwhelm customers with too much communication.

Finally, dedicated text message campaigns can be an effective way to engage with your customers and drive business growth. However, campaigns generally

require registration with a compliance agency to ensure that you are following all legal and privacy regulations. Luckily, there are companies out there that specialize in these campaigns and can handle all the necessary requirements for you.

After you’ve selected the option you believe will work best for you, there are several factors to consider when designing text message campaigns.

First, it is imperative to obtain consent from your customers and provide them with the option to opt-out at any time by replying with STOP. Second, we recommend limiting the frequency of your campaigns to no more than once a month in order to avoid overwhelming your customers. By adhering to these guidelines, you can effectively execute text message campaigns and achieve optimal results.

Providing valuable information also is key. The most successful campaigns we have observed typically integrate multiple value propositions to maximize their effectiveness. (My favorite text messaging campaigns are those that offer value or reminders to customers while remaining personal. This could be something as simple as a quick message reminding customers to check their tire pressure before a cold front or offering a discount on a safety inspection they got the previous year. ) For a successful campaign, it is crucial to personalize your messages by addressing your customers by their names and sending relevant messages at the appropriate time. Promptly responding to customer inquiries is also vital in maintaining good communication and establishing trust. By taking these steps, you can enhance the overall customer experience and foster lasting relationships with your customer base.

And don’t forget to solicit feedback, opinions or suggestions. One effective strategy is to ask for customers’ input on new products or services you’re considering, such as opening or closing your store on a certain day of the week.

My team has successfully implemented all of the above techniques and continuously adapts and learns as communication methods evolve. When you follow these best practices, utilizing text messaging as a tool for customer engagement can be incredibly effective in growing your business. Q

Tire Dealer Survival Guide The best option for text messaging customers is to use a shop management system that offers this functionality. This eliminates the need to manually type phone numbers and allows you to set up preloaded messages. With a shop management system, like our system, oTo Grip, your team can easily communicate with customers in a seamless manner. You can send and receive text messages and ensure that the right message is sent at the right time — improving your overall customer satisfaction and retention

TEXT MESSAGE CAMPAIGNS

Effective communication with customers is essential for any service-oriented business. We break down text communication into four categories: pre-service, during service, after service and campaigns.

In pre-service, we use text messaging to engage customers and make it easier for them to do business with us. We send them the shop address and our name to help them find us easily. We also use text messaging to share tire options and prices and to let customers know when their tires have arrived. And we use text messaging to follow up with customers if they don’t show up for their appointment.

During service, text messaging helps us

maintain an open line of communication with our customers. With modern shop management systems like oTo Grip, we can send quick updates about work in progress, let customers know when their vehicle is ready for pick up, or send them a picture of an issue spotted during inspection.

After service is where we have the opportunity to follow up with our customers. Our system, oTo Grip, suggests sending an “after-sale message” to thank customers for choosing our tire store and asking for their feedback. This message includes a link to our Google review page and a phone number to contact our district manager to discuss any concerns. This simple message has doubled our rate of five-star Google reviews and has given us the chance to rectify any negative experiences, while improving our overall customer experience, business process and business success. oTo Grip keeps track of these messages, so that we don’t overwhelm customers with too much communication.

Finally, dedicated text message campaigns can be an effective way to engage with your customers and drive business growth. However, campaigns generally require registration with a compliance agency to ensure that you are following all legal and privacy regulations. Luckily,

FOLLOW THE SCRIPT HOW TO RESPOND TO CUSTOMERS AFTER THE SALE “After service, we love the opportunity to follow up with our customers,” says Baker Ghanim, president of Bedford, Texas-based Ghanim Group dba Tire Store Service Center. “Our system, oTo Grip, suggests sending an aftersale message to thank customers for choosing our tire store and asking for their feedback. This message includes a link to our Google review page and a phone number to contact our district manager for any concerns.” Ghanim adds that the message has doubled the dealership’s five-star Google reviews “and has given us the chance to rectify any negative experiences — improving our overall customer experience, business process and business success.

“Our after-sale message reads, ‘Hi John, thank you for choosing Tire Store Service Center. Your satisfaction is our top priority and we appreciate your business. We would love to hear about your experience and encourage you to share your feedback with others by leaving a review. Your positive feedback would not only help us improve our service, but also help others find us.’ “’However, if there was anything that did not meet your expectations, please do not hesitate to contact our district manager at (469) 312-0963 via call or text. We are committed to resolving any issues and ensuring your complete satisfaction. Thank you again for your business and we hope to see you soon.’”

Ghanim says oTo Grip keeps track of messages sent to prevent customers from being overwhelmed by too many text messages.

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there are companies out there that specialize in these campaigns and can handle all the necessary requirements for you.

After you’ve selected the option you believe will work best for you, there are several factors to consider when designing text message campaigns.

First, it is imperative to obtain consent from your customers and provide them with the option to opt-out at any time by replying with STOP. Second, we recommend limiting the frequency of your campaigns to no more than once a month in order to avoid overwhelming your customers. By adhering to these guidelines, you can effectively execute text message campaigns and achieve optimal results.

Providing valuable information also is key. The most successful campaigns we have observed typically integrate multiple value propositions to maximize their effectiveness. (My favorite text messaging campaigns are those that offer value or reminders to customers while remaining personal. This could be something as simple as a quick message reminding customers to check their tire pressure before a cold front or offering a discount on a safety inspection they got the previous year. ) For a successful campaign, it is crucial to personalize your messages by addressing your customers by their name and sending relevant messages at the appropriate time. Promptly responding to customer inquiries is also vital in maintaining good communication and establishing trust. By taking these steps, you can enhance the overall customer experience and foster lasting relationships with your customer base.

And don’t forget to solicit feedback, opinions or suggestions. One effective strategy is to ask for customers’ input on new products or services you’re considering, such as opening or closing your store on a certain day of the week.

My team has successfully implemented all of the above techniques and continuously adapts and learns as communication methods evolve. When you follow these best practices, utilizing text messaging as a tool for customer engagement can be incredibly effective in growing your business. Q Baker Ghanim, president of Bedford, Texas-based Ghanim Group dba Tire Store Service Center, has created a retail point-of-sale system, oTo Grip, that utilizes texting. He can be reached at baker@tirestoretx.com.

MTD May 2023

Tire Dealer Survival Guide

How to drive the leadership bus IT’S IMPORTANT TO CAPITALIZE ON THE FIRST SMALL WIN By

T.J. Trum

F

or years, I have enjoyed and shared the quote, “Leaders are like eagles. They don’t flock. You find them each one at a time.” Recently, a good friend and colleague of mine, Steve Franks, shared this leadership story in one of our weekly safety team meetings: “I’ve been taking a public bus for years. Most passengers were going to work and almost no one ever talked to anyone else. About a year ago, an elderly man named Benny got on the bus and said loudly to the driver, ‘Good morning!’ Most people looked up annoyed and the bus driver just grunted.

The next day, the man got on at the same spot and again he said loudly, ‘Good morning!’ to the driver. By the fifth day, the driver greeted the man with a cheerful, ‘Good morning!’

And Benny said loudly, ‘My name is Benny. What’s yours?’

The driver said his name was Ralph.

“This was the first time any of us heard the driver’s name and soon people began to talk to each other and say hello to Ralph and Benny. After about one month, Benny extended his cheerful ‘Good morning!’ to the whole bus. Within a few days his ‘Good morning!’ was returned by a whole bunch of ‘Good mornings’ and the entire bus seemed to be friendlier.

“If a leader is someone who makes something happen, Benny was our leader in friendliness.

“A month ago, Benny stopped getting on the bus. Some of us thought he died and no one knew what to do. The bus got awfully quiet again. So I started to act like Benny and said ‘Good morning!’ to everyone and they cheered up again. I guess I’m now a leader.”

Any leadership book will almost certainly discuss the concept of change and in Steve’s story, we encounter the transformational cultural change of the daily bus experience. Change, however, is simultaneously both easy and difficult.

Too often, there is an unfortunate tendency to think that leadership is an amorphous action or innovative idea reserved for those either in existing positions of authority or aspirant idealists. But anyone can be a leader because it doesn’t take any exorbitant amount of effort to do small things that cost nothing.

How often in our daily lives do we navigate by those around us without exchanging our own simple version of a “Good morning?”

Change is also simultaneously extremely difficult. Benny did not simply board the bus and immediately affect change.

Having boarded the bus that first day with his resounding greeting, Benny received a dismissive grunt from the driver and the annoyed stares of his co-riders. But proper leaders are not dissuaded by failure. Failure is, by its very nature, part of the process of success. This pattern then continues day after day.

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

Only after the proverbial fifth ride did the driver even return Benny’s simple greeting. By the fifth day, there had been no transformational cultural change to the bus, because only the driver had finally reciprocated.

The driver, then, was Benny’s first “small win.” In leadership, the first small win is vitally important. Ralph needed Benny and Benny needed Ralph. Benny’s focus on the driver was consequential for two reasons. The driver was the very first person that Benny encountered when the bus doors opened and secondly, the driver was the most consistent member of the bus every single day. By his consistent, sincere connection, Benny achieved his first adopter.

Benny also capitalized on the small win by expanding further, “My name is Benny. What’s yours?” If getting the driver to reciprocate was Benny’s first small win, then what became the immediate next goal? Another small win: “My name is Ralph.”

Your trusted source for top-quality OEM, reproduction, and aftermarket replacement auto parts and accessories since 2010.

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Tire Dealer Survival Guide Too often there is a tendency to shift focus to the entire team at the first sense of a small win, but oftentimes, it is of the utmost importance to foster the new relationship with the first adopter. In Steve’s story, it is subtly noted, “This was the first time any of us heard the driver’s name.” The bus now saw the first adopter, but without the additional, small win of learning Ralph’s name, this somehow did not quite resonate with anyone else.

In what remains today one of my proudest accomplishments, I once successfully worked with our team to increase important training to our entire service, advisory, management, and sales teams. It took more than a year.

Focusing on the first small win I could find, I honed in on one division of our company willing to walk with me. They became my first adopters. When I had a “Ralph,” I had my first small wins.

YOUR TEAMMATES RIDING THE BUS ARE WAITING TO BE INSPIRED.

Once Benny found Ralph and won Ralph’s heart and mind, the others on the bus began to consider following suit thereafter. Too often, efforts to change fail because they stop short of the goal by declaring victory over the steps achieved, rather than focusing on the remaining tasks at hand.

This is hard work. Having one person return Benny’s greeting was never the end goal. The goal was the transformational change of the bus. Benny didn’t need to individually convert the hearts and minds of each member of the bus.

Rather, “soon people began to talk to each other.”

When soil is made increasingly fertile, seeds take root and prosper.

The growing process never seems to occur quite at the pace we would like to enjoy. Remember when “after about a month, Benny extended his cheerful ‘Good morning!’ to the whole bus?”

Most everyone on the bus saw the first adopter, learned his name, and yet, the cultural, transformational change still took an entire extra month to bear fruit!

Unwavering in his commitment and values, Benny investsed the additional month to ensure the rooting of the transformational change to the rest of the bus.

Having led transformational change efforts — some successfully and many that have failed — it never ceases to amaze me that despite my own optimism, the bus simply does not immediately return my “Good morning” greeting!

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Monthly, weekly, daily and one conversation at a time, I was extending my own “Good morning!” to those I encountered and explaining the “why.”

It advanced one teammate by one teammate. That division became an adopter and an advocate. After tending to the soil for more than a year, I was so pleased the bus returned my greeting!

There is one notable way in which the story of Benny on the bus diverges from the single greatest challenge facing businesses today — who is on the bus. The single greatest challenge facing business today is making sure the right teammates are identified, onboarded and remain on the bus. On a public bus, Benny had very little to no control over who rode the bus with him. (This offers its own admirable lesson that being kind to everyone, no matter their background or circumstances, is extremely important and shouldn’t be overlooked.)

But what if Benny had a say over who was on the bus? What if rather than being greeted by a grunt or annoyed stares, Benny could have had input into the core values of the bus itself and the competencies of those riding the bus? Two additional realities would surely unfold.

First, by conscientiously investing in the identification, onboarding and retention of bus riders with the competencies that are prone to return Benny’s greeting, Benny would have more efficiently affected cultural change on the bus. Perhaps it would not have taken five

days for the driver to reciprocate or an additional month to focus on the back of the bus. Let’s face it, some folks simply are not programmed to return a “Good morning!” If we truly believe that taking care of our customers means first taking care of our teammates, then investing in the identification, onboarding and retention of teammates to ride our bus is our number-one priority.

Second, imagine being a new rider on this bus where everyone is shouting “Good morning!” to each other every time the door opens. Once established, the culture of the bus becomes rooted, just like “the entire bus seemed to be friendlier.” This, of course, naturally replicated itself among new riders who had to decide whether to slowly back out the bus door and wait for the next one or embrace the culture of this uncommonly friendly bus and the core values, customs and practices.

Your teammates riding the bus are waiting to be inspired. My guess is that this article is being read amidst the chaos and noise of your day. Likely there are customers to service, emails to attend to, reports to review and all other matters of business. For all the reasons it is easy to continue riding the quiet bus, it is more important to say, “Good morning!”

Like an eagle, Benny soared away and no one knows precisely where he went.

Leaders inspire those in their presence by leaving a lasting presence in their absence.

It is true that in life, there are those that will come into our lives and exit.

Some will stay and linger, while others will be more transient. The bus, left momentarily “leaderless” after having lost sight and sound of its leader, grows quiet.

But those on the bus are different. As the leader, Benny made something happen. No one was necessarily conscientious in those moments of change because it happened almost imperceptibly. And while in the absence of the original leader, there was left only the deafening sound of silence. But change had taken root and new leadership emerged. I wish you and your teammates much personal and professional happiness, health and success as I also wish you “Good morning!” Q T.J. Trum is the in-house general legal counsel and team leader for risk management and safety at Pomp’s Tire Service Inc. T.J. also is a member of the board of directors for the Tire Industry Association.

MTD May 2023

Business Insight

Slow down to move faster

DON’T SKIP CRITICAL STEPS WHEN SERVICING CUSTOMERS By

I

Dennis McCarron

t’s no secret that the last couple of years have been financially good for the retail tire and service industry. Sales are up, profits are up and car count is largely up across the country.

What’s not up is employee head count. It has been incredibly difficult to find qualified candidates who are looking for a career, not just a paycheck. And a lot has been asked of existing employees to do more with less. Many of you have rightly adjusted pay scales over the last few years and while compensation is important — we have to compete with the pay of other trades — we also need to make sure our employees work smart.

Car count can, at times, be overwhelming. There isn’t a toll booth at the entrance of the store to make sure customers arrive in a regular, organized fashion. Most stores deal with a minimum of two rushes — one in the morning with drop-offs and waiters and then again near the end of the day as customers pick up their vehicles. Make sure your employees know how to prioritize their efforts during these rushes.

‘The pressure to get through every customer as fast as possible weighs heavily on even the most seasoned service advisor.’

In the drop-off rush, many times the pressure to “get through” writing up all the customers is wrongly prioritized by a staff that is likely short of proper head count. When an employee is left to make their own decisions about how to handle this, they usually go into “plow-through” mode and try to write up as many tickets as fast as possible.

While this works in the short term, the way they do it is by skipping critical steps necessary to properly service the customer.

A customer is sold tires without ever going out to the car. The proper interview of a customer with multiple service issues isn’t done and the technician is left to guess the causes. Think of a ticket that is written that simply says “engine diagnostic” without any explanation or history. These kinds of omissions from properly taking the right steps at the right pace may get everyone in the door, but it leads to absolute chaos and missed opportunities throughout the day.

Teach your employees during this time that yes, it is necessary to pick up the pace and act urgently, but speed never w w w . M o d e r n T i r e D e a l e r. c o m

trumps accuracy or proper process. Teach them to acknowledge customers who are waiting patiently. Teach them to take a deep breath when 10 customers arrive at the same time. Wouldn’t you rather have seven properly written tickets with the necessary information gathered from the customer and expectations discussed, rather than 10 hastily written, poorly executed tickets with things missing like phone numbers and a full explanation of when, where and how that mysterious noise happens? Skipping steps makes the process slower — not faster.

It’s a daunting task, to be sure. The pressure to get through every customer as fast as possible weighs heavily on even the most seasoned service advisor. But the likelihood that one customer who can’t wait 10 minutes is going to financially benefit the store or treat your employees with the respect they deserve is very low. Why should the entire process of professionally handling every possible customer be compromised by one or two people during the rush? It shouldn’t.

And don’t forget about the afternoon or evening rush. First and foremost, tickets need to be ready to invoice. That means all pertinent tire and service work is properly keyed onto the ticket, all authorized work is cleared and all declined work is properly identified.

It’s an added bonus if your staff can secure payment method and have a few tickets that are completely finalized. Again, during the rush is not the time to skip steps.

Far too many advisors or counter people simply swipe the credit card, have the customer sign the invoice and off they go.

This is a critical point in time where a professional advisor should review the ticket, explain what was done, identify what was not and possibly set up a next appointment. With average repair orders in the $400 range, care needs to be taken to ensure a customer understands what was done to their vehicle and what future work needs to be addressed. When customers feel they were rushed through the process — and most don’t understand the process or their vehicles’ needs to begin with — they develop suspicion. A customer who is suspicious of the process isn’t highly motivated to spend money.

Have your employees focus on getting through the process at a speed that doesn’t require skipping steps.

And be OK with the occasional impatient person who storms out after five minutes.

They weren’t going to buy anything anyway. Q Dennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email him at dennis@cardinalbrokers.com.

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Mergers and Acquisitions

It’s gonna be ACES

ELECTRIC VEHICLE GROWTH IS ONLY PART OF WHAT’S COMING By

I

Michael McGregor

’m what’s called an investment banker. While the term “investment banker” may suggest that we invest or bank, investment bankers actually do neither. Instead, investment bankers advise on mergers and acquisitions and on raising capital, but we do not typically invest our own money or manage the funds of others. We’re middlemen. We exist to get in the middle of stuff.

I enjoy helping tire dealers with mergers and acquisitions but am surprised by how many tire dealers think they can do better representing themselves. Many don’t even try to “make a market” for their own business the one time it matters most. The downside is they will never know how much they really could have gotten.

The chairman of my firm, Doug Rodgers, equates it to owning a Picasso when he asks, “Would you sell it to the first buyer that knocks on your door or take it to Sotheby’s, conduct an auction and get the highest price?” Selfishly, I want to get in the middle of all the tire deals, but that’s not happening.

So I’m diversifying into auto parts to get in the middle of those deals — and it’s gonna be ‘ACES.’’

‘For tire dealers, the impact of ACES will be felt less in the near term and more as the decade progresses.’

ACES stands for “autonomous driving, connectivity, electric vehicles and shared mobility.” Collectively, they are a huge disrupter to auto parts suppliers and manufacturers.

The impact of ACES is happening right now in auto parts manufacturing solely because of the electric vehicle (EV). I first became aware of accelerating EV acceptance in 2020 when we represented T-Sportline, an aftermarket supplier of wheels and accessories for Tesla owners, in its sale to Holley.

To tell the story, we described how the market was growing by listing how most all of the major, minor and new entrant original equipment vehicle manufacturers (OEMs) had EV models about to be introduced. Then in February 2021, General Motors established a goal of phasing out all gasoline-powered vehicles by 2035 and Ford announced its all-electric target for passenger vehicles in Europe by 2030.

McKinsey & Company says the EV segment is consistently growing faster than expected. They project that by 2035, EVs will likely represent more than 65% of all new light-vehicle sales globally. International climate goals, growing consumer preference and government action to boost EV adoption are driving this.

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With new EV car registrations in the U.S. in January 2023 rising above 7%, even Walmart is convinced the trend will accelerate and is planning charging stations for every property they own to boost traffic and enhance revenue.

McKinsey says internal combustion engine (ICE) auto parts revenue will level out soon, if it hasn’t already, and then start seeing double-digit declines, at least at the OEM level. Already, we are seeing large auto parts suppliers like Borg Warner and Continental talking about “growth” and “harvest” categories within their product portfolio, with an eye towards accelerating investment in EV parts while “milking” and then selling off ICE assets.

While some divest, other companies like Warren Buffet’s Marmon Holdings — a division of Berkshire Hathaway that in January 2023 acquired $120 million revenue manufacturer AP Exhaust — will be betting on a long runway ahead for ICE among OEMs and in the aftermarket.

By acquiring a company with ICE parts, Marmon Holdings can diversify its product portfolio and also expand into new markets. They also have the expertise and resources to help ICE parts manufacturers streamline their operations, optimize their supply chain and improve their profitability. Acquiring a company focused on making ICE parts can also help build relationships with other automakers who still produce vehicles with internal combustion engines. It’s a “last man standing” strategy that can be very profitable through 2040 on the OEM side and longer than that in the aftermarket.

The consolidation of tire dealers over the last decade has been opportunistic in nature. It’s not because anyone had a gun to their heads. Private equity first discovered that roll-ups of collision repair centers was a home run, so they pivoted to the next most profitable category, which was tires and service.

But there’s no existential crisis looming for tire dealers. I actually think it’s easier these days for small tire dealers to differentiate themselves from the chains through better customer service — and to thrive financially. Auto parts manufacturers, in comparison, have a gun to their heads. That’s why I’m getting in the middle of all that.

For tire dealers, the impact of ACES will be felt more as the decade progresses. ACES will eventually impact all tire dealers in the lower number of customer visits in the form of one-third fewer moving parts on perhaps fewer total vehicles; the lower profitability of those visits (margin pressure as more vehicles are fleet-owned and pricing power is lost); and potentially in the viability of their existing real estate locations for the type of work needed in the future. Q 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 May 2023

Dealer Development

Know the cost THE FALLOUT OF POOR CUSTOMER SERVICE By

I

Randy O’Connor

often refer to the “true cost” when working through the value of our work with D2D members. But I’ve never really put it in terms of customer service and the fallout that occurs when we fall short of delivering a great experience.

It’s 7 a.m. and your store line rings. You’re busy getting your morning routine flushed out and on the fifth ring you pick up the phone. It’s a first-time customer with a flat on the way to work.

Maybe you know your workload for the day or maybe you don’t, but you recognize how important a quick flat repair can be in earning a new customer and you offer to repair it as soon as they can bring it in.

An hour later, the customer shows up and is appreciative of your help all the way until you tell him it will be at least an hour.

Disappointed, but with no other options, the customer agrees.

Sixty minutes pass and your new customer steps back up to the counter and asks why his car hasn’t moved. You scramble and let him know it’s next to come into the bay.

Once in the bay, your tech’s time is split between a scheduled, waiting oil change/rotation and the flat repair. It takes almost another hour to get the repair done.

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‘Managing cash flow starts with executing experiences your customers will invest in again and again.’

Your tech pulls the customer’s car around. The customer sees this and they both meet you at the counter. Even though it was just a flat repair, somehow your team failed to update the work order, resulting in another five uncomfortable minutes.

The customer then pays and drives away.

We all know these situations happen. My hope is that a quick run-down of the “true cost” will help you get a better grip on ensuring that you don’t let experiences like this occur.

I recently read a study that showed industry average net in 2022 was 4%, give or take. Let’s assume that’s you. While you’re likely not spending as much on advertising these days, the average cost to acquire a new customer still sits in the $300 to $500 range, depending on market.

Let’s use $400. The cost, or maybe the loss, of that flat repair customer in that situation is $400 divided by 4% — or $10,000.

Let’s flip that another way. Let’s say your average ticket is $400.

Your flat-repair-lost customer’s true cost was $10,000. That’s equal to 25 customers’ revenue. 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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Dealer Development

Cash may be king, but Randy O’Connor reminds us that it only changes hands “when the value of what we’re providing meets or exceeds the customer’s perceived investment.”

Photo: Reno Vulcanizing

While that may seem like an overstatement, I’m just getting started. Your customer’s time has value too, right? Let’s say they make $25 an hour with whatever they do. They just spent three-plus hours getting a flat repair.

Sure, only two-plus of that was on your watch, but they’re blaming you for three-plus.

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I’ll assume this customer saves 3% of his income. (That’s his net.) Three hours at $25 an hour at a net rate of 3% turns into a true cost of $2,500 for them.

Your time and your teams’ time spent losing this customer has value, too. Let’s estimate that one total hour of customer/ vehicle service time was wasted providing a bad experience. Your average cost per hour at your location is $35. With your net at 4%, that’s another $875. Let’s pause and tally all this before we continue. That’s $10,000 plus $2,500 plus $875. Short story, the “true cost” was $13,375.

While the customer’s car was in your bay, you failed to do a super-basic inspection, which would have revealed that they could use an alignment and brakes. Let’s call it $600 in overlooked sales. That’s another big “true cost.” The fallout from this entire experience is really adding up!

We’ve all heard the term “cash is king” and while that’s true, we need to recognize that cash only changes hands when the value of what we’re providing meets or exceeds the customer’s perceived investment.

Managing cash flow starts with executing experiences your customers will invest in again and again. If the experience I walked you through had been managed differently, the outcome could well have been very different.

Let’s say that instead of still planning your day when the phone rings first thing in the morning, you decided to prepare your game plan the night before. You were ready for the call, picked it up by the third ring and leveled expectations with your customer.

Your customer walks in with a better understanding of the time required. Furthermore, had you set expectations up front you would have set yourself up to exceed those expectations on the back end by asking, ‘What time do you need your car back by?”

The next time a poor retail experience happens at your dealership, I challenge you to quantify it in terms of true cost.

Take those learnings and spend 15 minutes a day teaching those around you how to prevent them. Q Tire and auto industry veteran Randy O’Connor is the Owner/Principal of D2D Development Group (Dealer to Dealer Development Group.) He can be reached at randy@d2ddevelopmentgroup.com. For more information, please visit www.d2ddevelopmentgroup.com.

MTD May 2023

INTRODUCING THE

Austin Matney,

2022 Best Young Tech Award winner

20

23

Honoring technicians aged 35 and younger who are moving the service repair industry forward, who excel in their current roles and are passionate about their work.

DEADLINE TO ENTER: JUNE 2, 2023 4XDOLDZFDWLRQV

Prizes Trip to 2023 AAPEX/SEMA Show in Las Vegas

(Must be born after January 1, 1988)

Trip for two to the STX Supplier and Training Expo in Nashville in April 2024

At least 2 years experience in the industry

Tools & Equipment from contest sponsors Award plaque and uniform patch

Techs aged 35 or younger

Shown career development, innovation in their role, technical or educational achievement, community service and importance to the shop Techs can be nominated or nominate themselves

VISIT vehicleservicepros.com/2023bestyoungtech FOR MORE INFO OR TO SUBMIT YOUR NOMINATION TODAY! BROUGHT TO YOU BY:

EV Intelligence

How to attract hybrid and electric vehicle customers

HINT: THEIR NEEDS ARE THE SAME AS OTHER CAR OWNERS By

Craig Van Batenburg

W

hat do you drive? Why do you drive it? These questions and more contain the reasons — logical or not — that your customers formulated when they bought their new car or truck. The decision to spend $20,000 to $100,000 or more on their ride was to them the right one.

Used car buying customers had similar reasons, but maybe in a different order. The least expensive vehicles could have been a gift from a family member or some dilapidated piece of rolling scrap iron because they had little financial resources. The tires they choose often match the reasons for buying their car.

Now consider why someone buys a new electric car. Those reasons may seem strange to you. Knowing the motivation of someone else is hard and the only way to get a handle on it is to ask them, so that is what I have been doing for over 22 years.

‘Be ready for EMV customers and respect their views, as they may be very different than yours.’

On Friday, Oct. 15, 1999, I drove my 1992 Acura Legend to Lundgren Honda, walked in the showroom and ordered, sight unseen, a new Honda Insight Hybrid. What was my motivation? I was a repair shop owner/technician at the time and the 17 city miles-per-gallon (mpg)/22 highway mpg Acura I was driving — I bought it used from a customer — was producing too much carbon dioxide.

The Insight was rated at 49 city mpg and 61 highway mpg.

The Insight took 1.9 gallons of gasoline to travel 100 miles, while the Acura consumed 5.3 gallons for the same 100 miles — a huge difference. My top two reasons for buying were less global warming gasses and my love of technology. Number three had to do with my fascination with all things Honda. It is not always style and status for everyone, but those reasons are just as valid as my own. People buy what they want.

I was at the New York City Auto Show in early-April. I traveled to the commuter rail stations from my home in Worcester, Mass., with Aiden Neary, our Automotive Career Development Center (ACDC) Tesla geek. Aiden is young and we took his car, a 2006 Honda Civic Si six-speed. He bought it used last year for $5,000. Aiden loves his car. (His company car is a 2020 Tesla Model 3, but he prefers to drive his Si. Go figure.)

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At the auto show, there were many new hybrid (HEV), plug-in hybrid (PHEV) and battery electric (BEV) models to choose from. These three types we call “EMVs.” When you look at the used car market, reasons for buying change a lot. Cost is a large factor. Otherwise, many consumers would have bought new. There are some very old hybrids that are not worth fixing. PHEVs are no more than 12 years old and many newer PHEVs that used car buyers purchase are good vehicles. Used BEVs are mostly Nissan Leafs that need a battery pack.

According to Anne Lusk, who has a doctorate in architecture and is on the faculty at Harvard in Cambridge, Mass., the reasons people cite for buying an electric vehicle are the following: • The electricity for recharging an electric car is cheaper than the cost for gasoline; • If an electric car recharges at home overnight, time and money are not wasted driving to get gas; • Solar and wind power electricity are getting lower in cost and will be greatly lower than the cost of gasoline in the near future;.

• More electricity is produced using renewable resources each year. In fact, Massachusetts consumers have an option to buy completely “green power.” (This may not be true where you live); My reason of carbon dioxide reduction can be read into the Harvard study, but the reality is, this is not the number one motivator for most people.

What do you need to do to attract and retain EMV customers?

The same thing you are doing now. The four “Ps” of business still apply: product, place, promotion and price. Are you ready with tooling and equipment? Have you trained yourself, your sales team and your technicians? Is your dealership equipped with charging stations? Does its signage attract EMV owners? Will your website appeal to owners of electric cars? Once you have that all together, the price is easy to calculate. But you need to be in this for the long run.

Be ready for EMV customers and respect their views, as they may be very different than yours. There was a time when Prius owners were made fun of in this industry. Making fun of anyone different from you is childish. Tesla owners will need you not just for tires, but more. Don’t treat EMV customers differently than anyone else. They have the same needs that gas- and diesel-powered vehicle customers do. Q Craig Van Batenburg is the CEO of Van Batenburg’s Garage Inc., dba Automotive Career Development Center (ACDC), which is based in Worcester, Mass. A 50-year automotive service industry veteran, Van Batenburg provides training for facilities that service — or want to service — electric and hybrid vehicles. For more information, see www.fixhybrid.com or email him at craig@fixhybrid.com

MTD May 2023

Focus on Dealers

Ted Wiens Tire & Auto was founded by the late Ted Wiens Sr. in 1948.

Pictured are the second, third and fourth generation members of the Wiens family, who now run the dealership. (From left to right, Jennifer Wiens, the company’s brand manager; her husband, Vice President Ted Wiens III; Brianna Wiens, the dealership’s development manager, and President Ted Wiens Jr.) Photos: Ted Wiens Tire & Auto

‘That’s a huge milestone’

TED WIENS TIRE CELEBRATES 75TH ANNIVERSARY By

Mike Manges

T

ed Wiens Tire & Auto is the longestrunning independent tire dealership in the Las Vegas, Nev., market.

And the company is celebrating its 75th year in business.

The company, which was founded

by Ted Wiens Sr., recently marked the milestone with a celebratory dinner for employees and their spouses and significant others.

More than 170 people attended the event, including representatives from several vendors, as well as the Independent Tire Dealers Group LLC. Former Bridgestone Americas Inc. executive John Gamauf spoke during the dinner.

“We’ve been a Bridgestone-Firestone dealer since the beginning of time,” says Jennifer Wiens, who is married to Ted Wiens III, the dealership’s vice president and third generation of the Wiens family to work in the business.

“John showed pictures of Ted Sr. with Harvey Firestone,” founder of Firestone Tire & Rubber Co. 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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Focus on Dealers Ted Wiens Jr. cuts into the company’s anniversary cake.

“For us to be a fourth-generation company — that’s a huge milestone.

Not many can say that.”

Photo: Ted Wiens Tire & Auto

He also shared clips of old Ted Wiens TV commercials, including the dealership’s famous “talking tire” spot.

“Another commercial (announced) the grand opening of a location,” says Jennifer. “Back then, we sold everything

from tires to boats, washers and dryers and refrigerators.”

“John also did a little interview with Ted Jr.,” the dealership’s president and second-generation owner, as part of his presentation.

Ted Wiens III spoke during the event, as did his daughter, Brianna Wiens, the company’s development manager. Ted Wiens Jr. addressed attendees, as well.

“Tonight we are celebrating 75 years of being in business,” he said. “What does that mean? According to the U.S. Bureau of Labor, if you start with 100 companies, only 36 will last 10 years. Seventy-nine percent of companies would not make it past their 20th year.

“For us to be a fourth-generation company — that’s a huge milestone. Not many can say that.”

Ted Wiens Tire & Auto has nine retail stores, two commercial tire locations and one distribution center.

“And we’re looking at expanding,” says Jennifer. Q

More than 170 people attended the anniversary party, which was held at Ellis Island Hotel, Casino and Brewery in Ted Wiens Tire & Auto’s hometown of Las Vegas, Nev. The dealership has 12 total locations in the Las Vegas area.

Photo: Ted Wiens Tire & Auto

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MTD May 2023

Focus on Dealers

“I really love what I do and that’s the secret to all of this,” says Fay Kapke, who began working at Walker Tire in 1959. “You have to really love what you are doing.”

Photo: Walker Tire Point S

‘The Grand Poobah’ of retreading

AFTER 64 YEARS ON THE JOB, FAY KAPKE STILL LOVES WHAT HE DOES By

Madison Gehring

T

ire dealers now more than ever understand the importance of finding and maintaining hardworking employees.

Walker Tire Point S, a four-location dealership headquartered in Lincoln, Neb., has an employee at its retreading facility who has been there for 64 years.

INTRO TO RETREADING

Fay Kapke joined Walker Tire in 1959.

(The dealership opened its doors only eight years prior.)

“I just wanted a job,” at the time, he says.

“I got out of school and went job hunting. I think (Walker Tire) was the third place I went to and got offered a job.”

He started out doing oil changes and service calls. Then in 1961 a new opportunity presented itself.

“Mr. Walker (the dealership’s owner) came up to me and asked if I wanted to try out retreading because the (company’s) old retreader had retired,” explains Kapke.

“I told him, ‘Yeah, I’d rather do that than go out in a snowstorm and change someone’s tire.’”

He says that he loved retreading from the moment he started because there is “always so much to learn and always something to do.” w w w . M o d e r n T i r e D e a l e r. c o m

Back then, most of his training was on the job.

“If I did something and it worked, I kept doing that.” he says. “If I did something that didn’t work, I didn’t do that anymore.”

Next month Kapke will celebrate his 65th year at Walker Tire Point S. Photo: Walker Tire Point S

NO PLANS TO RETIRE

At nearly 83 years old, Kapke has seen his fair share of trends and changes, especially in the retreading industry.

“We used to cement treads way back when I first started,” he says.

“We used to have to carry everything, too. It was all very laborious. Now there are cable horses and extruder guns and chemical patches and envelopes. It makes it easier.”

Right now, Kapke works Monday through Thursday, 24 hours a week.

“I really love what I do and that’s the secret to all of this. You have to really love what you are doing.”

The employees at Walker Tire reciprocate that love to Kapke. Steve Gewecke, retread plant manager, says Kapke runs “circles around guys 50 years his junior.

“He has a knowledge base that he is eager to share and has forgotten more about retreading than most of us will ever learn.

“My son came into the plant to see where I worked and I introduced him to Fay by calling him ‘The Grand Poobah.’

“Fay looked at my son and said, ‘Your dad calls me that, but I don’t know if it’s an insult or not!’

“I informed Fay that a Grand Poobah was a local official of great wisdom and importance,” says Gewecke. “Fay thought about it for a moment and then said to my son, ‘I am The Grand Poobah,’ and got back to applying cushion gum to the tire he was working on.”

Kapke says he has no plans to retire and if technology keeps making his job less laborious, he might “last another ten years.

“We’re doing alright and I am enjoying it and still pretty healthy,” says Kapke.

“Tires do that. They keep you healthy.

“I’d hate to retire and start on my ‘honey-do’ list,” he adds with a laugh.

“And honestly, I don’t want to stop because I’m just now getting the hang of it!” Q

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Focus on Dealers

Nearly 40 vehicle technicians representing 20 different fire departments from across Long Island, N.Y., attended the event.

Photo: Barnwell House of Tires

Barnwell House of Tires educates firefighters EVENT COVERED NEW TIRES AND TRAINING By

Mike Manges

B

arnwell House of Tires recently held a tire and training symposium for Long Island, N.Y.-based fire departments.

During the day-long event — which took place in Farmingdale, N.Y. — the Central Islip, N.Y.-based tire dealership introduced new commercial tires to nearly 40 vehicle technicians representing 20 different fire departments, while educating them about tire maintenance.

“They are the people who keep fire trucks on the road and make sure those vehicles are running optimally,” says Scott Weeden, Barnwell House of Tires’ vice president of sales.

“They asked us to come in, give them some pointers and (discuss) what’s new in the tire industry.

“At the event, we talked about some of the new tires that are out,” including

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the Goodyear Endurance WHA, a tire made with a renewable soybean-based compound. “The wear on that tire is 10% to 12% better” than its predecessor, says Weeden. “We have some fire departments that want to try it.”

Barnwell House of Tires representatives — including Rich Petrusik, regional sales manager; Stanley Carreras, strategic account manager; and Marc Goldberg, territory manager and certified Tire Industry Association (TIA) trainer — also introduced attendees to the Michelin XDN2, the Bridgestone M799, the Goodyear G622 and the Goodyear Armor Max. “We brought the tires in so attendees could get close to them. We fed them the features and benefits. They had a lot of questions about what works best in their fleets and we made recommendations to them. It was very hands-on.”

Barnwell House of Tires also sells to other emergency responders. “We had some ambulance techs there, as well,” says Weeden.

Tire maintenance and service procedures also took center stage. “We talked about the RIST process. We talked about why that’s important when installing tires. We talked about lifting, jacking and blocking.

“We talked about tire wear. We looked at (ways) to help them identify when a tire should be taken out of service. These fire trucks sometimes jump over curbs and when they jump over curbs, the tires are going to flex. These things have to be looked at and handled because when that next call comes in,” fire trucks need to be ready.

“We don’t want that truck driving 50 feet down the street and then it’s done, all because of a tire issue that could’ve been prevented,” says Weeden.

Barnwell House of Tires also brought in a truck tire that had experienced a zipper rupture. “We had each of them look at the tire and asked what they thought had happened to it. They had some really good answers. The most dangerous thing that can happen with a tire is a zipper explosion.”

Air pressure was a critical part of the conversation. “When they check air pressure and see it’s 20% off, I asked, ‘What do you then do with the tire?’ Some of them said, ‘We air it back up.’

“We told them, ‘The standard is to take that tire off, inspect it and if there’s no problem with it, you then air that tire back up inside a safety cage.’ We wanted to (learn about) their processes, so we could educate them.”

Feedback was immediate and positive, according to Weeden. “Two of the attendees grabbed (Petrusik) and asked if he could walk their fleet the next day to get a look at what they’re doing.

“There’s nothing like being in the room with customers and getting them to talk and ask questions in an open forum. Even if they take one thing home, that’s huge for us. We’ve added value.

“There were some powerful takeaways for them,” says Weeden, who also serves on the TIA board of directors.

“It’s important for all of our customers and tire technicians to be safe and follow the guidelines put in place (in order) to be compliant. It’s a vital part of their job and spreading the word about training is very important to our industry.” Q MTD May 2023

Focus on Dealers

New decal honors OTR tire technicians PURCELL TIRE’S MASON HESS WANTS TO SEE THEM ‘ON EVERYTHING’ By

Mike Manges

A

new, “non-denominational” decal honoring OTR tire technicians and the vital role they play in OTR tire service is now available from Purcell Tire & Rubber Co. Purcell Tire is already putting the decal on its service trucks.

Mason Hess, director of the Potosi, Mo.-based tire dealership’s global mining division, is encouraging other OTR tire dealers to do the same.

“Tire techs who work in mines deal with very serious situations and have to be on their toes,” says Mason Hess, director of Purcell Tire’s global mining division (right), with Matt White, director of service, TIA. “They should be respected for it.”

Photo: Purcell Tire & Rubber Co.

The decal, which is available to all tire dealers, states, “With admiration and gratitude, thank you to all the tire technicians who keep our industries running and safe. You are the solid foundation the tire industry stands on.”

Photo: Purcell Tire & Rubber Co.

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

“This isn’t so much a Purcell Tire thing,” he says. “It’s an industry thing.

The decal is non-copyrighted. Anyone can use it. Everyone can take this and share it. You can put it on trucks. You can put it on shirts.

“This is to honor the most important people in our industry. It’s free to everyone — as long as it’s used with the intent to support and appreciate tire techs.”

Hess says tire technicians have the most dangerous job “on any mine site.

They are dealing with pressurized vessels which contain energy that can blast them a mile away. Nobody else at the mine site deals with those types of energies on a regular basis.

“Not to say other jobs in mining aren’t dangerous, but I know that tire techs who work in mines deal with very serious situations and have to be on their toes. They should be respected for it.”

The tire industry can do a better job of showing appreciation of tire technicians, according to Hess.

“When people work in our business and leave, the number one reason they cite is, ‘I don’t want to change tires for the rest of my life.’ That’s a sad statement for us, as an industry. Appreciating and supporting and honoring techs so they see themselves as being valuable is a piece of the puzzle — and hopefully that translates into a career.

It shouldn’t be, ‘Oh, he’s just a tire guy.’”

Purcell Tire printed 400 decals before the 2023 Tire Industry Association OTR Tire Conference, which took place this past February.

More can be ordered from the dealership. “I would love to see these decals go on trucks and patches and shirts and hard hats — everything,” says Hess.

To order decals, email thankatech@ purcelltire.com. Q

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TPMS

TPMS: Ford Edge – 2023 location on the vehicle is a good way to isolate the concern to a certain sensor/ wheel location. Rotate the wheels and road test the vehicle. This can be done in an attempt to replicate the concern and help determine if the concern followed the sensor or remained in the original sensor location. If the vehicle has been stationary for more than 30 minutes, the sensors go into a “sleep mode” to conserve battery power and need to be “woken up” so they transmit the latest tire pressure information to the RTM.

Training sensors in a different order Photo: Ford Motor Co.

DESCRIPTION & OPERATION

NOTE: When directed to train any TPMS sensors, use only the sensor training procedure outlined in this repair information.

Do not use the TPMS reset procedure outlined in the owner’s literature as this procedure does not program new sensors to the module.

The TPMS uses four valve-stemmounted sensors to monitor tire pressure.

These sensors transmit tire pressure data to the Radio Transceiver Module (RTM).

Each individual sensor contains its own battery and transmits tire pressure data to the RTM. The RTM collects the tire pressure data and sends the information to the Gateway Module (GWM) which then sends the information to the Body Control Module (BCM).

A l l TPMS f u nc t ions a re controlled by the BCM. The TPMS sensors are trained (calibrated) to the BCM, which records t he u nique identifier for each sensor. The BCM records the location of each TPMS sensor based on the training (calibration) order and compares the tire pressure data sent by the sensors with a programmed tire pressure. This programmed pressure is specified on the VC label. If the tire pressure deviates from the programmed tire pressure, the BCM signals the IPC to illuminate the TPMS warning indicator and display a message in the message center. The programmed tire pressure cannot be changed.

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The diagnostic scan tool is useful in diagnosing TPMS concerns and may be used to verify the accuracy of the tire pressure data transmitted by the TPMS sensors.

This is accomplished by comparing the BCM tire pressure PID data to the actual tire pressure using a digital tire pressure gauge. It is not necessary to train the sensors after a tire rotation on vehicles with the same front and rear tire pressures however, the BCM cannot recognize the sensor identifiers have been moved to different positions and retains the original position information for each sensor.

Wheel rotation and sensor training techniques

Training known good sensors from another vehicle can help determine whether the concern is with a sensor or the RTM. This technique cannot help determine whether the concern is due to RFI as some RFI source could be preventing the RTM from receiving the tire pressure status from the known good sensors as well as the original sensors. If the RTM in the suspect vehicle cannot train any of the original sensors and, likewise, cannot train known good sensors from another vehicle, then the concern is with the module or RFI and not with the original sensors. The original sensors should not be replaced.

If a sensor in a certain location has caused several events, yet the sensor trains and seems to operate normally, moving that particular wheel to a different

If the first sensor fails the TPMS training procedure, the BCM aborts the entire procedure. Starting the training procedure at a different wheel is a technique that can be used to determine if the remaining sensors can train to the module. This can help save time determining if one sensor is damaged, other sensors are having concerns or the BCM is experiencing training difficulties with a certain TPMS sensor location.

TPMS warning indicator

The TPMS warning indicator is used to indicate both a low tire pressure event and a possible system fault condition. The message center displays additional information associated with the low tire pressure event or the system fault condition. Occasionally, the warning indicator and message center indicate faults that cannot be resolved by the customer. Treat these as TPMS faults that must be serviced.

TPMS warning indicator illuminates continuously

The TPMS warning indicator remains on continuously and the message center displays LOW TIRE PRESSURE when any of the tire pressures fall below the low pressure limit. When this condition exists, adjust the tire pressure to the recommended cold tire pressure indicated on the VC label.

TPMS warning indicator flashes

The TPMS warning indicator flashes for 70 seconds and then remains on continuously when the ignition is set to ON and the TPMS is malfunctioning. The TPMS MTD May 2023

TPMS status PID can be used to determine why the TPMS warning indicator is flashing.

• Tire Pressure Sensor Fault: The message center displays TIRE PRESSURE SENSOR FAULT when a TPMS sensor is malfunctioning.

• No communication with the BCM: The TPMS warning indicator illuminates when the IPC has not received any signals from the BCM for more than five seconds. The message center displays TIRE PRESSURE MONITOR FAULT. • Tire Pressure Monitor Fault: The message center displays TIRE PRESSURE MONITOR FAULT when the TPMS is malfunctioning.

TIRE PRESSURE SENSOR REMOVAL AND INSTALLATION DISASSEMBLY

NOTE: Failure to follow the instructions below may result in damage to the TPMS. The TPMS sensor is mounted to the valve stem. Removal of the valve stem requires demounting the tire from the wheel and removal of the TPMS sensor.

Use only the digital tire pressure gauge any time tire pressures are measured to be sure that accurate values are obtained.

1. Remove the wheel and tire.

NOTE: The valve stem is connected to the TPMS sensor. Do not pull the valve stem from the wheel, or damage to the sensor will occur.

If a new TPMS sensor is being installed, remove and discard the valve stem-tosensor screw and the sensor.

2. Remove the valve stem core and fully deflate all air from the tire.

NOTE: Do not allow the tire beads to move beyond the wheel mid-plane (middle of the wheel) when separating the beads from the wheels, as damage to the TPMS sensor may occur.

Tire and valve stem position is critical to prevent damage to the TPMS sensor when using a paddle-type bead separator.

Some machines may have a nylon roller bead separator at the 12 o’clock position instead of the paddle-type bead separator at the 3 o’clock position.

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3. For a paddle-type tire machine, position the valve stem at the 12 o’clock or 6 o’clock position and the paddle at the 3 o’clock position. For a roller-type tire machine, align the valve stem with the roller at any position.

Index-mark the valve stem and wheel weight positions on the tire.

4. Place the wheel and tire assembly on the turntable of the tire machine with the valve stem at the 11:30 position and the machine arm at the 12 o’clock position and demount the outer bead from the wheel.

5. Reset the wheel and tire assembly on the turntable of the tire machine with the valve stem at the 11:30 position and the machine arm at the 12 o’clock position and demount the inner bead from the wheel.

NOTE: A new valve stem must be installed whenever a new tire or wheel is installed.

Remove and discard the TPMS sensorto-valve stem screw. Separate the TPMS sensor from the valve stem.

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TPMS During assembly, align the valve stem with the machine arm at the 6 o’clock position and mount the bottom bead of the tire.

This shows a paddle-type bead separator at the 3 o’clock position.

Photo: Mitchell 1

Photo: Mitchell 1

Position the valve stem at the 11:30 position and the machine arm at the 12 o’clock position to demount the outer bead.

Photo: Mitchell 1

When installing a new wheel, always install a new valve stem and sensor screw, but reuse the TPMS sensor when possible.

Use the general equipment wooden block when removing and discarding the valve stem.

Photo: Mitchell 1

Photo: Mitchell 1

NOTE: Use care not to damage the wheel surface when removing the valve stem.

When installing a new wheel, always install a new valve stem and sensor screw.

Reuse the TPMS sensor from the previous wheel if possible. The TPMS will not have to be trained if the sensor is reused.

If the TPMS sensor is being reused, inspect the TPMS sensor for damage and install a new sensor as necessary.

6. Using a suitable valve stem remover/ installer, remove and discard the valve stem. Use the general equipment: wooden block.

NOTE: To prevent TPMS sensor and valve stem damage, the valve stem must be installed onto the TPMS sensor and then installed into the wheel as an assembly.

7. Position the new valve stem onto the TPMS sensor and install the new screw.

Torque: 13 lb.in (1.5 Nm)

ASSEMBLY

NOTE: Damage to the TPMS sensor may result if the tire mounting is not carried out as instructed.

It is important to pull the valve stem and TPMS sensor assembly through the wheel rim hole in a direction parallel to the valve stem hole axis.

If the assembly is pulled through at an angle, damage to the valve stem and sensor assembly may occur.

Use care not to damage the wheel surface when installing the valve stem and TPMS sensor assembly.

Lubricate the valve stem with soapy water and install the valve stem and TPMS sensor assembly into the wheel

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using a block of wood and a suitable valve stem installer.

1. Using a suitable valve stem installer, install the new valve stem and TPMS sensor assembly. Use the general equipment: wooden block.

NOTE: Lubricate the tire beads using a suitable fast-drying, corrosioninhibiting tire bead lubricant.

Do not mount the tire at this time.

2. Position the wheel on the turntable of the tire machine, then lubricate and position the bottom bead of the tire on the wheel.

3. Position the wheel to align the valve stem with the machine arm at the 6 o’clock position and mount the bottom bead of the tire.

4. Reposition the wheel to align the valve stem with the machine arm at the 6 o’clock position, and mount the top bead of the tire.

NOTE: Use only the digital tire pressure gauge any time tire pressures are measured to be sure that accurate values are obtained.

Proceed to the next step if the tire beads do not seat at the specified inflation pressure.

5. Inflate the tire to the pressure specified on the VC label located on the driver door or door pillar.

WARNING: If there is a need to exceed the maximum pressure indicated on

TORQUE SPECIFICATIONS Component Valve stem-to-TPMS sensor screw

Ft.-lbs.

(N.m)

1.5

(135)

the sidewall of the tire in order to seat the beads, follow all steps listed below.

Failure to follow these steps may result in serious personal injury.

6. The following steps should only be carried out if the tire beads cannot be seated by inflating the tire up to the maximum inflation pressure listed on the tire sidewall.

• Relubricate the tire bead and wheel bead seat area.

• Install a remote valve and pressure gauge.

• Wear eye and ear protection and stand at a minimum 12 feet away from the wheel and tire assembly.

• Inflate the tire using the remote valve and tire gauge until the beads have seated or until the pressure gauge is 138 kPa (20 psi) more than maximum inflation pressure on tire sidewall. If beads have not seated, deflate the tire and proceed to the next step.

• Place the wheel and tire assembly in an OSHA-approved tire safety cage.

• Inflate the tire using the remote valve and pressure gauge until the beads have seated or until the pressure gauge is 276 kPa (40 psi) more than maximum inflation pressure on the tire sidewall.

Do not exceed 276 kPa (40 psi) above the maximum pressure on tire sidewall.

Install a new tire if the beads do not seat at this pressure.

• Install the wheel and tire. Q Information for this column comes from the tire pressure monitoring systems data in ProDemand, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www. mitchell1.com.

MTD May 2023

Products

Kumho expands Solus line The new Solus TA51a from Kumho Tire USA is designed to offer drivers of sedans, crossovers and SUVs a quiet, comfortable ride. Ribs in the tire’s main channel grooves dissipate road noise. Four wide channel groves drain water and minimize hydroplaning on wet surfaces. The Solus TA51a will be available in 82 sizes, fitting 13-inch to 19-inch wheels.

KUMHO TIRE USA www.kumhotireusa.com

Test TPMS batteries with Bartec update Bartec USA LLC has released new software for its Tech550Pro, Tech600Pro and TechRITEPro TPMS tools.

The update gives techs the ability to test the battery status of TPMS sensors while they are on the vehicle. The latest software release version 65.1 is now available for download on the Tech300Pro, Tech500 and Tech400Pro tools; software version 5.1 for the Tech550Pro, Tech600Pro, and TechRITEPro; and version 9.2 for the TPMS desktop.

BARTEC USA LLC www.bartecusa.com

Hankook adds Ventus SW1 evo to UHP lineup Hankook Tire America Corp. has added the Ventus SW1 evo Z AS X to its SUV tire lineup. “The Ventus S1 evo Z AS X provides ultimate handling at high-speeds, excellent traction in all-season conditions and uncompromised comfort for luxury SUVs,” say Hankook officials. Beveled edges minimize the impact between tread blocks for a quieter ride. Lateral grooves optimize water drainage, prevent hydroplaning and offer extra grip. The Hankook Ventus S1 evo Z AS X is available in nine sizes, ranging from 18 to 22 inches, with 10 more sizes coming later this year.

HANKOOK TIRE AMERICA CORP. www.hankooktire.com

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

Yokohama launches light truck tire Yokohama Tire Corp. has launched its Geolandar A/T XD, a tire engineered for full-size pickup trucks and commercial vans. It is severe snow service-rated and molded for optional studs, offering on- and off-road traction year-round. The Geolandar A/T XD is initially available in 21 sizes, for wheels ranging from 16 to 20 inches in diameter, with more sizes coming later in the year. Features include Yokohama’s Geo-Shield technology, which offers on/off-road durability; 3-Peak Mountain Snowflake certification; and more.

YOKOHAMA TIRE CORP. www.yokohamatire.com

JohnDow unveils TPMS sensors JohnDow Industries has added TPMS Retro Kit sensors to its Dynamic division’s line of products. The sensors have been designed for vehicles without manufacturer-installed tire pressure monitoring systems (TPMS). They are available in external (DY-BLE-E) and internal (DY-BLE-I) sensor options. Also available is the TPMS Repeater (DY-BLER) to extend overall signal distance up to 30 feet. Both sensor options work with the Dynamic BLE phone app in order to program and assign up to 36 sensors.

JOHNDOW INDUSTRIES www.johndow.com

Michelin rolls out BFGoodrich light truck tire Michelin North America Inc. has introduced the BFGoodrich HD-Terrain T/A KT tire. The new product features an allnew tread compound designed to resist chipping and tearing; “mud-phobic” bars and a serrated shoulder design that will allow drivers “to plow through gravel and mud,” according to company officials; and Michelin’s CoreGard technology, which protects against sidewall splitting.

MICHELIN NORTH AMERICA INC. www.bfgoodrichtires.com

73

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

74

ADVERTISER

PAGE

WEBSITE

ACDC

62

www.fixhybrid.com

Aftermarket Auto Parts Alliance Inc.

47

www.perfectstopsummerpromo.com

Alligator

71

www.alligator-tpms.com/mtd

American Omni Trading

27

www.american-omni.com/transmax

Aston Technologies

61

www.astontechnologies.com

Atturo Tires

5

www.atturo.com

Autel

9

www.autel.com

BKT USA Inc.

11

www.bkt-tires.com

Bridgestone

21

www.bridgestonetire.com

Continental

35

www.ate-na.com

Continental Tire

29

www.continentaltire.com

GT Radial

23

www.gtradial.com

Hunter Engineering Company

52

www.hunter.com/revolution

Ingersoll Rand

37

www.ingersollrand.com

K & M Tire Inc.

45

www.kmtire.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Kumho Tire USA

19

www.kumhotire.com

Linglong Americas Inc.

7

www.linglongtire.com

Maxxis Tires

25

www.maxxis.com

Mighty Auto Parts

31

www.mightyautoparts.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Prinx Chengshan Tire North America Inc.

33

www.fortunetireusa.com

Sailun Tire Americas

13

www.erangetires.com

Sailun Tire Americas

38-39

www.gosailun.com

Sentury Tire USA

17

www.groundspeedtires.com

SKF/Lincoln

65

www.skf.com

Tireco Inc.

41

www.milestartires.com

Transamerica Tire Company Ltd.

IFC

www.predatortires.com

WheelerShip LLC

57

www.wheelership.com

Wrenchers LLC

53

www.wrenchers.com

Yokohama Off-Highway Tires America Inc.

15

www.yokohama-oht.com

ZC Rubber America Inc.

55

www.arisuntires.com MTD May 2023

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