Modern Tire Dealer - March 2020

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The Industry’s Leading Publication March 2020, Volume 101, Number 3

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DEPARTMENTS 2 Editorial

Window of opportunity Act now to maintain access to vehicle repair data

4 moderntiredealer.com

F E AT U R E S 21

Customer education drives results

24

Gaining traction

36

What to stock and how to sell

News and navigation tools for MTD’s website

6 Industry News

What’s next for Yokohama? Barna talks products, market trends and helping dealers with the ‘here and now’

Relevant statistics from an industry in constant motion

Sell-out trends take a dip: But raw material prices trend in the right direction

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48 Business Insight

Looking for the exit ramp? The four phases of the dealership transaction process

When should you invest in new tools and equipment?

It depends on how you answer three important questions

Runaway payroll: the killer of dealerships

50 Mergers and Acquisitions

Winter tire market is getting a boost from all-weather segment

Winter tire selling season plays out differently across the country

14 Numbers That Count 16 Your Marketplace

The power of car care clinics

44

Show (don’t tell)

How to market and sell ride control services

52 Business Insight

How to create a culture of accountability: Clarity is the key that unlocks performance

54 European Notebook

Getting bigger all the time: SUV tires are huge business in Europe

Focus on Dealers 56 K&M Tire celebrates 50 years of service Focus on Industry 57 Form plus function: Michelin uses dealer, consumer input to develop new X-Ice Snow tire 58 Commercial steals the show at Goodyear meeting

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60 TPMS

Hyundai Equus & Sonata, 2011-19

66 Products 67 Ad index 68 Classified

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ON THE COVER: PHOTO BY LORI L. MAVRIGIAN

Modern Tire Dealer is a proud member of:

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

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Editorial

Window of opportunity

ACT NOW TO MAINTAIN ACCESS TO VEHICLE REPAIR DATA By

Mike Manges

I

n the not-too-distant future — within two years, to be exact — nearly 90% of new cars sold in the United States will have the ability to transmit repair and diagnostic data to automotive repair facilities telematically.

Those facilities, however, might not include your own if efforts to ensure independent access to vehicle data are unsuccessful.

Imagine helplessly standing by while motorists are forced to take their vehicles to car dealerships for service work — bypassing your location because you’ve been “frozen out.”

Aaron Lowe, senior vice president, regulatory and government affairs, for the Auto Care Association, recently called vehicle data access “probably the most significant issue facing our industry.”

Given the fact that many of you derive a significant amount of your income from automotive service, it’s difficult to dismiss that as an overstatement.

Making sure that you have continued access to repair and diagnostic information should be a top priority.

I’m happy to report that significant progress is being made at both the national and state levels.

A draft of a federal bill that would ensure vehicle data access by independent auto service repair facilities recently gained bipartisan sponsorship, with the goal of being introduced in the near future.

We, as an industry, also have an opportunity to influence efforts that are taking place in Massachusetts — which, if successful, could become a template for other states.

You might recall that the original Right to Repair law in Massachusetts was passed in 2012.

This led to the establishment of an agreement between the Auto Care Association, the Coalition for Auto Repair Equality and vehicle manufacturers that required OEMs to make the same service information that they provide to their franchised dealers available to independent repair facilities.

Telematically transmitted vehicle data, however, was not included at that time, says Lowe. And that’s what the United States Vehicle Data Access Coalition, of which both the Auto Care Association and the Tire Industry Association are members, is trying to rectify.

Legislators in Massachusetts recently heard arguments for and against open access. They now have until May 15 to authorize an amendment to the states’s existing Right to Repair Law that would require car manufacturers to equip vehicles “with an inter-operable, standardized and open access platform” across all makes and models.

According to the authors of the amendment, “such platform shall be capable of securely communicating all mechanical data emanating directly from the motor vehicle via direct data connection to the platform.”

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Imagine standing by while motorists take their vehicles to car dealerships for service because you lack access to repair data.

In addition, the platform “shall be directly accessible by the owner of the vehicle through a mobile-based application and, upon the authorization of the vehicle owner, all mechanical data shall be directly accessible by an independent repair facility.”

By the way, the amendment also provides for “heavy-duty vehicles having a gross vehicle weight of more than 14,000 pounds.”

The coalition then must secure 13,000 signatures by June to “guarantee an appearance on the November ballot,” according to Lowe.

When it comes to ensuring open access, “a national approach would be better for everyone,” he says. “But because of the way Washington D.C. works, the states are a more politically dynamic place for us to go, where we can see a better discussion and faster action.”

How can you get involved? If you live in Massachusetts, “contact your legislators,” says Lowe. “Call and let them know that this is important to the future of your business and your customers.”

If you live in another state, bring the issue to the attention of your representatives.

“At the federal level, we would urge dealers to encourage members of Congress” to support pro-access legislation.

Make education a priority. “We’re doing a lot of education in the state of Massachusetts but nationally, legislators and the public need to be more aware of this issue,” he notes.

Vehicle data access is a consumer choice issue. But it also has serious ramifications for your business.

Let’s use this window of opportunity make our voices heard. ■ If you have any questions or comments, please email me at mike.manges@bobit.com.

MTD March 2020

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Mavis Tire Supply is buying 112 NTB Tire & Battery Centers in four major markets, making it the second largest tire dealership in the U.S. with 810 outlets.

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Goodyear news nabs 4 out of 10 top spots The Goodyear Tire & Rubber Co. took 4 out of the top 10 spots on our most-read news web items list last month (www.moderntiredealer.com). It was good news (Goodyear dealer conference updates) and bad (a huge profit loss for the company in 4Q 2019). However, the top spot went to Mavis Tire Supply Co.’s announcement that it was purchasing 112 NTB Tire & Battery Centers. The move elevated the company to the rank of the second largest independent tire dealership in the U.S. Mavis will acquire 112 NTB stores MTD exclusive: Dealers react to possible Les Schwab sale Michelin will raise PLT tire prices Goodyear unveils consumer tires at conference Goodyear.com tire sales are a ‘win-win’ for dealers MTD exclusive: PLT brand market shares today vs. 10, 20 years ago Goodyear: Commercial business beat the market in 2019 What’s next for Yokohama? Barna talks products, OE, distribution What’s next for K&M Tire?

Goodyear records $399 million profit loss in 4Q 2019

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MTD March 2020

Industry News

What’s next for Yokohama?

BARNA TALKS PRODUCTS, MARKET TRENDS AND HELPING DEALERS WITH THE ‘HERE AND NOW’

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eff Barna has seen a lot of changes since he was elevated to the top role at Yokohama Tire Corp. two years ago.

And he’s driven quite a few changes of his own design, in an effort to position the company for future growth.

In this interview, which took place at Yokohama’s office in Santa Ana, Calif., Barna reflects on the tiremaker’s 2019, which he calls a year of “high intensity and organizational resilience.” He also discusses Yokohama’s efforts to accelerate its product development cycle, the state of the consumer tire market and more.

MTD: Three months into the new year, can you provide an assessment of 2019? How did Yokohama Tire Corp. fare last year?

Barna: We dealt with a good deal of adversity, some of which was self-inflicted and some of which was market-related.

We aligned with our distributor partners in the fourth quarter of 2018 as a strategy to hedge against potential SAP (systems, applications and products) implementation implications. We found ourselves promoting stocking plans to help them in the event we had any supply disruptions, only to discover we ended up being flawless. So, it was a bit of a false alarm, but our dealers came into the new year of 2019 with high stocking levels in what we viewed was a soft market. In addition, we initiated a number of organizational initiatives. We now have more of an administrative backbone, so to speak. We also had tariffs to contend with, specifically on the OTR side of our business. (Editor’s note: Yokohama sources some of its OTR tires from China.)

I think 2019 was important to us because, dare I say, 2017 and 2018 were almost too easy. There were a lot of opportunities to streamline functions and processes and get more aligned around our strategy to make sure we deployed our resources the right way.

We now have more focus on what matters most. We launched nine new products on the consumer replacement side, which was a tremendous undertaking — not only for our marketing department and sales team,

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“Between 70% and 80% of our top and bottom lines are attributable to products that are five years old or younger,” says Yokohama Tire Corp. President Jeff Barna.

but also our customers, as they transitioned to new treads and upgraded from existing treads. But we came through with flying colors.

MTD: Four out of those nine products were part of your Advan line. Why are you placing renewed emphasis on Advan?

Barna: I don’t want to suggest we had an identity crisis, but we seemed to be drifting into the (realm) of becoming market generalists. 2019 was the 50th anniversary of our business in the U.S. and it gave us an opportunity to reflect and reconnect with our roots.

When Yokohama came to the U.S., our renown was for ultra-high performance, light truck, off-road, racing/motorsports — those arenas. And over time, as some companies do, (we said) “We have such good momentum in (a particular) market.

What if we had tires for the Camry or the Taurus?” All of a sudden, you begin to migrate toward trying to be everything to everyone. If you aren’t careful, it pushes you away from your true identity. 2019 gave us an opportunity to revisit the true purpose of our company and how we service the U.S. market.

MTD: Yokohama is accelerating its product development cycle. Why is it important to develop and introduce more tires, more quickly, and how does that play into your overall consumer tire product strategy?

Barna: It starts with self-awareness and transitioning away from being market generalists to a company that has a very strong identity in performance niches. We’ve had an opportunity to address gaps and significantly upgrade existing platforms.

We’ve been preaching product vitality and gaining a clear picture of what new products relate to our revenue. Today, between 70% and 80% of our top and bottom lines are attributable to products that are five years old or younger.

We’re coming to a close on product development acceleration. Importance will now be placed on governance to ensure that our products don’t age out. We’ve developed a very intentional, generational plan for the products we’ve recently brought to market. We’ll have a nice, steady turn of two to three treads per year. That’s the rigor around how we define product vitality. It also gives our salespeople new and exciting things to talk about.

MTD: What’s your take on the current North American consumer tire market?

Barna: The market is still unsettled.

We’re keenly aware of what can be on the horizon in terms of acquisitions, footprint rationalizations, etc. One thing I’ve been fascinated with as of late is that it seems very in vogue for a lot of our competitors to speak about very advanced scientific developments that may or may not come true. They spend a lot of time talking about electric and automated vehicles, and the internet of things, and you can go down the line. The reality — and our responsibility as a manufacturer — is to make sure there is static focus on real-time, current developments in the marketplace.

“Does that mean that Yokohama will not be vested in autonomous vehicle or ride-sharing technology?” asks Barna.

“That’s not what we’re saying. Those things, when they come to fruition, will be table stakes. We’re trying to keep everybody focused on what matters in the here and now.” — Mike Manges MTD March 2020

Industry News

Bites Michelin adds mechanical care Michelin North America Inc. has introduced a light mechanical maintenance service for trailers, called Michelin Mechanical Care. The service works in conjunction with the Michelin Commercial Service Network.

Mavis will acquire 112 NTB stores

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avis Tire Supply Co. is buying 112 NTB Tire & Service Centers, a move that will make it the second largest independent tire dealer in the U.S. TBC Corp., which owns the NTB brand, says the 112 stores are located in the Philadelphia, Boston, Atlanta and Chicago markets.

The deal will leave TBC’s retail business with 615 locations under the Tire Kingdom and NTB banners.

Additionally, TBC says National Tire Wholesale, the distribution company TBC created with Michelin North America Inc., will serve Mavis.

Pete’s Road Service honored Members of the California Tire Dealers Association (CTDA) honored Fullerton, Calif.-based Pete’s Road Service Inc. at its annual New Year Luncheon. Thirdgeneration owner Kyle Fletcher accepted a 50-year certificate.

Hankook ramps up capacity Hankook Tire America Corp. President Soo Il Lee told dealers during its recent Partner’s Day the company will increase capacity to 4.8 million tires in 2020. .

VAA to meet in April

The Virginia Automotive Association (VAA) will hold its annual convention, trade expo and golf tournament April 24-26 at The Omni Homestead in Hot Springs, Va.

USTMA welcomes Nokian Nokian Tyres plc has joined the The U.S. Tire Manufacturers Association (USTMA) as the organization’s 13th member. Nokian opened a passenger and light truck tire plant in Dayton, Tenn., in 2019.

AutoStream adds 6th store Rick Levitan and Doug Grills have acquired Brentwood Automotive, a 44-year-old tire and automotive business in Baltimore, Md., to expand their network of AutoStream Car Care locations.

Pirelli elevates Berardi Pirelli & Cie SpA has named Pietro Berardi the new CEO for its North America region, effective March 1, 2020, replacing Marco Crola, who will take the role of the region’s chairman.

RNR will grow in Indiana RNR Tire Express is planning a big expansion in Indiana, as the franchisor has signed an agreement to open 25 stores in the Hoosier state over the next five years.

There are three RNR locations in the state currently.

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Mavis Tire Supply is adding 112 NTB outlets currently owned by TBC Corp. to its portfolio. The stores are located in the Philadelphia, Boston, Atlanta and Chicago markets. Mavis will jump to No. 2 on the Modern Tire Dealer 100 list.

“Further consolidating our NTB footprint is consistent with our strategy to focus on core markets and entering into this agreement with Mavis makes great strategic sense for our company,” says Erik Olsen, CEO and president TBC. “The cash from this sale will serve to accelerate strategic initiatives that we are confident will support our underlying mission to exceed the expectations of all of our customers and partners spanning retail, franchise, wholesale, distribution and e-commerce.”

TBC says employees at the 112 NTB locations, plus those in supporting field leadership roles, will have the opportunity to join Mavis.

“This agreement with NTB will enable us to grow our footprint in key markets and we are excited to welcome the talented NTB team members affiliated with these 112 locations to the Mavis family,” says David Sorbaro, co-CEO of Mavis. “We know that NTB team members are highly committed to exceptional customer support, and we are confident that customers at these locations will continue to receive best-in-class service.”

“We’re looking forward to continuing our partnership with Mavis as we transition these locations and for years to come through our distribution relationship,” says Olsen. “I know that customers, first under the NTB brand and now with Mavis, will continue to experience an exceptional customer experience.”

This deal will result in Mavis and TBC flipping positions on the Modern Tire Dealer 100 list of largest independent tire dealers in the U.S. TBC will drop to the No. 4 spot, while Mavis will jump to No. 2. Monro Inc. remains in between them. Discount Tire maintains the top spot on the list.

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Two tiremakers hike prices

umitomo Rubber North America Inc. was the first tire manufacturer to announce a price increase for 2020, but weeks later Michelin North America Inc. followed its lead.

The prices of Falken tire lines went up March 1. Sumitomo said it would make “inline adjustments on a per-size basis,”

and that the increase would be up to 5%. The Michelin hike covers passenger and light truck tires under the Michelin, BFGoodrich and Uniroyal brands. Prices will increase by up to 7% in the U.S. and up to 5% in Canada on March 16. The increases may vary across specific products within each brand portfolio.

MTD March 2020

Industry News

Bites CMA opens warehouses China Manufacturers Alliance LLC (CMA) has opened two new warehouses in California to bulk up its inventory. The new space adds about 225,000 units — most of which are Double Coin truck tires.

TA network grows TravelCenters of America Inc. (TA) has opened a new TA Truck Service center in Robertsdale, Ala., offering commercial truck tires, emergency roadside service and other truck maintenance services.

Hercules plays March Madness

Discount Tire opens in Pittsburgh

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iscount Tire has moved into its 36th state with the opening of a store in Pittsburgh, Pa. The nation’s largest independent tire dealership turns 60 years old in 2020.

Reinalt-Thomas Corp., which does business as Discount Tire and America’s Tire, The first Discount Tire store in Pennhas grown steadily over the past seven years, sylvania is located in Pittsburgh. The opening stores in 11 new states. The company company has locations in 36 states. surpassed 1,000 stores in 2018, and has 1,033 as of the last edition of the Modern Tire Dealer 100.

“Pennsylvania has been a state we’ve wanted to be a part of for years,” says Darwin Medearis, assistant vice president of Discount Tire’s Great Lakes region. “We are excited to bring our excellent service, knowledgeable employees, fair prices, and comprehensive selection to this great state to meet the needs of our new customers.”

This college basketball season Hercules Tire & Rubber Co. will partner with eight NCAA conferences, representing 32 colleges and universities, in a marketing campaign for the postseason.

Asbun replaces Higgins Five months after naming TJ Higgins group president of Americas Tire Business for Bridgestone Americas Inc., the tiremaker has given him a new job and named Gabriel Asbun as his successor. Higgins will serve as global chief digital strategic officer.

Icahn acquires in Puerto Rico Icahn Automotive Group LLC has completed its acquisition of Tecnicentros Mundial, a six-location automotive service chain in Puerto Rico. They’ll be rebranded as Pep Boys stores, giving the chain 33 locations on the island.

Unimax hosts dealers Pneus Unimax Ltd. hosted a two-day congress for 425 retail tire dealers in Canada.

The company brought all its retail banners together for the second edition of its tire and auto services show.

Giti enhances program The GT Radial Smart Program from Giti Tire (USA) Ltd. will provide marketing tools and education, plus incentives for dealers.

More layoffs at Goodyear The Goodyear Tire & Rubber Co. plant in Gadsden, Ala., has laid off another 105 workers, on top of 740 who took voluntary layoffs in December. Goodyear says it is rightsizing staffing at this plant as it restructures its U.S. operations.

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New ownership for Tredroc Tire Services

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wnership of Tredroc Tire Services Inc. has transitioned to Don Barnes Jr. and Bob Barnes of Belle Tire Distributors Inc. following the December 2019 retirement of John Lavelle.

Lavelle, the founder of the commercial tire dealership that eventually became Tredroc Tire Services, has sold his ownership interest to the Barnes brothers.

Up until Lavelle’s retirement, all three men were owners of Tredroc Tire Services.

With the transaction, Tredroc Tire Services became a wholly-owned subsidiary of Don and Bob Barnes’ business portfolio, which includes Belle Tire, a consumer tire chain of 114 retail stores.

Don Barnes Jr. will serve as chairman of the board for Tredroc. Larry Jeffries, a former Bridgestone executive, will continue in his role as Tredroc’s CEO, a position he has held since 2018.

“Tredroc will continue to operate independently with the support of Don and Bob,” notes Jeffries. “We’re excited to be a part of Don and Bob Barnes’ businesses as well as part of Belle Tire, an independent dealership that’s been in business since 1922 and is currently the ninth largest independent retailer in the U.S. We look forward to the next steps in our plans for growth.”

Tredroc Tire Services holds the No. 13 spot on Modern Tire Dealer’s list of the largest independent commercial tire

dealers in the country and is No. 21 on MTD’s top retreaders list. On the Modern Tire Dealer 100 list of the nation’s largest independent tire dealers, Tredroc Tire Services is tied for No. 59 and Belle Tire is ranked No. 9.

Lavelle laid the foundation for the success of today’s Tredroc Tire Services in 1977 when he established Antioch Tire Inc. The single-store dealership in Antioch, Ill., expanded with additional employees, service trucks and geographic coverage. Major acquisitions were made in 2001 and 2003. An acquisition in 2007 led to the creation of Tredroc Tire Services.

Tredroc Tire Services operates 19 commercial service centers, four retread plants and 270 service trucks. The company is headquartered in Elk Grove Village, Ill., and has locations in Illinois, Michigan, Ohio, Indiana and Kentucky.

“John’s been instrumental in the commercial tire industry for more than 42 years, and he has touched many lives,” says Jeffries. “He worked tirelessly for his company, his employees and his customers over the course of four decades. Though I have only had a few years to work with John, I can say with sincerity he will not only be missed as a business mentor, but also as a friend. All of us at Tredroc wish him the best in his retirement.”

Lavelle was honored by employees at a celebration in mid-January. — Ann Neal MTD March 2020

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Industry News

Dates May 6-8 Heavy Duty Trucking Exchange, The Scottsdale Resort at McCormick Ranch, Scottsdale, Ariz.

(800) 576-8788 www.heavydutytruckingexchange.com

June 9-12 The Tire Cologne, Koelnmesse, Cologne, Germany +49 221 821-2960 www.thetire-cologne.com

July 14-17 Latin Tyre & Auto Parts Expo, Amador Convention Center, Panama, Republic of Panama (786) 293-5186 www.latintyreexpo.com

July 22-24 INA PAACE Automechanika Mexico City, Centro Citibanamex, Mexico City, Mexico (770) 984-8016 www.INAPAACEAutomechanika.com

Aug. 17-19 18th annual China International Tire Expo (CITEXPO), Shanghai World Expo Exhibition & Convention Center, Shanghai, China +86 10-8589-8181 www.citexpo.com.cn

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ire industry veteran Jeff Morgan has been named executive director of Dealer Strategic Planning (DSP 20 Group).

Introduced to the tire industry in 2007, DSP 20 Group offers independent tire dealers the opportunity to share best practices with one another in a structured, confidential forum; benchmark the performance of their businesses against the industry; and ultimately improve their profitability.

A dynamic leader with a proven track record of helping tire operations optimize their effectiveness and success, Morgan comes to DSP 20 Group from Bridgestone Americas Inc., where he directed the strategy and activities of Bridgestone Jeff Morgan has DSP as Retail Operations LLC’s new learning and development team. joined executive director.

Before that, he held several human resources positions with Bridgestone at both the director and manager levels. Morgan also has significant experience running tire stores.

DSP 20 Group is a property of Bobit Business Media, which also owns Modern Tire Dealer.

“We are excited to add Jeff to our DSP 20 Group organization,” says Modern Tire Dealer Publisher Greg Smith. “Jeff has extensive tire industry experience and understands the needs of tire dealers. His expertise and proven track record of success will be instrumental in helping DSP 20 Group members manage their businesses more efficiently and profitably.”

“I’ve spent my entire career optimizing the profitability of tire operations and am eager to help DSP 20 Group members, as well as prospective members, boost their bottom lines,” says Morgan.

Morgan can be reached at jeff.morgan@20DSP.com or (310) 533-2576.

Private equity firm to acquire $150 million stake in Apollo

Sept. 8-12 Automechanika Frankfurt/Reifen 2020, Messe Frankfurt, Frankfurt, Germany +49 69 75 75-0 https://automechanika.messefrankfurt.com

Sept. 13-17 American Trucking Associations Fall Meeting, Raleigh Convention Center, Raleigh, N.C. (703) 838-1763 https://tmcconnect.trucking.org

Nov. 3-6 Automotive Aftermarket Industry Week, including Automotive Aftermarket Products Expo (AAPEX), the Specialty Equipment Market Association (SEMA) Show and TIA’s Global Tire Expo, Las Vegas, Nev. (800) 876-8372 www.tireindustry.org

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Jeff Morgan joins Dealer Strategic Planning

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n affiliate of global private equity firm Warburg Pincus LLC plans to acquire a $150 million stake in Apollo Tyres Ltd. In late February, Apollo’s board of directors approved a transaction that will issue compulsorily convertible preference shares in the company to the affiliate.

The investment represents a primary capital infusion into Apollo and is subject to shareholder and regulatory approvals.

Apollo Chairman and Managing Director Onkar Kanwar said the investment represents a strong vote of confidence in Apollo’s business, management team and growth prospects. “I believe the company will benefit from the backing of a large financial investor of their pedigree, and our partnership will further strengthen Apollo Tyres’ board

and governance.” Vishal Mahedevia of Warburg Pincus says the private equity firm believes Apollo is well-positioned to build upon the position it has carved out within the industry.

“Warburg Pincus is excited to partner with the management team at Apollo Tyres in this journey and looks forward to supporting then during the next phase of the company’s growth,” he says.

The acquisition of the stake in Apollo is not Warburg Pincus’ first foray into the tire manufacturing sector. The company was a co-purchaser of Alliance Tire Co. in 2007 and helped the specialty tire manufacturer expand its operations. Alliance underwent another ownership change before being purchased by Yokohama Rubber Co. Ltd. in 2016. ■ MTD March 2020

MULTIPLE TERRAIN. MULTIPLE SURFACES.

MULTIPLE OPPORTUNITIES. This month, Alliance Tire Group (ATG) is launching two new OTR tires for the construction industry—the Galaxy Mighty Trac ND radial skid steer tire and the Galaxy Giraffe ND telehandler tire—and giving customers a closer look at the Alliance 585 radial for backhoes.

The common denominator: versatility. Not just for operators in construction, farming, logging, material handling and more, but for tire dealers, too. More than 2,000 SKUs so you can deliver the ideal fit for your customers’ needs. Pricing you can make a living with. And knowing that ATG has your back with service, aggressive warranties and our unique Warranty Wizard app. Contact your ATG rep and find out more.

BETTER VALUE. SMARTER CHOICE.

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©GETTYIMAGES.COM/COFFEEKAI

10%

Percent that China’s auto market is likely to decrease in the first half of the year due to the coronavirus outbreak. More than 25 million vehicles were sold in China last year.

SOURCE: WWW.AUTOINFLUENCE.COM

©GETTYIMAGES.COM/DREAMNIKON

Percent a tire’s tensile strength is improved by adding carbon black to untreated rubber.

Tires used to be white, due to the addition of zinc oxide, a strengthening agent which reinforces the rubber but turns tires bright white. Adding carbon black also increases tread life by almost 100 times.

26.8%

©GETTYIMAGES.COM/VECTOR SOURCE: WWW.HEMMINGS.COM

14

SOURCE: CHINA ASSOCIATION OF AUTOMOBILE MANUFACTURERS

1,000%

©GETTYIMAGES.COM/BONG HYUNJUNG

NumbersThatCount

Relevant statistics from an industry in constant motion

8.8%

Percent of general automotive repair shops that serviced hybrid vehicles in the past month.

Percent of general automotive repair shops that serviced electric vehicles in the past month.

SOURCE: IMR INC. WWW.AUTOMOTIVERESEARCH.COM

SOURCE: IMR INC. WWW.AUTOMOTIVERESEARCH.COM

WHAT ARE THE BIGGEST CHALLENGES TO INDEPENDENT AUTOMOTIVE REPAIR SHOPS?

42.6%

Finding time for hands-on training

31.6%

Staying up with advances in diagnostics

31.1%

29.2%

Keeping up with advances in vehicle technology

Finding good, knowledgeable and motivated technicians

SOURCE: IMR INC., WWW.AUTOMOTIVERESEARCH.COM

19 inches

The height of the 1963 Hillman Imp “Flatmobile,” the lowest street legal car in the world. It is a flattened version of the Batmobile and was built specifically to break the Guinness World Record for the lowest car.

It has a ground clearance of two inches; a width of five feet, five inches; and a length of 12 feet, two inches.

SOURCE: WWW.BONHAMS.COM

MTD March 2020

ROGUEBLAZER R/T CLX12

WI NTER EQUIPPED. RANGEBLAZER A/T. L A ND S A IL = QUA L I T Y+PE RF ORM A NCE +RE S E A RCH + CON F IDE NCE .

For warehouse and factory direct programs call 305-621-5101.

Visit our new site at LANDSAILTIRES.COM. *See details at landsailtires.com/warranty.

PRE MIUM

HIGHWAY

ROADBLAZER H/T CLX11

MUDBLAZER M/T CLX9

RANGEBLAZER A/T CLX10

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

Sell-out trends take a dip

BUT RAW MATERIAL PRICES ARE TRENDING IN THE RIGHT DIRECTION By

John Healy

J

anuary 2020 was not the greatest month when it came to consumer demand for passenger and light truck tires, based on our research. Comments we heard from tire dealers suggest that demand fell that month versus prior-year levels.

The net number of respondents to our inquiries who indicated that they observed an increase in demand on a year-over-year basis was zero. (Compare this to 21.4% of our contacts who reported that they experienced growth in January 2018.)

Our tire demand index was down 17.6% on a year-over-year basis and down slightly more than 22% from November 2019.

Respondents told us that the shortfall in consumer demand can almost entirely be blamed on extremely mild weather in most parts of the country.

We noted that temperatures across the United States were clearly above levels seen in January of last year. Based on the data we saw, January 2020 was not only hotter on a historical basis, but also in comparison to last year, which will provide a more challenging backdrop for the industry over the next few months.

Warmer-than-normal temperatures, especially during the winter season, place less of a strain on vehicles and vehicle components than cold temperatures.

Recent conversations with dealers leave us with the view that retail sell-out trends showed a deceleration in January, with growth rates lower than what they were

during the fourth quarter of 2019. From a volume standpoint, surveyed dealers reported they saw unit sale declines compared to the prior year’s period, coming in as the second-lowest observed growth rate in our tire demand index over the past 12 months.

HOW ARE RAWS DOING?

Overall, raw material prices fell this past January. Looking closely at the recent trajectory of raw material costs, the price of a basket of raw materials required to make a common replacement vehicle tire declined 2.7% on a year-over-year basis in January, while decreasing 2.3% from December 2019.

WE MAINTAIN OUR POSITION THAT THE MARKET CONTINUES TO STRENGTHEN. This is rather notable as it marks a reversion back to the previous trend observed during the back half of 2019, when costs experienced five consecutive months of year-over-year declines.

We have observed that notable movements lower in raw material cost pressures remain.

Let’s look at specific raw materials and how they are tracking. We have noted that carbon black has started to see its cost pressures subside on a year-over-year basis. The year-over-year price decrease of

Snapshot of dealers’ PLT tire volumes (year-over-year change) Nov-18

Dec-18

Jan-19

Nov-19

Dec-19

Jan-20

Average

Increase

54%

42%

50%

55%

57%

30%

41%

Flat

29%

28%

21%

15%

14%

40%

30%

Decline

17%

30%

29%

30%

29%

30%

29%

Total

100%

100%

100%

100%

100%

100%

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

16

5.4% marked the fourth month in a row that carbon black prices declined, after a 1.5% decrease that started this trend in October 2019.

These recent movements have continued what we characterize as a massive turnaround for carbon black.

Natural rubber prices fell slightly on a year-over-year basis in January, while showing a more extreme reduction of 8% on a monthly basis from December 2019.

Synthetic rubber costs have remained negative for 10 straight months on a yearover-year basis. Meanwhile, price pressures on reinforcements like fabric and cord continue to track negatively year-over-year at a mid- to upper-single-digit rate.

Finally, crude oil prices experienced double-digit, year-over-year decreases in the months leading up to December, where a bump of 21% in costs occurred.

As stated in last month’s column, raw material costs and weather patterns — in addition to supply and demand, manufacturing capacity fluctuations and other dynamics — can have a profound impact on profit levels.

However, we maintain our position that the market continues to strengthen and that the long-term outlook for tire dealers and distributors remains healthy.

In fact, we note the majority of individuals in the dealer community we have spoken with this month have an upbeat outlook on volume trends going forward, based on a variety of factors, such as an influx of vehicles into the replacement cycle, the ongoing belief that there is a modest amount of pent-up demand caused by deferred maintenance, a continued increase in the number of miles driven, and more. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC based in Cleveland, Ohio. Healy covers a variety of subsectors of the automotive industry.

MTD March 2020

THE ALL NEW, ALL SEASON TIRE FOR CUVS & SUVS

CROSSOVER TO A BETTER RIDE

MEETING THE MARKET Crossovers and SUVs are more popular than ever, and their segment of the market is only increasing. Drivers count on their versatility and dependability, from cross-country road trips to trips to the store. The Nexen Roadian GTX touring tire meets this need and exceeds expectations. Drivers want a long tread life. They want all-season traction. They want the best mileage and a comfortable ride. On every count, the new Roadian GTX delivers.

A GROWING MARKET Crossovers and SUVs are the fastest-growing vehicle segment.

90%

THE ROADIAN GTX COVERS OVER 90% OF SMALL CROSSOVER TO MID-SIZED SUV MODELS.

1/3

ALMOST 1/3 OF NEW MODELS FOR 2017-2020 ARE CROSSOVERS.

MARKET RESEARCH

EXTEND YOUR JOURNEY

Out of 999 respondents, 39.9% felt that mileage/life of tire was the most important feature to them.

The Roadian GTX comes with Nexen Tire’s comprehensive warranty coverage, which goes above and beyond those offered by comparable competitors.

MILEAGE/LIFE OF TIRE 39.9%

TRACTION 27.6%

RIDE COMFORT 14.6%

70,000 MILE

ROAD HAZARD

TREAD WEAR WARRANTY

PROTECTION FOR 1 YEAR OR 2/32NDS" OF WEAR

36 MONTHS

FREE TRIAL

FUEL EFFICIENCY 12.0% PHYSICAL APPEARANCE 5.9% 0%

10%

20%

30%

OF ROADSIDE ASSISTANCE 40%

45 DAYS OR 500 MILES

THE IDEAL COMPLEMENT CROSSOVERS

Toyota RAV4, Honda CR-V, Nissan Rogue, and more

MID-SIZE SUVS

Honda Pilot, Hyundai Santa Fe, Toyota Highlander, BMW X5, and more

NO SACRIFICE ON COMFORT Drivers value a smooth ride, so computer simulations were used to create optimized block designs and sequences that reduce noise and increase comfort.

EXCEED YOUR MPG EXPECTATIONS. With a design that helps Crossovers and SUVs get more mileage from every gallon, the Roadian GTX is made for drivers who want to cut fuel costs and fuel emissions.

LIGHT SNOW? NO PROBLEM. The Roadian GTX uses additional sipes, an optimized profile, and new compound technology to ensure upgraded traction in light snow conditions, which makes it a well-rounded all-season option.

WEAR LIFE FOR YOUR LIFE Drivers place long tread life at the top of their tire wish list.

And with the new Roadian GTX, that wish comes true. Its long wear life makes it a great fit for on-the-go drivers who want a tire they can depend on for years to come.

34 SIZES

Inch

17

Product Code

19

Max. Air

Max. Load (lbs)

psi

S

Measuring

Section Width

Overall Diameter

Tread Depth

Approved

inch

inch

/32"

Rim

UTQG

Sidewall

99

H

4

51

1,709

6.5

6.0~8.0

9.0

27.6

9.5

680 A A

Black

17060

225/65R17

102

V

4

51

1,874

6.5

6.0~8.0

9.0

28.5

9.5

680 A A

Black

17054

235/60R17

102

H

4

51

1,874

7.0

6.5~8.5

9.4

28.1

9.5

680 A A

Black

17570

235/65R17

104

H

4

51

1,984

7.0

6.5~8.5

9.4

29.1

7.5

600 A A

Black

17061

245/65R17

107

V

4

51

2,149

7.0

7.0~8.5

9.8

29.5

9.5

680 A A

Black

17052

225/60R18

XL

104

H

4

50

1,984

6.5

6.0~8.0

9.0

28.6

9.5

680 A A

Black

17045

235/55R18

XL

104

V

4

50

1,984

7.5

6.5~8.5

9.6

28.1

7.5

600 A A

Black

235/60R18

103

H

4

51

1,929

7.0

6.5~8.5

9.4

29.1

7.5

600 A A

Black

17571

235/65R18

106

H

4

51

2,094

7.0

6.5~8.5

9.4

30.0

7.5

600 A A

Black

17055

245/60R18

105

H

4

51

2,039

7.0

7.0~8.5

9.8

29.6

9.5

680 A A

Black

17048

255/55R18

109

V

4

50

2,271

8.0

7.0~9.0

10.4

29.0

9.5

680 A A

Black

17056

255/60R18

108

H

4

51

2,205

7.5

7.0~9.0

10.2

30.0

9.5

680 A A

Black

17062

255/65R18

111

T

4

51

2,403

7.5

7.0~9.0

10.2

31.1

9.5

680 A A

Black

17057

265/60R18

110

H

4

51

2,337

8.0

7.5~9.5

10.7

30.5

9.5

680 A A

Black

17043

225/55R19

103

V

4

50

1,929

7.0

6.0~8.0

9.2

28.8

9.5

680 A A

Black

P

XL

XL

17033

235/45R19

95

H

4

51

1,521

8.0

7.5~9.0

9.3

27.4

9.5

680 A A

Black

17037

235/50R19

99

H

4

51

1,709

7.5

6.5~8.5

9.6

28.3

9.5

680 A A

Black

17572

235/55R19

101

H

4

51

1,819

7.5

6.5~8.5

9.6

29.2

7.5

600 A A

Black

17047

245/55R19

103

V

4

51

1,929

7.5

7.0~8.5

10.0

29.6

9.5

680 A A

Black

17407

255/50R19

XL

107

H

4

50

2,149

8.0

7.0~9.0

10.4

29.1

9.5

680 A A

Black

17414

255/55R19

XL

111

V

4

50

2,403

8.0

7.0~9.0

10.4

30.0

9.5

680 A A

Black

17566

255/60R19

109

H

4

51

2,271

7.5

7.0~9.0

10.2

31.1

9.5

600 A A

Black

17413

275/55R19

111

V

4

51

2,403

8.5

7.5~9.5

11.2

30.9

9.5

680 A A

Black

17046

235/55R20

102

V

4

51

1,874

7.5

6.5~8.5

9.6

30.2

9.5

680 A A

Black

17038

245/50R20

102

V

4

51

1,874

7.5

7.0~8.5

10.0

29.7

9.5

680 A A

Black

255/45R20

101

W

4

51

1,819

8.5

8.0~9.5

10.0

29.1

7.5

600 A A

Black

XL

109

V

4

50

2,271

8.0

7.0~9.0

10.4

30.1

9.5

680 A A

Black

17039

22

XL

Ply Rating

225/60R17

17568

20

Size

Load Index & Speed Symbol

SPEED RATING

RIM SIZE

17051

17569

18

P/ LT

H, V & W

17"-22"

AVAILABLE

P

255/50R20

17049

255/55R20

107

H

4

51

2,149

8.0

7.0~9.0

10.4

31.0

9.5

680 A A

Black

17410

265/45R20

XL

108

H

4

50

2,205

9.0

8.5~10.0

10.5

29.4

9.5

680 A A

Black

17040

265/50R20

XL

111

V

4

50

2,403

8.5

7.5~9.5

10.9

30.5

9.5

680 A A

Black

17406

275/40R20

XL

106

W

4

50

2,094

9.5

9.0~11.0

10.9

28.7

9.5

680 A A

Black

17408

275/45R20

XL

110

V

4

50

2,337

9.0

8.5~10.5

10.7

29.8

9.5

680 A A

Black

17409

275/55R20

113

H

4

51

2,535

8.5

7.5~9.5

11.2

31.9

9.5

680 A A

Black

17412

285/45R22

114

H

4

50

2,601

9.5

9.0~10.5

11.2

32.1

9.5

680 A A

Black

XL

NEXEN TIRE AMERICA INC. Corporate Headquarters, 21073 Pathfinder Rd., Ste. 100, Diamond Bar, CA 91765 T: (909) 923-4011 F: (909) 923-3991 E: info@nexentireusa.com NexenTireUSA.com |

Car care clinics

GB Auto Service’s Jeffry Gardner says car care clinics educate customers about how their vehicles operate without the pressure of the normal selling environment. “An educated customer is truly a better customer.”

THE POWER OF CAR CARE CLINICS CUSTOMER EDUCATION DRIVES RESULTS By

Joy Kopcha

W

hat if there was a proven, low-cost tool available to bring new customers in the door of your tire dealership? In addition to more traffic, it promises online benefits, too, as customers typically respond by posting positive online reviews.

And since an estimated 5% of independent tire dealers are doing it, it’s likely you can claim the advantage before the competitor across town figures it out.

That “it” boils down to three little words: car care clinic.

“It’s not this overwhelming, complicated thing that’s going to take a lot of time and special expertise,” says John Arnold, consumer tire education content development manager for Bridgestone Americas Tire Operations LLC. “It’s actually fairly simple and fairly limited in scope. A dealer is very likely doing each of these things you would cover in a car care clinic every day.”

Arnold has spent decades in the industry helping tire dealers with their businesses.

For 30 years, he worked for tiremakers as a salesman in the field. Since 2012, he’s managed educational programs for Bridgestone dealers.

Those programs include the company’s car care academy, a how-to guide to help tire retailers host their own car care clinics. It’s a structure to help dealers cover the basic topics, stay on track and keep the event w w w . M o d e r n T i r e D e a l e r. c o m

focused on customers. The information is available to any authorized Bridgestone dealer, says Arnold.

“It takes the mystery out of holding the event,” Arnold says of the playbook. “They can see the start, the finish, how far you go on each topic and what topics are covered.

It makes it easy for a dealer to participate in this, and it becomes an even more valuable resource to the dealer’s customer base.”

HOW TO PREPARE

The biggest task is inviting people to attend, though Arnold says dealers typically find success when they reach out to groups like the Girl Scouts and Boy Scouts, or other civic groups or community organizations.

Women’s groups are historically receptive to invitations, he says.

Here’s a tip: After distributing invitations, send a reminder. Doctors, dentists and hair stylists all remind their clients of upcoming appointments, and tire dealers should do the same, says Arnold. A simple email reminder with the time, date and location of the clinic helps keep the event top of mind.

Clinics help take the mystery out of automotive maintenance for consumers. “The purpose of the car care academy is to reassure them while there are some important steps to take to get the most out of their vehicle and driving experience, they’re fairly easy and simple.”

Beyond the invitations and reminders, hosting an event requires the basic clean-up work for any event a store might hold. “Make the dealership look nice,” says Arnold. That means taking out the trash, tidying up the space and making sure windows are clean, he adds. After that, you need a vehicle and a lift so you can show both the vehicle’s undercarriage and its engine.

“The steps are very quick and easy, and best of all, almost cost-free. This is a very low-cost proposition for a dealership.”

WHAT TO COVER

Arnold says an effective car care clinic is a summary of conversations tire dealers have with consumers every single day. “The good news is it’s not terribly difficult.”

He recommends that dealers start with the following points of discussion: Tire maintenance: Even with tire pressure monitoring systems (TPMS), consumers need to know to continue to check the air pressure in their tires. Arnold recommends telling customers that the TPMS light doesn’t come on until 10 pounds of pressure is lost, and that even 5 pounds of underinflation can drastically affect tread wear, over time.

Show them where to find the correct air pressure for their tires and vehicle and talk about how tread wear even can indicate the presence of a mechanical problem.

21

Car care clinics “They’re simple things, but they’re very important,” Arnold says.

Fluids: Dealers should leverage their own experience and give an overview of the fluids in a vehicle, from coolant and oil to brake and transmission fluids, he says. Can they be checked? How often should they be checked? When should they be changed?

Explain why these fluids are important to a vehicle’s overall health, he advises.

Other maintenance: This can include everything from windshield wipers and brakes to batteries and alignments. Explain what’s involved in an alignment, and what customers are paying for, says Arnold. “These are common things that dealers are doing every day, but they’re doing it on a random basis.

Draw them together in a nice, neat package.

“It’s a happier conversation than explaining why a customer needs to spend $200 on a battery on the car that just got towed in, or why that misalignment condition just ruined the front tires they paid so much money for only nine months earlier,” Arnold says. “It takes some of the stress out of these conversations. And you’re helping them avoid a future problem.”

THE BENEFITS

Bridgestone hasn’t collected data uniformly from the car care clinics it helps dealers offer, “but anecdotal reports from dealers are they do get a lift from these events, sales-wise.” On average, 20% of participants return within three weeks for some kind of service, Arnold adds.

And typically, they are new customers.

He says there’s some evidence to suggest even more people return within the six-month window, but that’s been harder for dealers to pin down.

There’s another benefit for dealers. Those who have hosted clinics often see a boost in online reviews.

“The reviews tend to be more strongly positive for dealers who have reached out to the community, particularly if they reach out to the parents of younger people, like Girl Scouts,” Arnold says. “Parents are very protective of their children and they really take an interest in dealers who take an interest in educating their kids on keeping their vehicle safe.”

GB AUTO SERVICE IS A BELIEVER

Count Jeffry Gardner, director of marketing for GB Auto Service Inc., as a car care clinic believer. He leads the marketing and

22

CAR CARE CLINICS: WHY WOMEN ARE SO RECEPTIVE

In high school and college, John Arnold says he was probably “the worst” tire salesman ever, but he’s turned that around with a career at Bridgestone, where he helps tire dealers “be a better resource for their customers.”

community engagement efforts for the 116 stores and seven brands that make up the GB Auto Service portfolio.

Gardner worked for Brakemax Tire & Service Centers before it was acquired by the private equity company, and he says Brakemax regularly hosted events.

“We had staged several of them to better communicate with the community, to discuss maintenance and help people understand maintenance in a non-sales way,” says Gardner. “Customers can be on the defensive when in a store. This way you can interact without that added stressor.”

He’s working to make car care clinics a staple at all GB Auto Service locations, but admits it’s been slow going as he so far has led the sessions, and thus must take travel into consideration.

He’s based in Tucson, Ariz., but the company also has stores in California, Nevada and Texas. He’s led anywhere from six to nine clinics a year — most of them in Arizona, except for one at a Tire Works Total Car Care store in Henderson, Nev. In each one, he and the store’s team members cover the basics to help drivers “have a better understanding of the mechanics” of their vehicle.

In Tucson, Phoenix and Las Vegas, they talk about the impact of the region’s dry air and low humidity on a vehicle’s tires and rubber hoses.

Sometimes they hold the sessions in the bays. Other times, they’re held in the showroom. It’s always an after-business-hours affair with catered food. Since the stores are

Although most consumers aren’t in tune with the mechanics happening under the hood of their vehicle, plenty of tire dealers focus their educational efforts on women. Bridgestone’s John Arnold has a theory why that’s the case.

“It’s my personal belief that they have a more receptive audience with women,” he says. “Women are more open to saying, ‘I don’t know much about this subject and I would like to learn more.’

“I think it’s like the ‘men don’t cry’ thing. Men certainly do cry, but they try to hide it. When it comes to vehicle knowledge or lack thereof, I think some are reluctant to admit they don’t know some basic things like how often should the coolant be changed in a car, or when they should have a car aligned. ‘When should I check the brakes?’ They feel that, as males, they should have been born with this knowledge, and to admit they don’t know may be uncomfortable.”

often in or near a shopping center, they’ll partner with other nearby businesses and give attendees goody bags and prizes.

Gardner says the largest clinic had three dozen attendees, “and that was probably too much because people are less likely to ask questions. It starts to feel like a college course.

“Twenty to 30 people is probably the sweet spot. I’ve done them with as few as 10 people. It’s a different dynamic.”

So how does he gauge an event’s success? “Direct conversion of an attendee to a customer isn’t something we’ve pushed for,” he says. “When I’m leaving a clinic and I see customers surrounding the manager and asking different questions, or setting up appointments, I think, ‘I created that relationship and helped build that rapport.’

There’s no key performance indicator to say this is how much business was brought in, but that’s not the point. It’s more long-term.”

Gardner says the stores give attendees VIP discount cards and follow up with emails after sessions. “But we’re careful not to solicit business, because customers are savvy. They don’t want to be sold on anything. We present the information, let them know that we’re here, and hope they can put it all together.” ■ MTD March 2020

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Winter tires

Gaining traction WINTER TIRE MARKET IS GETTING A BOOST FROM ALL-WEATHER SEGMENT

By

Ann Neal

H

as the winter tire market been hurt by the growing all-weather segment and four-wheel-drive capabilities of crossover and sport utility vehicles? Not at all, say the tire manufacturers, marketers and distributors who answered Modern Tire Dealer’s questions on the subject.

In fact, demand for winter tires is up, according to several respondents.

“As end consumers become more and more educated on the benefits of winter tires, we’ve noticed a steady increase in winter tire demand year-over-year in both the U.S. and across the globe,” says Terry Smouter, director of sales management for Hankook Tire America Corp.

Pirelli Tire North America Inc. has seen an uptick in demand, too. “The winter tire market is on a growth trend in 2019 in both the passenger and SUV segments,” says Vincent Unanue, senior manager, OE and product, Pirelli North America.

Available in 88 sizes, Apollo’s Vredestein Wintrac Pro ultra-high performance tire was ranked first in recent tire tests by a European automotive magazine.

24

Metrics tracked by Nokian Tyres plc also point to increased use of winter tires in Canada, where all provinces recommend the use of winter tires and some places require them, as well as in the U.S. “In Canada, winter tire usage from consumers has been up pretty consistently over the last five years,” says Steve Bourassa, manager of passenger and light truck products. “Almost 70% of the people in Canada are now using winter tires, and that’s up from closer to 50% five years ago.”

Bourassa says the use of winter tires declined in the U.S. until the end of 2019.

“Industry shipments into the U.S. of winter tires in 2019 were higher than in 2018.

That’s the first time we’ve seen an increase in a few years.”

The availability of all-weather tires and the

The Blizzak WS90 uses an all-new tread compound featuring Bridgestone’s patented Multi-Cell technology for improved stopping distance on ice.

shift away from conventional sedans create more, not fewer, winter tire selling opportunities. “All-weather tires take away from an all-season tire versus a winter tire,” says Joe Maher, product manager for Continental Tire the Americas LLC’s passenger and winter tires in the U.S. “The consumer who’s really interested in the best winter performance buys a winter tire.”

Many respondents stressed the need to educate CUV/SUV owners. “It’s important for dealers to educate drivers on the myth that all-wheel-drive vehicles reduce the need for winter tires,” says Will Robbins, senior product manager, Bridgestone Americas Tire Operations LLC. “Cornering and braking performance in snow and ice still require the same traction from tires, whether it is a front- or rear-wheel-drive vehicle.”

Cooper says the new Discoverer Snow Claw tire is its latest innovation in pickup truck and SUV tires built for extreme weather conditions.

Falken is launching the studdable WinterPeak F-Ice 1 in 2020. Features include a tread pattern with winding grooves for hydroplaning resistance.

MTD March 2020

Consumers are gravitating toward CUVs and SUVs for the extra capabilities they believe sedans do not have, notes Abhishek Bisht, global head of new markets and channels for Apollo Tires Ltd., which owns the Vredestein brand.

These capabilities include more offerings with all-wheel-drive, more storage capacity and high ground clearance for visibility.

“Dealers need to acknowledge the reasons behind consumer choice and guide the consumer to understand that tires — specifically all-weather and winter — fulfill many of the same demands for increased capability and grip,” he says.

Both winter and all-weather tire markets are alive and well in the CUV and SUV segments, notes Sonny McDonald, national training manager for Toyo Tire U.S.A. Corp. “If you look at the OE sizes on most of these types of vehicles, the rim diameters are 17-inch and larger, the aspect ratio is 55 or smaller, and the speed/performance is H- or V-rated and higher,” says McDonald.

“Today, many winter tires — but more allweather tires — are built to match OE specs for load carrying and speed/performance rating in 17-, 18-, 19- and 20-inch rim diameters, which is now typical for today’s CUV/SUV,” he says. “Those unique sizes in specialized products offer a tire dealer greater potential for higher profitability and revenue generation.”

With technology breakthroughs and advancements, many believe all-weather tires are going to edge closer to winter tires in terms of cold-weather performance in the coming years, according to Steven Liu, senior director of proprietary brands at American Tire Distributors Inc., which owns Hercules Tire & Rubber Co. Liu notes that improving the cold-weather performance of all-weather tires would sacrifice other performance attributes during warmer temperatures.

“The reality is, in the current state, the balance is swinging wider than ever before,” says Liu. “Not everyone will be completely satisfied with the performance of an allweather tire, thus pushing the true winter technology further to addressing specific needs at the regional level.”

That’s good news for independents whose dealerships are built around understanding their local market.

According to David Poling, director of tire development and product w w w . M o d e r n T i r e D e a l e r. c o m

Continental says the tread pattern of the VikingContact 7 features an efficient groove network that offers precise tracking stability.

marketing for Giti Tire (USA) Ltd., “The challenge today is that tire technology has improved so much that our expectations as consumers have grown exponentially regarding the ability to go, stop, and turn in any weather or road condition, as if it is a warm summer day on a dry, smooth road with perfect grip. The reality is there is no one ‘perfect’ tire for all vehicles, roads, climate and weather conditions.”

WINTER TIRE TRENDS

MTD prefaced questions on the impact of all-weather tires and CUV/SUV vehicles on the market by asking for the latest winter tire trends. Here’s what manufacturer representatives said in reply, in alphabetical order of company:

Bisht, Apollo Vredestein: Technology in the segment keeps evolving to provide drivers with less compromise with regards to vehicle dynamics and handling when using winter tires. Where there are severe winters and snowfall with packed snow, drivers want true winter performance. The segment will continue to be significant.

Robbins, Bridgestone: As with many product categories, tire manufacturers continue to face the challenge of delivering maximum product performance while minimizing performance trade-offs. Bridgestone continues to place an emphasis on advancing tire performance across multiple performance attributes. The latest generations of Bridgestone winter tires feature a new tread compound and advanced pattern technologies that offer improvements in snow and ice performance while also offering improved wear and non-winter performance versus their predecessors.

In addition to minimizing performance trade-offs, demand continues to grow for tires that offer year-round use and are certified for severe snow service with

the 3-Peak Mountain Snowflake. These all-weather products provide the benefits of traditional all-season touring tires while also offering enhanced snow performance.

Andrea Berryman, director, product management, Cooper Tire & Rubber Co.: We’ve seen a shift in the last decade toward studless winter tires. Roughly half the winter tire sales in the U.S. and over half in Canada are studless tires.

Also, winter tires have become less of a utilitarian purchase as consumers are spending more time researching their winter tire purchase. People are expecting better handling and a quieter, more comfortable ride out of their winter tires, and studless tires, in general, are better at delivering these typically “all-season” characteristics.

Sam Choo, product coordinatorwinter tires, Falken Tire Corp.: Winter tire usage is growing in Canada, where consumers are well-educated about the profound benefits of driving on winter tires. TRAC’s (Tire and Rubber Association of Canada) 2019 Canadian Winter Tire Report stated 75% of Canadians used winter tires last year, up 17% from 2014.

TRAC largely attributes Canada’s widespread acceptance of winter tires to government regulations, something we now see happening in the U.S. In 2019, the Utah Department of Transportation passed a regulation requiring the use of traction devices on certain roads, specifically listing 3-Peak Mountain Snowflake-rated tires as an accepted traction device for vehicles below 12,000 GVW. We see things slowly beginning to change in the States, and laws like this lead us to believe the number of Americans who opt for winter tires will begin to increase in tandem. As is the case with other tire categories, size offerings in the winter segment are getting larger in diameter, due to both the trend in OE fitments and the affordability of aluminum wheels.

Leo Kuo, sales manager, Federal Tire Corp.: Consumers are more interested in all-weather/ four-season tires. Federal Tire is currently offering the Xplora AP with the 3-Peak Mountain Snowflake.

Poling, Giti: Current trends are improved compounding and tread designs, all-weather, improvements in winter tires, studless winter tire performance similar to studded tires, and improved stud technologies.

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Winter tires

Federal is planning a second quarter 2020 release for the new Himalaya K1 LT for light pickup trucks.

The studdable GT Radial IcePro3 offers coverage for a wide range of passenger and crossover vehicles.

Ron Henegar, senior product manager, consumer high performance and winter tires, Goodyear Tire & Rubber Co.: The biggest trend is a focus on improving product performance in cold and snowy conditions.

Smouter, Hankook: We see a demand for a winter tire compound that is more versatile in varying winter road conditions.

By that, we mean that in addition to having tread siping and studdability to assist against black ice and snow conditions, customers want a winter tire that is also going to perform adequately under dry conditions where the temperature is at or below freezing.

Liu, Hercules: Consumers are becoming better educated on the benefits of winter tires and aware that their safety depends on the right tires — not only for snow and ice performance, but also in colder temperatures. The winter tire industry is relatively mature, and the growth of the winter tire market is driven largely by legislation.

We are attuned to the compulsory requirements in each regional market and any future changes. Given the developments in the automobile industry and a rise of awareness of traffic safety, we tend to believe the future of winter tires is optimistic. By its nature, winter tire market demand, volume and timing are heavily dependent on weather patterns and severity, making it difficult for manufacturers and distributors to plan. This leads to the burning question: Will the all-weather product be the one-for-all solution? For Hercules winter tires, we are seeing a steady and balanced growth trend in the U.S. and Canada.

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Goodyear’s WinterCommand Ultra for sedans and CUVs will be available to consumers in the third quarter of 2020.

Brandon Stotsenburg, vice president automotive division American Kenda Rubber Industrial Co. Ltd. (Kenda): The biggest trend in the U.S. is the advent of all-weather tires, which will be a strong improvement for most end-users. The majority of winter sales in the U.S. market break into two segments. One is premium performance for higher-end vehicles (CUV, SUV and auto) which can afford designated winter tires and a second set of wheels.

The other segment is for entry-level winter in areas that specifically need designated winter tires. There are still value steps for winter, but the volumes are much smaller than in other segments (touring, grand touring, etc.). In Canada, there is a need for more specific applications focusing on ice traction, severe snow, etc.

Shawn Denlein, executive vice president of sales and marketing, Kumho Tire U.S.A. Inc.: Winter tire seasonality is even more dramatic than before now, because the years with heavy winter snowfall have been inconsistent. Consumers are able to keep and use the same winter tires for two or three seasons before replacement. Before there was a steady decline for the industry from 2014 to 2017, then it stabilized in 2018, and went up slightly for 2019.

Sabrina Garofalo, product manager, winter, Michelin North America Inc.: In Canada, the market is continuing to grow and has been over the last five years.

Consumers are looking for better traction in winter conditions… the mobility aspect of it. For customers in Nordic-climate areas, winter tires are an effective option.

Jay Lee, director product planning, Nexen Tire America Inc.: During the winter season, many of our customers

Hankook says the optimized pattern design of the Winter i*cept evo2 SUV helps improve traction performance.

are looking for all-weather tires to avoid having to switch between summer and winter patterns when the seasons change.

Bourassa, Nokian: Over the last 10 years, there’s been an improvement in winter traction, handling on dry roads, longevity, and reduced noise levels. All in all, the technology has come quite a long way over the last decade to make much better and well-rounded winter tires. All-weathers bring an interesting new element to the tire industry, particularly where we have consumers in the U.S. who live in areas where they tell themselves they don’t get enough snow to justify a set of winter tires.

Those are the types of consumers that are very well-positioned and well-placed to be an all-weather consumer.

Unanue, Pirelli: Consumers are realizing winter tires are a safety feature. For this reason, we launched a communications campaign in November, #Below44, designed to educate consumers on why winter tires are critical for anyone who lives in an environment where the temperature regularly drops below 44 degrees Fahrenheit. Winter tires can provide improved braking and traction in winter conditions, be it a rear-wheel-drive or all-wheel-drive vehicle. In addition, tires worn below 4/32 inches, although legal to drive, experience longer braking distances and reduced performance in wet or snowy conditions, as there is less space for the water or snow to go.

Mike Park, product manager, Tireco Inc.: M+S designation will not mean much and the 3-Peak Mountain Snowflake symbol will be the standard for whether a tire has enough traction to handle snow conditions.

There’s also the growing trend in the allMTD March 2020

Winter tires

Made in the U.S., the studdable Avalanche XUV from Hercules is 3-Peak Mountain Snowflake-certified and has a proprietary tread pattern.

The Kenda Klever A/T2 KR628 will be offered in 40 initial sizes with the 3-Peak Mountain Snowflake. Expected retailer inventory is summer 2020.

weather tires with the 3-Peak Mountain Snowflake symbol.

Cameron Parsons, product manager, competition and specialty tires, Toyo Tire U.S.A. Corp.: Larger and higherperformance vehicles are being used more in winter conditions than before. This includes luxury and touring vehicles, and even sports cars that owners want to continue driving in the winter seasons.

As a result, we’ve seen an uptick in ultrahigh-performance-type tires that carry the 3-Peak Mountain Snowflake label.

These tires are developed to handle the greater weight and power of these types of vehicles, while also delivering cornering and braking characteristics you’d find in a performance tire.

Weather conditions are also changing, with increased average rainfall across the country, making wet performance a major priority. All-weather tires are quickly rising in popularity, due to their ability to run year-round in sunny summers, as well as wet and snowy winters. The all-weather category bundles convenience, affordability and safety in one package, making it an excellent solution for many consumers in areas that experience rain and snow.

Bob Abram, senior manager of product planning, Yokohama Tire Corp.: Ice traction is a must for marketing premium winter product today. Icy road surfaces present the most challenging driving conditions and are a concern for a large portion of the U.S. — not just the snowbelt.

WHAT ABOUT ALL-WEATHER?

With the advent of all-weather tires, do respondents expect dealers to sell both all-

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Kumho’s premium WinterCraft WP72 for sedans features an asymmetric pattern design for enhanced snow performance, as well as wet/dry traction.

weather and winter tires? Do they find that dealers want to sell and market both? And are tire dealers succeeding in selling both types of tires? Here’s what respondents told MTD.

Bisht, Apollo Vredestein: We find dealers oftentimes are selling all-weather in place of all-season, and not so much replacing a dedicated winter at the point of sale. Dealers are happily selling both within the same screen, with all-weather enabling them to offer the best fit for their consumers’ climate, vehicle and preferences. A good all-weather tire fulfills the “all-season” promise for any dealer and consumer, and by converting to allweather the end user gets extra capability, confidence and handling across the more inclement conditions when they need it.

Robbins, Bridgestone: This is one of the biggest questions in the industry at the moment. We’ve found the answer can vary based on geography, climate and customer expectations.

For areas with significant snowfall and ice, we still expect traditional winter tires to be an important tire for dealers to stock based on their trusted performance in challenging and unpredictable winter conditions.

In more moderate climates, we expect to see some dealers move from stocking both traditional all-season and winter products to focusing primarily on allweather products, which are designed to perform across all four seasons.

Maher, Continental: Whether dealers want to sell both is not really something I can speak to, but they do sell both allweather and winter tires. It seems that allweather tires are a substitute for a different

Nexen says Winguard Winspike WH62 tires are molded to allow for stud installation that provides better traction on ice and snow.

touring tire or a different kind of passenger tire — not a substitute for winter tires. An all-weather tire in a climate like Boston or Pittsburgh or Cleveland will have an appeal for a consumer buying a touring tire that is capable of going in the snow. While both winter tires and all-weather tires have a 3-Peak Mountain Snowflake, the snowflake test is a snow test. There is no ice involved.

A soft-compound winter tire typically will be much better in the ice than any of the all-season tires with the 3-Peak Mountain Snowflake.

Berryman, Cooper: All-weather tires are aimed at a different consumer than winter tires. People who live in the northern U.S. or Canada and are looking for optimal tire performance throughout the year should own two sets of tires: an all-season set and a winter tire set. However, for those customers who are unwilling to store and change an extra set of tires, all-weather tires offer an advantage over all-season and allow you to keep one set of tires on your vehicle year-round.

All-weather tires typically trade off some wet traction in the summer as compared to an all-season tire, and trade off some winter performance in the winter as compared to a dedicated winter tire. But all-weather tires provide a good balance of performance for those unwilling to own two sets of tires. It really comes down to where the consumer lives, whether he or she is willing to purchase an extra set of tires and wheels, and whether they need to be on the road when the weather turns bad.

Choo, Falken: The all-weather segment continues to expand year after year as more and more products are introduced.

MTD March 2020

Winter tires These tires are an excellent option for consumers who want added winter capability but prefer not to deal with the cost and complications of a second set of wheels and tires. The 3-Peak Mountain Snowflake symbol, and the performance it connotes, is becoming more popular by the day. Utah’s recent regulation points to just how valuable the 3-Peak Mountain Snowflake symbol is to manufacturers, dealers and consumers alike. We absolutely see the value in all-weather products, though we acknowledge they simply can’t replace the cold weather performance of true winter tires.

The product offerings of each dealer certainly depend on both their customers’ preferences, as well as their region’s climate.

We’ve seen dealers carrying multiple all-weather products among their winter tire offerings, which gives their customers the whole spectrum of options to best fit their needs. However, we believe dealers would prefer to sell a winter/all-season tire combo as opposed to only all-weather, both due to the increase in safety and

performance on the road, as well as the amount of snow but have roads that are opportunity to serve their customers twice regularly plowed, all-weather tires can give per year. As we alluded to above, we believe those consumers peace of mind. the winter/all-season or Inventory managementwinter/summer combo wise, dealers are not willing will almost always be the to sell and market both safest option for consumtires. Maintaining the ers, but when convenience inventory for summer, and cost are considered, all-season, all-weather all-weather products can and dedicated winter be a fine option. tires — in both studless Kuo, Federal: This is all and studdable/studded — based on where the dealers would require a monuare located. We find the mental effort in inventory dealers in more severe winmanagement and knowlter weather conditions — edge of one’s customer base, (like) heavily snowed areas something most dealers says the V-shaped — are still more willing to Michelin find a challenge. tread design of its new X-Ice carry traditional snow tires. Snow tire provides 100% It would behoove the However, in other regions, use of the contact patch for dealer to sell only one when there’s a shift to carry more optimal grip performance on thinking about inventory. snow and ice and for excepall-weather tires.

However, the dealer has to tional slush performance.

Poling, Giti: In some prepare to capture each extreme winter areas, consumers may customer — whether dedicated winter, ice need a dedicated winter tire. For those or all-weather — and consider different in less extreme areas that still see a good price points to fit the consumer’s budget.

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Winter tires And yes, I would think they are succeeding at selling both.

Henegar, Goodyear: Dealers will continue to sell both all-weather and winter tires because there is a market for both. While some consumers demand the superior level of winter performance that only a true winter tire can provide, others want the versatility provided by all-season tires, including advanced snow traction.

Smouter, Hankook: Yes, we believe there is room for both segments at tire dealerships in central and northern regions of the U.S. All-weather tires are a great hybrid development with a level of dry compliance seen in all-season tires that is accompanied by a tread arrangement and compounding more closely aligned with winter tires. The severe snow mark inscribed on the sidewall of the tire lets consumers know that this is a more winter-friendly version of an all-season tire. However, this emerging segment is not going to be able to perform at the same level as a dedicated winter tire that is necessary in certain winter regions of the country with consistent winter conditions.

Dealers across the U.S. have started to really embrace the all-weather segment, and they are willing to promote both segments to their customers. The allweather segment has found success with customers who may have not purchased winter tires in the past but are looking for a tire that’s going to prepare their vehicles for the winter weather, more so than a traditional all-season tire would do. With unpredictable winter weather throughout the central to northern U.S., the all-weather tire has found a place on our dealers’ product screen and this is a big reason why Hankook is excited to be introducing an all-weather tire later this year to the U.S. market.

Liu, Hercules: It primarily depends

Nokian says the Hakkapeliitta LT3 features the world’s first stainless steel studs, which minimize corrosion from salt, the company adds.

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on the geographical region where the dealer is located and the targeted customer demographics. Canada and U.S. markets will need to be looked at under different lenses. We expect to see swapping of units between the all-weather and true winter tires, especially where 3-Peak Mountain Snowflake tires are compulsory, in some regions, whereas true winter tires are very much needed and will continue to strengthen in some areas, with allweather for the most part serving only as a supplemental solution.

For many dealers, there’s a general perception that all-weather tires are comprised of half a true winter tire, rather than being seen as an all-season tire with better winter traction. While the all-weather tire won’t replace a set of dedicated winter tires for drivers in the northern snowbelt, they are a viable option for anyone who typically uses all-season tires year-round and is looking for improved traction in inclement weather.

We have seen dealers willing to sell and market both and have found successes in both. There are also dealers who pick one over the other and double down.

Furthermore, the all-weather categories can be broken down into passenger and light truck, and each has a very different adaptation phase/length of time. The light truck tire category has included some all-weather choices in the marketplace for quite some time. We have witnessed substantial growth and from there, we are noticing line expansion and size coverage into crossover/SUV. The penetration of the 3-Peak Mountain Snowflake symbol has been slower in the passenger car category, given the vehicle capability and usage extension, but we could potentially see a ramp up in the near future.

Stotsenburg, Kenda: This will depend on specific market need. For most geographies, there will be a trend toward all-weather tires as these tires will satisfy the needs for the end user. If they are in an area with higher-end vehicles, they will need to have access to the premium performance tires. There are differences in performance levels for tires marked with the 3-Peak Mountain Snowflake certification. There is a standard set to achieve this level, but it is self-certified, and there are tires stamped for winter snowflake which may not truly meet the

conditions within certain regions. We suggest that dealers be aware of the brand performance under winter conditions to assure the best fit for their customers.

Denlein, Kumho: In the U.S. areas with heavy snowfall, we do not anticipate much change, such as in the Pacific Northwest and northern Midwest areas. However, we are seeing the impact of all-weather tires, specifically on non-studdable winter tires. We expect dealers to carry the more aggressive studdable winter tires, along with all-weather tires.

Lee, Nexen: We do expect both allweather and winter tires to be sold. While all-weather capabilities are becoming ever stronger, many parts of the country that experience harsher seasons still require optimal winter performance and summer performance, respectively. That being said, all-weather tires are still increasing in popularity.

Bourassa, Nokian: If you are in or near a northern climate, it’s going to make sense to offer both products. There are going to be consumers who want the utmost winter traction and a winter tire is going to be that for them. In most areas outside of Quebec, you are also going to have customers who don’t want a tire changeover. They want to use one set of tires year-round and for those customers, the safer option to your typical all-season tire is going to be an all-weather tire. In our experience, the success of allweather has not been at the detriment of winter. It’s really selling a safer alternative to the all-season tire. Dealers are succeeding in selling both, at least in what we’ve seen.

Whether they want to is a different question.

Everybody has the same four walls to jam that many more products and SKUs into.

It brings a new challenge to the market for dealers and distributors.

Unanue, Pirelli: From what we hear in the market, more extreme winter climates such as the mountains in the West tend to use winter tires as opposed to all-weather tires for added traction and stability. In the Northeast and Midwest, for example, some consumers are experimenting with all-weather tires, and we see the same dealers selling winter tires as well.

Park, Tireco: We expect dealers to sell both all-weather and winter tires, and they are willing to do so and are successful.

Winter tire laws, public education and word-of-mouth play a significant part in motivating drivers to use winter tires.

MTD March 2020

McDonald, Toyo: Tire dealers are willing and wanting to carry both. Tire dealers understand they need to offer a good-better-best scenario for those customers wanting either a winter tire or all-weather. That starts by asking qualifying questions to make the best tire recommendation. One of the questions that a dealer may ask is, “What is the worst driving condition you may face?” If a customer says snow and ice, then ask what level and frequency they drive in those conditions and if they run separate winter tires. Based on the answers, the dealer can offer the good-better-best scenario for that customer for either a winter tire or an all-weather tire.

Abram, Yokohama: Smart dealers will carry both. All-weather tires are ideal for consumers who reside and drive mostly in metro areas, where winter precipitation is heavy and storage options are few. Consumers who need to drive in more rural areas are still better-suited for traditional winter tires, as they need the most winter grip and the snow removal is much less consistent, or at times non-existent, in those areas.

THE IMPACT OF CUV/SUVS

MTD asked if the shift away from conventional sedans is creating more opportunities for dealers to sell winter tires — and if yes, how dealers can capitalize on them.

Bisht, Apollo Vredestein: All-wheeldrive may help the car start, but does nothing to assist in braking or turning, so consumers need to be politely informed that the tire will make the difference, despite the feeling of security given by all-wheel-drive.

Robbins, Bridgestone: In our experience, vehicle type is not a significant driver

of winter tire use. It really comes down to the climate and seasonal driving conditions of each market. Where dealers can create new opportunities in this segment is by educating consumers on the significant benefits of winter tires in snow, ice and other winter conditions. With their specially formulated compounds and unique tread designs that maximize grip and retain flexibility in cold temperatures, winter

tires provide the confident performance you need in unpredictable winter weather conditions.

Maher, Continental: It creates a different opportunity. This has to do with the all-wheel-drive vehicle that gets them going, but stopping and turning is really the same as all other cars. It also adds a little bit of a new spectrum because a lot of these vehicles are capable of having an all-terrain tire, which

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The Pirelli Scorpion Winter is designed for SUVs and CUVs with a focus on stability and control in snow, ice, wet and dry conditions. Pirelli says it combines excellent performance, braking and handling with a low-noise ride.

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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Winter tires

The Milestar Weatherguard AW365 from Tireco for coupes, sedans and CUVs is available in 28 sizes and is 3-Peak Mountain Snowflakecertified. Features include angled tread notches for enhanced stability.

The Toyo Observe GSi-6 HP is a studless performance winter tire. Toyo says its aggressive tread design and high grip silica tread compound are designed to deliver excellent traction, cornering and braking performance.

may have a 3-Peak Mountain Snowflake, but is not really a dedicated winter tire. Taking advantage of these opportunities is about educating consumers who are looking for tires that an all-wheel-drive vehicle is not any safer in the winter just because it has all-wheel-drive.

Berryman, Cooper: Whether we’re talking about a sedan or an SUV, original equipment tires continue to be tuned for higher speed ratings or fuel efficiency, often at the expense of winter performance.

This creates an opportunity for retailers to explain the benefits of purchasing winter tires to a consumer even before their original equipment tires wear out, allowing the consumer to experience first-hand the performance benefit that winter tires offer when the temperature drops.

Choo, Falken: It’s widely accepted that consumers are transitioning away from traditional sedans and opting for more capable crossovers and SUVs. This is largely due to the added features and advanced driving systems these vehicles offer. However, while many drivers assume vehicles with all-wheel drive have no need for capable winter tires, we know it’s simply not true. A four-wheel-drive or all-wheel-drive system might help drivers get started out of the snow, but all-wheel drive will make no difference when they suddenly need to slam on the brakes. At this point in time, we believe this is the most valuable opportunity at a tire dealer’s disposal: the opportunity to educate consumers about the need for tires that provide

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The studdable Arctic Claw Winter WXI from TBC Brands LLC meets requirements for the 3-Peak Mountain Snowflake rating in the U.S. and Canada. It is available in 91 metric and LT sizes for a wide range of vehicles.

wintertime traction, no matter the system that comes standard with their vehicle.

Kuo, Federal: In our opinion, in regions with less severe winter weather, we think the shift won’t necessarily create more opportunity for dealers in winter tires specifically if the shift means we are now looking at more SUVs and CUVs. They could easily sell more RT (rugged terrain), AT (all terrain), MT (mud terrain) tires and in our opinion, tires with the 3-Peak Mountain Snowflake symbol. Dealers located in severe winter weather usually stock up on winter tires since they are required in those areas. That’s why Federal is coming out with a snow truck tire.

Poling, Giti: Sedans and CUVs are usually built on similar platforms and so their tire needs will be similar. Consumers who own CUVs may be more likely to take them into adventurous areas and so understanding the customer’s needs will be most important for the dealer. Therefore, dealers may have more opportunities for winter tire sales, but there may also be just as many for all-weather, as these tires may better align with the limited adventurous trips. To take advantage of these opportunities, dealers must know their market.

Henegar, Goodyear: Many consumers have a misconception that CUVs have better winter driving capabilities than a conventional sedan. There is a real opportunity for dealers to educate consumers on the importance of winter tires in maximizing the traction and winter driving capability of CUVs.

The new IceGuard iG53 features Yokohama’s latest ice traction technology, including an absorptive tread compound and 3D triple sipes. The IceGuard G075 is designed to fit popular crossover vehicles and SUVs.

Smouter, Hankook: We feel that the trend toward more CUVs, SUVs and light trucks does open up more opportunities for winter tires. Because those types of vehicles traditionally open up more utility opportunities, drivers are more willing to test the limits in winter conditions.

Dealers can take advantage of this by assuring their customers that the use of winter tires will maximize the capabilities of the utility vehicles and light trucks in winter conditions.

Liu, Hercules: Based on the rapid growth in the crossover/SUV-light truck market in the last five years, and all-wheel-drive becoming a common option, yes. When it comes to winter tires, the analogy I would use is tires are like shoes. You need to make sure you have the right set of tires for your vehicle’s intended purpose by design, so in part this means the dealers need to take the extra time and capitalize on the opportunity to identify needs and upsell to the end users.

Education is key. The common misconception is a vehicle equipped with all-wheel-drive is sufficient to deal with snow, slush and ice. An all-wheeldrive vehicle equipped with all-season tires would quickly reach its limits when put in a dynamic situation in inclement winter weather. As dealers’ product stocking mix is becoming more complex, it’s exceedingly critical that dealers gain a better understanding of their respective regional market nature and size, identify growth opportunity MTD March 2020

Winter tires through vehicle pull-through and make the proper recommendations based on vehicle capabilities and users’ needs.

Stotsenburg, Kenda: There is a growing need for winter applications for both CUV and SUV, as well as light truck and commercial vans. The application and geography will determine whether the customer can utilize an all-weather tire or will need a winter tire. The increasing volumes will mirror the growing trends for more CUVs versus traditional autos.

Dealers should openly display their options and tell end-users in-store and online that they have solutions for their winter needs. Have visuals showing CUVs, SUVs and light trucks in winter conditions.

Denlein, Kumho: With consumers switching from sedans and coupes to CUV-style vehicles, there are more winter snow severe tire options available and these vehicles mostly come with all-wheel-drive systems. We’re seeing a consumer trend that is undervaluing the importance and difference of a true winter tire versus the all-weather-plusall-wheel-drive combination.

Garofalo, Michelin: I think it’s an evolution of the market. Instead of providing tires for sedans, now it’s a matter of fitting SUVs and CUVs. When you look at sedans 10 years ago and the size offerings then, sizes have gone up. In order to expand in terms of coverage, we’ve added 18-inch and above sizes. That’s where the growth is, and that trend is consistent in other regions, as well.

Lee, Nexen: The determination for winter tires to be more appropriate is reliant on the weather and terrain conditions more so than the type of vehicle.

Bourassa, Nokian: There’s a false confidence that comes with an all-wheel-drive SUV or CUV. All kinds of tests that we’ve done and independents have done show that when it comes to stopping and cornering, the all-wheel-drive option does not really provide additional benefits and certainly not as many benefits as winter tires do. The reality is CUVs/SUVs are typically larger and heavier than their sedan counterparts, which makes them harder to stop. That’s where consumer education can help people make the right choices for their vehicle.

Unanue, Pirelli: We have seen demand

for winter tires for CUVs and SUVs grow as consumers look for ways to improve the safety and stopping distance of their vehicles. Winter tires improve stopping distance and handling in temperatures that regularly drop below 44 degrees Fahrenheit and provide added peace of mind in snow or icy conditions. This is thanks to the directional tread pattern with high sipe density for enhanced grip, wide deep grooves for evacuating snow and slush away from the contact patch for better braking and handling, and a tread compound designed to stay pliable in the cold for enhanced traction.

Park, Tireco: Educate consumers.

Drivers not using winter tires believe that all-season tires offer sufficient traction and stopping power in winter road conditions.

Abram, Yokohama: I think it could make it a bit more difficult to sell winter tires, as many consumers will believe their SUV is better-suited for inclement weather than a car, especially if their vehicle has all-wheel-drive. Those customers should be reminded that all-wheel-drive can’t stop the vehicle if the tires don’t have the necessary snow or ice grip. ■

What to stock and how to sell WINTER TIRE SELLING SEASON PLAYS OUT DIFFERENTLY ACROSS THE COUNTRY By

Ann Neal

M

ild temperatures, not allweather tires, are to blame for a slower winter tire selling season for some independent tire dealers.

Winter tire sales took a hit this year for dealers in the eastern part of the country, where the winter of 2020 generally has been wetter, rather than snowier or colder, than average.

“Our winter tire sales have decreased year over year, mostly due to the lack of snow,”

36

says John Murray, manager of purchasing, inventory and logistics for Cleveland, Ohio-based Conrad’s Tire Service Inc. The dealership, which goes to market as Conrad’s Tire Express and Total Car Care, operates 38 stores in northeastern Ohio.

It’s the same for Randy Jones, president of Tireman Auto Service Centers Ltd. Based in Toledo, Ohio, his dealership operates 20 stores in northwestern Ohio and southern Michigan. “Winter tire season has been very slow so far due to the mild weather,” he says.

There are 59 VIP Tires & Service stores operating in Maine, New Hampshire, Vermont and Massachusetts. Winter tire sales overall have been positive, according to Blair McGaughey, the dealership’s director of tire merchandising. “Typically, our customers buy in anticipation of the winter season or will purchase prior to coming major snowstorms.”

Howie Fetzer owns one store in Fairfield, Conn. He pins softer than normal winter tire sales at his dealership, Fetzer Tire and MTD March 2020

PHOTO COURTESY FETZER TIRE

Automotive Repair Service, squarely on lack of traditional winter weather. Fetzer says he is seeing more consumers moving to all-weather tires from all-season tires, not winter tires.

The weather has not changed selling dynamics for Graham Tire Co., which is based in Sioux City, S.D., and has 31 locations throughout South Dakota and Nebraska.

“We do not sell a lot of snow tires to begin with, and we do not order in any type of significant supply to have in stock,” says David Mickelson, CEO and president of Graham Tire’s South Dakota and Nebraska locations. “We will order them in based on customer requests.”

Much of 2020’s harshest cold and big snow events have occurred in the western part of the country. Jason Smith’s five-bay dealership in Frisco, Colo., Utopia Tire and Service, has been in the midst of it. The store is in the Rocky Mountains, less than a half mile from Interstate 70 and about 75 miles west of Denver.

At 10,000 feet above sea level, Frisco is going to get snow “just as sure as the sun

tire sales also got a boost from a new traction law in Colorado that extended the mandate for vehicles to be outfitted with tires that have earned 3-Peak Mountain Snowflake certification from September through May.

WHAT MOTIVATES BUYERS

Howie Fetzer says sales of winter tires at his Fairfield, Conn., store have been soft this year due to mild weather.

rising,” says Smith. Utopia Tire’s winter tire sales this year have been fantastic.

“We’ve been up double digits every year since I bought the store,” says Smith. Winter

For some consumers, the winter tire buying decision is dictated by circumstance. “When they realize they have no traction, it forces the issue that they need to do something about it,” says Fetzer. A good experience with previous winter tires also can motivate many consumers to buy again for the upcoming cold season, according to Jones of Tireman Auto Service.

Conrad’s Murray has found that three factors often motivate customers to buy winter tires. One is a change in their vehicle’s driving performance, caused by degrading traction.

Other customers may have purchased a new vehicle that is unable to perform to their previous vehicle’s capabilities. And for others, the buying decision may be prompted by original equipment tire limitations.

Whatever their motivation, winter tire

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Winter tires buyers tend to be more informed than allseason tire buyers. “I do think that repeat snow tire buying customers tend to do a little more research and purchase from a basis of snow tire performance reviews than (when buying) a typical all-season tire,” says Murray. “We carry an opening price point snow tire line, and a premium snow tire line for this reason.”

ALL-SEASON VERSUS ALL-WEATHER

38

on all-weather tires, since we operate in an area that doesn’t always receive a lot of snow,” says Jones. “Many customers prefer all-weather tires so they don’t have to go through the changeover process.”

Mickelson says the Graham Tire stores in South Dakota and Nebraska sell many all-weather tires, too.

“I agree that most people have moved away from winter tires. We have terrible winters where we live with lots of snow and wind. However, the cities really do a great job of clearing the streets to make them drivable with decent tires.”

PHOTO COURTESY UTOPIA TIRE

The shift to all-weather tires is a good thing for highway safety, according to Fetzer. “The consumer is being misled about the safety of the vehicle they’re driving and the tires on that vehicle in winter conditions,” he says. “They don’t understand the difference between all-season and all-weather tires.

A lot of people around here don’t want to deal with having two sets of tires. If you can accomplish that in one tire, they’re in favor of that product.”

Most of Fetzer’s customer do not drive on snow-covered or icy roads. “They’re driving on roads that are dry or wet 80% of the time, but they want that aspect of safety in winter that all-season tires do not provide them.”

Colorado drivers, likewise, are mistaken about the capabilities of all-season tires and four-wheel-drive vehicles, according to Smith. “A lot of folks think that because they have four-wheel drive that they don’t need winter tires. However, everyone needs winter tires, especially for 4x4 vehicles.”

He says he explainsthe need to replace all-season tires on four-wheel-drive vehicles with a tire designed for severe conditions every day.

“For decades there’s been a misconception in this country that all-season means all-year, and that’s not the case, unless you live in Phoenix. Customers don’t understand that an all-season tire does not function well below 45 degrees, nor does it actually offer any winter traction.”

Most people think all-weather and allseason are the same. “We have to educate them on the differences in the compounding and the tread patterns,” notes Smith. “With all-weather tires, they’ve got a compound that will stand up to the heat of summer but still stay soft in winter conditions.”

Smith has had great success switching people from all-season to all-weather tires, and the availability of all-weather tires has not hurt his winter tire sales. Consumers who cannot afford two sets of tires especially value

all-weather tires, he says. “I can put them on something that meets the winter traction laws that’s going to give them outstanding winter performance but now they don’t have to switch tires every six months.”

Conrad’s has purchased a limited amount of all-weather products with limited results, according to Murray. “I believe there are noticeable performance trade-offs, where traction, noise and longevity are constantly at battle,” he says.

Murray says there will always be a snow tire segment, especially in heavy winter weather regions “until and if a true alltemperature tire compound develops.”

Jason Smith describes this year’s winter tire sales as fantastic. He owns Utopia Tire and Service in Frisco, Colo.

But snow tire regions appear to be shrinking and consumer knowledge continues to fade in areas where snow may be limited. “As the all-season tire improves and provides consumers more confidence, I think the dedicated winter tires in less winter-effected driving will see a decrease,” says Murray.

McGaughey says all-weather tires sell well at VIP Tires and Service locations.

“Because of our strong winters, winter tires are still in demand and we have not seen any cannibalization at this point.”

The Tireman Auto Service Center stores in Ohio and Michigan also do good business in all-weather tires.

“We’ve always had a strong following

LOOKING AHEAD TO NEXT YEAR

Smith plans to beef up his inventory of winter tires. “We have double-digit growth every year here at our store, so we’re constantly buying more tires and we’re constantly working out better deals with our vendors and with our manufacturers.”

He aims for all Utopia Tire employees to participate in ride-and-drives put on by tire manufacturers. “They’ve actually driven on the tires and compared them side by side.

That allows us to meet our goal, which is always to treat every customer like they are our family or friend who is out there driving.

We want to keep everyone safe.”

Fetzer says this year’s relatively mild Connecticut winter will not influence his winter tire purchase for next year. “We get deliveries twice a day, five days a week.”

Jones is planning to purchase fewer winter tires for his dealership as a result of the mild weather. “We will be more conservative in our winter tire purchases next season due to the anemic sales this year. Undoubtably, we’ll have several units left over this season.”

VIP Tire’s McGaughey did not specify upcoming purchases, saying he will be reviewing size and brand trends, programs and accounts for current inventory: “We basically stay with the same core brands, but look for opportunities in unique sizes or price points.”

Conrad’s will consider current or leftover inventory as part of its purchase program, reducing new purchases in 2020, according to Murray. “One of the challenges with snow tire inventory are the previous snow tire product lines being discontinued within a couple years, replaced with the newest and greatest, making clearing the old styles more difficult, and the margin-cutting that happens in the marketplace on these older products.” ■ MTD March 2020

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To o l s a n d e q u i p m e n t

When should you invest in new tools and equipment?

By

I

Jeff Morgan

n any business, the question of when to invest in new tools or equipment is always a challenge. There are so many variables to consider before making that important capital investment.

Timing is at the top of the list. If you jump in too soon, you may not see the return on your investment, which could have a negative impact on your cash flow. If you wait too long, or choose not to invest at all, you run the risk of losing out on business to other shops that can service your customers better.

There certainly is no magic formula associated with making these purchase decisions. However, you should apply some logic to the decision-making process in order to lead you down the right path. Ultimately, the secret involves:

Once you understand that, there are three basic questions you should ask that will help determine what you should do.

you may still need to make some equipment upgrades because ADAS may link to other vehicle systems and components that your dealership services.

For example, in order to properly align vehicles that feature ADAS, calibrating various sensors and cameras in the ADAS system is required. This often takes specialized equipment to help ensure the wheel alignment angles and ADAS calibration are in sync with each other. Failure to do so could cause these systems to not function properly.

Conversely, by having the right equipment, you can provide a more accurate and detailed service to the customer so these systems continue to work as they should. This also helps generate additional revenue as you capture increased rates that are associated with that service.

It also gives you an opportunity to educate customers about the advanced systems on their vehicles and demonstrate that your dealership can service these technologies correctly, which builds customer loyalty.

Question 1: Is this tool needed to properly service the vehicles I am seeing? Understanding the technology — as well as the average age and type — of vehicles you are servicing is critical.

You want to make sure that you have the right tools and equipment to service these vehicles and generate added revenue for your business. A great example of this is the growth of Advanced Driver-Assisted Systems (ADAS).

More vehicles are coming equipped with ADAS than ever before and many of these vehicles are finding their way into your service bays now.

Even if your dealership doesn’t service these systems directly,

Question 2: Will this tool better meet the expectations of my customers? The speed of change today is extremely fast — and nowhere is this more apparent than in the service bay. Customer expectations are changing just as quickly.

Amazon’s business model is a perfect example of this. The convenience that comes from buying an item online at a competitive price and having it delivered to your door in a short period of time has changed the way many other retailers do business.

The other piece is that consumers now have information to make educated purchase decisions in the palm of their hand.

This easy access to information is coming to the automotive

• knowing who your target customer base is, and • being just ahead of the curve in terms of their vehicles’ needs.

40

IT DEPENDS ON HOW YOU ANSWER THREE IMPORTANT QUESTIONS

MTD March 2020

To o l s a n d e q u i p m e n t

Some store owners believe their existing tools and equipment are “good enough for now.” However, upgrading tools and equipment can generate increased service bay efficiencies.

quicker, safer, and more accurate results? How much would these improved efficiencies impact your payroll and bottom line? The cost of purchase could be offset by productivity improvements in a relatively short period of time.

Additionally, if a new or improved tool can reduce the possibility of injury to your employee or damage to you customer’s property, that can be an additional benefit.

“When on the fence regarding a tool or equipment purchase decision, consider if it could help you expand your customer base,” Morgan advises dealers.

service business, as well. The use of digital inspection software now gives you the ability to send photos directly to customers, so they can see the condition of the component that needs to be repaired or replaced.

Just as the old, tried and true concept of “show and sell” — bringing the customer out to the vehicle to show them what you are recommending and why — builds confidence and trust, the digital inspection process can do the same, without the customer needing to be at your shop at the time.

This can speed up the process of gaining approvals for additional work, increasing your store’s efficiency and sales.

As your customers become more accustomed to the convenience that’s enabled by technology, you should be looking at more ways to provide it.

Question 3: Will this tool improve my shop’s efficiency and productivity? There are many new tools and pieces of equipment that are introduced for this very thing. The argument some store owners make, however, is that what they have is “good enough” for the moment. That may or may not be the case. Just because a tool or a piece of equipment is working and has met your needs thus far does not necessarily mean that you shouldn’t consider an upgrade or a newer, better version.

For example, that wheel balancer or tire changer that you have used for a decade might still work, but will upgrading it provide

42

When you ask yourself these three questions, you should have the insight that you need to make the appropriate decision.

If you answer “yes” to all three questions, this is a purchase you should consider making as soon as possible.

If you answer “no” to all three questions, this purchase may not be for you in the short term. However, you may want to revisit that possible investment at some point in the future, as vehicles and the needs of your customers will continue to change.

If you answer “yes” to some questions, consider which questions are most important to your business today and let that help drive your decision.

Also, this may be where you consider what you want your business to be moving forward. When on the fence regarding a tool or equipment purchase decision, consider if it could help you expand your customer base.

Take hybrid or all-electric vehicles, for instance.

You may not be targeting these vehicles and may not see many of them in your service bays currently. But have you noticed a growing number of these vehicles in your geographic area? Could this be an untapped market for you?

Obtaining the needed tools or equipment to service and attract these vehicles could help you service not only these vehicles but other vehicles in a customer’s household that you may currently be missing.

Tool or equipment purchase decisions are never easy, regardless of the scale or cost. Should you or shouldn’t you? Should you do it now or do it later? There is always a degree of risk involved.

I would suggest that the greater risk comes in choosing not to make these decisions at all. You do not want to wake up one day and realize that you and your business have been left behind by the competition. Don’t allow that to happen. Stay ahead of that curve. ■ Tire industry veteran Jeff Morgan is executive director of Dealer Strategic Planning, the DSP Group. He can be reached at jeff.morgan@20dsp.com or (310) 533-2576. For more information, visit www.20DSP.com.

MTD March 2020

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Ride control services

Show (don’t tell) HOW TO MARKET AND SELL RIDE CONTROL SERVICES By

Nancy Dunham

Y

ou tell your clients when their tires are unsafe. You should do the same when you see their cars have worn or faulty struts, springs, shocks and other ride control elements.

Those and other ride control parts add to the comfort of a ride, but drivers often don’t realize the vital roles they play in automotive safety. “Fundamentally, it comes down to a gross misunderstanding of what ride control products do,” says Aaron Shaffer, director of product and operations for KYB Americas Corp. “We probably created the problem ourselves.”

The misconception developed years ago, according to Shaffer, “when we started calling it ‘ride control.’ That makes people think that these products only add to comfort.

That isn’t true.”

STRATEGIES TO EDUCATE THE CONSUMER

Shaffer says tire dealers know that ride control systems impact braking, steering, stability and other crucial safety factors.

The problem is that many customers don’t understand that a car’s individual parts are intended to work together as a unit.

Shaffer equates the separate elements of the ride control system to the parts of

a furnace. A furnace won’t run properly if its blower motor, pressure switch and other items don’t properly function in concert.

Even something as basic as a furnace filter can limit the effectiveness of a furnace.

Homeowners realize they must have parts replaced to keep the furnace functioning at an optimal level.

The same is true with different ride control parts.

“We actually use a furnace analogy in one of our training courses,” says Shaffer.

“When you’re talking to a motorist, people are too quick to just talk about the parts they need,” rather than “talking about the overall purpose of what the part does and how it keeps the entire system working.”

It’s important to note that late model cars may have different needs and price points than those of older cars.

“We try to offer a better and best option in as many cases as possible,” says Brett Matschke, owner of Richlonn’s Tires, which is based in Janesville, Wis. “Of course, that can’t be across the board. Ride control is very vehicle-specific. As time passes and a vehicle ages, we try to make sure the owner is aware of (what they) need so they can choose a cost-effective option. And we do offer a finance option. Ride control is an investment.”

Adams Tireworx in Castro Valley, Calif., performs a 50-point digital inspection on each car that comes into its bays.

44

GOING DIGITAL

Trevor Adams, owner of Adams Tireworx in Castro Valley, Calif., has also found that it’s better to mention ride control services earlier rather than later in conversations with customers.

“We do a 50-point digital vehicle inspection on almost every car that comes in here,” says Adams. “Then, our advisors will look over the inspection (report) before it’s given to the customer.”

Tireworx is one of the first shops in its area to use the digital system, which has expanded the dealership’s sales by $2 million in the past three years, according to Adams.

Before Adams adopted the system, his store’s ride control system’ sales rates were at 45%. Now they are 75%, he says.

Generally, Adams finds that customers with higher-end vehicles don’t mind spending the money on ride control systems if they understand the value they will derive.

“It all comes down to the relationship we have with the customer,” he says. “We try our best to explain that there is a lot of value in doing this.

“They generally understand what it takes to keep their cars in great shape, to keep them rolling. They love their cars. We love them and love their cars and want to keep them rolling.”

Trevor Adams, owner of Adams Tireworx. has found that it’s better to mention ride control services earlier rather than later.

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Ride control services Another way Adams adds value is to ensure that he obtains the best price on parts.

“We always use high-quality parts, but we make sure we get them for the best price possible,” he said.

“We very rarely buy parts from a dealer unless it’s an item such as air bags that must be replaced with a dealer item.

“We have built a lot of trust with our customers,” he adds. “They know that we’re trying to find the best deal for them.”

Matschke agrees that early conversations with customers are critical to ride control sales and service. At his dealership, a vehicle’s mileage is the key trigger that begins a discussion about shocks, suspensions, struts and more.

“Obviously, we can diagnose the complaints, and we can point the customer in the right direction,” he says, noting that conversations begin in earnest when the odometer hits the 70,000-mile mark.

“But about 80% of vehicles go to the junk yard with their original (ride control)parts.

That’s why we start talking early and tell them we really need to focus on how ride control affects tires as much as braking does.”

Test drives can also be useful in illustrating ride control problems, he says.

It’s a positive to market ride control service through traditional channels, such as mailers and Google ads, as car owners become more tech-savvy, according to Adams.

“We don’t always come right out and call it ride control,” he says. “We’ll say things like, ‘Is your car not comfortable enough for you?’ We use phrases like that just to get more eyeballs on the ads.”

Matschke’s shop has tried various marketing strategies, including rebates, over the years.

“We have had limited success with ride control marketing,” he says. “Again, it (begins) with going back to the starting point, which is what our relationship with the customer is.

And then, as time passes, we put ride control on their radar and start them thinking about it as mileage grows. We’ll also remind that

MARKETING RIDE CONTROL

Most technicians at Richlonn’s Tires have extensive training on ride control systems, said Matschke. Part of that training involves test drives that show precisely how cars perform with various road control problems.

That type of exercise makes it easier for technicians to explain options to customers.

“It’s helpful to be able to compare those two (vehicle experiences), especially from a braking standpoint,” he says. “It’s as much about the safety part of it as it is about comfort. And our staff can talk about how safety dissipates over time as systems wear.

“You have to communicate and talk to the customer, and walk the customer through the situation,” he says. “It’s important to say, ‘We’re going to invest in getting your car back to the feel and safety it had when you started driving it.’”

That’s only possible when a dealer has built long-term relationships with customers.

Trust is what allows customers to consider expensive solutions and understand why such investments are positive, he notes.

“We need to help them get to the point that they understand why we make certain recommendations,” he said.

46

Brett Matschke, owner of Richlonn’s Tires based in Janesville, Wis., says a vehicle’s mileage may trigger a discussion with the owner about the need for purchasing ride control products.

‘The last couple times you were in here, we discussed this. It’s getting closer to the time.’”

TAKE IT FOR A SPIN

KYB’s Shaffer is a believer in showing the customer why ride control systems need to be maintained. His advice is for dealers to pre-plan test drives and then take customers on them.

One way to do that is not only to plan the route but also have a car with a finely tuned ride control system as a “test” vehicle that the customer can compare against their own. Allow them to experience the difference in stability, braking and other critical points, he advises.

“When you start talking and show some of the benefits, you can take some of the pressure off the immediate price,” he says.

“People think that these products’ only or main purpose is comfort.”

Some drivers operate under the misconception that because today’s sophisticated vehicles have long lives and are sometimes described as “computers on wheels,” they don’t need extra maintenance.

“What we teach in our training is that service writers should remind people that a computer can’t stop your vehicle,” he says. “A computer can’t turn a vehicle. A computer can’t avoid a crash. All it can do is send command. And your car is designed assuming every part is brand new.

“If that’s not the case, it takes much longer to actually function and perform the way the vehicle was designed to do.” (KYB has a video and step-by-step set of road test instructions on its website that dealers can use to set up their own ride tests.)

Make sure that the “test” car is readily available and full of gas, says Shaffer. And ensure the technician has a list of concerns about the customer’s car. That will allow the tech to show the customer the difference in how their vehicle performs in contrast to the “test” car.

Experienced drivers can often detail ride problems that a customer wouldn’t notice, he says. Adding that longer stop times, nose-diving, excessive bouncing and extra sway are all points of concern. Squealing, steering difficulties and less-than-optimal ride height are other red flags.

“The test drive doesn’t have to be that long,” says Shaffer. “It’s fine if it takes three minutes.”

One critical aspect is that the test drives are done exactly the same way on the same roads for the same time each time. It’s ideal if the test drive takes place on various surfaces — including gravel and pavement — and includes driving across speed bumps and also with quick stops and starts.

It’s also essential to avoid distractions.

“A lot of times, people just drive their vehicle casually. They have the air conditioner on high with the stereo going. That’s not a real road test because you really need to use almost all of your senses.”

Techs should always hand their list of ride control concerns to customers.

Road tests help you “quickly determine what’s normal and abnormal. They are a lot more effective than verbiage.” ■ Nancy Dunham is an automotive journalist based in Washington, D.C.

MTD March 2020

Business Insight

Runaway payroll: the killer of dealerships By

Dennis McCarron

WHAT’S THE BEST GROSS PROFIT TARGET FOR KEEPING PAYROLL UNDER CONTROL?

W

ithout a doubt, the number-one factor in most business failures is runaway payroll.

The primary reason most businesses fail is the lack of ability — or sometimes even the lack of attempt — to control payroll. The better part of my career in helping store managers and owners has been spent talking about payroll. Why the mighty focus?

It is a federal obligation that if you cannot meet payroll, you must close your doors and declare bankruptcy. You could operate at a financial loss for years. It’s not illegal to run a business poorly.

But it is illegal to not pay your employees.

Let’s look at what we mean by payroll, what your numbers should be, and then what you can do to manage payroll and protect your business.

Payroll, in this context, is two segments: gross pay and employee share of payroll taxes.

Gross pay is before any taxes are withheld.

Payroll taxes are entirely paid by the company and then half is collected back by the employer. So, when we talk about payroll, it’s always gross pay, plus company share of payroll taxes.

Payroll is measured against gross profit — not sales. Why? Let’s start with the two most important equations in business:

Gross profit is how we pay expenses. Legally, what’s your most important expense? Payroll. With that fact cemented in mind, what should your number be?

Payroll should never exceed 50% of gross profit. Alarms should go off if it does exceed that percentage. Having said that, the goal of a shop that sells tires and service should be 45% of gross profit. That leaves enough money for the company to pay its expenses, invest back in itself, buy inventory and for the owner to accurately balance risk versus reward.

I mention 50% as it is the tipping point when action is required.

When companies ask for my help and their payroll is 50% or 51%, we sit down and create a plan that will help return the company to profitability. When a dealership is at 56% to 58%, we make tough — sometimes drastic — changes to save it from bankruptcy. We make changes people might not like. But often they are necessary to save the dealership.

So, what should you do? First, start measuring payroll at least weekly. It’s much easier to make small changes when payroll hits 48% or 49% than it is to make drastic, life-altering changes.

Second, know and understand that the best way to keep payroll in check is to increase gross profit. Sell your products in packages. This approach works because it simplifies the selling process.

It’s hard enough to get a single “yes” from a customer. Imagine trying to get a “yes” for the tire sale, another for balancing, another for tire protection, and another for alignment. (Ever hear a dentist first sell you the cost to drill a cavity and then explain how much the filler will cost? Neither have I.) Here’s another way to control payroll through gross profit: Raise. Your. Labor. Rate.

Does your labor rate look like it was calculated for the year 1920 or the year 2020? Raise your minimum labor rate to at least $105, and higher if you’re in a major metro area.

Third, the last resort when it comes to controlling payroll is termination. It’s unfortunate, but if you wait too long to make small changes, this becomes your only tool.

But you’ve read this far. Hopefully, you’ve picked up enough pointers to not have to use this last resort. Don’t wait. Manage your payroll now. ■

SALES ARE ONLY AS GOOD AS THE RATIO THEY CREATE WITH GROSS PROFIT.

• Sales minus cost of goods sold = gross profit • Gross profit minus expenses = net profit Without a doubt, sales are important. Without sales, you start with zero. But sales are only as good as the ratio they create with gross profit. Let’s say a tire is sold in your store for $200. You bought that tire for $150. Upon its sale, you made a gross profit of $50, which is 25%.

At this point, you don’t even have enough money to restock your last sale, let alone pay any expenses. So, let’s sell this tire correctly. Let’s add $17 in mounting and balancing. Let’s add $30 in tire protection. Let’s get that car up on an alignment rack and check its alignment. You get the idea.

It is only with gross profit that we can pay our bills, or our expenses.

The whole point is that we must take care of the customer while taking care of the company.

If you take care of the customer at the company’s expense, you will run out of money. If you take care of the company at the customer’s expense, you will run out of customers. The only way to stay in business is to take care of both.

48

Dennis McCarron is a partner at Cardinal Brokers, a leading broker in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email him at dennis@cardinalbrokers.com.

MTD March 2020

Mergers and Acquisitions

Looking for the exit ramp?

THE FOUR PHASES OF THE DEALERSHIP TRANSACTION PROCESS By

Michael McGregor

S

ince there is no typical tire dealership, there is no typical transaction when changing the ownership of a tire dealership. Each business and situation is unique.

As investment bankers who help tire dealerships with exit options, we try to employ a consistent process so that every tire dealer wishing to sell his or her business has the best chance of getting a result that he or she can be happy with.

Typically, tire dealers engage in four phases when attempting to sell their companies.

Phase one: pre-engagement. This typically starts with a referral or inquiry. Very quickly, a non-disclosure agreement (NDA) is drawn up so the selling dealer is protected during discussions. Since owner motives matter, this is where we ask, “What are you thinking about doing?”

Whether it’s creating an employee stock ownership plan, executing a majority sale to a financial buyer or executing a 100% sale to a strategic buyer, the seller gets to decide what he or she wants to do, but the seller’s options depend on the condition or his or her financials. The larger and more profitable the business, the more options are available. Phase one should always involve an analysis and rough recast of financial results, a discussion about the range of values in the current market and the likely tax impact of various deal structures, followed by a visit to the market to look at the seller’s outlet or stores. Often, steps that a dealer can take to improve the business’ valuation are reviewed, if he or she is willing to take more time to improve results. When an owner is finally ready, an engagement agreement is signed.

Phase two: preparation. This step typically starts with an information request that lists a whole bunch of things that are needed to properly understand and then market the seller’s business. Compiling this information — while keeping it quiet from a tire dealer’s staff — usually takes some time. Eventually there is a kick-off meeting with the client. In our experience, this meeting usually includes the dealership’s owner, his or her accountant or some other trusted person with access to financials, plus myself, my deal partner or junior banker and a member of our research team. Over the course of several hours, the business’ history, locations owned and leased, key managers, store staffing, marketing, operations, tire/service mix, margins, financials and other factors will be reviewed. This results in a confidential information memorandum (CIM) that describes the opportunity, a blind teaser and a target buyer list.

Phase three: go to market. After the deliverables have been approved by the client, a blind teaser is typically sent to the target customer list. The teaser should explain the business opportunity without identifying the dealership’s name or location.

Instead, project names are typically used. When targets respond and express their interest, they receive an NDA. With signed NDAs in hand, we send out the CIM so a prospective buyer can determine whether or not he or she would be interested in the business. We then will conduct calls with the targets and answer as many of their questions as we can. Sometimes we get them additional information and sometimes we also conduct calls with the owners. It all depends on the number of prospective buyers and the level of interest they demonstrate. In cases where buyers show a lot of interest, we adhere to a strict, formal timetable and process. Assuming there are multiple buyers, a process letter that describes how the deal will be run will be delivered.

Phase four: closing. This phase comes after a letter of intent is signed by both parties.

At this point, the dealership is officially off the market and “betrothed” to the buyer.

Due diligence usually takes about 90 to 120 days. There is a definitive stock or asset purchase agreement for both parties to negotiate. We have found that honesty is always the best policy in due diligence. Disclosing bad news early and often builds trust with buyers. This phase can get emotional and stressful for sellers. We try to remind our clients that they know everything about their business and the buyer knows nothing and is therefore taking on all the risk. We only know that a client is a motivated seller by how well he or she cooperates with the seemingly never-ending information requests. Finally, a definitive stock or asset purchase agreement is negotiated and signed, and the deal is closed and funds are wired.

IT’S UP TO THE TIRE DEALER TO MAKE THE BUSINESS AS ATTRACTIVE AS POSSIBLE.

50

At the moment, multi-location tire dealer transactions are taking a year or longer to get done. Timing depends on the number of buyers interested in any given opportunity, their pipeline of deals ahead of yours and their need to digest recent acquisitions they might have made.

Ultimately, the business that is for sale is what it is. It’s up to the tire dealer to make the business as attractive as possible. ■ Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers. com/tire-and-service) and advises and assists multi-location tire dealers on mergers and acquisitions in the automotive aftermarket. For more information, contact him at michael.mcgregor@focusbankers.com.

MTD March 2020

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Business Insight

How to create a culture of accountability

CLARITY IS THE KEY THAT UNLOCKS PERFORMANCE By

Mike Townsend

In the February 2020 issue of Modern Tire Dealer, Mike Townsend discussed the importance of securing buy-in from your employees.

In this article — the fourth installment in a five-part series about steps you can take to build the best possible team at your dealership — Townsend tells you how to foster accountability.

M

ost leaders gain a commitment from their employees and then walk away, thinking, “Finally everything will change for the better,” only to find 90 days later that nothing has changed, including results.

As a tire store owner or manager, it’s not enough to set goals for your employees. You first must address the behaviors and/or habits that need to change so your employees can reach those goals. And you must instill a sense of accountability.

Many people think that accountability means taking the blame when something goes wrong.

Accountability is about delivering on a commitment, not just establishing or completing a set of tasks. It’s taking initiative with thoughtful, strategic follow-through. And it’s necessary at all levels of an organization.

Leading by example is very important when it comes to accountability. I have seen some inexperienced leaders give orders, ask inappropriate or accusative questions, and even plead for cooperation. I also have seen inexperienced leaders yell, act passive-aggressively, or throw up their hands in frustration, while thinking that they are “holding people accountable.”

None of this works. Getting angry with people when they fall short is not productive. In fact, it will almost always kill motivation and performance. Micro-management will have the same effect.

The key is clarity, and to foster accountability, you must establish clarity in the following areas:

Clear measurement. Frustration happens when you are surprised by failure. Sometimes this surprise happens because an employee is afraid to ask for help and has not established the right kind of trust with you. Sometimes it comes from premature optimism on both sides, which can easily happen without healthy conflict. During the “expectations” conversation with employees, you should agree on weekly milestones with clear, measurable and objective targets. If you see that the goal might not be met, you need to re-evaluate your strategy, brainstorm a solution and tweak the accountability plan. Keep in mind the goal is to get employees back on track and not allow them to “cop out” on a needed change in habits.

Clear feedback. Honest, open, ongoing feedback is critical.

People should know where they stand. Feedback should be fact-based and easy to deliver. Feedback also can go both ways.

Is there something you can be doing to be more helpful? You should give feedback weekly and always remember to be nice when delivering it.

Clear consequences. If you’ve been clear in all of the above ways, you can be reasonably sure that you did what is necessary to support employees’ performance. At this point, you have three choices: repeat, reward or release. Repeat the steps if you feel that there is still a lack of clarity. If the person has succeeded, you should reward them appropriately.

This could take the form of a spiff, a promotion or another tangible thing. If the employee has not delivered and you are reasonably certain that you have followed the above steps, then they might not be a good fit for the role. You should release the person from it or help that person find another role.

FRUSTRATION HAPPENS WHEN YOU ARE SURPRISED

BY FAILURE.

Clear expectations. The first step is to be extremely clear about what you expect. This means being clear about the outcome you want to see, how you’ll measure success, and how people should go about achieving the objective. Many leaders make the mistake of dictating the what, where, when and how the accountability habits will be executed. Ask your team to provide their own vision of the desired outcome, what success will look like and how they will succeed. Ask them to identify skills and resource gaps that could hinder results. The above should be done to make sure everyone is on the same page.

Otherwise, you are setting employees up for failure.

52

Establishing clarity in the above areas can help you achieve a culture of accountability that leads to results. The idea is to coach your employees instead of driving them, so that they do not forget what they agreed to be accountable for. Never forget that accountability is a team effort.

In my next article, we will focus on results, including knowing what to measure, how to hold others accountable for results and what to do when expected results miss expectations. ■ Mike Townsend is owner of Townsend Strategies, a sales and leadership training and marketing firm. He has 30 years of sales experience, 13 of them in the tire industry. As a Six Sigma black belt and professional trainer, Townsend says he “has witnessed every scenario and heard every objection in the retail tire environment across every state in the U.S.” For more information, call (865) 318-4588 or (800) 319-8552, or email Townsend at mike@townsendstrategies.com

MTD March 2020

European Notebook

Getting bigger all the time SUV TIRES ARE HUGE BUSINESS IN EUROPE By

John Stone

I

t is only a few years ago that SUVs were still a minority choice for drivers throughout Europe with these vehicles occupying only 12% of the continent’s total car parc.

However, in 2019, SUVs amounted to 30% of light vehicle sales in Europe, according to my research At the same time, this surge in popularity has taken the sale of SUV tires to the very top of the popularity list in European countries, with many leading tire manufacturers offering a progressive amount of different SUV tires within their latest product ranges.

Looking at this segment as a whole, the number of SUV tires sold in Europe has grown in the last five years.

There is no doubt that SUV tires will remain popular options for European vehicle owners.

This also includes the constantly growing market for “small SUV” tires, commonly made for crossover vehicles, which are gaining popularity in Europe, as well.

According to my research, the European countries with the greatest share of SUV tire sales during the past four-year period have been France with 18%, followed by Poland with 16% and then Italy with 15%.

Other significant markets include Germany and the United Kingdom.

At the same time, SUV tire sales across other European countries like Austria, Spain, The Netherlands and Portugal are showing growth.

Among countries in the “other” category, Poland is a relative newcomer.

However, it already has one of the highest SUV tire sales rates in Europe.

What about wheel sizes? Looking at wheels across Europe, it seems that sizes have progressively increased in diameter over the past eight years.

In 2012, the standard rim size across most of Europe was 15 inches in diam-

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SUV tires are expected to remain popular options for European vehicle owners. This trend also includes “small SUV” tires commonly produced for crossover vehicles, which is a segment of the market that is rapidly growing in popularity, as well.

eter, according to my research. By 2014, 16-inch wheels were considered to be the standard size.

Today, the market has increased even further to include 17-inch wheels and up to 23 inch rims in some countries, although 16-inch wheels still hold the largest market share in Europe, based on my observations.

The percentage share of wheels between 17 and 23 inches in diameter has continued to rise in most European countries,

I SEE NO IMMEDIATE END TO EUROPE’S PASSION FOR LARGE, VERSATILE VEHICLES. although this can differ slightly from country to country.

Looking a little deeper into this highly competitive market, in Mediterranean countries such as Italy, Portugal, Spain and France, it is interesting to note that 17-inch and smaller rims remain popular.

I have spoken with a number of tire retailers and distributors across several European countries and the general impression I am receiving is that the consumers’ passion for SUVs and crossover

vehicles shows no chance of stalling in the near future.

We can only assume that even more varieties of rugged SUV tires will be launched into an already crowded market sector in due course.

On a less encouraging note, some European tire retailers and distributors openly spoke with me about the strain this popular trend is putting on their businesses.

The main concern seems to be that since SUV tires are larger than standard passenger car tires, they typically take up more space on tire racks.

One prominent dealer told me, “Of course, it’s good when I do sell SUV tires, but at the same time, it can reduce the amount of tire brands I can stock.”

A Catch-22 situation indeed!

Taking everything into consideration, I see no immediate end to Europe’s passion for large, versatile vehicles fitted with large, versatile tires. ■ John Stone has been working within the global tire industry for the past 28 years. In 2004 he launched his own consulting company, Sapphire Media Service, which caters to business media clients around the globe. Stone also writes for tire and automotive-related publications in Europe, South Africa and Asia.

MTD March 2020

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Focus on Dealers

K&M Tire celebrates 50 years of service ANNOUNCES MORE SUPPORT FOR MR. TIRE MEMBERS By

Mike Manges

O

ver the past 50 years, K&M Tire Inc., which started as a single-store dealership, has evolved into one of North America’s largest independent tire distributors, with 31 centers throughout 27 states.

K&M Tire celebrated that achievement and its 50th anniversary during its annual meeting, which recently took place in Columbus, Ohio.

The event, which was attended by hundreds of K&M Tire customers and guests, included a large trade show, motivational speakers, several info sessions and a kickoff session during which K&M Tire CEO Ken Langhals and his daughter, K&M Tire President Cheryl Gossard, shared their business philosophy.

“We want to impact our customers by letting our family (of employees) know that we should always do what’s fair,” said Langhals. “We want to make sure we do the right thing. Our customers are part of our extended family. We want them to grow and be the best they can be.”

Strategic acquisitions have been a big driver of K&M Tire’s growth over the past several years.

In 2017, the Delphos, Ohio-based company acquired two wholesale operations: Becker Tire & Treading Inc., which had locations in Kansas, and MotoStar Tire and Auto Parts Inc., which had facilities in New York, New Hampshire and Maine.

Last summer, K&M Tire acquired Cadillac Wholesale Tire Inc. in Michigan, which furthered its push into that state.

Gossard told attendees that acquisition opportunities have materialized as a result of K&M Tire’s focus on its “mission. My goal for K&M over the next few years is to always focus on our mission and values.

We have to make sure that we always keep the customer in mind. Instead of looking at the map and planning our next acquisition, it’s … making sure we focus on our customers and are doing a good job, each and every day.

56

K&M Tire President Cheryl Gossard (left) and company CEO Ken Langhals (center), discussed business during the distributor’s recent meeting in Columbus, Ohio.

“We love growth,” she continued. “Our acquisitions are fun and exciting. But I feel these things will just happen.”

During the two-day meeting, K&M Tire also announced updates to its Mr. Tire program group, which encompasses more than 1,600 locations across the U.S., according to Dave Miller, K&M Tire’s director of marketing.

“In mid-2019, we unveiled a new digital platform for all consumer rebates,” he told attendees. “Only you can administer these rebates. They are genuinely exclusive and are for you.”

The platform lets consumers “input their email addresses and trace exactly where in the process their rebate is. In 2019, the

K&M Tire customers attended a large trade show during the event. “Our customers are part of our extended family,” says Langhals.

turnaround rate for our rebates was two to four weeks,” in contrast to typical rebate return intervals, which can be longer.

In late-2019, Miller said K&M Tire launched an instant rebate program to help Mr. Tire members “close sales by giving them the opportunity to sell tires on the spot and administer the rebate here and now.” (K&M Tire carries 51 tire brands, in total.)

The company also is ramping up its social media advertising. Moving forward, social media platforms will be “the first place where we’ll administer advertising,” said Miller.

In addition, K&M Tire has added geofencing to its marketing toolkit. “Picture a 30-mile radius around your facility,” Miller told attendees. Through geo-fencing, the distributor will be able to feed Mr. Tire ads to customers within that zone, plus other, tailored geographies.

“If you’re a dealer who likes to control your own advertising, we also have (custom) ad packages. This is a tremendous way to increase traffic in your own backyard.”

And for Mr. Tire members who sell medium truck tires, K&M Tire has rolled out a truck tire volume bonus program, he added.

“Our success is directly related to your success,” Langhals told attendees. “You are the backbone of this business. Without you, our customers, there is no K&M Tire.” ■ MTD March 2020

Focus on Industry

Form plus function MICHELIN USES DEALER, CONSUMER INPUT TO DEVELOP NEW X-ICE SNOW TIRE By

Mike Manges

M

ichelin North America Inc.’s new Michelin X-Ice Snow tire “is designed to give drivers peace of mind when driving in extreme winter conditions,” according to Michelin officials.

Introduced last month during a rideand-drive event near Montreal, Quebec, the Michelin X-Ice Snow targets passenger cars, SUVs and CUVs and will be available this fall in 82 T- and H-rated sizes, ranging from 14 inches to 22 inches in diameter.

Forty-one more sizes will be added in 2021.

With the roll-out of the Michelin X-Ice Snow, “we now have an exceptional winter tire with a new tread design and innovative technologies and leadership in ice breaking,” says Sylvaine Cuniberti, Michelin marketing director. Features of the tire include: • Michelin’s proprietary Flex-Ice 2.0 tread compound, “a full silica-based compound to maintain flexibility in severe cold climate conditions,” according to Michelin officials; • Michelin’s EverGrip technologies, which boasts a rigid polymer for improved grip on both ice and snow for the duration of the tire’s life; and • Two types of full-depth, interlocking 3D sipes “for an increased claw effect on snow and ice and for long-lasting biting edges.”

The X-Ice Snow also features a nextgeneration, V-shaped tread design that provides “100% use of the (tire’s) contact patch for optimal grip performance on snow and ice and for exceptional slush performance.”

The design “maintains its shape even when worn to continue providing grip in winter conditions.”

APPEARANCES MATTER

Michelin developed the X-Ice Snow tire based on feedback from consumers and tire dealers, who told the tiremaker that w w w . M o d e r n T i r e D e a l e r. c o m

The recently introduced Michelin X-Ice Snow targets passenger cars, SUVs and CUVs and will be available this fall in 82 T- and H-rated sizes, with 41 more sizes on the way in 2021.

they prefer winter tires with aggressive tread designs.

Dealers “wanted a product that, visually, was easy to sell,” says Dave Cowart, Michelin marketing manager. “The appearance of winter tires is very important.”

Some winter tire customers, he adds, “base their buying decision on the appearance of the tire,” and the window to make the sale can be short.

End users also sent a strong message that they wanted a winter tire with an aggressive, interlocking center rib.

“This was a direct input from the customer,” says Cowart.

“The look of the tire is so essential in winter tires,” says Sabrina Garofalo, product manager, winter, Michelin. “If the look of the tire isn’t aggressive enough, it’s a hard sell.”

Although the Michelin X-Ice Snow is a worldwide product offering, feedback from North American dealers and customers “was certainly weighted,” according to Farell Scott, winter product manager, North America, Michelin.

The tire’s predecessors, the Michelin X-Ice Xi3 and the Michelin Latitude X-Ice Xi2, “performed very well and were continuously recommended,” says Scott. “We could have simply changed their tread

designs” without improving upon their on-the-road performance.

But dealers and end users also sought longevity, which the tiremaker’s Flex-Ice 2.0 tread compound provides, says Julie Laliberte, Michelin sales and training manager.

Enhancing the silica content of the tire’s tread compound “offers maximum flexibility in severe cold,” which is important, she notes, because many drivers run on dry, yet cold, surfaces during the winter months.

The inclusion of Michelin’s EverGrip technologies helps ensure grip as the tire wears over its lifespan, according to Laliberte. And the tire’s tread stock features “engineered micro-particles” that also will enable the tire to maintain traction through its life cycle.

“You can have the perfect tread design but if you don’t have the right compounds, the tire won’t do what it’s supposed to,” she notes.

LOCALLY MADE

The Michelin X-Ice Snow will be manufactured at the tiremaker’s plant in Nova Scotia, which will supply 85% of the product’s volume in North America. The plant is “over 90% dedicated” to producing the tire, according to Cowart.

SKUs intended for the Canadian market will sport a maple leaf symbol.

In addition to launching the X-Ice Snow, Michelin used the Quebec event to roll out the X-Ice North 4 winter tire.

Sold in Europe for several years, the tire will only be available in Canada — starting in the fall of 2020 — in 30 sizes, ranging from 15 inches to 20 inches in diameter, according to company officials.

The X-Ice North 4, which is equipped with 250 studs for extra traction, will be “a nice complement” to the Michelin X-Ice Snow, according to Garofalo. It also features an optimized, V-shaped tread design, plus a “Nordic” rubber compound for enhanced grip at lower temperatures and longer tread life. ■

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Focus on Industry

Commercial steals the show at Goodyear TWO CONSUMER TIRES COMING IN LATE 2020 By

Joy Kopcha

S

erving fleets, whether it’s through new products or a larger network of dealers, is a critical part of the business plan for Goodyear Tire & Rubber Co. That was evident from the main stage all the way to the trade show floor of the tiremaker’s 2020 dealer conference.

Early data from 2019 shows Goodyear grew its fleet business by 5% in a down market, said Dave Beasley, vice president of Goodyear’s commercial business in North America. He said Goodyear grew its share in both the replacement and original equipment markets.

One piece of that growth was signing Chicago, Ill.-based Commercial Tire Service as a Goodyear dealer. Beasley said that adding the dealership to “the Goodyear family … expands our network in this high-growth market.”

Add to that the December acquisition of Raben Tire, which has operations in five Midwestern states. Beasley called it “an opportunistic move that allows us to acquire good value from a motivated seller.” The benefit for Goodyear is the ability to expand service to fleets and extend its distribution footprint.

Beasley said Goodyear’s goal has been to increase tire volume and extend its network. Commercial Tire Service and Raben Tire will help the company accomplish that into the future. So will the introduction of more products for fleets, he added.

“Fleets are looking for solutions to reduce downtime and improve their cost, and Goodyear is built to lead them through this challenge,” he said.

A large portion of the trade show floor was dedicated to Goodyear’s commercial products and services, including its four tire management solutions.

THREE WORDS FROM RICH KRAMER In his keynote address, Goodyear Chairman, CEO and President Rich Kramer told Goodyear dealers that their success, and the tiremaker’s success, is built on both following a threepronged approach: Plan: The future isn’t quite as unsettling with a plan in place, said Kramer, who told dealers to follow the advice of their forebears, who “kept one eye on the horizon and … another eye on everything going on around them.”

Partnership: A plan is worthless if not executed, and execution is “a team sport,” said Kramer.

Purpose: Being a tire supplier isn’t enough anymore. “We believe our purpose is to enable mobility to make life’s connections easier every day,” Kramer said. He encouraged dealers to think about their purpose, too.

“How do you make lives better? What’s your North Star?

When was the last time you thought about it?”

58

Clint Burgardt, left, and Kelly Burgardt, right, from Dakota Truck and Farm Service and Harry’s Tire Service in Minot, N.D., talk with Goodyear’s Mahesh Kavaturu, center, about truck tire products during the trade show. Kavaturu serves as the commercial tire technology director for Goodyear.

Beasley said the company is adding options to Tire Optix, which launched in 2018 and inspected more than two million tires in 2019. “We believe there is potential for (Tire Optix) to be used beyond commercial fleets,” Beasley said.

For larger fleets, the company is adding Goodyear CheckPoint, a drive-over reader system that checks tire inflation, tread depth and load, and sends that information to fleet managers.

Goodyear TireReady is a subscription-based service that helps a fleet manage the entire life cycle of a tire, from initial installation through maintenance, retreading and replacement. Fleets pay a “simple monthly fee per vehicle.”

Another new product is Goodyear TPMS Plus, which utilizes sensors to monitor tire conditions in real time. When problems arise, the driver is directed to the nearest service center, or roadside assistance is dispatched.

The company didn’t unveil any new truck tires for 2020, but Cary Budzinksi, senior director of commercial sales in North America, said the Fuel Max RTD, launched a year ago in two sizes for original equipment, will be available to dealers in the replacement market in six sizes in the second quarter of this year.

TWO NEW CONSUMER TIRES

Goodyear also unveiled two new consumer tires. The Goodyear Assurance ComfortDrive is an all-season tire that includes Goodyear ComfortFlex Technology, designed for smoother transitions and impact absorption, while delivering “ultra-refined” handling, according to Goodyear officials. The tire has optimized aqua-channel grooves and other features. It will be available in 44 sizes, for wheels ranging from 16- to 20-inches.

The Goodyear WinterCommand Ultra will debut with 23 sizes.

Thirty additional sizes for wheels with 18- to 20-inch diameters will come in 2021. The tire is designed as a premium winter offering, and Goodyear calls it its “strongest-performing winter tire yet.”

Both tires will be available in the third quarter of 2020. ■ MTD March 2020

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TPMS

Hyundai Equus & Sonata, 2011-19

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he tire pressure monitoring system (TPMS) of the Hyundai Equus (2011-2016) and Sonata (2011-2019) monitors the air pressure in the four road tires with wheel-mounted tire pressure sensors. To do this, the system uses a receiver, four radio frequency (RF) tire pressure sensors, two warning indicators on the instrument cluster, and a data circuit to perform system functions. When tire pressure is below the allowed threshold or a rapid leak is detected, the low pressure warning light on the instrument cluster will be illuminated. If the system detects a receiver or sensor fault, or if it detects a fault that is external to the receiver or sensor, the TPMS warning indicator on the instrument cluster will be illuminated.

If the fault is considered “critical,” the

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mode and sleep mode. In stationary/rolling mode, the sensor will measure pressure and temperature every four seconds, and measure acceleration every 60 seconds. In sleep mode, the sensor enters a low current consumption state where no measurements are made in order to conserve battery power.

All sensors are in this state when new. The sensor will not transmit unless requested to do so by the initiate command or when vehicle accelerates to 20 mph (32 km/h).

TIRE PRESSURE MONITOR WARNING INDICATORS TPMS focus: 2016 Hyundai Equus.

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NOTE: Tire pressure is also dependent on the temperature of the tire. For every 18 degrees Fahrenheit (10 degrees Celsius) increase in tire temperature, tire pressure increases about 1.5 psi (10 kPa). Tire pressure should only be adjusted when tires are cold (about the same as ambient air temperature).

When the low tire pressure warning light comes on, check the air pressure of all tires and adjust to the specified cold pressure listed on vehicle certification label (found on the driver’s door or door pillar).

If a tire is damaged, repair as necessary.

Ensure the warning light goes off (this may take up to four minutes if the tire is not rapidly re-inflated).

If the warning light stays on, recheck tire pressure. If tire pressure is OK, turn the wheel a quarter turn and wait another four minutes (the sensor may be in an RF null). If the warning light is still on or if the TPMS warning indicator is lit, there is a malfunction in the TPMS. See the appropriate manufacturer service information.

TPMS RESET PROCEDURES

NOTE: If the tire pressure sensor is replaced, it will need to be initiated. The TPMS is not affected by wheel and tire rotation. When the low tire pressure warning light comes on, check the air pressure of all tires and adjust to the specified cold pressure listed on the vehicle certification label. Ensure the warning light goes off (this may take up to four minutes if the tire is not rapidly re-inflated).

MTD March 2020

ALL ILLUSTRATIONS COURTESY OF HYUNDAI MOTOR CO.

TPMS

Figure 1: Registering the tire pressure sensor (1 of 2).

TIRE PRESSURE SENSOR INITIATION (AUTOMATIC)

• Auto-locate/learn takes place only once per ignition cycle. On successful completion, four road wheel sensor IDs, together with their respective road wheel positions, are latched into memory for monitoring.

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Figure 2: Registering the tire pressure sensor (2 of 2).

• Until Auto-Learn completes, previously learned sensors (together with their respective locations) are monitored for under inflation/leak warnings.

• Auto-location/learning only functions when speed is more than 15 mph (20 kph).

• It takes less than 10 minutes at 15 mph (20 kph).

TIRE PRESSURE SENSOR INITIATION (MANUAL)

NOTE: In the following procedure, a Hyundai GDS (Global Diagnostic System) with the TPMS module must be used.

NOTE: When four sensors have been learned as road wheels, it is not possible to learn new road wheel sensors on the same ignition cycle.

1) Condition - Ignition ON and Engine OFF 2) Hold TPMS module within 3 inches (76 mm) of the sensor valve, read each tire pressure sensor ID in the following order: front left, front right, rear left, then rear right.

3) Press the ENTER button as each tire is illuminated on the screen.

4) Press the WRITE button after reading all the sensor IDs. 5) Connect the GDS to the Data Link Connector (DLC) located under the left side of the instrument panel. Register the four sensor IDs to the receiver (see Figures 1 and 2).

NOTE: The tire pressure monitoring system receiver will complete the learn procedure of the new sensor after the vehicle is driven up to 20 minutes at speeds over 20 mph (32 km/h).

NOTE: For the system to correctly monitor the tires for under-inflation, there should be a total of exactly four sensors, one on each of the four road wheel positions.

There should be no other sensors in the vehicle since this could cause the system to monitor the wrong sensors or fail to learn a new sensor.

6) Modify any sensor ID and press the [OK] button.

MTD March 2020

AUTOMOTIVE INTELLIGENCE

TPMS KITS Ask Your Autel Distributor for Details

Figure 3: Installing the valve to the sensor.

DEMOUNTING/MOUNTING PROCEDURES

CAUTION: The tire should be demounted from the wheel using the tire changer manufacturer’s instructions.

Use the following information to avoid damage during the demounting/mounting procedures.

CAUTION: Ensure that the wheel to be fitted is designed for sensor mount. There should normally be a mark to indicate this.

NOTE: If the tire pressure sensor is replaced, it will need to be initiated. See “Reset procedures.”

The TPMS is not affected by wheel and tire rotation.

TIRE PRESSURE SENSOR

CAUTION: Do not use puncture repair fluid, as this can cause the sensor pressure port to block and an incorrect warning to occur.

Removal 1) Remove the wheel and tire assembly.

CAUTION: Avoid tire/tool contact with the valve while demounting the tire.

2) Deflate the tire and remove the balance weights. The tire bead should be broken about 180 degrees from the valve side of the wheel. The bead breaker should not be set too deep. Demount should end

Torque specifications Component Wheel nut Tire pressure sensor valve nut

Ft.-lbs. (N.m) 65-79.6 (88-108) In.-lbs.

(N.m)

35

(4)

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near the valve. CAUTION: The valve nut should not be re-used.

3) While handling the sensor with care, remove the valve nut.

4) Discard the tire’s valve stem assembly.

Installation CAUTION: Avoid bringing the tire pressure sensor in contact with lubricant.

Always handle the tire pressure sensor carefully.

1) Assemble the valve to the sensor, making sure the hex nut is in contact with the metal insert in the sensor body (see Figure 3).

2) Tighten the 7 mm nut with a nut driver to the required torque. See “Torque specifications.”

3) Ensure that the valve hole and mating face of the wheel are clean. Mount the assembly to the wheel using a standard valve stem puller tool.

4) Lubricate the tire bead (not the rim).

Do not use excessive lubrication.

5) Start tire mounting at about the 5 o’clock position from the valve.

Move the mounting tool away from the valve. Avoid tire/tool contact with the valve. Finish with the mounting tool near the valve.

6) Adjust inflation pressure of all wheels.

Install the valve cap.

7) If installing a new sensor, initiate the tire pressure sensor. See “Tire pressure sensor initiation” under “Reset procedures.” ■ Information for this column comes from the tire pressure monitoring systems data in ProDemand®, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in Poway, Calif., Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com. To read archived TPMS articles, visit www.moderntiredealer.com.

TS508/TS508WF PLUS

COMPLETE

SOLUTION

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

© 2020 Autel U.S. Inc., All Rights Reserved

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Nominate a Candidate for MTD’s 28th Tire Dealer of the Year Award

WE WANT TO HEAR FROM YOU! Established in 1993, Modern Tire Dealer’s Tire Dealer of the Year Award is the oldest and most prestigious honor of its kind. Each year, Tire Dealer of the Year candidates are evaluated in five categories: 1. BUSINESS SUCCESS 2. MARKETING SKILLS 3. MANAGEMENT SKILLS 4. INDUSTRY KNOWLEDGE 5. COMMUNITY INVOLVEMENT Do you know an independent tire dealer who excels in these areas?

Nominate him or her today!

DEADLINE FOR ENTRIES IS MAY 29, 2020.

In addition to the recognition of his or her peers – and the tire industry – the winner will be featured in the September 2020 edition of Modern Tire Dealer and online. Plus, MTD will make a cash donation to the charity of the award winner’s choice.

DON’T MISS YOUR CHANCE TO RECOGNIZE AN OUTSTANDING TIRE DEALER!

I am very honored and humbled at being named Tire Dealer of the Year by MTD. This award is as much about our great team as it is about me. Our success at McCarthy Tire Service is due to their hard work and dedication.”

– John McCarthy Jr., McCarthy Tire Service Inc. and 2019 Tire Dealer of the Year Award winner

THE MOST PRESTIGIOUS TIRE INDUSTRY AWARD!

TO NOMINATE, GO TO:

https://www.moderntiredealer.com/tiredealeroftheyear For more information, contact MTD Editor Mike Manges at mike.manges@bobit.com

Products Autel has expansion package for ADAS calibration system Autel Intelligent Technology Corp. has released an expansion package for its portable MA600 ADAS Calibration System. The MA600CAL1 package expands coverage from lane departure warning (LDW), included in the standard package, to blind spot monitoring (BSM), park assist and adaptative cruise control (ACC) radarbased systems, Mercedes vehicles’ night vision systems and around view monitoring (AVM) and rear collision warning (RCW) camera systems. The package features a corner reflector (radar), Mercedes night vision calibrator, RCW patterns for Volkswagen, Mercedes and Nissan vehicles and AVM patterns for Cadillac and Honda vehicles.

AUTEL INTELLIGENT TECHNOLOGY CORP. LTD. www.maxisysadas.com

Raybestos caliper line has new dual bleeder part numbers Brake Parts Inc LLC (BPI) has added dual bleeder part numbers to its Element3 brake caliper line. The new dual bleeder part numbers cover several popular vehicles-in-operation (VIO) applications such as the Ford F-150 and Honda Civic.

The company says the Element3 caliper additions are known as dual bleeder part numbers because they fit both the left and the right sides, so there’s only one caliper part number, instead of two. This means repair shops can stock one part number for the axle, instead of two.

RAYBESTOS www.brakepartsinc.com

Falken offers new WildPeak H/T02 for pickup trucks The new WildPeak H/T02 is designed to provide superior wear life, industry-leading wet performance and unmatched durability for high-powered pickup trucks. Falken says all LT sizes of the H/T02 were tested and developed using the latest 3/4-ton diesel pickups, and all LT-size offerings feature an “HD” badge on the tire’s sidewall. Features include rigid tread blocks and a rugged upper sidewall. The WildPeak H/T02 has a 70,000-mile tread life warranty (50,000 miles for HD sizes). Sizes range from 15 to 22 inches. Falken Tires is a subsidiary of Sumitomo Rubber Industries of Japan.

FALKEN TIRE CORP. www.falkentire.com

Delinte DS8 is offered in 82 fitment sizes The ultra-high performance, all-season Delinte DS8 is available in staggered fitments and wheel diameters from 18 to 32 inches from Sentury Tire USA. The Delinte DS8 is available in 82 fitment sizes. The company says the DS8 is designed and built for high-performance handling in all wet and dry road conditions. Delinte DS8 features include multiple staggered fitment options for traction and stance, big block tread patterns to maximize contact with the road, wide-cutting main grooves to evacuate water effectively, and angled tread slots to move out rain and snow for better vehicle control.

SENTURY TIRE USA INC. www.delintetires.com

Martins Industries has new tire cages for pickup trucks Martins Industries has introduced two models of pickup truck tire cages, Pickup Tire Xpeditors MPTX-50 (pictured) and MPTX-100. The MPTX-50 is built to carry up to 50 tires of 17 inches in outer diameter, while the MPTX-100 can carry up to 100 of them with its overhead section on top of the cab.

Both models fit most 6.5- and 8-foot pickup truck beds, including those of the Ford F-150, GMC Sierra and Chevy Silverado and many others. Both models use stainless steel clamps to fix the cage to the bed.

MARTINS INDUSTRIES INC. www.martinsindustries.com

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Nexen unveils Roadian GTX for SUVs and CUVs The new Roadian GTX is designed for crossover (CUV) and sport utility (SUV) vehicles.

Nexen Tire America says the Roadian GTX meets consumer demand for a safe, long lasting, and versatile tire in every season, including light snow. The Roadian GTX has a tread wear warranty of 70,000 miles, road hazard protection, and 36 months of roadside assistance. The Roadian GTX is available in more than 34 sizes covering more than 90% of the most popular CUV/SUV OEM tire sizes in the market today. Sizes range from 17 to 22 inches.

NEXEN TIRE AMERICA INC. www.nexentireusa.com MTD March 2020

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

Aftermarket Auto Parts Alliance Inc.

45

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Alliance Tire Group

13

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Autel

23, 60, 63

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Bartec USA

62

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BendPak Inc. Ranger Products

41

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BKT USA Inc.

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Blackburn OEM Wheel Solutions

51

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Cardinal Brokers LLC

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Cooper Tires

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DSP 20 Group

55

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Federal Tires

53

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General Tire

35

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GRI Tires

37

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GT Radial

47

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K & M Tire Inc.

29

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Kenda Tires USA

IBC

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Kumho Tire USA Inc.

3

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Linglong Americas Inc.

7

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Maxxis Tires

39

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Mighty Auto Parts

43

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Nexen Tire America Inc.

IFC, 17-20

www.nexentireusa.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Nokian Tyres Inc.

27

www.nokiantires.com/one

Opus IVS

59

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Sailun Tire Americas

9

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Sentury Tire

15

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TechForce Foundation

61

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Tireco Inc.

49

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Yokohama Tire Corporation

31

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ZAFCO International

33

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67

Advertising information (330) 899-2200 ext. 2217

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MTD March 2020

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Klever S/T KR52 The Klever S/T is designed to provide a long tread life, maximize ride comfort and a balanced tire performance for snow and wet weather for a wide range of CUVs and SUVs. T ir e

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