Commercial Tire Dealer™
Truck stops join low-cost imports as a challenge to commercial dealers By Ann Neal
A
lthough demand for retreads is increasing, low-cost imported tires continue to squeeze profitability for commercial tire dealers. Aggressive truck stop chains, manufacturer price increases and supply issues are the latest headwinds. Yet respondents to Modern Tire Dealer’s annual survey of commercial tire dealers are finding opportunities in the midst of the challenges.
tires rise following the U.S. International Trade Commission’s decision to not levy duties on Chinese truck and bus tires. “We thought the tariffs were going to go into place,” says David Mickelson. He is president and CEO of Graham Tire Co.’s South Dakota and Nebraska locations. “Like most tire companies, we had made arrangements with our manufacturers. We were very surprised when the tariffs didn’t go through,
Retreading is gaining ground “We feel the quality of our Bandag brand retreads is such that we can compete with a low-cost Chinese tire,” says Pete Glesing, president of commercial sales and operations for Best-One Tire and Service. “It feels like we are making some headway there. Request for Chinese product, while still there, has lessened throughout the year.” Best-One Tire and Service does quite a bit of business with the nation’s top 50 fleets, which do not buy the Tier 4 products, according to Glesing. “They are regimented to a retread program because they know ultimately The new Best-One Tire and Service commercial-retail store in New Haven, Ind., has that’s the best way to drive out eight heavy-duty service bays and three drive-through commercial service bays. costs from that line item.” But private fleets, trailer leasing companies and some owner and it certainly caused an impact in the marketplace with an operators demand low-cost Chinese tires. Best-One Tire and influx of import tires.” Service, which holds the No. 2 spot in the rankings, is taking Mickelson says that while Graham Tire offers Chinese steps to regain its cap and casing sales. “We’re trying to do products, his employees focus on selling the benefits of some things that are starting to move the needle to where we retreading and the value of a new tire that can be recapped are purchasing and selling less Chinese product and producing multiple times. The message is getting through as his retreading and selling more cap and casings,” says Glesing. business has seen some improvement in the last six months. Bob Majewski is also “It’s still tough but you have fleets that understand the value seeing perceptions tilt of retreading. And they are not always just looking at price.” toward retreads. “We Beasley Tire Service Inc. began producing its first retreads Truck stops join low-cost imports as a are proving to people a year ago at a leased facility in Hungerford, Texas. “As long as challenge to commercial dealers . . . 28 how much better the you can fill your shop with tires from fleets that are retreading retread is over the low- their own tires, you do OK,” says President Bob Beasley. Top 25 Commercial Tire Dealers . . . 38 cost tires, but this takes His company just completed building a larger retread plant Commercial tire dealers want more time,” says Majewski, next to its corporate headquarters in Houston. from their suppliers . . . 44 who is chief technical “We were a large Michelin associate retread dealer for many SmartWay-verified truck tires . . . 56 officer for Lebanon, years until we finally opened our own shop,” says Beasley. Tenn.-based Sumerel The new plant is set to begin producing 250 medium truck Also in CTD Tire Service Inc. tire retreads a day this month. The capacity is 350 retreads New RV industry radial standard . . . 42 Dealers saw volumes per day with the potential for 450. of low-cost imported Beasley Tire’s commercial offerings include emergency road TBC commercial tire strategy . . . 70
Special Report
Commercially viable . . . 72
28
MTD October 2017