Modern Tire Dealer - January 2023

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Market hangover

Factors that will continue to impact your business

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NORMAL? U.S. TIRE MARKET IS ‘RIGHT-SIZING’ — BUT CHALLENGES REMAIN MTD’s Facts Issue brings you the numbers behind the story

January 2023 | Vol. 104, No. 1 | $30 | www.moderntiredealer.com

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The Industry’s Leading Publication Find out why tires are key to optimizing electric vehicle performance on page 74.

Photo: Ford Motor Co.

DEPARTMENTS 4 Editorial Numbers game A look at some key stats reveals major changes in the U.S. tire industry

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

8 Industry News Giti doubles down on commitment to U.S. market ‘Our presence has been redefined,’ says CEO Phang

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

20 Your Marketplace Positive sellout streak continues Improvement comes even as miles driven lags

64 Business Insight Are your bonus programs ineffective?

It may be time for a fresh look — and a fresh start

66 Mergers and Acquisitions How sharing the wealth creates wealth Founders of GCR hit on a winning formula that still works

72 Dealer Development Stop, look and listen Are old habits holding your business back?

74 EV Intelligence Tires are key to optimizing EV performance The wrong tire can reduce a vehicle’s range

76 Focus on Dealers Sullivan Tire eyes more growth in 2023 ‘We have a lot that we’re looking at right now’

77 Focus on Industry New Continental UHP summer tire targets enthusiasts ‘Trackable street tire’ will be available in nearly 80 sizes

78 Products 79 TPMS Acura MDX – 2023

82 Ad index

January 2023, Volume 104, Number 1

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F E AT U R E S 22 Market hangover

Analyst John Healy breaks down factors that will continue to impact your business in 2023

60 New service tools take the spotlight

More products from the 2022 SEMA Show/AAPEX

MTD’s 57th Facts Issue

30 World sales leaders, sales margins and domestic tire shipments 32 Imports 34 Channel market share 36 Replacement tire market share 38 OE tire market share 40 Where dealerships are located 42 Top tire brands 44 Tire sizes 46 Tire pricing 48 Commercial tire market 50 North American tire plant capacities 52 Automotive service 54 Mergers and acquisitions

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Editorial

Numbers game

A LOOK AT SOME KEY STATS REVEALS MAJOR CHANGES IN THE U.S. TIRE INDUSTRY By

Mike Manges

“C

hange is the law of life.” President John F. Kennedy spoke these words nearly 60 years ago, while delivering a speech in Germany. You could argue that change also is the law of the tire industry.

At the moment, you are holding MTD’s 2023 Facts Issue, our comprehensive look at the domestic tire industry — from shipments, imports, margins, manufacturing and pricing to market share, sales, distribution and more.

In light of that, I thought it would be interesting to look at some industry facts and figures that have changed over the last 20 years, using the 2023 MTD Facts Issue and the 2003 MTD Facts Issue as reference guides.

Tire sizing. In 2002, 14- and 15-inch passenger tires dominated, with the number-one size in the U.S. replacement channel, 235/75R15, accounting for nearly 7% of the overall replacement passenger tire market, which totaled 190.5 million units. In 2022, only one 15-inch tire made the top 10 — which also includes one 20-inch size, an 18-inch size, five 17-inch sizes and two 16-inch sizes — with 225/65R17 being the most prevalent replacement passenger tire size. (Slightly more than 216 million replacement passenger tire units shipped in 2022, according to MTD estimates. That’s a 12.5% increase from 2002 totals.) Don’t expect to see a reversal in current tire sizing trends. It’s true that as long as there are 20-year-old Honda Civics on the road, there will be a need for 15- and 16-inch inch tires. But it’s onward and upward from here.

Pricing. Tire diameters aren’t the only things that have gone up. Look at retail tire pricing. In 2002, the average retail price for a major brand 195/75R14 passenger tire was $62.72. Not exactly apples to apples, but in 2022, the average retail price for a major brand 195/65R15 tire was $129.76. Twenty years ago, the average price of a major brand LT235/85R16 tire — the most popular replacement light truck tire size in the U.S. at the time — was $101.08. Last year’s

most popular light truck tire size was LT265/70R17. A major brand light truck tire in that dimension, on average, sold for $269.46.

World leaders in new tire sales. Another intriguing thing I discovered during my research is that the top five world leaders in tire sales, in descending order — Michelin Group, Bridgestone Corp., Goodyear Tire & Rubber Co., Continental AG and Sumitomo Rubber Industries Ltd. — have maintained their relative positions, 2002 through 2022, although, of course, their respective sales have multiplied since. (For example, we estimate that Michelin’s sales will total $27.7 billion in 2022 versus $14 billion some two decades ago. Bridgestone’s sales jumped from $13.9 billion in 2002 to $22.8 billion in 2022.) However, there have been significant changes in this area. The eighth largest tire manufacturer in 2002 — Cooper Tire & Rubber Co. — was delisted from the stock exchange when it was acquired by Goodyear. And three companies that were not on the list in 2002 — Zhongce Rubber Group Co. Ltd., Cheng Shin Rubber Ind. Co. Ltd. and Giti Tire Pte Ltd. — now appear.

Market share and brands. Each year as part of the Facts Issue, MTD examines market share by brand in three key product segments — replacement passenger, replacement light truck and replacement medium truck. Several brands that populated our replacement passenger tire market share rankings two decades ago — Cordovan, Cornell, Delta, Laramie, National and Sears and Sigma — no longer show up on the list. (Sears for good reason as Sears Auto Centers shuttered its doors last year after a long, slow decline. In 2002, however, the Sears brand had 4% passenger tire market share.) How many of today’s market share leaders will be around 20 years from now? Check back in 2043!

Retreading. The number of active retread plants in the U.S. has been shrinking for a long time. In 1982, there were around 3,350 domestic medium truck tire retread plants, according to MTD estimates. By 2002, that number had fallen to 1,065 plants. It’s now believed there are around 640 active truck tire retread shops throughout the country. What hasn’t declined is the efficiency of retreaders. An estimated 15.6 million medium truck tire retreads were produced in 2002 — roughly equal to the same number of truck tire retreads that were manufactured in the U.S. last year. Take a bow, retreaders! All told, you’re achieving the same aggregate output while operating out of 425 fewer plants. (And I’m sure better machinery, tread rubber stock, processes and casings have helped.)

I strongly encourage you to spend some time with MTD’s hotoff-the-press Facts Issue. Our hope is that this will be your reference guide and that you will turn to it throughout the year. Meanwhile, we’ll continue to track those numbers that matter — as well as future changes that will impact your business. ■

MTD’s Facts Issue brings you the numbers that matter.

Photo: Pexels

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If you have any questions or comments, please email me at mmanges@endeavorb2b.com.

MTD January 2023

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As tire dealers continue to monitor their supply, 2023 is starting off with a new wave of tire price increases.

Photo: MTD

Tiremakers’ pricing, strategy moves matter If you thought 2023 would come without a new wave of tire price increases, the flip of the calendar might have left you slightly disappointed. But the good news is that MTD has plenty of insights into what tire manufacturers are thinking and planning for the year ahead — and readers are noticing. Three of last month’s top stories are exclusive interviews with leaders from various tire manufacturers. And don’t worry, we have more of those exclusive interviews up our sleeve in 2023.

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Michelin to enact up to a 9% price increase Sullivan Tire eyes more growth in 2023 Giti doubles down on commitment to U.S. market Hankook’s Williams discusses company’s growth strategy SRNA’s Darren Thomas weighs outside forces versus strategy Why commercial tire dealerships are installing dash cams Bridgestone plans PLT price increase USTMA predicts 400,000 fewer tires shipped in 2022 Focus on car count, sales agility in 2023 How Westside Tire & Service thrives during tough times

HOME OFFICE 3515 Massillon Rd., Suite 200 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 Website: www.moderntiredealer.com PUBLISHER Greg Smith gsmith@endeavorb2b.com (330) 899-2200, Ext. 2212 EDITORIAL Editor: Mike Manges, ext. 2213 mmanges@endeavorb2b.com Managing Editor: Joy Kopcha, ext. 2215 jkopcha@endeavorb2b.com Associate Editor: Madison Gehring, ext. 2216 mgehring@endeavorb2b.com PRODUCTION Creative Services Director: Zach Pate Art Director: Jonathan Ricketts Graphic Designer: Audrey Mundstock Production Manager: Karen Runion, ext. 2210 krunion@endeavorb2b.com MARKETING STRATEGISTS Bob Marinez rmarinez@endeavorb2b.com (330) 899-2200, ext. 2217 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 EXECUTIVE OFFICE 571 Snelling Ave. N. St. Paul, MN 55104 (651) 224-6207 CORPORATE OFFICER Vice President: Chris Messer

Modern Tire Dealer (ISSN: 0026-8496) is published monthly by 10 Missions Media, LLC, 571 Snelling Ave N, St. Paul, MN 55104-1804. Copyright © 2023 by 10 Missions Media, LLC. All rights reserved. Modern Tire Dealer content may not be photocopied, reproduced, or redistributed without the consent of the publisher. Periodicals postage paid at St Paul, MN and additional mailing offices. POSTMASTERS Send address changes to: Modern Tire Dealer, 571 Snelling Ave N, St. Paul, MN 55104.

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Industry News

Giti doubles down on commitment to U.S. market ‘OUR PRESENCE HAS BEEN REDEFINED,’ SAYS CEO PHANG

G

iti Tire (USA) Ltd. is doubling down on its commitment to the United States market. “Our presence in America over the last decade has been redefined,” says Wai Yeen-Phang, the company’s CEO. Phang — along with David Poling, Giti Tire’s director of tire development and product marketing — recently sat down with MTD in Las Vegas, Nev., to discuss the company’s performance, production, new product plans, dealer strategy and more.

MTD: Describe Giti Tire’s performance in the U.S. this past year.

Phang: I would say that our challenges are just like anyone in this industry as we have gone through the last few years. We had the pandemic. Then we had global supply chain disruptions. Our challenges were the same as everyone’s challenges.

But most importantly for us, we kept focus on our objective.

If you look back, we have been in the market for more than 25 years. At this stage in the lifecycle of our organization, we made the decision to reinvent our global manufacturing footprint. This led to repositioning and realignment and the coming onstream of our plant in Chester County, S.C. We have built a very substantial (business) in the U.S. and it’s obvious you need to have a manufacturing base where the market is. Over time, this will help alleviate the supply situation. We have stayed focused on this direction and that is the core substance of our business.

MTD: What role has the South Carolina plant played in Giti’s growth?

Phang: The factory came to life in October 2017. Since then, the first phase of

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development of manufacturing has been ongoing. To set up a tire factory and for it to reach its first stage of maturity will take about a decade and we are halfway there.

The most important thing (has been) training the first generation of the plant’s workforce and we are happy to say that in terms of the competency of the factory and the competency of our workforce, we are on target.

The (South Carolina) location is integrated from research and development all the way through manufacturing. Out of this facility, we are able to prove to the market that we can make challenging products that require manufacturing and design technology.

MTD: Are most of your tires sold in the U.S. made at that plant?

“We have reinvented ourselves,” says Wai Yeen-Phang, CEO of Giti Tire (USA) Ltd. Photo: MTD

Phang: Not at this moment. Even 10 years from now, it will still be a combination of imports and (tires) from South Carolina.

Giti has maintained a steady cadence of new product introductions. Why is this important?

MTD: Tire dealers are telling us that domestic and import supply is less of a problem than it was 12 months ago. Many dealers are sitting on a glut of tires. Has this forced you to change production or the number of units you’re bringing in from outside the U.S.?

Poling: It’s important that we continue to refresh our product lines. Even during (the pandemic) when we faced challenges, since we have a R&D facility located at our plant, we were able to keep our development ongoing. We have a full pipeline of products that are available and ready to go.

And it’s important we continue to show our high level of technical expertise in rolling out these products. Dealers are always looking for that next new product that meets market trends.

Phang: All of us know that the American market goes by selling cycles and selling seasons. This year, unfortunately, the selling season has been impacted by inflationary forces. And like anyone else, in the early part of the year, supply disruptions (created) a big backlog. We were not spared from this impact. So right at this moment, everybody is rebalancing supply and demand. We will just have to react accordingly.

MTD: Despite market disruptions,

MTD: Giti introduced two commercial truck tire lines under the GT Radial brand in 2021. How were they received by the marketplace?

Phang: When we designed these tires, we did a lot of field surveys to understand MTD January 2023

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Charge less and go further.

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Industry News selective with the GT Radial brand. I think this is going to be very key for us in making our brand stand out.

MTD: Are you satisfied with the coverage you have achieved in the U.S. dealer channel?

“It’s important that we continue to refresh our product lines,” says David Poling, Giti Tire’s director of tire development and product marketing.

Photo: MTD

the needs of our customers. We balanced the applications and balanced the performance between running line-haul routes and regional routes. We did a lot of work to define what we put into the design of the tires and we hope to carry on in that direction by adding more size extensions.

Phang: If you look at the channel, the American tire market is already very mature, very saturated and highly fragmented. We are reaching a stage where there are very massive changes in the structure of (tire dealer) ownership. There are very few first generation dealers left. That’s why there’s so much M&A. It’s like musical chairs. I would say that we are watching.

Developing our sales channel is a neverending journey. There will never be enough. We have to look at where we are, our availability of products and what we can provide to the North American market.

MTD: What are some of Giti’s biggest opportunities at the moment?

Phang: On a global basis, this is something we have been (working on) for more than a decade. In the Asian market, we have launched a lot of EV products. We have done some development in Europe. In the U.S., it will come. It’s just a matter of time. We have already started this journey. It’s a necessity for all tire manufacturers as the market changes.

Phang: I would say participating in emerging markets. There are a lot of emerging segments. All-weather is a growing segment... (and) the growth of the R/T light truck tire segment.

We are committed to the U.S. market. The building of our manufacturing facility in the U.S. is a statement of our commitment to the American market. The factory will not be able to provide substantial volume yet, but it will surely grow.

You can rest assured that the products that are going to come out of the factory will be very relevant to the American market.

This is an integrated facility with a research center inside the factory, where every day, David and his team are listening and reacting to (customers’) needs to make sure our products in America will continue to be relevant to this market.

MTD: Can you see bringing a tire that has been specifically designed for EVs to the U.S. market?

MTD: Is Giti’s business in the U.S. where you anticipated it would be?

Poling: We’re certainly looking at that. We have a global plan for EV tires. We’re working with OEMs on some of their EVs. So we certainly see what’s required and how we can take advantage of that with lines that are similar to our current products, but are specific to the high-load, hightorque requirements of those vehicles. We need to address the needs of those cars and how (their owners) drive and see if we can create a better solution than the OE tire — just like we do today with normal vehicles.

Phang: I would say that we are where we want to be. We have reinvented ourselves. Our presence in America over the last decade has been redefined. We have manufacturing. We have R&D. We are very happy to have laid the foundation.

And this will enable us to service our U.S. customers and the North American market.

MTD: The emergence of electric vehicles (EVs) presents new opportunities for tire manufacturers. Does your company see opportunity in providing tires for EVs?

MTD: You mentioned seeking OE fitments on EVs. Can you discuss your general OE strategy in North America?

Poling: Our OE strategy is to focus on a few key partners and develop lines for them and their premium fitments — being

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Poling: We are uniquely positioned to (serve) the North American market. Having been in the industry for 35 years, I can tell you we are very unique. We design everything internally. We do our own tread patterns and our own sidewall designs. And everything we design for this market is designed for manufacturing. It’s seamless and makes us more responsive to market forces, so we can deliver products that meet (the market’s) expectations.

MTD January 2023

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Industry News

Bites Toyo plant opens Toyo Tire Corp.’s consumer tire plant in Serbia has opened. The factory will provide tires to the U.S. market, as well as Europe.

Announced in 2019, the 150-acre facility is expected to reach its full capacity of five million tires per year during the second half of 2023, according to Toyo officials.

TireHub adds locations TireHub LLC opened a number of new distribution centers, all in new markets, during the fourth quarter of 2022. The new centers are located in Shreveport, La.; Beltsville, Md.; Greenville, S.C.; Tulsa, Okla., Grand Rapids, Mich. and Spokane, Wash.

VIP Tires grows in Vermont A fifth VIP Tires & Service store has opened in Vermont. The company renovated a former car dealership in Bennington, Vt., and added four new bay doors, plus a new shop floor, roof, parking lot, restrooms and landscaping. VIP now has 67 locations throughout the Northeast.

Bridgestone promotes Hoeft Bridgestone Americas Inc. has named Steve Hoeft president of its commercial truck group. He replaces Chris Ripani, who had led the company’s commercial business since 2020. A five-year Bridgestone veteran, Hoeft most recently served as chief operations officer for the firm’s commercial truck group.

Sentury hires Klekamp Sentury Tire USA has named David Klekamp its technical tire director. A 36year tire industry veteran, Klekamp will be involved in developing Sentury’s product strategy in the United States, among other functions. He’s held senior positions with several tire manufacturers over the years.

Sheehey joins Ralson Commercial truck tire market veteran Brian Sheehey is the new senior vice president of Ralson Tires North America. He most recently served as vice president of marketing, North America, for Yokohama Off-Highway Tires America Inc. Ralson Tires recently made its North American debut.

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T

2023 opens with price hikes

he next wave of tire price increases has begun, as tiremakers announced new hikes for the start of 2023.

Michelin North America Inc. increased prices by as much as 9% on Jan. 1 across its brands on select passenger and light truck tires, plus commercial on-road and mining tires and service offerings. The increase applied to orders in the U.S. and Canada.

Bridgestone Americas Inc. didn’t specify the amount of its latest price increase, which applied to passenger and light truck tires sold in the U.S. and Canada. The increase, effective Jan. 1, applied to Bridgestone, Firestone and Fuzion brand products.

Pirelli Tire North America Inc.’s next price increase goes into effect on Jan. 15. Prices will go up by as much as 10% on passenger and light truck tires and the exact amount will depend on tire line and size. Pirelli officials attributed the increase to “changing market conditions.”

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Industry needs more than 600,000 techs

ewer students completed automotive post-secondary education programs in 2021, thus widening the gap of technicians needed to work in tire dealerships and automotive service businesses across the U.S. With 11.8% fewer automotive program graduates in 2021 — along with smaller drops of graduates in diesel and collision repair programs- by 2026 the disparity will total nearly 1 million qualified workers, according to The TechForce Foundation.

The numbers come from the foundation’s 2022 Transportation Technician Supply & Demand Report.

The worsening technician supply picture — with combined completions dropping from 48,208 in 2020 to 44,052 in 2021 — overshadows a strong year-over-year rebound in technician employment in the automotive (+4.2%) and diesel (+6.5%) repair segments.

TechForce estimates that demand for new entrant automotive/diesel/collision repair technicians – for new positions, replacements for occupational separations and unfilled positions from prior years — will reach 232,000 in 2022 and total more than 900,000 through 2026.

“This year’s report underscores not only the challenges we face in attracting, training and retaining technicians but also the boundless opportunities for talented young people to build successful, rewarding careers in one of the world’s most dynamic and technology-intensive industries,” said TechForce Foundation CEO Jennifer Maher.

“The solution to this crisis lies in industry, non-profit, education and government partners working together Combined with a need for more than 600,000 automotive to build awareness, technicians by 2026, the diesel and collision repair industries are in need of help, too. Combined, the three categocuriosity and inter- ries will be short by more than 900,000 technicians by 2026, est in these careers the TechForce Foundation says. among our youth.”

Photo: TechForce Foundation MTD January 2023

1/12/23 11:45 AM

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MTD_0123.indd 13

1/4/2023 9:15:15 AM

T:10.75"

S:9.75"

When Confidence in the Rain Matters.

Industry News

Bites GRI names Connor director Global Rubber Industries Pvt. Ltd. (GRI) has named Michael Connor as director of sales for its United States operations. He will oversee GRI’s sales, marketing, operations and customer service efforts in North America, covering its material handling, agriculture and construction tire portfolios.

Atturo offers racing rewards Atturo Tire Corp. has introduced a motorsports contingency program to expand Atturo’s support to racing teams in the offroading community. The program will feature payouts of up to $2,500 for the premier off-road series such as SCORE, Best in The Desert and Ultra4.

Blackhawk sponsors MMA The Blackhawk tire brand has been named a sponsor of Bellator MMA, a global mixed martial arts organization. Blackhawk branding will be featured on live event signage and Bellator social media posts.

A

Hercules had big year in 2022

merican Tire Distributors Inc. (ATD) grew its Hercules dealer network by 300 customers in 2022, adding to more than 4,000 retail locations throughout the United States and Canada.

“The addition of these new dealers alone will enable us to potentially add over 100,000 units in 2023,” says Josh Simpson, Hercules’ president.

ATD also significantly expanded its product offerings during 2022. In addition to adding 300 customers to its HerThe past 12 months saw ATD’s cules dealer network, American Tire DistribuHercules and Ironman brands tors Inc. rolled out a number of Hercules and Ironman brand tires during 2022. This includes achieve double-digit unit sales the HerculesTIS TT1 light truck tire. gains, with Ironman experiencing Photo: MTD “a little higher uptick in sales.”

And ATD made several enhancements to its dealer programs during the year.

“In 2022, we enhanced our Hercules University — powered by Spark — training program to offer ASE test prep and leadership training for our Diamond and Platinum dealers at no charge, in addition to offering access to ATD’s single supplier auto replenishment tool at no cost” to all Hercules Power Program members.

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MTD January 2023

1/12/23 11:45 AM

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Industry News

Tyres International becomes Ascenso Tires North America

Bites CEAT’s production grows CEAT Specialty Tires increased its production capacity of ag radial tires by 50% in 2022 to meet growing demand in North America and plans to increase its production capacity for radial ag tires to 160 tons per day within two years’ time.

Giti renews with Formula Drift The GT Radial brand from Giti Tire (USA) Ltd. has renewed its partnership with Formula DRIFT for another three-year term to provide tires to teams in the Pro Championship.

Pirelli is OE at Polestar Pirelli & Cie SpA’s P Zero has been chosen

by Polestar to be the original equipment tire on the new, limited edition Polestar 2 BST 270. The vehicle will be outfitted with size 245/35R21 tires.

T

yres International, a Mahansaria Tyres Private Ltd. (MTPL) subsidiary, will now operate under the trade name Ascenso Tires North America. Since its acquisition

by MTPL in 2021, Tyres International has been the exclusive importer of Ascenso brand tires to the United States and Canada.

“Moving to (the) Ascenso Tires North America trade name reflects the company’s growth in the last two years since the tie-up with Mahansaria Tyres Private Ltd. and its strategic plan and investment to become a leading tire manufacturer,” say MTPL officials.

MTPL purchased Tyres International “to efficiently bring Ascenso’s innovative and extensive product range of tires to their customers in North America,” including tires for agricultural, industrial, construction, earthmover, forestry and material handling applications.

The company has added more than 350 sizes to its product portfolio within the last year, “offering a wide range of tires across applications and customizing solutions to suit specific customer requirements.”

Lexus picks Bridgestone Bridgestone Corp. has earned a new original equipment fitment with Lexus. In North America, the fifth-generation Lexus RX will be outfitted with the Alenza Sport A/S tire.

RNR to open in Houston RNR Tire Express has signed a franchise agreement to bring a new location to Houston, Texas, in early-2023 that will be owned and operated by local entrepreneurs Taos Ford and Benito Olson.

MaddenCo adds partner MaddenCo has enhanced its Tire Dealer System software with an integration of a two-way texting and digital vehicle inspection platform from autotext.me.

All Star Auto names CEO All Star Auto Parts, a specialty distributor of alternative automotive parts that acquired Blackburn OEM Wheel Solutions in 2022, has named Andrew Sexton its CEO. He succeeds Matt Immerfall, who will join the company’s board of directors.

Vic Harisis dies T.G. “Vic” Harisis, who founded Western Tire Equipment & Supply Co. Inc. in 1974, recently died at the age of 92. He spent his entire career in the tire equipment and supply business and led his company to become an $85 million enterprise.

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M

Monro waives battery installation fees at stores

onro Inc. says it is making “sweeping changes” in its battery sales and service business. The company now offers free battery checks “and in a departure from the industry standard,” is waiving battery installation fees at its locations.

“Our customers’ safety is our first concern,” says Michael Broderick, Monro’s CEO. “It’s not about just replacing the battery. It’s about offering a free, quality 32-point courtesy inspection to ensure that everything is in good working order, especially during the winter season.”

The company is making more than battery service changes. It’s also working with its primary tire supplier, American Tire Distributors Inc. (ATD), to increase in-stock levels of winter tire inventory at its stores.

“This strategic partnership has led to an expanded snow tire offering with Nexen Tires and Nokian Tyres, a more established regional inventory for entry opening price point and all-terrain tires and an upgraded inventory system to allow for daily review and replenishment,” say Monro officials.

ATD acquired Monro’s wholesale business this past summer. As part of the agreement, Monro says it will buy at least 90% of its tires from ATD.

I

Group buys MTD TEN

ndependently owned Dealer to Dealer Development Group LLC (D2D Development Group) has acquired MTD TEN (Training and Education Network) from Endeavor Business Media, MTD’s parent company.

Randy O’Connor, principal and owner of D2D Development Group, says the “transition of MTD TEN — formerly DSP 20 Group — back to independent ownership has been on our members’ minds for years. It makes perfect sense to have an independently owned membership led by an independent.”

O’Connor also writes MTD’s monthly Dealer Development column, formerly titled as TEN Insights. ■ MTD January 2023

1/12/23 11:45 AM

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NumbersThatCount

Relevant statistics from an industry in constant motion

6

Independent tire dealerships ranked on the 2021 MTD 100 that were acquired before the 2022 version of the MTD 100 was published.

SOURCE: MTD

Photo: Plaza Tire Service

26

Number of GCR Tires & Service locations acquired by Southern Tire Mart LLC this past fall.

12.2

SOURCE: MTD

SOURCE: S&P GLOBAL MOBILITY

Photo: MTD

Photo: Pexels

102 MILLION

Average vehicle age in years in the U.S.

300,000

Number of tires produced in eight Hankook plants around the globe in 2021.

Units of 2022 vehicles advertised and available for sale from Ford, Chevrolet, Ram and Jeep in the first week of December 2022.

SOURCE: HANKOOK TIRE & TECHNOLOGY CO. LTD.

SOURCE: S&P GLOBAL MOBILITY

Photo: Hankook

Photo: Ford Motor Co.

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MTD January 2023

1/12/23 11:45 AM

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

Positive sellout streak continues IMPROVEMENT COMES EVEN AS MILES DRIVEN LAGS By

John Healy

O

ur recent checks with dealers leave us with a view that retail sellout trends continue to show strength and moved higher year-over-year compared to November 2021. Contacts indicate that November saw the greatest year-over-year growth to date in 2022.

Looking closer at volume for the month of November on a regional basis, we note the Midwest region reported the strongest year-over-year growth. Both the Southeast and Southwest regions saw the “weakest” year-over-year performance, with both reporting approximately flat trends.

Dealers indicate pricing actions from manufacturers continue to be a worry.

However, slightly easier comparables and winter weather helped drive more traffic into service bays in November.

Looking at miles driven over the last month, which has a significant correlation with the need for a new set of tires, trends again declined on a year-over-year basis in November 2022.

DRIVING REMAINS DOWN

The month of November showed a 7% year-over-year decline in our miles driven momentum index, which compares to a 10.2% decline in October and 5.8% decline in September.

We note the index continues to see volatility during a prolonged period of below-normal miles driven. Every month since March, miles driven have declined. The timing coincides with the Russian invasion

of Ukraine and subsequent increases in fuel prices in the U.S. The prolonged contraction in our miles driven index mirrors the prolonged declines seen in the aftermath of the COVID-19 lockdowns. But this time, there’s not the same kind of catalyst, like a nationwide lockdown.

Simply put, this prolonged decline represents a true reduction in U.S. miles driven.

TIER-THREE COMEBACK?

Tier-two tires remain the leaders in this uncertain market, which matches the longterm trend of 2022, where tier-two tires have either been the most in-demand or tied for most in-demand in the last seven of 10 months.

And while tier-three tires had been at the bottom of the rankings recently, they tied with tier-one tires in November.

Given rising prices for tires and all consumer goods — as well as an influx of lower-tier inventory in the back half of the year — we were not shocked to see this type of result in November. To us, this indicates demand across all three tiers and confirms our survey work, which showed strong demand during the month of November.

RAW MATERIALS MODERATING

Turning to raw material costs, the “basket” of raw materials to make a basic replacement vehicle tire increased roughly 5.6% yearover-year in November 2022, following an 8.1% year-over-year increase in October.

Snapshot of Dealers’ PLT Tire Volumes (Year-Over-Year Change) Sept-21

Oct-21

Nov-21

Sept-22

Oct-22

Nov-22

Average

Increase

57%

45%

50%

43%

50%

57%

41%

Flat

14%

10%

17%

21%

20%

29%

27%

Decline

29%

45%

33%

36%

30%

14%

32%

Total

100%

100%

100%

100%

100%

100%

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

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02_MTD_News-Numbers.indd 20

We note the raw material cost increases have begun to moderate as our raw material index in November fell 2.1% sequentially from October, while the month of October fell 2.0% sequentially from September. Based on data through November, this would equate to a 6.5% decline in raw material costs from the third quarter to the fourth quarter.

Looking forward, holding current spot prices flat would equate to a 6.9% yearover-year increase in input costs in the fourth quarter.

Aggregate costs of raw materials have been increasing since May 2020, with peak year-over-year gains — of 37.7% — occurring in March 2022 as the conflict in Ukraine sent oil prices higher.

In assessing raw material price movements, the price of carbon black has increased on a year-over-year basis for 23 months straight, but the rate of increase has begun to moderate.

Crude oil prices have moderated from their spring 2022 peak.

Oil prices grew an average of 9.7% yearover-year in November, though there have been months of sequential declines. Oil prices fell an average of 2.9% in November from October.

Moving to natural rubber prices, our natural rubber index fell by 20.4% in October and 20.9% in November, with month-overmonth declines each month.

At the same time, synthetic rubber costs grew in November by 1.4% year-over-year, though we tracked sequential declines to other raw materials.

Price pressures on reinforcement items continue to show moderation in year-overyear gains as well, with October and November prices up 15.3% and 11.3% respectively, which compares to an average year-over-year gain of 43.3% in the third quarter. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland. Healy covers a variety of subsectors of the automotive industry.

MTD January 2023

1/12/23 11:45 AM

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Industry analysis

Market hangover

ANALYST JOHN HEALY BREAKS DOWN FACTORS THAT WILL CONTINUE TO IMPACT YOUR BUSINESS IN 2023 By

Mike Manges

“To say that supply and demand dynamics over the last 24 to 36 months have been unpredictable would be an understatement,” says Healy.

Photo: MTD

A

re challenges like the supply chain crisis and price increases finally in the rear-view mirror? Not necessarily, says John Healy, who tracks the domestic tire industry for Northcoast Research Holdings LLC. (He also writes MTD’s monthly Your Marketplace column.)

The lingering hangover of these factors — along with inflation, rising inventory levels and other dynamics — will impact tire dealers well into the new year. He explains why in this MTD exclusive.

MTD: Last year, there was a significant shortage of products and SKUs. Today, tire dealers are telling us there is almost too much supply, which has created sky-high inventory levels.

That’s a major swing that took place in a compressed period of time. What do you attribute this shift to? What happened and how did it happen so quickly? How important will inventory management be for tire dealers?

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02_MTD_News-Numbers.indd 22

Healy: To say that supply and demand dynamics over the last 24 to 36 months have been unpredictable would be an understatement. That said, figuring out inventory dynamics and proper alignment has been even more challenging than forecasting demand as tariffs, rising costs, shortages of inputs and delayed and expensive freight costs have all complicated this equation.

Managing tire inventories is always tough and 2022 was a period that was among the toughest. Entering 2022, many dealers we spoke with were seeing accelerating demand as more full re-opening levels were ongoing and industry inventories for product lacked visibility.

Heading into 2022, we heard from many dealers that industry fill rates were suboptimal by a fair margin. Given this, as well as lack of visibility from a timing and expense standpoint on imports, many dealers were scrambling and at times increasing the size of their orders to hopefully get some portion of their target.

MTD January 2023

1/12/23 11:45 AM

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Industry analysis While these dynamics were at play, we believe manufacturers started to catch up from a production standpoint, while simultaneously figuring out ways to get product into markets at an expedited rate. While all of these good things were happening, the demand side of the equation due to inflationary pressures on the consumer started to peak and soften.

In a nutshell, demand softened at the margin, while manufacturers were ramping up production and international product was figuring out more economic ways to get on-shore — thus creating the situation of today, where we feel industry inventories have caught up to demand and are starting in some areas to be uneven.

MTD: Inflation and interest rates have had a major impact on consumers. How has this affected retail tire sellout by tier and what are your projections for 2023?

Healy: While tire buying is not always discretionary, we do believe the categories in which consumers select the tire to purchase is often a function of what the dealer has and recommends, but also the total price point. Given rising pressures in affordability of nearly all goods and services, we are seeing a shift in recent months of the consumer looking for value over brand at the point of sale.

Simply put, consumers are often surprised by the price to replace four tires on their vehicle as a result of inflation, raw materials and even vehicle size. The result for many consumers is sticker shock at the cost to get back on the road.

Given this, we have seen tier-two manufacturers gain share over the last few quarters as part of our survey work with the dealer community. Confirming these trends were recent conversations at the Specialty Equipment Market Association Show with major retailers, which are increasingly modifying their product screen from premium to mid-tier and value lines, so that they can increase consumer conversion and near-term satisfaction.

With inflation being the driving force of this change, we believe the move to value brands will only intensify in 2023.

Currently, unemployment still sits at just under 4% — a healthy level. With rising rates and affordability pressures, the likelihood of economic cooling and a recession seems like a prophecy likely to

24

02_MTD_News-Numbers.indd 24

take place in 2023, under these scenarios.

And from the healthy level of employment today, we believe it’s likely that the job situation will deteriorate in the next six months — likely causing the consumer, who is already becoming more valueconscious, to intensify their current path of trading down.

MTD: Nine months to one year ago, shipping was a major problem in our industry. Fewer containers were on the water and freight rates were out of this world. Several tire manufacturers and dealers have told us that freight rates have plummeted in recent months. Why? What’s going on with shipping? Will we see more of the same in 2023?

‘We believe the move to value brands will only intensify in 2023.’

Healy: If we have learned anything in the last two to three years, it’s to expect the unexpected. When one bottleneck or concern seems to be figured out by our great ingenuity as a country, something else seems to pop up. I fully expect that to be the case in the next 12 months.

That said, will it continue to be the shipping area that compounds logistics and economics for manufacturers and retailers? It’s hard for me to come up with a long list of reasons why it would be.

Generally speaking, I am a bit more cautious on economic output in 2023 as the consumer seems to be a bit more cautious and big-ticket purchases have become more aspirational than in years past due to financing costs. Ultimately, we think these things will all shake out in terms of lower prices due to higher rates and inflation becoming tamed, but we think it takes time and will likely be the story of at least the first half of 2023.

Given this, we think shipping pressures and bottlenecks could be alleviated as demand cools.

The one offset we see to this dynamic could be rising energy costs and the uncertainty that this could bring to the shipping/ logistics area. Also labor continues to be uncertain and could be a wild card as we head into 2023.

MTD: M&A activity continued in 2022, including several big acquisitions on the commercial tire dealership side.

In the face of rising interest rates and with inflation at a 40-year high, do you expect to see more or fewer deals made next year? Why or why not?

Healy: The broader M&A environment on automotive retailing, service centers and the tire industry surprised me in 2022. Earlier in the year, I would have predicted a cooling of M&A given the intense pressure facing operators related to sourcing, costs and labor — resulting in operators focusing inward rather than on expansion. However, that was not the case.

Looking to 2023, it’s hard for me to not feel a similar way. We feel the combination of rising interest rates and healthy profits in recent years is likely to cause somewhat of an impasse in the expectation of prices to be paid by both buyers and sellers. With high prices in the industry and higher costs of capital, the return math for acquirers is likely to become a bit more difficult.

This dynamic — as well as a consumer outlook that is likely more difficult to get excited about — makes us think that activity levels in the months ahead may abate relative to the speed and size M&A has shown in the last few years. Given this, we look for more sanguine activity in 2023 as buyer and seller expectations align, leaving the door open for a pick-up in activity in 2024 once the parties can find common ground.

MTD: On the wholesale-distribution side, Amercian Tire Distributors Inc. (ATD) made a big move by selling its Canadian subsidiary, National Tire Distributors.

And Monro Inc. sold its wholesale division — which operated under the Tires Now banner — to ATD, thereby exiting the wholesale-distribution business.

What’s your take on ATD’s strategic direction? Do you expect to see more M&A activity in the wholesale channel?

Healy: We are not surprised by the ATD move or the Monro move this year. We feel wholesaling is a tough business right now.

Product availability caused strains in the business in 2021. And 2022 was a year where product costs went up significantly. This dynamic is causing operators to invest more capital to stay the same size — something that is not always enjoyable.

MTD January 2023

1/12/23 11:45 AM

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1/4/2023 9:15:22 AM

Industry analysis Given the capital constraints and consumption of this business, we are not surprised that some entities are reexamining their role in the market and potentially looking to align their capacity and industry position in the niches of where they can add value and earn higher rates of return. That’s what we think happened with ATD and Monro in 2022 and we cannot argue that their decisions seem out of left field to us.

Will more of this happen in 2023? We think so. We look for the big to get bigger and believe the distribution business is a perfect business for this dynamic to continue to unfold. Dealers tell us that they want consistency, price transparency and good fill rates. We think being a bigger distributor allows for these and we look for those with size and commitment to the category to be the winners in 2023.

MTD: In 2021, nearly 45 separate price increases were publicly announced by tire manufacturers. This year, there have been significantly fewer price hikes, but percent increases, as a rule, have been greater. What’s your take on all of this? Has the window for price hikes closed? Are manufacturers in less of a position to enact price increases now versus a year ago and if yes, why?

“Activity levels in the months ahead may abate relative to the speed and size of which that M&A has shown in the last few years,” says Healy, commenting on tire dealership buyouts.

Photo: MTD

26

02_MTD_News-Numbers.indd 26

Healy: We would agree completely that the pace of price increases in 2022 slowed compared to 2021. That said, we have seen the magnitude of those hikes in 2022 steeper than the previous year.

MTD January 2023

1/12/23 11:45 AM

Industry analysis Our expectation is that as raw materials go, so will price increases.

Broadly speaking, we are hopeful that Fed actions and normalization of production schedules will result in moderating inflation rates, which hopefully keep raw materials manageable for manufacturers.

Under this backdrop, we expect fewer price hikes in 2023.

We would not be surprised to see some price hikes in early-2023 with the change of the calendar year and raw material prices that are still above year-ago levels.

That said, as we look to the second half of the year, we think raw material prices for manufacturers might be lower on a yearover-year basis, which theoretically may serve as a pause point for further hikes.

Separately, we believe manufacturers heard from dealers and distribution contacts that fewer and more full price hikes are more reasonable than monthly hikes. We think visibility into prices and ability to manage inventory is key for all retailers and wholesalers and is appreciated.

MTD: Over the past few years, we’ve seen the emergence of several new product categories or sub-categories. The all-weather tire category has grown exponentially.

The number of last-mile delivery vans continues to increase, leading to greater demand for C-type tires. And more manufacturers are entering the electric vehicle (EV) tire space with products

that are specifically designed for these vehicles. What are your thoughts on the above categories and the opportunities they will provide for both tire suppliers and dealers?

Healy: The area I am most excited about is EV. I have come to the conclusion — after numerous conversations with industry

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‘Tariffs might be cast aside as a tool that is not right for the current environment.’

MTD: Several tire manufacturers that have plants in countries that were slammed with tariffs have reported that the impact of countervailing duties on their businesses was significantly less than expected. Others have developed effective work-arounds to mitigate the impact. What will be the ongoing impact of tariffs in 2023?

Healy: We believe with a global tire market from a demand standpoint, as well as from a manufacturing standpoint, the impact of tariffs has become harder to measure. We believe that global economies continue to look for ways to combat inflation and believe items such as tariffs — while protectionary to industries — likely work against the cost dynamic to the end consumer. Given this — and what we believe is a global effort to curb inflation — tariffs might be cast aside as a tool that is not right for the current environment in the short run. w w w . M o d e r n T i r e D e a l e r. c o m

02_MTD_News-Numbers.indd 27

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Industry analysis operators and dealers — that EVs come back for tire service at a much more frequent and earlier life cycle than internal combustion engine (ICE) vehicles.

Given the consumer wealth which is operating EVs, we think the propensity for branded manufacturers that are investing in product specific for these fitments is a big revenue opportunity for at least the next few years.

Simplistically, we believe tire manufacturers have long competed on price and product quality to win share. Product quality has long been marketed to consumers “guaranteed to last X amount of miles.” This investment into how long the tire will last has been a competitive development, but one that has likely worked against the industry’s ultimate revenue and unit size. We see the proliferation of EV fitments as a catalyst for unit demand in years ahead. Our research suggests that EV tires wear out 20% faster than ICE comps. One could argue the growth in EV fitments creates the biggest catalyst for growth in the replacement tire category in decades.

MTD: The Russia/Ukraine war convinced a number of tire manufacturers to withdraw from Russian operations, including manufacturing. What impact, if any, has this had on the North American market and why?

Healy: We have seen some imports into the U.S. replacement tire market increase in 2022, but my sense is that these units are not coming from facilities out of Russia. Frankly, several manufacturers with Russian operators have pulled out of the region, including Michelin, Bridgestone, Pirelli and Yokohoma.

We think the impact of exiting these facilities/operations likely creates capacity in years ahead that will allow for new upstarts to operate or potentially other operators to bring capacity into the region. Ultimately, we see geopolitical factors as deciding how and when these operations will begin to re-contribute to the global tire supply chain and not something we expect to have a meaningful impact in 2023 — especially in the U.S. replacement market.

MTD: Sales of new and used cars are still below historic averages. Meanwhile,

28

02_MTD_News-Numbers.indd 28

Lightning round Healy sounds off on the world’s biggest tire manufacturers John Healy recently provided quick takes on the largest global tire manufacturers. (He did not comment on Zhongce Rubber Group Co. Ltd. or Cheng Shin Rubber Co. Ltd.):

with the only dealer critique being the ability to get product. We think this remains a focus and a light truck tire market share opportunity for the company.

Michelin Group: We look for Michelin to keep inflating the category. While environmental and sustainability goals are buzz words for many in the financial industry, Michelin is making inroads as it relates to the tire category. We believe Michelin keeps making a great product and (is) serving dealers well, but we are really impressed with some of the traction it’s making with alternative compounds and engineering to make tires more sustainable and potentially work down costs over the long run.

Sumitomo Rubber Industries Ltd: A business in transition. We noted headlines earlier this year of new leadership and planned exits of the company’s truck tire business in Asia, but an overall plan to increase production in other categories that the business feels it has a right to compete in and win.

Bridgestone Corp.: Happy dealers and expansion. Of all the brands we hear about, we continue to hear good things about service, partnerships and Bridgestone’s ability and willingness to continue to invest in the business.

Goodyear Tire & Rubber Co.: We think Goodyear is exceptionally positioned to win the EV race. Our checks with dealers suggest EV fitments wear out faster than internal combustion engine vehicle fitments. This, we think, helps the industry and we believe Goodyear is batting well above its normal average in terms of executing wins in this category on the OE side.

Continental AG: Quality and a share gainer.

Feedback from the channel has continued to be positive about Continental’s products, the average age of a used car is 12.2 years — an all-time high. What does this mean for tire dealers? And what kind of impact has this had on tire manufacturer shipments into the original equipment (OE) channel? Is having a premium OE tire fitment as important today as it used to be?

Healy: Slumping new car sales relative to previous year levels — 2017 through 2019 — has created natural aging and depletion of the car population in the U.S. market. Given that cars are now

Pirelli & Cie SpA: Consistency and performance. We believe Pirelli continues to remain the most aspirational brand in the category with solid fitments on “dream vehicles,” but also new traction in areas.

Hankook & Co./Yokohama Rubber Co. Ltd.: Potential winners in 2023. We think that with elevated prices to the consumer — but abatement in terms of logistical and global trade complications — perhaps mid-tierpriced import brands might be in a share gain position in the year ahead.

Toyo Tire & Rubber Co. Ltd.: Expanding.

We believe the company is readying to launch some production in Europe, which I believe is their initial foray into production in the region.

Giti Tire Pte. Ltd.: We continue to see the brand show up more in the performance and specialty categories and believe additional capacity increases should allow for this momentum to continue. older and have more miles, we see this as helping the maintenance category for all things automotive. From our perspective, this aging car population will in 2023 help contribute to the demand picture.

As it relates to the OE side of the business, with new car production in the mid-teens from the low 17-million level ... we believe some manufacturers have shifted manufacturing capacity from OE to replacement to align with the realities of the current market.

That said, we are believers that the chip shortage is in decline and will MTD January 2023

1/12/23 11:46 AM

Industry analysis likely be a thing of the past by the second quarter of 2023.

Given this, we look for tire manufacturers to have to realign production from replacement to OE at the start of the year to meet manufacturer demand.

‘We suggest dealers be smart and nimble with inventory.’

DRIVE FORWARD Fortune Tires, a Prinx Chengshan brand, stands strong in offering a tire that always meets the highest standards. Offering uniformity of quality to meet the precision needs of a wide range of vehicles, from family cars to high-performance SUVs to commercial vehicles.

MTD: What are the three most important things independent tire dealers should monitor and prepare for as 2023 begins?

Healy: Our top three suggestions to monitor would include technician retention, inventory levels and consumer engagement.

A major pain point for dealers over the last year or two has been the ability to find and retain technicians. We do not see the supply of technicians as increasing in a major way of late, so thinking that this area of stress will go away would be naïve. From our perspective, technicians are worth their weight in gold and we believe to provide the type of service that allows for returning customers, good techs are essential.

Managing inventory levels would be an area that we would advise dealers to devote attention to in 2023. We think the consumer is trading down, so having product at a price point that leads to sales conversion is key. Additionally, with raw materials potentially showing some moderation for manufacturers in months ahead, volatility in pricing and availability might become more favorable. As a result, we suggest dealers be smart and nimble with inventory.

Consumer engagement is our final area of recommended emphasis. Having an e-commerce offering, we believe, is essential for the road ahead. The ability to shop, book appointments and provide feedback is all part of a successful “modern tire dealer” game plan. ■

Perfectus

Viento

Tormenta H/T

Tormenta A/T

Tormenta R/T

Tormenta M/T

Tormenta LMD

FDH106ET

FTH107

FDR601ET

FAR602

FAM210

FAM211

FAM212

ST01

You’ll have confidence in Fortune Tires as each model is backed with leading industry warranties.

Designed for those who are focused, those who overcome, those who persist.

Are you ready to Drive Forward with Fortune?

“Managing inventory levels would be an area that we would advise dealers to devote attention to in 2023,” says Healy.

FST02

Prinx Chengshan North America, Inc. info@prinx.us.com FORTUNETIREUSA.COM

Photo: MTD

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

02_MTD_News-Numbers.indd 29

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1/12/23 11:46 AM

2023 MTD Facts Issue

BACK TO

NORMAL?

U.S. tire market is ‘right-sizing’ — but challenges remain

A

fter a better-than-expected 2020 and what can only be described as a massive, across-the-board rebound in 2021, the United States tire market appears to be right-sizing.

But challenges — including several hangovers from last year — remain.

Following a solid finish in 2021, retail sellout levels remained elevated during the first quarter. However, demand began to fluctuate around the start of the second quarter, before taking a negative turn mid-year.

Blame it on 40-year-high inflation levels, elevated interest rates, tight household budgets, declining consumer confidence or all of the above — fewer customers bought passenger and light truck tires as the year wound down.

Consumers who remained in-market continued to gravitate toward less-expensive options, as the knock-on effect of tire manufacturer price increases, which continued throughout the year, were felt.

On the original equipment (OE) side, passenger and light truck tire shipments increased during 2022 as auto manufacturers ramped up production The commercial medium truck tire market continued to show the greatest amount of growth — with replacement shipments eclipsing last year’s totals by 20%-plus. (OE truck tire shipment gains were more modest, but still significant.)

Supply also recalibrated in 2022. Container ship pileups and freight rates are no longer the problem they were 12 months ago. The flipside is that tire dealers and distributors are now faced with high inventory levels.

WHAT’S NEXT?

Will consumer tire demand rebound in 2023? It depends on several macro-economic factors. Last month, the Federal Reserve announced that it seeks to achieve “inflation at the rate of 2%

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03_MTD_Facts.indd 30

over the longer run.” (The national inflation rate fell to 7.1% in November, the lowest level since December 2021.)

However, interest rates are expected to remain elevated throughout 2023.

An upswing in vehicle miles driven will work in the tire industry’s favor. And fewer tire manufacturer-driven price increases are expected — a good thing not only for dealers and distributors, but also vehicle owners.

World Leaders in New Tire Sales (Fiscal year 2022; in billions of U.S. dollars)

TIRE MANUFACTURER

2022

2021

Michelin Group

$27.7

$26.9

Bridgestone Corp.

$22.8

$21.9

Goodyear Tire & Rubber Co.

$17.6

$14.9

Continental AG

$14.4

$13.9

Sumitomo Rubber Industries Ltd.

$7.1

$7.2

Pirelli & Cie SpA

$6.8

$6.3

Hankook Tire & Technology Co. Ltd.

$6.3

$6.2

Yokohama Rubber Co. Ltd.

$5.4

$5.2

Zhongce Rubber Group Co. Ltd.

$4.9

$4.5

Toyo Tire & Rubber Co. Ltd.

$3.4

$3.2

Cheng Shin Rubber Ind. Co. Ltd. *

$3.2

$3.6

Giti Tire Pte. Ltd.

$3.1

$3.0

*C H EN G S H I N D O ES B U S I N ES S A S M A X X I S I N T ER N AT I O N A L – U S A

ALL ESTIMATES IN THIS SECTION ARE THE RESULT OF MTD RESEARCH, UNLESS OTHERWISE NOTED.

MTD January 2023

1/12/23 11:46 AM

U.S. Passenger Tire Shipments

(in millions of units, rounded to nearest one-hundred-thousandth)

Overall U.S. Replacement Tire Sales Total value of 2022 replacement tire market: $61.4 billion

Year

Replacement

OE

2022

216.1

41.5

2021

222.0

37.5

2020

202.6

36.2

2019

222.7

45.1

SEGMENT

2022

2021

2018

217.0

47.0

Passenger

$38.0

$33.4

2017

209.3

46.0

2016

207.7

49.0

Light truck

$9.0

$8.1

2015

205.9

49.0

$11.7

$9.5

2014

206.6

46.3

$2.0

$1.9

2013

201.6

44.0

2012

192.0

40.5

Commercial truck OTR Ag

$.721

$.714

U.S. LIGHT TRUCK TIRE SHIPMENTS

A LOOK AT MARGINS

Average sales margins fluctuated from 2021 baselines. Passenger tire retail and light truck tire retail margins declined slightly — pushed downward by price hikes and other factors.

Meanwhile, wholesale passenger tire and new medium truck tire margins increased. Commercial medium truck tire retread margins saw the biggest gain.

U.S. AVERAGE Tire SaleS Margins

(in millions of units, rounded to nearest one-hundred-thousandth)

Year

Replacement

OE

2022

37.0

6.2

2021

38.1

5.6

2020

30.4

5.0

2019

32.0

5.9

2018

31.1

5.6

2017

30.8

5.4

2016

31.4

4.9

Segment

2022

2021

Passenger (retail)

28.2%

29.0%

2015

29.0

4.6

Passenger (wholesale)

12.0%

11.6%

2014

28.8

4.4

Light truck (retail)

25.0%

26.2%

2013

28.3

4.2

2012

28.3

4.1

Medium truck

16.5%

16.0%

Retread (medium truck)

19.0%

17.5%

DOMESTIC SHIPMENT REPORT

Reflecting the general drop in consumer demand that began around the middle of the year, overall U.S. replacement passenger and light truck tire shipments fell in 2022.

Passenger tire shipments at the replacement level declined by slightly less than 2.6%. Replacement light truck tire shipments dropped slightly less than 2.9% year-over-year.

However, OE passenger and light truck tire shipments climbed as automobile production gradually increased.

OE passenger tire shipments rose by 10%. OE light truck tire shipments also grew by around 10%.

Medium truck tire shipments — both replacement and original equipment — reflected the continued strength of the commercial truck tire market.

Replacement truck tire shipments grew by more than 20% versus 2021 levels, while OE truck tire shipments increased by around 9% year-over-year. 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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U.S. Medium Truck Tire Shipments

(in millions of units, rounded to nearest one-hundred-thousandth)

Year

Replacement

OE

2022

28.0

6.5

2021

22.7

5.9

2020

18.5

4.5

2019

18.9

6.5

2018

21.0

6.2

2017

19.2

5.7

2016

18.4

5.3

2015

18.0

6.3

2014

17.3

5.8

2013

15.7

5.0

2012

16.0

5.3

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Imports

Overall imports increased in 2022 THAILAND REMAINS BIGGEST EXPORTER TO U.S.

T

hailand remains the biggest exporter of tires to the U.S. market in three key categories — passenger, light truck and medium truck tires. And even though Thailand’s passenger and consumer tire exports to the domestic market actually slowed slightly in 2022, there’s no sign of the nation giving up its top spot in the near future.

Thailand has a 10-million-unit cushion in passenger tire shipments and a more than 14 million-unit lead when combining passenger and light truck tire units.

Full-year estimates show more than 164 million passenger tires were imported into the U.S. in 2022, up from 151 million in 2021. (That’s an 8% increase.)

A year ago, a country made the top 10 list if it shipped more than 3.9 million passenger tire units to the U.S. In 2022, that threshold was 4.2 million units, which meant Brazil, with 3.1 million imports, and Portugal, with three million, were both short of the top rankings. China imported 2.7 million passenger tires into the U.S. in 2022.

Outside factors influence all of these numbers and the war in Ukraine prompted some tire manufacturers to adjust — or sell off — their business operations in Russia. And while neither country is historically a large provider of tires to the U.S., the downturn still was noticeable. In 2021, 900,000 passenger tires were imported into the U.S. from Russia, compared to less than 650,000 in 2022. The difference was even more stark in Ukraine, with 447,000 passenger tires shipped to the U.S. in 2021, compared to about 153,000 shipped in 2022.

Demand for commercial truck tires in 2022 drove an incredible increase in imported units of nearly seven million tires. An estimated 24 million medium truck tire units were imported into the U.S. in 2022, up from 17.2 million tires in 2021. Eight of the 10 largest exporting countries posted giant double-digit year-over-year increases.

Thailand holds a comfortable lead over the others in this category.

The next-biggest exporter, Vietnam, increased shipments by more than 70% in 2022. That’s after a 56.8% increase from 2020 to 2021.

2022 U.S. Passenger Tire Imports

2022 U.S. MEDIUM Truck Tire Imports

Country

2022

2021

Country

2022

2021

% Change

Thailand

32.0

33.3

-3.7%

Thailand

10.4

6.9

+49.1%

Mexico

21.9

21.1

+3.9%

Vietnam

3.2

1.8

+69.8%

Indonesia

17.3

14.9

+16.4%

Japan

2.4

1.7

+39.3%

South Korea

14.8

12.6

+17.0%

China

1.7

1.0

+64.1%

Vietnam

10.6

9.9

+7.3%

Canada

1.4

1.5

-3.8%

Japan

10.2

8.1

+25.6%

South Korea

1.1

0.9

+21.1%

Canada

9.7

10.0

-2.9%

India

0.7

0.5

+33.7%

Chile

6.0

5.5

+10.1%

Spain

0.5

0.3

+32.7%

Malaysia

4.2

3.5

+19.6%

Brazil

0.4

0.3

+46.1%

Philippines

4.2

2.9

+41.9%

Germany

0.3

0.3

-14.5%

(in millions of units, rounded to nearest one-hundred-thousandth)

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03_MTD_Facts.indd 32

% Change

2022 U.S. Consumer Tire Imports

(in millions of units, rounded to nearest one-hundred-thousandth)

Country

2022

2021

% CHANGE

Thailand

39.1

40.6

-3.8%

Mexico

24.9

24.3

+2.4%

Indonesia

19.8

17.1

+15.4%

South Korea

16.9

14.6

+15.8%

Vietnam

16.2

14.0

+16.2%

Canada

14.2

14.6

-2.5%

Japan

12.8

10.3

+24.3%

Chile

6.6

6.3

+4.4%

Philippines

6.3

4.3

+44.3%

Malaysia

4.4

3.5

+23.4%

(in millions of units, rounded to nearest one-hundred-thousandth)

MTD January 2023

1/12/23 11:46 AM

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MIDWEST 12/12/2022 1/4/2023 8:34:46 9:15:23 AM AM

Distribution

LEADERS OF THE PACK

INDEPENDENT TIRE DEALERS MAINTAINED DOMINANCE IN 2022

U.S. CONSUMER TIRE RETAIL MARKET SHARE BY CHANNEL Channel

2022

2021

2020

Independent tire dealers

66.0%

66.0%

65.5%

Auto dealerships

9.5%

9.0%

9.5%

Mass merchandisers

9.0%

9.0%

8.0%

Warehouse clubs

8.0%

8.0%

8.0%

Tire company-owned stores

6.0%

6.0%

6.0%

Miscellaneous outlets

1.5%

2.0%

3.0%

DISTRIBUTION KINGS

Despite a notable increase in consolidation, independents remained the dominant channel when it comes to wholesaling tires.

TireHub, the joint venture between Bridgestone Americas Inc. and Goodyear Tire & Rubber Co., continued to grow its footprint, opening seven locations during the fourth quarter of 2022 alone.

(By the end of the year, it had 79 locations throughout 34 states.)

National Tire Warehouse, the joint venture between Michelin North America Inc. and Sumitomo Corporation of America, says it operates more than 100 locations.

U.S. Consumer TIRE Wholesale Market Share By Channel

IN THE CLUB

Warehouse clubs moved 8% of consumer tires at the retail level during 2022, according to MTD estimates.

The store count for Sam’s Club, the largest warehouse club operation in the U.S., was flat 2022 versus 2021. Costco Wholesale Corp. added 21 locations to its domestic footprint. BJ’s Wholesale Club grew its store count to 233 this past year.

NUMBER OF WAREHOUSE CLUBS IN THE U.S. WAREHOUSE CLUB

2022

2021

2020

Sam’s Club

600

600

557

Costco Wholesale Corp.

579

558

554

BJ’s Wholesale Club Inc.

233

229

219

LARGEST DEALERSHIPS ADDED STORES

Looking at other large tire retailers and the number of stores they operate, Walmart Auto Care Centers and Bridgestone Retail Operations maintained the same number of locations 2022 versus 2021.

Mavis Tire Express Services Corp., Discount Tire, Monro Inc., Goodyear Tire & Rubber Co. and Les Schwab Tire Centers Inc. all added locations during 2022. (Mavis was listed as the largest independent tire dealership in the U.S. on the 2022 MTD 100, published this past July.)

TBC Corp. and Ford Quick Lane Tire & Auto Centers winnowed their store counts during the last 12 months.

OTHER TOP TIRE RETAILERS IN THE U.S. Retailer

2022 Locations

Walmart Auto Care Centers

2,580

Bridgestone Retail Operations

2,200

Mavis Tire Express Services Corp.2

1,146

Discount Tire

1,122

1

Pep Boys — Manny, Moe & Jack

919

Monro Inc.

865

Ford Quick Lane Tire & Auto Centers

790

TBC Corp.

613

Channel

2022

2021

2020

Independent wholesaledistributors

80.0%

80.0%

80.0%

Tire company-owned

10.0%

8.0%

8.0%

Goodyear Tire & Rubber Co.4

565

Miscellaneous outlets

10.0%

12.0%

12.0%

Les Schwab Tire Centers Inc.5

460

1

3

2 LARGEST TIRE DEALERSHIP, IN NUMBER OF LOCATIONS, IN THE INCLUDES BRIDGESTONE COMPLETE AUTO CARE, TIRES PLUS, HIBDON TIRES PLUS AND WHEEL WORKS LOCATIONS; MAVIS WAS LISTED AS THE 5 4 LES SCHWAB ONLY INCLUDES COMPANY-OWNED STORES 2022 MTD 100; 3INCLUDES TIRE KINGDOM AND NTB TIRE & SERVICE LOCATIONS; INCLUDES GOODYEAR AUTO SERVICE AND JUST TIRES LOCATIONS;

A

t the retail level, nobody moves more tires than independent tire dealers — and that has only become more pronounced with time. In 2017, independent tire dealerships sold 61.5% of all retail tires in the U.S. Since then, that percentage has increased to 66%.

It was a good year for auto dealership service sales as customers continued to hold onto their vehicles, while new cars remained in short supply.

A source close to Walmart told MTD that the company’s Auto Care Centers, many of which were shuttered during the first year of the COVID-19 pandemic, had a solid year in tire sales.

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03_MTD_Facts.indd 34

MTD January 2023

1/12/23 11:46 AM

MTD_0123.indd 35

1/4/2023 9:15:24 AM

Replacement tire market share

‘Flight to value’ continues

ECONOMIC UNCERTAINTY INFLUENCED CONSUMER BRAND PREFERENCE

T

he consumer “flight to value” continued in 2022. Impacted by interest rate increases, the higher price of goods and general economic uncertainty, many tire buyers opted for less-expensive brands.

Consumers also are holding onto their vehicles longer and some are putting off needed service, including tire replacement. (According to S&P Global Mobility, the average age of a personal vehicle in the United States is now 12.2 years. By contrast, some 20 years ago, the average vehicle age was 9.6 years.)

And dealers are reporting that many consumers who have been out of the market for the last several years are now experiencing sticker shock due to the tire price hikes of 2021 and 2022.

36

03_MTD_Facts.indd 36

2022 REPLACEMENT PASSENGER TIRE BRAND MARKET SHARE

2022 REPLACEMEnT LIGHT TRUCK TIRE BRAND MARKET SHARE

BRAND

2022 SHARE

BRAND

2022 SHARE

Goodyear

10.5%

Goodyear

9.0%

Michelin

9.5%

BFGoodrich

7.5%

Bridgestone

7.0%

Bridgestone

6.5%

Firestone

7.0%

Firestone

6.5%

Continental

5.0%

Falken

5.0%

Michelin

6.5%

BFGoodrich

4.0%

General

6.0%

Cooper

3.5%

Cooper

5.5%

Hankook

3.5%

Toyo

5.5%

Yokohama

3.5%

Yokohama

5.0%

General

3.0%

Hankook

4.0%

Kumho

3.0%

Falken

3.5%

Nexen

2.5%

Hercules

3.0%

Toyo

2.5%

Kumho

2.5%

GT Radial

2.0%

Continental

2.0%

Hercules

2.0%

Multi-Mile

2.0%

Multi-Mile

2.0%

Nexen

2.0%

Pirelli

2.0%

Pirelli

2.0%

Kenda

1.5%

Nitto

1.5%

GT Radial

1.5%

Sailun

1.5%

Kenda

1.5%

Sentury

1.5%

Maxxis

1.5%

Sumitomo

1.5%

Sailun

1.5%

Uniroyal

1.5%

Big O

1.0%

Big O

1.0%

Kelly

1.0%

Mastercraft

1.0%

Mastercraft

1.0%

Maxxis

1.0%

Nitto

1.0%

Primewell

1.0%

Sumitomo

1.0%

Others

9.5%

Others

10.0%

(based on an estimated 216.1 million units)

(based on an estimated 37 million units)

MTD January 2023

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MTD_0123.indd 37

1/4/2023 9:15:27 AM

OE tire market share

Have car sales turned the corner?

RECENT NUMBERS SHOW PROMISE

D

espite prohibitive interest rates and lean dealer inventories, there are indications that new light vehicle sales are heading in the right direction.

In August, light vehicle sales in the U.S. registered positive for the first time in more than a year, according to LMC Automotive, an automotive industry intelligence provider. September’s sales showed “incremental improvement,” yet “fell short of expectations” after full-month results had been tallied.

Sales rebounded in October, growing by 11.4% on a year-over-year basis to 1.17 million units, according to LMC research.

Here’s a breakdown of consumer tire brand market share on North American vehicles.

2022 NORTH AMERICAN OE CONSUMER TIRE MARKET SHARE TOTALS

(based on 47.7 million consumer tire units)

BRAND

2022 SHARE 2021 SHARE

Goodyear

22.3%

22.6%

Michelin

18.7%

18.7%

Continental

14.5%

14.5%

Bridgestone 13.3%

13.3%

Hankook

7.6%

7.5%

Pirelli

3.9%

3.8%

Firestone

3.7%

3.7%

Falken

3.5%

3.4%

General

2.4%

2.4%

2022 North American OE Consumer Tire Market Share Pirelli..............................34% Continental..................26% Bridgestone...................25% Dunlop.......................... 6% Michelin..........................5% Hankook..........................3% Yokohama........................1%

BMW

Mercedes-Benz

Subaru

Continental....................32%

Bridgestone...................56%

Pirelli.............................25%

Continental.....................27%

Bridgestone...................14%

Falken...............................7%

Tesla

Ford

Cooper............................5% Dunlop.............................4%

Continental....................40%

Yokohama........................3%

Michelin.........................25%

Yokohama.........................2%

General Motors

Kumho.............................5%

Continental......................6%

Toyo...................................5%

Hankook.........................6%

BFGoodrich......................2%

BFGoodrich...................5%

Hankook..........................2%

Dunlop............................5%

Dunlop............................1%

Toyo...................................5%

General.............................1%

Yokohama.........................4%

STELLANTIS

Falken...............................3%

Goodyear......................36% Michelin........................22% Bridgestone.................14% Firestone........................12% Continental.......................6% Hankook...........................6% General.............................2% Pirelli................................2%

Honda

Kumho

2.4%

2.3%

Yokohama

2.0%

2.0%

BFGoodrich

1.8%

1.8%

Nexen

1.6%

1.5%

Hyundai/Kia

Toyo

1.2%

1.2%

Dunlop

1.0%

1.0%

Others

0.1%

0.3%

03_MTD_Facts.indd 38

Goodyear..........................7%

Goodyear........................7%

Goodyear......................24% Michelin.........................24% Continental.....................20% Hankook.........................10% Pirelli.................................9% General.............................7% BFGoodrich......................3% Bridgestone.....................2% Toyo..................................1%

Michelin........................25% Goodyear........................25% Bridgestone...................17% Continental.....................16% Hankook..........................9% Yokohama......................4% Firestone..........................3% Pirelli................................1%

38

Michelin.........................11%

Hankook.........................40% Kumho.............................30% Nexen............................21% Continental.....................9%

Nissan Continental....................28% Michelin........................27% Goodyear........................15% Falken...............................8% Bridgestone....................6%

Goodyear.......................33% Michelin........................14% Bridgestone...................13% Firestone.........................7% Continental......................6% Yokohama.......................6%

Goodyear........................20% Pirelli.............................10% Hankook...........................5%

Toyota Bridgestone..................25% Michelin........................25% Goodyear........................12%

Firestone........................3% General.............................1%

Volkswagen Continental.....................46% Kumho.............................14% Goodyear.......................13% Hankook.........................11%

Falken...............................4%

Falken.............................9%

Nexen.............................4%

Bridgestone....................5%

BFGoodrich....................3%

Nexen...............................2%

General...........................3%

Volvo

Pirelli...............................3%

Pirelli...............................50%

Hankook.........................2%

Continental....................30%

Kumho.............................2%

Michelin........................20% MTD January 2023

1/12/23 11:47 AM

MTD_0123.indd 39

1/4/2023 9:15:27 AM

Distribution

Location, location, location

WHERE TIRE DEALERSHIPS ARE CONCENTRATED

W

here are the United States’ roughly 29,000 independent tire dealerships located?

The South Atlantic region has the biggest concentration of independent dealerships. The New England region has the smallest number as a percentage of the total. The below charts drill down into the details by region and state.

Independent Tire Dealer Locations By Region and State

West North Central

(Based on 29,000 total)

New England

5%

Massachusetts.................................. 37% Connecticut........................................ 23% New Hampshire................................. 16% Maine.................................................. 14% Vermont............................................... ..5% Rhode Island.........................................5%

Middle Atlantic

8%

Pennsylvania...................................... 50% New York............................................ 27% New Jersey........................................ 23%

East North Central

15%

Ohio..................................................... 31% Illinois.................................................. 23% Michigan............................................. 19% Indiana................................................ 15% Wisconsin........................................... 12%

40

03_MTD_Facts.indd 40

10%

Missouri.............................................. 31% Minnesota........................................... 18% Iowa..................................................... 16% Kansas................................................. 15% Nebraska............................................. 10% North Dakota...................................... ..5% South Dakota.........................................5%

South Atlantic

22%

Florida...................................................29% North Carolina.....................................19% Georgia.................................................18% Virginia................................................. 13% South Carolina.................................... ..9% Maryland............................................. ..7% West Virginia.........................................3% Delaware................................................1% Washington, D.C...................................1%

East South Central

7%

Tennessee............................................36% Alabama...............................................32% Kentucky.............................................. 23% Mississippi.............................................9%

West South Central

13%

Mountain

8%

Pacific

12%

Texas..................................................... 63% Louisiana.............................................. 14% Oklahoma............................................. 13% Arkansas.............................................. 10%

Colorado............................................... 23% Arizona................................................. 22% Utah...................................................... 15% Idaho..................................................... 11% Nevada................................................. ..9% New Mexico........................................ ..9% Montana............................................... ..7% Wyoming.............................................. ..4%

California.............................................. 75% Washington......................................... 13% Oregon.................................................. 10% Alaska................................................... ..1% Hawaii................................................... ..1% NUMBERS ARE BASED ON TIRE DEALERSHIPS’ SELF-DISCLOSURES AND ADDITIONAL MTD RESEARCH.

MTD January 2023

1/12/23 11:47 AM

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Dave Marks

dmarks@itdgusa.com | 925.658.0323

MTD_0123.indd 41

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Distribution

What brands do dealers sell?

PLENTY OF NEW PRODUCTS HIT THE MARKET IN 2022

E

ach July, MTD publishes the MTD 100 — a ranking of the largest independent tire dealerships in the U.S., based on number of stores. The MTD 100 also lists how many outlets each dealership has and the tire brands those dealerships sell.

Here are the most frequently mentioned brands on the 2022 MTD 100 and how many stores carry them.

BRANDS LISTED IN THE MTD 100 2022 RANKING BRAND 1

Michelin

2

BFGoodrich

DEALERSHIPS/ LOCATIONS

2021 RANKING

TIREMAKER/ MARKETER

PRODUCT

TARGET CATEGORIES

WHEN ANNOUNCED

Pirelli Tire North America Inc.

P Zero Corsa

Passenger, CUV

January

Nokian Tyres plc

Outpost AT and Outpost APT

LT, CUV, SUV

January

Nokian Tyres plc

Hakkapeliitta RS

Passenger

January

Nokian Tyres plc

Hakkapeliitta RS SUV

SUV

January

Kumho Tire USA Inc.

Road Venture AT52

LT, SUV

February

Nitto Tire U.S.A. Inc.

Nomad Grappler

CUV, SUV

March

Omni United

Renegade A/T Pro

LT, SUV

March

Pirelli Tire North America Inc.

P Zero All Season Plus

Passenger

March

Hankook Tire North America

Ventus S1 AS

Passenger

March

Hankook Tire North America

Hankook Ion

Passenger

March

Toyo Tire U.S.A. Corp.

Celsius Sport

Passenger, CUV, SUV

March

American Tire Distributors Inc.

Ironman All Country HT

LT, CUV, SUV

April

100/7,679

1

90/6,686

3

Bridgestone Americas Inc.

Bridgestone Potenza RE-71R5

Passenger, CUV

April

Sailun Tire Americas

ERANGE EV

Passenger

April

Bridgestone Americas Inc.

Bridgestone DriveGuard Plus

Passenger, CUV

April

TBC Brands LLC

Mud Claw Comp MTX

LT, CUV, SUV

May

3

Bridgestone

77/6,280

2

4

Continental

74/5,660

4

5

Firestone

72/5,664

5

TBC Brands LLC

Sumitomo Encounter HT2

LT, CUV, SUV

May

Nexen Tire America Inc.

Roadian ATX

LT, SUV

June

Continental Tire the Americas LLC

General AltiMAX RT45

Passenger

June

Horizon Tire Inc.

Crossmax PLT

Passenger

June

Yokohama Tire Corp.

Advan Neova AD09

Passenger

July

Performance Plus Tire

Kontio WhitePaw Classic

Passenger

August

TBC Brands LLC

Multi-Mile XTX AT4S

LT, CUV, SUV

August

5

Goodyear

72/6,206

6

7

Uniroyal

66/4,453

8

8

Yokohama

65/5,577

9

9

General

64/6,156

7

10

Cooper

59/6,418

10

Goodyear Tire & Rubber Co.

Goodyear Electric Drive GT

Passenger

September

Sumitomo Rubber North America Inc.

Falken Azenis FK460

Passenger

September

Hankook Tire North America

Laufenn X FIT HP

SUV

September

Bridgestone Americas Inc.

Firestone Firehawk AS V2

Passenger

September

Michelin North America Inc.

Michelin Defender 2

Passenger, CUV

September

Pirelli Tire North America Inc.

Scorpion Weather Active

LT, SUV

September

Pirelli Tire North America Inc.

Cinturato Weather Active

Passenger

September

11

Hankook

57/6,407

10

12

Falken

41/3,894

14

12

Toyo

41/3,898

12

14

Dunlop

40/5,270

13

15

Kelly

39/5,059

16

Yokohama Tire Corp.

Advan Sport V107

Passenger

September

American Tire Distributors Inc.

Hercules Roadtour Connect PCV

Passenger

October

Toyo Tire U.S.A. Corp.

Open Country R/T Trail

LT, SUV

October

Sumitomo Rubber North America Inc.

Falken WildPeak R/T

LT, SUV

October

TBC Brands LLC

Elodrado Sport Fury 4T4S

LT, CUV, SUV

November

Sentury Tire USA

Delinte Bandit Crossover DX-20

CUV, SUV

November

Sentury Tire USA

Landsail Stormblazer CLX-20

CUV, SUV

November

American Omni Trading

Thunderer Mach 1 Plus

Passenger

November

American Omni Trading

Thunderer Ranger 007

Passenger

November

American Tire Distributors Inc.

Hercules T1S TT1

LT

November

American Kenda Industrial Co. Ltd.

Vezda Touring 4S KR211

Passenger

November

Goodyear Tire & Rubber Co.

Wrangler Workhorse HT

LT, SUV

November

Continental Tire the Americas LLC

Continental ExtremeContact Sport02

Passenger

November

Apollo Tyres Ltd.

Vredestein Pinza HT

LT, CUV, SUV

November

Tireco

Milestar Patagonia A/T Pro

LT, SUV

November

Trimax Tire

Farroad All-Weather

Passenger

November

Trimax Tire

Kapsen

Passenger

November

15

Pirelli

39/5,059

14

17

Kumho

33/3,901

17

18

Nexen

28/3,130

19

19

Sumitomo

25/1,833

Not listed

20

Nitto

22/2,364

18

NEW PRODUCTS IN 2022

Independent tire dealers and distributors had new products to sell in 2022. More than 45 new consumer tires were unveiled to the media by tire manufacturers and marketers during the year.

A number of products were introduced during the 2022 Specialty Equipment Market Association Show, which was held in November.

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03_MTD_Facts.indd 42

MTD January 2023

1/12/23 11:47 AM

MTD_0123.indd 43

1/4/2023 9:15:28 AM

Tire sizes

That’s about the size of it

20-INCH TOPS THE LIST

HIGH-DIAMETER TIRES CONTINUE TO DOMINATE

W

hether replacement or original equipment, passenger and light truck tires are getting bigger and are becoming more plentiful. Looking at available passenger car tire sizes, based on rim diameter, two new 17-inch sizes, four new 18-inch sizes, five new 20-inch sizes, three new 21-inch sizes and three new 22-inch sizes joined the P-metric segment during 2022. The total number of P-metric sizes now available equals 390, up 17 from 2021.

Available Passenger Car Sizes by Rim Diameter 12-inch: 1

13-inch: 14

14-inch: 26

15-inch: 55

16-inch: 61

17-inch: 64

18-inch: 70

19-inch: 30

20-inch: 39

21-inch: 7

22-inch: 13

23-inch: 2

24-inch: 7

26-inch: 1

*SOURCE: TIRE & RIM ASSOCIATION

Compared to the passenger tire segment, fewer sizes were added to the LT metric population last year. Additions include one 19-inch size and one 22-inch size. There are 187 LT metric sizes available.

That’s two more than the total in 2021 and 11 more than the total in 2020.

Available LT Metric Sizes by Rim Diameter 14-inch: 6

15-inch: 19

16-inch: 38

17-inch: 31

18-inch: 35

19-inch: 2

20-inch: 23

22-inch: 20

24-inch: 10

26-inch: 3

*SOURCE: TIRE & RIM ASSOCIATION

In the LT high flotation category, one 16-inch size, two 17-inch sizes, three 18-inch sizes and one 20-inch size were added during 2022. The total number of LT high flotation sizes equals 113, seven more than in 2021.

Available LT High Flotation Sizes By Rim Diameter 14-inch: 2

15-inch: 22

16-inch: 2

17-inch: 22

18-inch: 18

20-inch: 23

22-inch: 9

24-inch: 10

26-inch: 3

28-inch: 2

*SOURCE: TIRE & RIM ASSOCIATION

44

03_MTD_Facts.indd 44

SWEET 17

Seventeen-inch sizes continue to dominate replacement passenger tire sizing, with five 17-inch sizes — including 225/65R17 — appearing in the replacement passenger tire top 10.

MOST POPULAR REPLACEMENT PASSENGER TIRE SIZES *SOURCE: USTMA

Original equipment replacement tire sizing continues to inch upward. Four 20-inch sizes appear in the current top 10, as do four 18-inch sizes. A 17-inch size (225/65R17) and a 19-inch size (235/40R19) round out the list.

The below sizes make up 35.5% of the OE passenger tire market.

MOST POPULAR OE PASSENGER TIRE SIZES *SOURCE: USTMA

Rank Size

% of total

1

275/60R20

6.7%

2

235/60R18

4.4%

Rank Size

% of total

3

235/45R18

4.2%

1

225/65R17

5.5%

4

235/40R19

3.3%

2

205/55R16

4.2%

5

225/65R17

3.2%

3

215/55R17

3.6%

6

235/65R18

3.1%

4

215/60R16

2.7%

7

275/55R20

3.0%

5

195/65R15

2.5%

8

225/60R18

2.6%

6

235/60R18

2.0%

9

235/55R20

2.5%

7

275/55R20

1.9%

9

245/50R20

2.5%

8

225/50R17

1.8%

8

265/70R17

1.8%

10

225/60R17

1.7%

Most Popular Replacement LT Tire Sizes *SOURCE: USTMA

Rank Size

% of total

1

LT265/70R17 9.1%

2

LT245/75R16 8.1%

3

LT275/70R18 7.0%

4

LT225/75R16 6.8%

5

LT245/75R17 5.7%

6

LT265/75R16 5.2%

7

LT285/75R16 4.1%

8

LT235/80R17 3.6%

9

35X12.5R20LT

10

LT275/65R18 3.4%

3.5%

MOST POPULAR OE LIGHT TRUCK TIRE SIZES

*SOURCE: USTMA

Rank Size

% of total

1

LT275/70R18 15.8%

2

LT275/65R20 13.1%

3

LT245/75R17 10.7%

4

LT285/70R17

9.0%

5

LT275/65R18

7.9%

6

LT235/65R16

7.7%

7

LT225/75R16

6.2%

8

LT265/70R17

6.1%

9

LT235/80R17

3.7%

10

LT315/70R17

3.3%

An 18-inch size (LT275/70R18) tops the most popular OE light truck size list. Five out of the current top 10 light truck OE tire sizes are in the 17-inch category.

MTD January 2023

1/12/23 11:47 AM

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Tire pricing

Will tire prices stabilize?

DATA SUGGESTS ‘LEVELING OUT’ COULD BE UNDERWAY

A

fter the large number of rapid-fire passenger and light truck tire price hikes that were enacted in 2021, fewer tire manufacturers took pricing actions during 2022.

However, the impact of price increases is still being felt by tire dealers.

In the August 2022 issue of MTD, retail tire pricing expert JP Brooks, director of business development for Duluth, Minn.-based Fitment Group, which analyzes millions of consumer tire data points, indicated that the market was still absorbing increases announced earlier in the year.

“If a company announced that a price increase will go into effect on Aug. 1, those prices aren’t instantly reflected in the market on Aug. 2,” he said at the time. “We could start feeling those in October or even November.”

Moderating inflation levels could work in the favor of tire dealers moving forward, says Brooks.

2022 Average Advertised PASSENGER Tire Prices

At press time, the national inflation rate was 7.1% — down from 7.7% the previous month. This corresponds with tire pricing trends that Fitment Group observed at the end of 2022.

The consumer price index in November “was the smallest 12-month increase since December 2021,” which “is good news for consumers,” says Brooks.

During most of 2022, advertised retail pricing on major brand tires increased by more than 9%, he reports.

But during the first week of October, “we saw our first small decline in advertised pricing, which continued through October and November. Does this mean tire prices are stabilizing? The data would seem to suggest that.”

But that doesn’t mean market dynamics and other factors that have driven price hikes are going away soon. “We still have a war in eastern Europe, COVID-19 issues in China and underlying inflation pressures remain.”

2022 AVERAGE ADVERTISED LIGHT TRUCK TIRE PRICES

Size

Major Brand

Low-Cost

Size

Major Brand

Low-Cost

225/65R17

$186.06

$113.48

LT265/70R17

$269.46

$191.00

205/55R16

$152.23

$87.22

LT245/75R16

$237.02

$149.83

215/55R17

$181.05

$99.62

LT275/70R18

$296.88

$214.43

215/60R16

$143.50

$89.31

LT225/75R16

$225.65

$141.63

195/65R15

$129.76

$75.05

LT245/75R17

$265.23

$176.54

*SOURCE: FITMENT GROUP (WWW.FITMENTGROUP.COM)

*SOURCE: FITMENT GROUP (WWW.FITMENTGROUP.COM)

2022 Pricing by Region (LT265/70R17) Region

OPENING

Value

Better

Best

Winter

East North Central

$199.50

$243.91

$268.60

$285.67

$238.20

East South Central

$203.23

$242.69

$267.36

$282.62

$237.12

Middle Atlantic

$170.97

$242.17

$265.60

$284.36

$225.92

Mountain

$205.41

$263.44

$273.69

$283.42

$241.82

New England

$173.55

$248.97

$277.95

$309.31

$247.68

Pacific

$202.18

$254.31

$268.64

$279.97

$241.62

South Atlantic

$191.96

$240.04

$268.47

$283.28

$236.43

West North Central

$202.33

$239.46

$266.12

$280.62

$237.91

West South Central

$200.98

$242.74

$265.05

$279.51

$239.34

* SOURCE: FITMENT GROUP (WWW.FITMENTGROUP.COM)

46

03_MTD_Facts.indd 46

MTD January 2023

1/12/23 11:47 AM

Tire pricing

ONLINE TIRE PRICING

More companies continue to move units via online tire ordering portals. Here’s a look at two tires and at what prices they were advertised through various portals at press time.

2022 Online Tire Pricing MILESTAR PATAGONIA MT (LT265/70R17)

MICHELIN LATITUDE TOUR HP (225/65R17) Website

Price

Website

Price

amazon.com

$168.97

bigchieftire.com

$270.99

belletire.com

$190.00

blackstire.com

$269.98

bigbrandtire.com

$180.99

discounttiredirect.com

$218.96

bigchieftire.com

$217.99

moderntirect.com

$221.37

bigotires.com

$240.99

onlinetires.com

$226.30

bjs.com

$216.99

prioritytire.com

$238.95

discounttiredirect.com

$185.25

simpletire.com

$202.96

dunntire.com

$189.98

tireagent.com

$261.13

gotodobbs.com

$202.95

tirediscounters.com

$263.00

integratire.com

$289.00

tireoutlet.com

$238.95

mavistire.com

$213.00

tires.com

$239.00

midas.com

$280.72

tireseasy.com

$196.68

ntb.com

$207.99

quicklane.com

$241.95

simpletire.com

$214.96

tirediscounters.com

$235.00

tireengineers.com

$182.99

tirerack.com

$214.37

tires.com

$202.00

vipauto.com

$222.67

walmart.com

$201.23

* SOURCE: FITMENT GROUP (WWW.FITMENTGROUP.COM)

* SOURCE: FITMENT GROUP (WWW.FITMENTGROUP.COM)

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

03_MTD_Facts.indd 47

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1/12/23 11:47 AM

Commercial tire market

Pedal to the metal

TRUCK TIRE DEMAND ACCELERATED IN 2022

O

ne year ago, when discussing the replacement medium truck tire market, a commercial truck tire sales veteran told MTD, “I’ve never seen growth like this!”

That momentum continued through 2022.

Full-year 2022 U.S. replacement medium truck tire shipments are expected to total 18 million units — a 20%-plus increase from last year’s levels. This follows a year-over-year increase of around 19% from 2020 to 2021.

Demand for medium truck tires was strong during the first nine months of 2022. And several manufacturers report that this positive momentum carried over into the fourth quarter.

“October and November were our biggest months,” a representative from one manufacturer told MTD. “Our November was off the charts.”

Continued growth could be offset by several factors. There’s been “a slowing in the personal consumption of goods,” says Bob Costello, chief economist at the American Trucking Associations, which could cause a drop in freight movement.

(In October, for-hire tonnage experienced the largest single monthly decline since the start of the COVID-19 pandemic.)

Factors working in the favor of truck tire suppliers and dealers include the continuing release of pent-up demand and fleets holding onto older trucks and trailers.

“The age of equipment continues to increase,” a representative from a large commercial tire dealership told MTD. “This will force fleets to spend more on maintenance, including tires.”

48

03_MTD_Facts.indd 48

2022 U.S. REPLACEMENT MEDIUM TRUCK TIRE BRAND (based on 28 million units)

BRAND

2022 SHARE

Michelin

13.5%

Bridgestone

13.0%

2022 U.S. RETREADED TRUCK TIRE MARKET SHARe (based on 15.5 million units)

BRAND

2022 SHARE

Bridgestone/ Bandag

44.0%

Michelin/Oliver

24.0%

Goodyear

22.0%

Vipal/Marangoni

5.5%

Continental

3.0%

Others

1.5%

Goodyear

9.0%

Yokohama

8.5%

Continental

8.0%

Firestone

7.5%

Double Coin

5.5%

Hankook

3.5%

Toyo

3.5%

Falken

3.0%

Sailun

2.5%

General

2.0%

Roadmaster

2.0%

Sumitomo

1.5%

Westlake

1.5%

Zenna

1.5%

Segment

BFGoodrich

1.0%

Radial Rear 331,855

232,560

Gladiator

1.0%

Bias Rear

443,290

391,680

Small

1.38 million 355,980

Others

12.0%

AG TIRE DEMAND GREW

Demand across all six ag tire segments that MTD tracks was up in 2022.

According to MTD estimates, more than 3.1 million ag tires were shipped in the U.S. last year — at both replacement and OE — a slight increase over 2021 totals.

“Worldwide and in the United States, demand for ag tires in replacement was very strong in 2022,” says Arvind Poddar, chairman and managing director, Balkrishna Industries Ltd. Here’s a snapshot of ag tire shipments, broken out by segment.

2022 AG TIRE MARKET SHIPMENTS BY SEGMENT Replacement

OE

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Plant capacities

North American Tire Plant Capacities AS OF JANUARY 1, 2023 (IN THOUSANDS OF UNITS) Company/Plant Location/Year Constructed

Non-Union ISO Certified

Passenger per day Light truck per day

Truck per day

Others per day

Total 0.04

Bridgestone Americas Inc. Aiken, S.C., 2013

0.0

0.0

0.0

0.04

La Vergne, Tenn., 1972

x x

0.0

0.0

5.8

0.0

5.8

Warren County, Tenn., 1990

x

0.0

0.0

9.4

0.0

9.4

Bloomington, Ill., 1965

x

0.0

0.0

0.0

0.30

0.30

Des Moines, Iowa, 1945

x

0.0

0.0

0.0

3.36

3.36

Wilson City, N.C., 1974

x

x

24.0

0.0

0.0

0.0

24.0

Aiken County, S.C., 1999

x

x

32.0

5.0

0.0

0.0

37.0

x

9.2

9.1

0.0

0.0

18.3

6.8

0.0

0.0

0.0

6.8

13.5

7.6

0.0

0.0

21.1

85.5

21.7

15.2

3.70

126.10

Joliette, Quebec, Canada, 1966 Monterrey, Mexico, 2007

x

Cuernavaca, Mexico, 1980

x

Total: Carlstar Group LLC Jackson, Tenn., 2009

x

x

0.0

0.0

0.0

26.0

26.0

Clinton, Tenn. (Dico), 1974

x

x

0.0

0.0

0.0

15.0

15.0

0.0

0.0

0.0

41.0

41.0

12.5

1.0

0.0

0.0

13.5

30.0

4.0

10.3

0.0

44.3

Total: Continental Tire the Americas LLC Sumter, S.C., 2013

x

Mount Vernon, Ill., 1973, 1988

x

x

Clinton, Miss., 2020

0.0

0.0

2.8

0.0

2.8

Total:

42.5

5.0

13.1

0.0

60.6

15.0

0.0

0.0

0.0

15.0

15.0

0.0

0.0

0.0

15.0

Giti Tire (USA) Ltd. Richburg, S.C., 2017

x

x

Total: Goodyear Tire & Rubber Co. Danville, Va., 1966

x

0.0

0.0

11.0

2.0

13.0

Fayetteville, N.C., 1969

x

31.0

10.5

0.0

0.0

41.5

Findlay, Ohio, 1917*

x

7.0

16.0

0.0

0.0

23.0

x

64.5

0.0

0.0

0.0

64.5

Texarkana, Ark., 1964*

x

24.0

8.0

0.0

0.0

32.0

Topeka, Kan., 1945

x

0.0

0.5

5.5

0.1

6.1

x

42.0

0.0

0.0

0.0

42.0

x

0.0

0.0

0.0

13.0

13.0

x

19.0

0.0

0.0

0.0

19.0

16.4

0.0

0.0

0.0

16.4

203.9

35.0

16.5

15.1

270.5

12.6

1.3

0.0

0.0

13.9

12.6

1.3

0.0

0.0

13.9

11.0

0.0

0.0

0.0

11.00

11.0

0.0

0.0

0.0

11.00

37.5

3.4

0.0

0.0

40.9

0.0

9.5

0.0

0.0

9.5

25.5

10.7

0.0

0.0

36.2

36.7

0.0

0.0

0.0

36.7

8.7

0.0

0.0

0.0

8.7

0.0

0.0

0.0

0.07

0.07

26.5

0.0

0.0

0.0

26.5

0.0

0.0

0.0

0.1

0.1

Lawton, Okla., 1978

Tupelo, Miss, 1984/1960*

x

x

Medicine Hat, Alberta, Canada, 1960 Napanee, Ontario, Canada, 1990

x

San Luis Potosi, Mexico 2017

x

Total: Hankook Tire North America Clarksville, Tenn., 2016

x

x

Total: Kumho Tire Co. Inc. Macon, Ga., 2015

x

Total: Michelin North America Inc. Ardmore, Okla., 1969

x

Dothan, Ala., 1979

x

x

Fort Wayne, Ind., 1961 Greenville, S.C., 1975

x

Greenville, S.C. (C3M), 1996

x

Piedmont, S.C. (Tweel), 2014

x

Lexington, S.C., 1981

x

Lexington, S.C., 1998

x

50

03_MTD_Facts.indd 50

x

x

MTD January 2023

1/12/23 11:47 AM

Company/Plant Location/Year Constructed

Truck per day

Others per day

Spartanburg, S.C., 1978

Non-Union x

ISO Certified

0.0

0.0

6.4

0.0

6.4

Starr, S.C., 2013

x

0.0

0.0

0.0

0.01

0.01

Tuscaloosa, Ala., 1945

Passenger per day Light truck per day

Total

19.7

5.5

0.0

0.0

25.2

Bridgewater, Nova Scotia, Canada, 1971

x

14.1

4.0

0.0

0.0

18.1

Granton, Nova Scotia, Canada, 1971

x

2.7

0.0

0.0

0.0

2.7

Waterville, Nova Scotia, Canada, 1982

x

0.0

0.0

7.0

0.5

7.5

Queretaro, Mexico, 2002

x

6.0

0.0

0.0

0.0

6.0

4.0

0.4

0.0

0.0

4.4

181.4

33.5

13.4

0.68

228.98

1.7

1.1

0.0

0.0

2.8

1.7

1.1

0.0

0.0

2.8

Leon, Mexico, 2018 Total: Nokian Tyres plc Dayton, Tenn, 2019

x

x

Total: Pirelli Tire North America Inc. Rome, Ga., (MIRS), 2002

x

x

1.2

0.0

0.0

0.0

1.2

Guanajuato, Mexico 2011, 2018

x

x

22.0

0.0

0.0

0.0

22.0

23.2

0.0

0.0

0.0

23.2

Total: Specialty Tires of America Inc. Indiana, Pa., 1915

x

x

0.92

0.18

0.05

2.35

3.5

Unicoi, Tenn., 1997

x

x

0.3

0.5

0.05

0.25

1.1

1.22

0.68

0.1

2.6

4.6

Tonawanda, N.Y., 1923

7.3

2.7

2.3

5.0

17.3

Total:

7.3

2.7

2.3

5.0

17.3

Total: Sumitomo Rubber USA LLC (Sumitomo Rubber North America Inc.)

Titan Tire Corp.

Bryan, Ohio, 1967

x

0.0

0.0

0.0

0.33

0.33

Des Moines, Iowa, 1943

x

0.0

0.0

0.0

11.25

11.25

Freeport, Ill., 1964

x

0.0

0.0

0.0

8.1

8.1

0.0

0.0

0.0

19.68

19.68

40.0

6.5

0.0

0.0

46.5

40.0

6.5

0.0

0.0

46.5 0.07

Total: Toyo Tire North America Manufacturing Inc. White, Ga., 2005

x

x

Total: Trelleborg Wheel Systems Spartanburg, S.C., 2015

0.0

0.0

0.0

0.07

Charles City, Iowa, 2012

x

0.0

0.0

0.0

0.5

0.5

Total:

0.0

0.0

0.0

0.57

0.57

Yokohama Tire Corp.

West Point, Miss., 2015

0.0

0.0

3.0

0.0

3.0

Salem, Va., 1968

x

x

25.7

1.1

0.0

0.0

26.8

Total:

25.7

1.1

3.0

0.0

29.8

0.0

14.2

3.8

0.0

18.0

0.0

14.2

3.8

0.0

18.0

Mexico City, Mexico

0.0

1.0

1.0

0.14

2.14

Tultitlan, Mexico

7.0

1.5

0.5

0.0

9.0

Tacuba, Mexico

8.0

2.5

0.0

0.0

10.5

Total:

15.0

5.0

1.5

0.14

21.64

10.0

7.2

2.8

0.0

20.0

10.0

7.2

2.8

0.0

20.0

U.S. Totals

537.32

87.48

56.60

74.83

756.23

Canadian Totals

45.00

13.10

7.00

13.50

78.60

Mexican Totals

93.70

34.40

8.10

0.14

136.34

TOTAL:

676.02

134.98

71.70

88.47

968.17

Grupo Carso/Euzkadi (Continental AG) San Luis Potosi, Mexico

x

Total: JK Tyre & Industries (formerly CIA Hulera Tornel)

Corporacion de Occidente SA de CV (Cooper Tire) Guadalajara, Mexico, 2005

x

Total:

x

*NOTES FORMER COOPER TIRE & RUBBER CO. FACTORY

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

03_MTD_Facts.indd 51

51

1/12/23 11:47 AM

Automotive service

On the menu

THE MOST COMMON AUTOMOTIVE SERVICES, PLUS AVERAGE TICKETS

R

espondents to MTD’s 2022 Tire Dealer Automotive Service Study report that auto service remains a big driver of overall sales. Overall, dealers who responded to the study expected that an average of 42% of their total sales would come from auto service during 2022.

Percent of Sales From Auto Service

BIG-TICKET ITEMS

When asked to cite their highest-ticket auto services, respondents cited air conditioning ($706.43) and engine repair, diagnostics and tune-ups ($682.14) as their number one and number two items, respectively.

Shocks/struts ($591.67) and chassis/

suspension work ($575) came in at number three and number four, respectively.

Bearings and seals ($435.71) rounded out the “top five.”

Mounting and balancing a tire ($31.59) was cited as the smallest-ticket item.

The average ticket for ADAS service was not available.

Auto Service Offerings

Average Ticket Per Job

AUTOMOTIVE SERVICE

PERCENT WHO OFFER SERVICE

AUTOMOTIVE SERVICE

AVERAGE TICKET (IN DOLLARS)

ADAS

18%

ADAS

N/A

Air conditioning

62%

Air Conditioning

$706.43

Alignment

77%

Alignment

$165.11

Battery/electrical

74%

Battery/electrical

$195.00

Bearings/seals

74%

Bearings/seals

$435.71

Brakes

74%

Brakes

$376.66

4%

Chassis/suspension

74%

Chassis/suspension

$575.00

81-90%

6%

46%

Chemicals (injector cleaners, etc.)

$141.43

91-99%

1%

Chemicals (injector cleaners etc.)

Cooling systems

64%

Cooling systems

$166.43

Electronic diagnosis

62%

Electronic diagnostics

$194.00

Engine repair/ diagnostics/tune-ups

67%

Engine repair/ diagnostics/tune-ups

$682.14

Exhaust systems

41%

Exhaust systems

$338.14

Ignition and spark plug

64%

Ignition and spark plug

$350.00

Mounting/balancing

90%

Mounting/balancing (one tire)

$31.59

Oil/lubrication

72%

Oil/lubrication

$73.26

Shocks/struts

79%

Shocks/struts

$591.67

Tire pressure monitoring systems

92%

Tire pressure monitoring systems

$98.13

Visibility (wipers)

72%

Visibility (wipers)

$35.58

PERCENT OF DEALERS

PERCENT OF AUTO SERVICE SALES

1-10%

26%

11-20%

8%

21-30%

7%

31-40%

10%

41-50%

15%

51-60%

12%

61-70%

11%

71-80%

TIRE SERVICE STILL RULES

It’s no surprise that tire pressure monitoring system service is the most common automotive service that tire dealers offer at 92%.

Slightly fewer respondents to MTD’s latest study report that they offer tire mounting and balancing, while 79% said they provide shock and strut replacement.

At the other end of the spectrum, 41% of dealers said they offer exhaust system service and 46% offer chemicals, injector cleaners and similar items.

Only 18% of respondents said they service advanced automotive assistance systems (ADAS), proving that there is still plenty of opportunity associated with this rapidly evolving technology that has become the norm on new vehicles.

52

03_MTD_Facts.indd 52

MTD January 2023

1/12/23 11:47 AM

LESS TIME CLICKING. MORE TIME FOR FIXING.

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MTD_0123.indd 53

1/4/2023 9:15:31 AM

Mergers and acquisitions

The next frontier

ACQUISITIONS TOOK A COMMERCIAL, WHOLESALE TURN

I

nflation and interest rates climbed during 2022 and the possibility of a recession hasn’t been ruled out. In theory, mergers and acquisitions should be slowing. But the opposite happened.

More tire dealership acquisitions (65) were announced during 2022 than were announced the previous year (43).

While most companies listed below did not reveal financials, the biggest retail deal — from a store count perspective — was Mavis Tire Express Services Corp.’s acquisition of Moosic, Pa.-based Jack Williams Tire Co., which was announced in April. The transaction included 39 retail stores, plus Jack Williams Tire’s wholesale division.

Tire Discounters Inc. was the most prolific acquirer based on total number of separate deals completed. The Cincinnati, Ohiobased company acquired more than 15 other tire dealerships.

Acquisitions picked up on the commercial tire front. No fewer than five primarily commercial tire dealerships — East Bay Tire

Co., McCarthy Tire Service Co. Inc., Pomp’s Tire Service Inc., Purcell Tire & Rubber Co. and Southern Tire Mart LLC — acquired other commercial tire dealerships.

Bridgestone Americas Inc.’s divestment of key GCR Tires & Service locations continued as Southern Tire Mart and Pomp’s Tire Service picked up 26 and 23 GCR locations, respectively.

On the wholesale side, U.S. AutoForce LLC acquired Max Finkelstein Inc. during the first quarter of the year.

During the second quarter, Monro Inc. sold its Tires Now wholesale division to American Tire Distributors Inc. (ATD).

Shortly thereafter, ATD sold its Canada-based National Tire Distributors wholesale business to Groupe Touchette Inc., which is based in Quebec.

Kingswood Capital Management LP acquired controlling interest in Turbo Wholesale Tire during the fourth quarter. ■

Buyer

Quarter

Acquired

# Of Outlets

Location(s)

Big Brand Tire & Service Inc./Percheron Capital

1Q

C&R Tire

5

Arizona

Big Brand Tire & Service Inc./Percheron Capital

1Q

Community Tire Pros

6

Arizona

Big Brand Tire & Service Inc./Percheron Capital

1Q

S&S Tire Auto Service Center

2

Arizona

Coast Tire & Auto Service

1Q

49% stake held by Goodyear Tire & Rubber 26 Co.

New Brunswick, Nova Scotia and Prince Edward Island

East Bay Tire Co.

1Q

Brandon Tire Supply

9

California

Leeds West Groups

1Q

Big O Tire

1

Oklahoma City, Okla.

North Carolina, South Carolina and Tennessee

McCarthy Tire Service Co. Inc.

1Q

Piedmont Truck Tires Inc.

10 service locations, 2 retread plants

Mavis Tire Express Services Corp.

1Q

Action Gator Tire

23

Central Florida

Mufflerman Inc.

1Q

Superior Tire & Auto Inc.

10

Ontario

Purcell Tire & Rubber Co.

1Q

Callender Tire Inc.

1

Commerce City, Colo.

Rice Tire Co.

1Q

American Fleet Services

1

Virginia

U.S. AutoForce LLC

1Q

Max Finkelstein Inc.

15

Maryland, New York, Pennsylvania and Virginia

Distribution Stox

1Q

Service de Pneus Lavoie Outaouais Inc.

4 distribution centers

Ontario, Quebec

American Tire Distributors Inc.

2Q

Monro Inc.’s Tires Now division

7 distribution centers

Kentucky, North Carolina, South Carolina and Tennessee

Big Brand Tire & Service Inc./Percheron Capital

2Q

MPG Tire & Auto Service

11

Tucson, Ariz.

K&M Tire Inc.

2Q

Midtown Tire

1

Rochester, N.Y. Delaware, Maryland, New Jersey, New York and Pennsylvania

Mavis Tire Express Services Corp.

2Q

Jack Williams Tire Co.

39 retail stores, 11 warehouses

McCarthy Tire Service Co. Inc.

2Q

Classic Tire Service Inc.

1

Barclay, Md.

McCarthy Tire Service Co. Inc.

2Q

LS Truck Tire Repair

5

New Jersey and Pennsylvania

McMahon’s Best-One Tire & Auto Service

2Q

Isaac Tire Inc.

1 retread plant

Indiana

Nebraskaland Tire, Kansasland Tire and Coloradoland Tire

2Q

McWhorter’s Auto & Tire Service

8

Texas

Pomp’s Tire Service Inc.

2Q

Dale’s Tire & Retreading Inc.

3 commercial locations, 1 retread plant

South Dakota

54

03_MTD_Facts.indd 54

*GB Auto Service Inc. rebranded itself as Sun Auto Tire & Service Inc. in June 2022.

2022 NORTH AMERICA TIRE DEALERSHIP MERGERS AND ACQUISITIONS

MTD January 2023

1/12/23 1:30 PM

MTD_0123.indd 55

1/4/2023 9:15:32 AM

Mergers and acquisitions Buyer

Quarter

Acquired

# Of Outlets

Location(s)

Pomp’s Tire Service Inc.

2Q

Whalen Tire

9 stores, 2 retread plants

Montana and Washington

Purcell Tire & Rubber Co.

2Q

Lowe Industrial Tire Service LLC

1

Grain Valley, Mo.

Purcell Tire & Rubber Co.

2Q

Tri-State Tire

1

American Fork, Utah

Leeds West Group

2Q

Canady’s Tire Corp.

1

Broomfield, Colo.

Leeds West Group

2Q

Big O stores owned by Willis Automotive

3

Iowa

Leeds West Group

2Q

Big O store owned by Craig Brown

1

Oklahoma

Sullivan Tire Co. Inc.

2Q

C&R Tire

2

Massachusetts

Sun Auto Tire & Service Inc.

2Q

Good Neighbor Tire & Auto Service

2

Oregon and Washington

Sun Auto Tire & Service Inc.

2Q

Superior Tire Inc.

4

Arizona

Tire Discounters Inc.

2Q

Butler Tires and Wheels

4

Georgia

Tire Discounters Inc.

2Q

Bobby’s Tire & Automotive

1 retail store, 1 commercial Virginia location

Tire Discounters Inc.

2Q

Freeman Tire

1

Cookeville, Tenn.

Tire Discounters Inc.

2Q

Hometown Tire

1

Monroe, Ga.

Tire Discounters Inc.

2Q

Huddle Tire

3

Ohio

Tire Discounters Inc.

2Q

K&G Tire

1

Buckner, Ky.

Tire Discounters Inc.

2Q

Kedron Tire & Automotive

1

Peachtree, Ga.

Tire Discounters Inc.

2Q

Taylor’s Tire

1

Greensboro, N.C.

Tire Discounters Inc.

2Q

Thompson Tire

7

Virginia

Big Brand Tire Service Inc./Percheron Capitol

2Q

AAA Auto Care

5

Nevada

Big Brand Tire Service Inc./Percheron Capitol

2Q

Christensen Automotive

12

Nevada

Group Touchette Inc.

3Q

National Tire Distributors Inc. (ATD)

26

Canada

Mavis Tire Express Services Corp.

3Q

Melvin’s Tire Pros & Auto Service Centers

5

North Kingston, R.I.

McMahon’s Best-One Tire

3Q

Best-One of Auburn

1

Auburn, Ind.

Pit Stop Auto Repair

3Q

Micky Franklin’s Tire & Auto

1

North Fort Myers, Fla.

Pomp’s Tire Service Inc.

3Q

Tredroc Tire Services Inc.

17 tire locations, 4 retread Illinois plants, 2 distribution centers

Pomp’s Tire Service Inc.

3Q

23 GCR Tires & Service locations

23 stores, 5 retread plants

Colorado, Montana, Oregon and Washington

Burt Brothers Tire & Service Inc.

3Q

Brereton Automotive & Tire

1

Provo, Utah

Southern Tire Mart LLC

3Q

26 GCR Tires & Service locations

26

California, Colorado, Nevada and Utah

Southern Tire Mart LLC

3Q

Redburn Tire Co.

13

Arizona, Colorado, New Mexico and Texas

Sun Auto Tire & Service Inc.

3Q

Coopers Auto Repair Specialists

2

Washington

Tire Discounters Inc.

3Q

Shadden Tire

3

Crossville, Tenn.

Tire Discounters Inc.

3Q

Dyke Tire Pros

1

Richmond, Va.

Tire Discounters Inc.

3Q

Koehler Tire

1

Madison, Ind.

Big Brand Tire & Service/ Percheron Capital

4Q

AA Auto and Christenson Auto

15

Nevada

Chapel Hill Tire

4Q

Bull Tire and Service

1

Cary, N.C.

Commercial Tire Inc.

4Q

1 GCR Tires & Service outlet, 1 retread plant 1 store, 1 retread plant

Spokane, Wash.

Kingswood Capital Management LP

4Q

Turbo Wholesale Tire

1 distribution center

California

Sullivan Tire Co. Inc.

4Q

Central Tire

2

Maine

Sun Auto Tire & Service Inc.

4Q

TGK Automotive Specialists

24

Arizona and Minnesota

Sun Auto Tire & Service Inc.

4Q

Toscalito Tire & Automotive

5

California

Tire Discounters Inc.

4Q

Dellinger’s Tire

1

Chesapeake, Va.

Tire Discounters Inc.

4Q

Fred’s Tire

1

Columbus, Ga.

Tire Discounters Inc.

4Q

Arne’s Tire

1

Blairsville, Ga.

Tire Discounters Inc.

4Q

Leete Tire & Auto

8

Virginia

56

03_MTD_Facts.indd 56

MTD January 2023

1/12/23 11:48 AM

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“I’m 93 years old and just getting started.”

“In this industry you’re surrounded by good people. Being named Modern Tire Dealer’s Tire Dealer of the Year is a tremendous honor. It might be the biggest honor I’ve received.”

– Bob Dunlap Chairman and CEO, Dunlap & Kyle Co. Inc.

DOTY_0123.indd58 2 MTD_0123.indd

1/10/2023 1/10/23 4:40:37 3:12 PMPM

WE WANT TO HEAR FROM YOU!

Nominate a candidate for MTD’s 2023 Tire Dealer of the Year Award Established in 1993, Modern Tire Dealer’s Tire Dealer of the Year Award is the oldest, most prestigious honor of its kind.

Each year, Tire Dealer of the Year Award candidates are evaluated in five categories:

WHAT’S NEW IN ALIGNMENT EQUIPMENT THE LATEST ON TIRE PRICING

WITH THE BEST PEOPLE, ‘YOU’LL NEVER LOSE’ BOB DUNLAP IS OUR TIRE DEALER OF THE YEAR

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

September 2022 | Vol. 103, No. 9 | $10 | www.moderntiredealer.com

Do you know an independent tire dealer who excels in these areas? Nominate him or her today!

DEADLINE FOR ENTRIES IS MAY 26, 2023 To nominate, go to: www.moderntiredealer.com/awards For more information, contact MTD Editor Mike Manges at mmanges@endeavorb2b.com

DON’T MISS YOUR CHANCE TO RECOGNIZE AN OUTSTANDING TIRE DEALER! DOTY_0123.indd 3 MTD_0123.indd 59

1/10/23 3:12 PM 1/10/2023 4:40:53 PM

SEMA Show/AAPEX coverage

NEW SERVICE TOOLS TAKE THE SPOTLIGHT

T

More products from the SEMA Show/AAPEX

BY MIK E M AN GE S & M ADDIE GEHR IN G

ire pressure monitoring sensors and scanners, wrenches and other tire service tools were on display during the recent Specialty Equipment Market Association Show and AAPEX events in Las Vegas, Nev. Here’s a detailed look at some of the tools and technologies that were highlighted.

WEGMANN FOCUSES ON SENS.IT RS

Wegmann Automotive USA Inc. is promoting its Alligator brand sens.it RS and tire pressure monitoring system.

The sensor has 99.7% vehicle coverage. It also replicates original equipment manufacturer functionality and is compatible with various tools, according to Wegmann officials.

In addition, Wegmann has created a universal TPMS service kit in its Alligator line. The kit works for 97% of all metal valve sensors in North America.

The benefit “is the simplification of only one tool, which helps speed up the maintenance and training process,” say company officials. “And a reduction in SKUs equals a reduction in dead stock.”

Bartec’s new RiteSensor Blue uses Bluetooth, which is commonly found in today’s electric vehicles.

Photo: Bartec USA LLC

BARTEC RITESENSOR BLUE WORKS WITH TESLA

Bartec USA LLC introduced its RiteSensor Blue, which is the newest development in its RiteSensor line. “This sensor is designed to meet the evolving requirements of electric vehicles (EVs) and make it more flexible for technicians,” says Scot Holloway, CEO of Bartec.

Prevous RiteSensor products worked on radio frequencies.

RiteSensor Blue uses Bluetooth, which is more commonly used in EVs. It comes pre-programmed for use with current Tesla Model 3 and Tesla Model Y vehicles.

Electric cars “are in full swing in the market and leading brands like Tesla use Bluetooth in their vehicles, so we are just keeping up with the changes,” says Holloway.

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The new Alligator sensor replicates OE functionality.

Photo: MTD

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SEMA Show/AAPEX coverage KEN-TOOL HIGHLIGHTS WRENCH KITS

Ken-Tool displayed torque wrench kits, tire inflators and other tire service tools at its SEMA Show booth.

The torque wrench line consists of a two-piece kit with a ¾-inch drive and another two-piece kit with a one-inch drive.

Doug Lee, sales manager for Ken-Tool, says the line is different from others because it shows technicians torque levels, rather than just making a clicking noise.

Ken-Tool’s new handheld tire inflator comes with an “over-pressure” setting, according to Lee. The company also displayed the Rust Rhino, a hub cleaner designed to quickly clean mating surfaces of truck wheel components.

MYERS TIRE SUPPLY DEBUTS MXP LINE

Myers Tire Supply introduced its MXP “Extreme Performance” line of tools, which includes two half-inch impact wrenches — the MTS53372 and the MTS53254; the MTDS53256, a one-inch impact wrench; a 3.5-ton floor jack; and two tool box/service carts — the MTD433723NG and the MTS393922NG. The MXP line will expand to include ratchets, socket sets and more, according to Myers officials.

Ken-Tool’s new torque wrench kits show torque levels, says Doug Lee, the company’s sales manager.

Myers’ new MXP line includes several tools.

Photo: MTD

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SEMA Show/AAPEX coverage SNAP-ON PROVIDES ADAS SOLUTION

Snap-on Inc.’s new Tru-Point advanced driver assistance system (ADAS) solution “not only checks ADAS-related alignment values, but it also monitors each step of the set-up procedure — making sure that the process was completed to meet (original equipment manufacturers’) safety specifications,” say Snap-on officials.

The system measures target height from the tire contact patch.

All information is shown in a digital touchscreen and Tru-Point prints out a report that technicians can show to customers.

Other features of Tru-Point include two wheel chocks, AC400 clamps, a vehicle information number scanner and more.

• 3D Mobile Wheel Alignment System • Fully automatic. Beam can be moved up and down • Compatible with all car lifts including 2 post lifts and mid-rise scissor lifts • Shortest distance of rolling run-out compensation in the industry, no need to wait during rolling • Dual display screens Tru-Point monitors each step of ADAS service set-up.

Photo: MTD

HAMATON U-PRO HYBRID SENSOR IS TESLA-COMPATIBLE

Hamaton Inc. displayed its new U-Pro Hybrid BLE (Bluetooth low energy) sensor that is designed for Tesla vehicles during the SEMA Show. The sensor is pre-programmed for the Tesla 3, the Tesla X and the Tesla Y and is a direct replacement for the Sysgration BLE sensor, according to Hamaton officials.

“It makes it easier for technicians to move faster through their shop with the Bluetooth feature,” says Ryan Dalton, Hamaton’s marketing manager. The clamp on the new sensor comes in two colors — black and graphite.

Hamaton also showcased its U-Pro Hybrid NFC and U-Pro Hybrid 2.0, which are programmed by the same app and are compatible with more than 25 ATEQ-manufactured tire pressure monitoring system tools.

• Fully Automatic. Super easy to operate • Leverless Center Post. Rim size up to 30" • Equipped with Wheel lift cart and a 12" display screen that shows the underside of the wheel when changing the tire

The new U-Pro Hybrid BLE sensor from Hamaton Inc. is preprogrammed for Tesla models.

Photo: MTD

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Business Insight

Are your bonus programs ineffective?

IT MAY BE TIME FOR A FRESH LOOK — AND A FRESH START By

Dennis McCarron

A

s you begin a fresh new year, considerable thought should be given to revising your company’s bonus program. While a one-size-fits-all approach isn’t appropriate, there are some choices that can help you maintain — and if applicable, revive — employee interest.

Let’s tackle the big issue first. Bonus programs require a start time and an end time. A bonus — sometimes called an incentive plan — is not a “set it and forget it” type of concept.

Human behavior studies have proven that if an incentive program goes on indefinitely, people lose interest. What’s worse, if you find that the program after too long a period isn’t producing results and you decide to end it, employee behavior worsens. This is known as entitlement.

You took something away that wasn’t’ working anymore, but employees relied on the incremental income stream.

Now you’re the bad guy!

Rip off that bandage if you have an ineffective bonus program and start fresh.

If you have technician or hourly salespeople bonus programs, it’s best to use a monthly or quarterly timeframe to begin and end.

For management bonuses, longer periods of six months to a year — you can pay portions along the way — is better. So every quarter, the sales and production bonus focus changes and every half or full year, the management bonus focus is modified.

The structure of your bonus program should fall into just a few categories.

For sales and technicians, it’s usually a small dollar amount for specific items sold or recommended.

The item should be fairly common, yet underperforming in your store, as well as highly profitable, like an alignment or air filter.

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If a bonus is too easy to achieve, it becomes an entitlement. If it’s too hard, it becomes an anchor on motivation.

End times are critical here, as many owners get caught in the trap of increasing the payout when performance slows. For example, an owner wishes to pay $1 for every alignment sold. In the first month, the store sells 90 alignments. In the fifth month, the store is back down to 30 alignments, so the owner “ups the ante” to $2.

This may revive interest, but the cost of the program just doubled.

Sometimes an owner may pay $10 per alignment, but employees have zero excitement around the program.

Store manager bonus programs usually are net profit-based. One of the most common is 10% of net. It seems pretty simple and it is widely in use, but let’s shine a light on its biggest flaw — store managers don’t control most fixed expenses. This creates an eventual mistrust of whether the net profit line is a “real” number, as many managers say.

There is an alternative — a gross profit minus payroll bonus program. The most control a store manager has over profitability falls into what gets sold, for how much and who got paid to do it. If a store manager is really good at motivating his people to sell items at the proper amount, but allows for a ton of overtime, it’s all a giant waste of time. This kind of bonus allows for nearly clear transparency, is easy to calculate on an ongoing basis and the manager has near complete control of the levers that build the payout.

The big benefit of this program is trust.

A net profit bonus has to wait a few days or a week after the close of the month to be calculated. A typical store manager doesn’t really understand rent factors or where advertising dollars are spent.

But a gross profit minus payroll bonus can be calculated on a weekly basis, so the manager knows what’s going on with his bonus the whole month.

What percentage should you pay? Each store is going to be a little different. A store that sells a lot of tires, but not much service, will have a lower dollar amount to apply and vice versa.

The simplest way to start off is to take what was paid out last year and reverse the math. If you paid your store manager $24,000 in performance bonus over the full year, look at gross profit minus payroll numbers.

What percentage is $24,000 of that?

The idea isn’t to pay managers less or create a program that is so lucrative to the employee that you have to stop it midway through because it’s bankrupting you. The idea is to create a transparent program the employees trust, can calculate on their own at any given point and gets reliably shaken up every so often to renew interest.

And for managers, every year the program should be tweaked — a small added payout to tires, a small added payout to payroll control — whatever the company needs to be more successful.

Bonuses should be a stretch, but not impossible to achieve. If a bonus is too easy to achieve, it becomes an entitlement.

If it’s too hard, it becomes an anchor on motivation. ■ 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

How sharing the wealth creates wealth

FOUNDERS OF GCR HIT ON A WINNING FORMULA THAT STILL WORKS By

Michael McGregor

T

he “GCR” in GCR Tires & Service did not always stand for “genuine, complete and reliable.” GCR, which is now owned by Bridgestone Americas Inc., was founded by three experienced tire industry operators who had all worked for the Firestone Tire & Rubber Co. in the 1960s.

The founders believed in two core concepts — one, that the store manager was the most important person in the organization, and two, that the way to attract and retain the best store managers was to share ownership with them.

While Les Schwab Tire Centers was experimenting with similar mechanisms out west in Oregon, concurrently in Texas, the GCR group built — in 25 years time — one of the most profitable and valuable retail and commercial tire businesses in the industry.

Bridgestone has sold dozens of GCR locations to independent commercial tire dealerships over the past several years. (The tire manufacturer has retained nine GCR stores.)

The core principles that built the original GCR organization still resonate today.

To get the story on the early days of GCR, I tracked down Jim Gauntt, GCR’s chief financial officer from the 1970s, and Ken Weaver, former president of U.S. and Canada commercial operations and chief financial officer of Bridgestone Americas, who worked at GCR beginning in 1984.

According to Gauntt, GCR started in 1945 when Balie L. Griffith left Firestone as a district manager and took over a store in Odessa, Texas, incorporating as the Balie Griffith Tire Company. By 1960, he wanted to retire, so he asked his son, Balie J. Griffith, to take over for him. Balie was the “G” of GCR. Harold Crawford, a district manager with Firestone, was contacted by Balie about partnering to buy a tire dealership in Abilene, Texas. Balie would only buy the dealership if an experienced man like Harold would run it for him, so in 1963, the Balie Griffith Tire Co. (“G”) put the Harold Crawford Tire Co. (the “C” in GCR) in business with a 51%-49% ownership split.

Operating this way, they opened and acquired two additional stores soon after.

Perry Rose was the southern division manager for Firestone, managing the Southeastern states and Texas. If an independent dealer wanted to buy any Firestone store or dealer, they contacted him.

With Rose’s blessing, Griffith and Crawford began acquiring Firestone company-owned and dealer locations in Odessa, Abilene, Midland, Brownwood and Sweetwater, Texas.

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Rose was coming down to the grand openings so often that they got to know him well. In 1970, they enticed him to take over some stores in Austin, Texas. The ‘R” in GCR was now in place.

Each of the three principals brought unique strengths to the combination, according to Weaver. Griffith was strong in real estate, Crawford was an excellent tire buyer and Perry Rose was a retail expert.

By the time the partners reached nine stores — each store separately incorporated — accounting had become a bit challenging.

Rose recruited Jim Gauntt, an experienced operations manager from Firestone’s Atlanta, Ga., office. When Gauntt got to Austin in 1971, they bought out a tire dealer and a Firestone store in Beaumont, Texas; a dealer in Corpus Christi, Texas; and Balie had built another store in Odessa.

By the end of 1971, they were at 13 stores.

From the beginning, the partners required individual store managers to buy 25% of the ownership of the location that they operated. They would go to the bank with the store manager to borrow the $5,000 needed for his 25% of the $20,000 typical equity capitalization. Then Balie Griffith Tire Co., Harold Crawford Tire Co. and Perry Rose Tire Co. each bought 25% of the store.

“They did several things that I thought were really clever, one of which was they gave managers ownership,” says Weaver.

“Again, you had to buy it, but they believed retail is all about store management.

“With that, everybody is an owner and as I’ve learned in the private equity business, there’s a heck of a difference between an owner and an employee. Everybody ate out of the same bucket, interests were aligned and we all did well or poorly together.”

The partners also paid well to get the best people. Gauntt recalls that “in addition to 25% ownership, managers got 10% of an operating profit bonus, each and every year.

“If the store made $200,000, they got $20,000 off the top, in addition to their salary. The managers would run the store just like it was their own — which in fact, it was.”

Topping all that off, every employee participated in a long-term profit-sharing trust.

Employees contributed 5% of their salary to the profitsharing trust and depending on how the store or group did overall, the company would match it up to an additional 15%.

“It mattered to everyone in their store that the store made money,” says Gauntt.

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1/4/2023 9:15:41 AM

Mergers and Acquisitions

The founders of GCR believed in two core concepts — one, that the store manager was the most important person in the organization, and two, that the way to attract and retain the best store managers was to share ownership with them.

Photo: Bridgestone Americas Inc.

The trust grew to be a substantial amount of money as “The result of this is they were hiring Firestone district the funds were invested in the stock market and real estate. managers to run stores,” says Weaver. “Bill Blankenship Several store managers made over $1 million each on this started in Houston and he had one store. He kept opening alone, when proceeds were finally distributed. new stores and became a market manager. For him, it was kind of a pyramid.

Weaver believes the profit-sharing trust “allowed every“They took great pride in that whoever one to build personal wealth and it kept the plank holder was for a market, they turnover low.”

When the company expanded into put his name on that market. In Houston, ‘You let them have a piece Houston, Bill Blankenship, another Firethose stores were called ‘Bill Blankenship of the action, they will do stone district manager, was hired to run Firestone’. Again, it was all about ‘How can we get the individual store and market the first store in that market. a better job.’

As the partners opened more stores people as involved and committed to the in Houston, they found they needed local supervision, so business as we possibly could?’” they created the market manager position for Blankenship.

However, as the business grew, with all of the stores set up This entitled him to get ownership in all the stores that he as separate C-corporations, things got way too complicated. supervised, so Griffith, Crawford and Rose each relinquished Gauntt says that “in 1980, we sat down and decided, ‘Why part of their combined 75% ownership and gave Blankenship don’t we merge Balie Griffith Tire Co., Harold Crawford 10% of each of the stores he ran.

Tire Co. and Perry Rose Tire Co. and we will figure out the

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Mergers and Acquisitions ownership of what that’s worth and what all these stores are worth and you’ll all own your share of the stock in a group called GCR?’” This simplified everything to the point that they wound up opening outlets all over the state — eventually growing to 93 stores.

Granted, their timing was perfect as the Texas economy was booming, but their structure allowed them to grow quickly — especially for those days.

“We hired good people like Ken Weaver, for example,” says Gauntt. “When you get good people like that, it just makes your job easier. We could acquire quality store managers.

“You give them 25% ownership and if they see it growing every year, they perform well. They considered it their store — even though they had GCR as a majority owner — and we required them to run it like a GCR store.”

Weaver remembers that the company instituted standards of excellence that “were simple, robust and understood by everyone.”

These included 10% operating profit to sales; at least $2 of gross profit for every dollar of payroll; 90 days of inventory; and less than 10% past due accounts receivable on commercial accounts.

“Morale was outstanding” continues Gauntt. “We made sure that we had a lot of fun in our business. We had contests every year that if you ran your store and made your budget and GCR made the total budget, we’d take a trip.

“We went to Hawaii three or four times for an annual meeting — taking wives and kids. We’d been all over — just about every year for the 17 years that I was there.”

Perry Rose, Harold Crawford and Balie Griffith were all very active up until about 1983, when they promoted Cliff Windham, who was one of their market managers, to general manager.

They made Windham and Gauntt vice presidents and told them to run GCR and they would only answer to the

board once a month. Crawford had a health scare in 1985 and started talking about selling his stock to get his estate squared away. Griffith figured out how much his stock was worth, but Crawford decided not to sell.

“We made him such a good offer that Perry Rose said, ‘If you make me that same offer, I’ll sell my stock,’” says Gaunt.

It was at this time that John Nevin, CEO of Firestone, and Jay Rosensen, Firestone’s chief operating officer, caught wind of the fact that Rose was planning to sell his stock, so they contacted GCR and asked to buy all of it.

‘Morale was outstanding. We made sure we had a lot of fun in our business.’

GCR was doing $97 million in annual revenue in 1987 in 93 total stores — 80 retail locations and 13 commercial locations. Although the exact details of the transaction have been lost with the passage of time, I’m guessing the company sold for between 1x and 1.5x revenues. The transaction was solely for the operating company, as real estate was not included in the sale.

When asked why more companies don’t operate like GCR, Gauntt says “I cannot answer that. It confounds me. I don’t know why in the world they don’t because it’s a system that in any business that’s ever tried it, it’s worked.You let them have a piece of the action, they will do a better job. And that was the secret to our success, I promise you. We considered everybody a partner and treated them that way and we got good, quality people.”

Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/ automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael.mcgregor@focusbankers.com.

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1/4/2023 9:15:41 AM

Dealer Development

Stop, look and listen

ARE OLD HABITS HOLDING YOUR BUSINESS BACK? By

Randy O’Connor

T

he year was 2008. I was about three years into running a tire and service dealership. I remember running a group of stores where the owner — let’s call him Charlie — would make rare but impressionable visits.

While I was usually worried about the smallest details in order to make a good impression, I didn’t quite have a good grasp on the end game quite yet.

When Charlie arrived at the store, he spoke to everyone.

He always entered through the front door and went directly to the waiting room. He’d say hello and thank you to every single customer. Without knowing him, they all knew who he was.

At least that was my impression.

Over time, it occurred to me that this was one in a series of lessons that, through his leadership, would make a huge difference in the years to come. No reports, no audits, no reviews, no sit-down meetings — just leadership, all with a simple please and thank you.

Years later, having worked with hundreds of tire dealership owners, I’ve come to call that lesson “listening to the walls.”

Let me explain.

From the moment Charlie walked through the door, he worried about nothing but the impression of those people who were in his waiting room. Sure, he probably saw a million other things that I needed to manage better, but that wasn’t the point.

(Owners and managers, please take note!)

Charlie made a significant impression on our customers — and on me. My resolve was to figure out how to replicate his magic on a daily basis. So after closing time, I set a chair in the middle of the waiting room and sat in complete silence for several minutes.

It occurred to me that our technicianss walked through the very same door as Charlie multiple times, day in and day out.

They would then complete their work, pass back through the front door and hand work orders off to the service manager, while completely ignoring the customer.

The simple answer was for them to pause and do just as Charlie had done. “Ms. Jones, my name is John. I worked on your vehicle today and it’s ready. Thanks for your business.”

This would turn out to make a huge difference to our customers and to our business.

Having changed the customer experience in a small but significantly impactful way, I wondered how to do the same at scale. Call me crazy, but once again I took a seat in the showroom after hours and just listened. I listened to the walls. I moved to the bays and listened to the walls there. I even took a seat in the parking lot and yes, I listened to the “walls.” They spoke volumes — at least to me.

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You see, we’re creatures of habit. From a young age, we’re taught to arrive at school at a particular time, sit at the same desk and move on when the bell rings. It should be no surprise that as we grow, these habits entrench themselves in our lives.

Breaking habits or changing behaviors, as we discuss in our 20 Group meetings, can be some of the most difficult barriers to creating a successful dealership. Sometimes the best lessons come from breaking our patterns and habits. When it happens, it’s magical. You should try it.

Old habits limit us. We should work on changing them.

While sitting in a quiet shop all alone may seem crazy, I bet you’ll hear and see things you wouldn’t otherwise. Giving yourself an opportunity to gain a new perspective is something we all deserve. You’ll hear and see small things, like dusty furniture, old magazines, outdated point-of-sale material, untidy restrooms and unstocked refreshment areas. But you’ll also see some really big things.

If you keep an open mind, you’ll see pieces of your customers’ journey that can change their experience. You’ll see barriers to productivity and efficiency. You’ll notice things that have been in plain sight for years, but were never seen or heard.

Our habits limit us. We should work on changing them.

While you may not be crazy enough to plant a chair in your showroom and simply listen, there are so many ways to see and hear a fresh perspective. Start with simple changes. Take a different route to work. Observe. Open your store through a different door. Observe. You get my point. Change the behavior and observe. I’m willing to bet you’ll learn something you wouldn’t have otherwise.

Charlie’s leadership all those years ago led me to see things and change behaviors in ways I only came to appreciate later.

Whatever position you’re in, I challenge you to lead change for the better, as well. All you have to do is listen — even if no one is speaking. ■ 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.

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EV Intelligence

Tires are key to optimizing EV performance THE WRONG TIRE CAN REDUCE A VEHICLE’S RANGE By

Craig Van Batenburg

I

n 1999, the first Honda Insight gas/electric hybrid (HEV) was sold in America. It was the first hybrid in the United States.

(Toyota had introduced the Prius in Japan a couple years earlier.)

Bridgestone Corp. was contracted by Toyota to design a low rolling resistance tire, even before the Prius came out, as Toyota was under a mandate from California to sell zeroemission vehicles since 1996.

The Toyota RAV 4 was redesigned for that mandate and the tires on the sidewall were labeled “for electric vehicle (EV) use only.”

Later, Bridgestone designed and sold low rolling resistance tires for the launch of the 1998 Prius and the 2000 Insight. The Bridgestone tires for the Prius were the same construction as the Insight’s tires, but the Honda’s rim had a smaller width. It was a beginning. A lot of changes have happened since then.

Where are we now? Sales of EVs are booming. The term “low rolling resistance” is well-known. As you know, tires have a large effect on miles per gallon (MPG) and they also have a big impact on battery use, which I’ll cover in my next column.

Most drivers want a safe tire, one that lasts a long time and is fuel-efficient. When an EV or HEV rolls into your lot, do you suggest bolting on the original equipment (OE) tires that came standard on those vehicles or do you sell whatever you have in stock? There are also plug-in hybrids (PHEV) that come into your stores every day. What do your service advisors sell them?

What do they know about the customers’ buying motives? As I’ve noted in prior columns, you need to understand what motivates EV, HEV and PHEV owners before you can win their trust and sell to them.

The tires you sell and install on any HEV, PHEV or EV need to provide traction that’s as good or better than what the OE tire provides.

What happens after your customer leaves your store with a new set of tires? That pesky dash read-out of instantaneous MPG tells the story. What will customers do if it drops? Did you sell the wrong tires? Is your front counter staff ready to engage in that conversation?

If you have new salespeople, make sure they thoroughly understand the features and benefits of the tires you carry so

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they can help suggest the correct tires to the vehicle owner.

Make sure your salespeople are educated so they can make the best new tire recommendation.

Your salespeople also need to be aware of aftermarket vehicle modifications and how they can impact performance. My company, the Automotive Career Development Center (ACDC), has been educating technicians about EV, HEV and PHEV service since 2000. We received a call from Barry Mounce, a shop owner in Arkansas, a while back. (ACDC had sponsored an HEV training class at his shop.)

One of Barry’s customers had bought a year 2000 five-speed standard shift Honda Insight on eBay and flew to Colorado to drive it back. On the return trip, the car drove OK, but had warning lights on the dash. The owner discovered that its fuel economy was lower than what other Insight drivers were getting.

Barry called ACDC for help. We asked for codes and pictures of the car, as ACDC had the same one. One picture explained it. The car had been modified with small rims and tires to drop it two inches closer to the ground. It looked cool, but the wheel speed sensors were spinning at a much higher rate than expected, so the vehicle’s regenerative function was turned off.

Barry bought four factory rims and tires and the car was fixed.

Many people who modify their vehicles will sometimes run into problems they did not see coming when changing rims and tire sizes. As their trusted tire and wheel advisor, you will need to be ready for these possibilities.

Remember that whenever the driver of an EV, HEV or PHEV lifts their foot off the accelerator pedal, regenerative braking occurs. You do not need to have your foot on the brake to go into “regen” mode. Any loss of traction will take the vehicle out of regenerative braking — it will stop recharging the highvoltage battery — and go into hydraulic braking in case of an event that requires ABS. The tires you sell and install on any HEV, PHEV or EV need to provide traction that’s as good or better than what the OE tire provides. The same goes for rolling resistance. The wrong tire can reduce an EV’s range.

EVs are heavy, so weight is a factor, too. Again, make sure your staff is “trained up” so they can provide the best possible tire recommendation for the customer’s vehicle. ■ 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.

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1/6/2023 8:49:20 AM

Focus on Dealers

Sullivan Tire eyes more growth in 2023 ‘WE HAVE A LOT THAT WE’RE LOOKING AT RIGHT NOW’ By

Mike Manges

S

ullivan Tire Co. Inc. is in growth mode. The Norwell, Mass.-based dealership added four stores to its 90-plus location network this past year via the acquisition of C&R Tire, a two-store dealership with outlets in Worcester and Sturbridge, Mass., in May and the purchase of Central Tire, a dealership with retail and commercial operations in Sanford and Shawmut, Maine, several months ago.

MTD recently discussed what’s next with Joe Zaccheo, Sullivan Tire’s CEO, and Paul Sullivan, the company’s vice president of marketing. (Zaccheo was named Sullivan Tire’s CEO this past April. He’s been with the dealership for more than 25 years.)

In addition to more than 75 retail locations, Sullivan Tire has more than 15 commercial tire outlets and more than a dozen distribution centers. The company also operates three retread plants.

MTD: How would you describe Sullivan Tire’s business in 2022?

Zaccheo: We are up. We’re growing our business and our top line is (up) double digits versus last year.

Sullivan: More importantly, we’re up in the number of consumers we service each and every day.

Zaccheo: We (also) had a growth spurt in our retreading business. And our truck tire sales are showing an uptick versus last year.

MTD: What have some of your other bright spots been?

Zaccheo: Hiring has been a bright spot.

We lost a few (employees), but we’re net

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“We stay away from the bad news and focus on the positives,” says Joe Zaccheo, Sullivan Tire Co. Inc.’s CEO. The Norwell, Mass.-based dealership recently made some key acquisitions.

Photo: Sullivan Tire Co. Inc.

positive 100 employees. We’ve been able to lower our turnover. We’ve stepped up screening new employees.

We’ve upgraded all of our locations.

And we’re not open on Sundays, so we’re focusing on work-life balance. I think our message of family and taking care of our employees — we’ve done a better job with that.

Sullivan: We’re doing a much better job of onboarding people. And day-to-day communication throughout the company has been (a strong point.) We are out there in force, visiting locations.

MTD: Can you tell me about your latest acquisitions and why they’re important?

Zaccheo: Our acquisition in Worcester (and Sturbridge) was a company called C&R Tire.

We were one of its biggest suppliers. We had developed a relationship with them.

Worcester is a growing city and it was a market we wanted to get back into. We wanted to head west in Massachusetts.

This — along with the Sturbridge location — gave us that opportunity. And it will spin into other opportunities.

We also acquired a company called Central Tire, which is a microcosm of Sullivan Tire. They have commercial, wholesale, retreading and a little bit of retail. The stores came with a very loyal customer base. They’re very sales-oriented and we also had supplied tires to them.

Zaccheo: There’s a lot of factors. When acquiring existing businesses — especially ones we sell to — we know the culture, we know the employees and we know the customer base. It’s a more seamless transition. These companies are accepted in their communities.

Land in New England is very expensive and the cost of construction has gone through the roof. Building new is a longerterm play and a more expensive play.

MTD: What opportunities do you see in 2023 and beyond?

Zaccheo: As we look at (this) quarter, we know there’s a lot of talk about a recession.

There’s a possibility that when a car comes in, the owner may spread out their repairs over a period of time. That’s something we’re anticipating.

But we stay away from the bad news and focus on the positives. I think miles driven will probably be up (this) year. A lot is affected by gas prices and things are headed in the right direction from that standpoint.

Sullivan: We know the average automobile is close to 12 years old. And a set of tires today is expensive. People are looking for good value and they’re looking for trust.

Sullivan: We are honored to be part of the history and legacy of these businesses.

Zaccheo: We’re going to continue to look at electric vehicles and how to service them — making sure our employees are properly trained. We’re going to continue calibrating advanced driver assistance systems.

MTD: What are the advantages of growing through acquisitions versus building new stores in the New England market?

Sullivan: We have considerable opportunities to grow. We have a lot that we’re looking at right now.

MTD January 2023

1/12/23 11:49 AM

Focus on Industry

New Continental UHP summer tire targets enthusiasts ‘TRACKABLE STREET TIRE’ WILL BE AVAILABLE IN NEARLY 80 SIZES By

Mike Manges

C

ontinental Tire the Americas LLC is expanding its ultrahigh performance (UHP) tire lineup with the addition of the all-new Continental ExtremeContact Sport02 summer UHP tire, which is “geared toward enthusiasts who want to get the most out of their vehicles,” says Brian Beierwaltes, the company’s senior marketing manager.

Continental demonstrated the performance capabilities of the ExtremeContact Sport 02 during a recent ride-and-drive event in Palm Springs, Calif., that was attended by Continental tire dealers and distributors.

More than 90% of the tire’s sizes are available now. Twelve more sizes will be added — giving the product a total of 77 sizes.

The new tire features Continental’s SportPlus Technology, which provides enhanced handling, optimized grip and extended tread life.

It also comes with built-in tread wear indicators that provide pull-point recommendations for both wet and dry surface driving. And it is backed by a 30,000-mile warranty, as well as a 60-day customer satisfaction trial.

“We improved things from a performance perspective across the board — wet performance, dry performance and overall mileage,” says Beierwaltes.

“We’re constantly continuing to evolve and making sure we’re giving customers what they want.”

In designing the tire, “we made a specific, conscious effort to look at Audi, BMW and Porsche” models “to make sure we could fit almost the entire, broad spectrum.

“We built it based on what consumer needs are. We’ve always been a performancedriven company.” 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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‘A VERY HOLISTIC LINEUP’

In developing the new Continental ExtremeContact Sport02, “what we’ve tried to do is have a go-to product for dealers who can say, ‘I can rely on its performance. I will have that tire for 98% of everyone out there who wants it. And it’s packaged (in a way) I can be confident selling it,’” says Bjorn Glaser, project manager, performance tires, PLT, for Continental.

The new tire replaces the Continental ExtremeContact Sport.

“What we wanted to do is continue what we have in that tire and make it better in terms of incremental performance — the feel of the tire, increases in grip and response and overall dry and wet grip,” he adds.

The Continental ExtremeContact Sport02 tire is “technically not the most extreme” product in Continental’s United States ultra-high performance tire lineup, according to Glaser.

“There is the ExtremeContact Force, which is a streetable track tire. The ExtremeContact Sport02 is a trackable street tire.

“It’s focused on enthusiast street performance” but also daily driving, such as “commutes to work, taking your kids somewhere, your weekend fun-run. And you can also take it to the track.

“We offer a very holistic lineup — 91% (coverage) on Porsche sedans, excluding SUVs. For Audi, (it will fit) your higherend A3, S3 and S4 , RS3 and RS4, RS4 and RS5 — that type of vehicle.

“For BMW, essentially, everything that’s not an SUV” will be an appropriate fit for the new tire, says Glaser, who estimates that the UHP summer tire segment accounts for “about four to five million (units)” in the United States market.

Dealers who attended the launch of the Continental ExtremeContact Sport02were impressed by the tire’s performance.

The new Continental ExtremeContact Sport02 — which replaces the Continental ExtremeContact Sport — features Continental’s SportPlus Technology, which provides enhanced handling, optimized grip and extended tread life.

It will be available in nearly 80 sizes.

Photo: MTD

“This is not a tire that’s normally in my personal wheelhouse because of where I live and the vehicle I drive,” said Christopher Pierce, chief financial officer of RHD Tire, a Grand Rapids. Mich.-based wholesaler.

“But it was very impressive. I could drastically tell the difference” in performance.

When asked to comment on where the tire might fit within his company’s product screen, Pierce replied that “we don’t do a lot of summer performance tires, so I’m curious to see where we put it. I think it will fit well in our Chicago market.”

Keith Noble, who represented Whiteville, N.C.-based Black’s Tire & Auto Service at the event, is confident that the new tire will sell briskly, “especially in the metro markets, where you have more enthusiasts and higher socioeconomics. I think we’ll have a lot of success with it.

“Continental does a great job with the intangibles, too — outside of just the price of the tire. What comes with (the company’s products) is pretty impressive. It just gives us more selling points at the store level.”

Noble also likes the new tire’s size coverage.

“They’ve done a great job with the fitments.” SKUs “are so diverse now.”

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Products

New Pinza light truck tire hits market

Hankook brings Ion EV line to U.S.

Apollo Tyres Ltd. is expanding its Vredestein light truck tire line with the addition of the Vredestein Pinza HT, a highway all-season product. The Pinza HT sports an all-season tread compound, larger shoulder blocks for optimal cornering, large circumferential grooves for enhanced wet surface traction and other features. The tire comes with a 70,000-mile warranty – 50,000 miles for LT sizes – and is backed by a road hazard warranty.

APOLLO TYRES LLC www.vredestein.com

Hankook Tire America Corp. has introduced its first tires that are specifically for electric vehicles to the U.S. market.

Together, the ION evo AS and ION evo AS SUV are available in 26 sizes, for wheels ranging from 18 inches to 22 inches in diameter. The tires feature Hankook’s EVolution technology, which focuses on extended tread wear, noise reduction and enhanced grip. Both tires come with a 50,000-mile mileage warranty.

HANKOOK TIRE NORTH AMERICA www.hankooktire.com

Vogue adds new whitewall

BendPak unveils AP Series lifts

The new Classic White wide whitewall tire from Vogue Tyre & Rubber Co. is available in size 235/75R15 with a 1.5-inch whitewall design. The Classic White carries a T speed rating and features Vogue’s Miracle Tread compound, which contains extreme silica technology for enhanced traction and wet grip. The tire also offers an XL load range thanks to a robust belt and sidewall package.

VOGUE TYRE & RUBBER CO. www.voguetyre.com

BendPak Inc. has introduced its AP Series of two-post lifts with patent-pending features that are designed to make lifting electric cars and traditional internal combustion engine-powered vehicles safer.

Lifts in the series come with a swing arm design that provides under-vehicle clearance and extension and retraction. They also feature BendPak’s Automatic Swing Arm Resistance System.

BENDPAK INC. www.bendpak.com

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TBC rolls out Sumitomo HT2 The new Sumitomo Encounter HT2 from TBC Brands LLC is available in 52 metric and light truck tire sizes, fitting wheels ranging from 16 inches to 22 inches in diameter. The tire features wide circumferential grooves and wave-shaped lateral sipes for hydroplane resistance, curved shoulder grooves to minimize noise, a reinforced bead apex for enhanced stability and more.

TBC BRANDS LLC www.sumitomotire.com

Goodyear expands Wrangler line Goodyear Tire & Rubber Co. has added the Workhorse HT to its Wrangler light truck tire line. Backed by a 60,000-mile limited treadwear warranty, the Workhorse HT features a long-wearing tread compound for enhanced tread life and traction in wet, dry and light snow conditions. The tire comes in 34 sizes and targets pickup trucks and SUVs. GOODYEAR TIRE & RUBBER CO. www.goodyear.com MTD January 2023

1/12/23 11:50 AM

TPMS

Acura MDX – 2023

T

he tire pressure monitoring system (TPMS) continuously monitors all four tire pressure sensors and the system function whenever the vehicle is turned to the ON mode. If the TPMS detects low pressure in a tire, it alerts the driver by turning on the low tire pressure/ TPMS indicator and the appropriate tire indicator. If it detects a problem in the system, it turns on the low tire pressure/TPMS indicator (starts blinking).

FILL ASSIST OVERVIEW

• • • •

Vehicle ON mode; Vehicle speed is zero mph; Shift position is in P position/mode; and Increase/decrease rate of pressure ≥15 kPa (0.15 kgf/cm 2, 2.2 psi).

However, the fill assist function may not operate under the following conditions: • When increase/decrease rate of pressure does not reach 15 kPa within one minute; • When using a portable handheld compressor.

The fill assist function alerts the condition of the tire pressure when adjusting the tire pressure levels. The body control module monitors the variation of tire pressure with the tire pressure sensor signal and sends alerts about the condition of tire pressure by flashing the turn signal/hazard warning lights and emitting beeps from the keyless buzzer.

OPERATING CONDITION

The fill assist function operates when all the following conditions are met:

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

05_MTD_FocusOn-Products-TPMS.indd 79

This is the system diagram for the Acura MDX TPMS. Photo: Mitchell 1

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TPMS OPERATION

The fill assist function operates the turn signal/hazard warning lights and keyless buzzer in three modes, depending on the condition of the tire pressure. The system will also be activated when the tire pressure decreases (due to punctures, etc.) and when all the criteria of the operating condition have been met.

The system can only detect one tire that has the variation of tire pressure at a time. When inflating multiple tires consecutively, the system begins to monitor the first tire that reaches the operating condition. However, the tire pressures should be adjusted individually since the system is unable to detect which tire is within the operating condition first.

TPMS RESET PROCEDURES

NOTE: When working with a vehicle equipped with the electronic air suspension, be sure to set it to the leveling off mode to prevent unexpected operation. Refer to the Electronic Air Suspension System Service Precautions for the procedure. Do this procedure if any of the following was done: • Body control module was replaced; • Tire pressure sensor was replaced; • A known, good wheel with a tire pressure sensor from another vehicle was substituted; • A tire rotation was performed.

To ensure the body control module memorizes the correct sensor ID, the vehicle with the new tire pressure sensor must be at least 10 feet away from other vehicles that have sensors.

If the body control module was replaced, you must use the HDS to memorize the sensor IDs.

MEMORIZING THE TIRE PRESSURE SENSOR ID

The fill assist function operates the turn signal, hazard warning lights and keyless buzzer in three modes, depending on the status of the tire pressure.

Tire Pressure Sensor ID - Memorize (Without the HDS) Drive the vehicle for at least 40 seconds at a speed of 15 mph (24 km/h) or more, and all of the sensor IDs will be memorized automatically.

After memorizing, reduce the pressure in all four tires to less than the listed specification and check to see if the low pressure indicators come on.

SPECIFICATIONS

Photo: Mitchell 1

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Type

Lower Limit

2WD without 20 inch wheel, or AWD

190 kPa (27.6 psi)

2WD with 20 inch wheel

198 kPa (28.7 psi)

NOTE: The HDS can memorize the sensor ID of a new tire pressure sensor or a previously memorized sensor ID. Tire Pressure Sensor ID - Memorize (with the HDS) Select the following menu buttons on the HDS screen in sequence: • TPMS (System Selection Menu) • SENSOR ID LEARNING After memorizing, reduce the pressure in all four tires to less than the listed specification and check to see that the low pressure indicators come on.

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Type

Lower Limit

2WD without 20 inch wheel, or AWD

190 kPa (27.6 psi)

2WD with 20 inch wheel

198 kPa (28.7 psi)

TIRE PRESSURE SENSOR REMOVAL AND INSTALLATION

REMOVAL Each tire pressure sensor contains a lithium anode battery that is not removable. The complete tire pressure sensor should be disposed of according to local battery disposal guidelines or requirements. Improper battery disposal can be harmful to the environment.

MTD January 2023

1/12/23 11:50 AM

TPMS 8. Position the wheel so that the tire machine is next to the valve stem and will move away from it when the machine starts.

Apply a paste-type tire mounting lubricant; 9. With a dry air source, inflate the tire to seat the tire bead to the rim.

When installing, position the wheel at the specified 90-degree angle position.

INSTALLATION 1. Insert the tire pressure sensor in the rim hole; 2. Pull the tire pressure sensor straight through the rim hole perpendicularly to the rim hole. The letter “P” in the second diagram on this page shows the specification of range of zero to 10 degrees.

Make sure the tire pressure sensor is installed within the angle; 3. Position the wheel so that the tire machine is next to the valve stem and will move away from it when the machine starts; 4. With a dry air source, inflate the tire to seat the tire bead to the rim.

NOTE: Make sure the tire bead is seated on both sides of the rim evenly; 5. Adjust the air pressure to the specifications listed on the door jamb. ■

Photo: Mitchell 1

TORQUE SPECIFICATIONS 300 kPa (43.5 psi) Information for this column comes from the tire pressure monitoring systems data in ProDemandR, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com.

During installation, pull the tire pressure sensor straight through the rim hole. (P) shows the range of zero to 10 degrees.

Photo: Mitchell 1

NOTE: Images and procedures for removing the tire from the wheel are for reference only. Remove the tire from the wheel according to the procedure listed by your tire changing machine manufacturer.

1. Break the bead loose from the wheel. Note these items to avoid damaging the tire pressure sensor: • Do the outside of the wheel first; • Do not position the bead breaker of the tire changer too close to the wheel; • Position the wheel as shown.

2. Position the wheel so that the tire machine and the tire iron are next to the valve stem and will move away from it when the machine starts; 3. Check the tire pressure sensor housing for any cracks, deforms or damage and replace it, if necessary; 4. With a diagonal plier, cut around the valve bulb to make the removal of the valve assembly easier; 5. Pull out the valve assembly vertically through the rim hole using a valve stem puller tool; 6. Insert the tire pressure sensor in the rim hole. Apply a mild soap and water solution; 7. Pull the tire pressure sensor straight through the rim hole perpendicularly to the rim hole; 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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sales@trimaxtire.com 330-592-2325

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

PAGE

WEBSITE

1-800EveryRim OEM Wheels

14

www.1-800everyrim.com

31 Incorporated

79

www.31inc.com

ACDC

80

www.fixhybrid.com

Aftermarket Auto Parts Alliance Inc.

53

www.info.myplace4parts.com

American Omni Trading

33

www.thunderertireusa.com

American Tire Distributors

37

www.atd.com

Apollo Vredestein Tires Inc.

25

www.vredestein.com

Apollo Vredestein Tires Inc.

45

www.apollotrucktires.com

Armstrong Tire

73

www.armstrongtire.com

Aston Technologies

62

www.astontechnologies.com

Atturo Tires

57

www.atturo.com

Autel

5

www.autel.com

BendPak Inc.

67

www.bendpak.com/ergochair

BKT USA Inc.

11

www.bkt-tires.com

Bridgestone Tire

13

www.bridgestonetire.com

Continental Tire

23

www.continentaltire.com

EasyPay Finance

75

enrollment.easypayfinance.com/MTD-facts-issue

Gaither Tool Company Inc.

70

www.gaithertool.com

GRI Tires

26

www.gritires.com

GT Radial

39

www.gtradialsmartprogram.com

Greenball Corporation

69

www.greenball.com

Hunter Engineering Company

61

www.hunter.com/maverick

Independent Tire Dealers Group

41

www.itdgusa.com

K & M Tire Inc.

15

www.kmtire.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Linglong Americas Inc.

7

www.linglongtire.com

Marangoni Tread NA

49

www.na.marangoni.com

Maxxis Tires

43

www.maxxis.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Nokian Tyres Inc.

55

www.nokiantires.com

Pre-Q Galgo Corporation

27

www.pre-q.com

Prinx Chengshan North America Inc.

29

www.fortunetireusa.com

Sailun Tire Americas

9

www.erangetires.com

Sentury Tire USA

19

www.delintetires.com

Tireco Inc.

35

www.milestartires.com

Toyo Tires

21

www.toyotires.com/CelsiusSport

Transamerica Tire Company Ltd.

IFC

www.predatortires.com

Trelleborg Wheel Systems Americas Inc.

71

www.trelleborg.com/wheels/us

Trimax Tire

81

www.trimaxtire.com

WheelerShip LLC

65

wholesale.wheelership.com

Yokohama Off-Highway Tires America Inc.

17

www.yokohama-oht.com

ZC Rubber America Inc.

63

www.arisuntires.com

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MTD January 2023

1/12/23 11:50 AM

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1/4/2023 9:15:42 AM

2023

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1/4/2023 9:15:43 AM