Modern Tire Dealer - March 2023

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WHEN TO SELL RIDE CONTROL SERVICE MARIJUANA IN THE WORKPLACE - WHAT YOU NEED TO KNOW THE POWER OF ALTERNATIVE FINANCING

WHAT SELLS WINTER TIRES? March 2023 | Vol. 104, No. 3 | $10 | www.moderntiredealer.com

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DEPARTMENTS

The Industry’s Leading Publication March 2023, Volume 104, Number 3

4 Editorial Just say no — and say it now Establish, enforce a marijuana use policy at your dealership

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

8 Industry News Michelin CEO: Tire dealers will play key role in EV revolution Survey shows consumers are unaware of tire tech

16 Numbers That Count Relevant statistics for an industry in constant motion

18 Your Marketplace Retail sellout remains soft Weak winter hurts early 2023 demand

46 Business Insight We need to chat – and sooner than you expect AI will be a game-changer at your dealership

48 Mergers and Acquisitions What’s up with all these C-corps?

Why some sleepy CPAs need to be fired

50 Dealer Development Dealers achieved gross profit gains in 2022 Here’s how they did it

52 EV Intelligence The cost of entry into the EV market An in-depth look at real-world numbers

54 Focus On Dealers K&M Tire promises more perks in 2023 Bigger warehouses, enhanced programs are on the way

56 Focus on Dealers Point S plans to nearly double store total in five years Co-op wants 500 stores across 50 states

58 Focus on Industry Sailun launches WSTX Ice Blazer winter tire Tire is exclusive to the Canadian market, available in 60-plus sizes

60 Focus on Dealers Northwest passage Nordness reflects on 30 years at helm of the NWTDA

61 Products 63 TPMS Hyundai Elantra – 2023

66 Ad index on the cover: Chalabala | 536956955 | Getty Images Modern Tire Dealer is a proud member of:

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Dealers say consumers who are educated about winter tires make the selling easy.

30

Photo: Alyeska Tire

F E AT U R E S 20 Is 3-Peak Mountain

Snowflake the ultimate in winter tire certification?

Not necessarily. Some manufacturers believe it’s just a starting point

30 Consumer education sells winter tires

Dealers share effective winter tire selling strategies

32 The power of

alternative financing

Provide an option for your underserved consumer

36 Marijuana in the workplace What you need to know — from regulations to testing and disciplinary actions

42 Vehicle prep can spot problems early

Getting cars ready for summer includes going beyond normal protocols

44 Knowing when to sell ride control service

Should you wait until the customer notices a problem?

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Editorial

Just say no — and say it now ESTABLISH, ENFORCE A MARIJUANA USE POLICY AT YOUR DEALERSHIP By

Mike Manges

Y

ou’ve worked hard to build your business into the successful enterprise it is today. You’ve scrimped, saved and sacrificed.

You’ve made countless tough decisions with the greater good of your customers, your employees and your dealership’s future in mind.

You’ve followed the rules, done it the right way and now you’re enjoying the rewards. (At least I hope you are!)

Now, let me ask you a question. Are you willing to throw all of this away — every single last piece of it — because of one employee’s lapse in judgement or moment of self-indulgence?

That’s what could very well happen if you don’t implement and enforce policies that deal with the use of recreational marijuana at your dealership.

To date, 22 states — and Washington, D.C. — have legalized the use of recreational marijuana. (Thirty-eight states — plus Washington, D.C. — have legalized the use of medical marijuana.)

In t his edit ion of MTD, SESCO Management Consu ltants, a company that advises tire dealerships on human resource issues, covers the intricacies of medicinal and recreational marijuana and what you need to know and do as it pertains to both.

I urge you to read the story, clip it out and keep it handy. If you have a hiring manager or human resources person, share it with them. Share the Tire work requires a clear mind. article with your attorney, Make sure your employees are too. Make it required substance-free.

Photo: MTD reading for your store managers or anybody who’s in a position of authority at your company.

You need to understand the facts about marijuana use in the workplace and how it can destroy your business.

You may have heard or read that marijuana “is harmless.”

Consider these points, provided by the National Institute for Occupational Safety and Health: • The active ingredient contained in marijuana “affects areas of the brain that control the body’s movements, balance,

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coordination, memory and judgement” and marijuana use “can impair coordination and distort perception.”

• The risk of getting in a vehicle accident increases “significantly” after marijuana ingestion.

In addition, marijuana use is more common than you might think. According to SESCO, one in eight workers actively uses marijuana on a recreational basis.

Research conducted by the National Safety Council shows that marijuana “is the most frequently used illicit drug of abuse in the United States and the drug most often detected in workplace drug testing.”

You don’t want a high employee to clock into work and get behind the wheel of a delivery truck or forklift — nor do you want a spaced-out technician working on your customers’ vehicles.

Just one marijuana-related incident has the potential to ruin your business, no matter how much insurance you carry. All it takes is one lawsuit.

What can you do? The article from SESCO that I mentioned makes a number of smart recommendations that I believe you should heed and follow.

At the very minimum, you should implement a zero-tolerance policy when it comes to marijuana use at your place of business.

Let your managers and other employees know that marijuana use will not be tolerated and that anyone found in violation of your dealership’s policy will be fired.

Put this in writing, using a third-party expert, if necessary.

Run it by an attorney before finalizing.

Require all employees — current and new — to read, understand and sign off on your policy as a condition of employment.

For the sake of your business’ continued existence and success, you have to say more than “no” to drug use.

You need to put policies in place and those policies must be enforced. Leaving it to chance puts you — and everything you’ve worked so hard for — at risk.

On a much lighter note, I’d like to draw your attention to MTD’s brand new website — accessible at the same address, www.moderntiredealer.com — and MTD Hotwire e-newsletters.

We launched these new platforms on March 1 and are excited about their fresh, eye-catching design and more importantly, how much more effectively they will deliver information to you.

Our new website, for example, is easier to navigate and features more info than ever before.

That’s critically important as we continue to provide content to help you run your business even more efficiently and profitably. ■ If you have any questions or comments, please email me at mmanges@endeavorb2b.com.

MTD March 2023 3/7/23 8:22 AM

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ModernTireDealer.com DIGITAL RESOURCES FOR THE INDEPENDENT TIRE DEALER

Stay tuned to MTD’s podcast!

The Modern Tire Dealer Show is available on Stitcher, Spotify, Apple Podcasts, Google Podcasts, iHeart Radio, Amazon Music, Audible and MTD’s website. Download it today!

MTD digital edition

eNewsletters Sign up now for Modern Tire Dealer’s e-Newsletters. We’ll send you the latest tire news and our most popular articles.

Go to www.moderntiredealer. com and scroll down to The Modern Tire Dealer Newsletter is the Definitive Source for Tire Dealer Success.

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

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www.twitter.com/MTDMagazine @MTDMagazine

The dynamics of supply and demand have been unpredictable over the past three years.

Photo: South Carolina Ports Authority

Dealers look for insights as 2023 unfolds Pricing and supply issues from 2022 continue to impact tire dealerships in 2023. MTD readers are looking for insights on where things are headed in the year to come as economic uncertainty remains and surprises continue. For example, last year, it was expected that economic issues would put a damper on tire dealership mergers and acquisitions, but that didn’t turn out to be the case. Here’s a look at the most well-read MTD web stories of the past month.

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Tire dealership M&A: Breaking down the big deals of 2022 Will there be more price increases in 2023?

Michelin CEO: Tire dealers will play key role in EV revolution Point S plans to nearly double store total in five years More big deals: Tire dealership M&A continued in 2022 How the founders of GCR hit on a winning formula Belle Tire Golden Tire Iron contest shows appreciation for techs K&M Tire dealer conference and trade show kicks off Hangover from pricing, supply crisis carry over into 2023 Why the customer isn’t always right

Modern Tire Dealer (USPS Permit 369170), (ISSN 0026-8496 print) is published monthly by Endeavor Business Media, LLC. 1233 Janesville Ave., Fort Atkinson, WI 53538.

Periodical postage paid at Fort Atkinson, WI, and additional mailing offices. POSTMASTER: Send address changes to Modern Tire Dealer, PO Box 3257, Northbrook, IL 600653257. SUBSCRIPTIONS: Publisher reserves the right to reject non-qualified subscriptions. Subscription prices: U.S. ($81.25 per year). All subscriptions are payable in U.S. funds.

Send subscription inquiries to Modern Tire Dealer, 571 Snelling Ave N, St Paul, MN 55104. Customer service can be reached toll-free at 800-260-0562 or at subscriptions@ moderntiredealer.com for magazine subscription assistance or questions.

3515 Massillon Rd., Suite 200 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 www.moderntiredealer.com PUBLISHER Greg Smith gsmith@endeavorb2b.com (330) 899-2200, ext. 2212 EDITORIAL Editor: Mike Manges, ext. 2213, mmanges@endeavorb2b.com Managing Editor: Joy Kopcha, ext. 2215, jkopcha@endeavorb2b.com Associate Editor: Madison Gehring, ext. 2216, mgehring@endeavorb2b.com PRODUCTION Art Director: Erin Brown Production Manager: Karen Runion, ext. 2210, krunion@endeavorb2b.com MARKETING STRATEGISTS Bob Marinez rmarinez@endeavorb2b.com (330) 899-2200, ext. 2217 Marianne Dyal mdyal@endeavorb2b.com (706) 344-1388 Dan Thornton dthornton@endeavorb2b.com (734) 676-9135 Sean Thornton sthornton@endeavorb2b.com (269) 499-0257 Kyle Shaw kshaw@endeavorb2b.com (651) 846-9490 Martha Severson mseverson@endeavorb2b.com (651) 846-9452 Chad Hjellming chjellming@endeavorb2b.com (651) 846-9463 MTD READER ADVISORY BOARD Rick Benton, Black’s Tire Service Inc. Jessica Palanjian Rankin, Grand Prix Performance John McCarthy Jr., McCarthy Tire Service Co. Inc. Jamie Ward, Tire Discounters Inc. CUSTOMER/SUBSCRIPTION SERVICE (800) 260-0562 subscriptions@moderntiredealer.com ENDEAVOR BUSINESS MEDIA, LLC CEO: Chris Ferrell President: June Griffin CFO: Mark Zadell COO: Patrick Rains CRO: Reggie Lawrence Chief Administrative and Legal Officer: Tracy Kane EVP Transportation: Kylie Hirko VP Vehicle Repair: Chris Messer

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Printed in the USA. Copyright 2023 Endeavor Business Media, LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopies, recordings, or any information storage or retrieval system without permission from the publisher. Endeavor Business Media, LLC does not assume and hereby disclaims any liability to any person or company for any loss or damage caused by errors or omissions in the material herein, regardless of whether such errors result from negligence, accident, or any other cause whatsoever. The views and opinions in the articles herein are not to be taken as official expressions of the publishers, unless so stated. The publishers do not warrant either expressly or by implication, the factual accuracy of the articles herein, nor do they so warrant any views or opinions by the authors of said articles.

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MTD March 2023 3/7/23 8:29 AM

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Industry News

Michelin CEO: Tire dealers will play key role in EV revolution SURVEY SHOWS CONSUMERS ARE UNAWARE OF TIRE TECH

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s electric vehicles (EVs) continue to become more popular in North America, Michelin CEO Alexis Garcin says consumers will need to learn that tires are “the most important rangeextending feature of an electric vehicle.”

And he says independent tire dealers will play a critical role in educating consumers on that front.

Garcin, the president and CEO of Michelin North America Inc., recently spoke with reporters about three key pillars of the tiremaker’s business — its people, profit and focus on the planet through sustainability efforts.

Michelin North America Inc. President and CEO Alexis Garcin says independent tire dealers will play a key role in educating consumers that tires are “the most important range-extending feature of an electric vehicle.”

Photo: Michelin

Much of the commentary focused on the company’s work tied to electric vehicles. Garcin pointed to Michelin’s role in new technologies in history, including the creation of the radial tire in 1946 and the company’s first fuel-efficiency-focused tire in 1992.

He noted that last year Michelin unveiled the Pilot Sport EV, a tire the

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company says is capable of extending an EV’s range, while also reducing noise levels by 20%.

“That’s a way to contribute to better mobility, but also make (the) tire an even more important piece (of) the car than it is today,” Garcin said.

He said the extra weight of EVs — along with their increased torque — puts more pressure on tires.

“We can see today that some tires might wear up to 20% faster. That’s why bringing technologies to the market and educating consumers can help the market, moving forward, while maximizing the performance of the tire (and) increasing the range of the car without sacrificing wear.

“And that’s a game-changing situation for us because that will leverage all the know-how of the last decades.”

So far, consumers are blind to the technology in those tires, according to a survey that was conducted on behalf of Michelin in the fall of 2022.

Results indicated that 83% of U.S. drivers aren’t sure what kind of tire an EV needs. The same survey showed that 52% of existing EV owners don’t know what kind of tire their vehicle needed either.

The survey also showed affordability (59%), range anxiety (43%) and how to charge the vehicle at home (37%) are the top EV-related concerns.

Garcin said Michelin believes tire technologies are inseparable from car technologies and that the tiremaker will play a role in software-defined vehicles.

He says eight out of 10 EVs use Michelin tires. (In the fine print, Michelin makes that claim based on its tire sales to EV manufacturers with annual sales projections of at least 1,000 vehicles in the U.S. and Canada.)

The tiremaker also began investing in RFID technology a decade ago and Garcin said that by 2024, “all of our tires will be equipped with RFID” so the company can further integrate its products with automakers’ platforms.

“We believe there is an opportunity that we’re already working at with several OEMs to make sure that we can provide a complete seamless tire experience … and provide consumers with much more predictive information instead of reactive information.”

That might come in the form of automated messages to alert drivers that it’s time to rotate their tires. It could also come in the form of studying a driver’s behaviors and recommending a different tire for a different kind of driving experience, said Garcin.

Even with that connected technology, Garcin said Michelin will continue to rely on its network of dealers.

“We have a very clear strategy in North America to rely on partners to service customers. That’s something that is very close to my heart and how we operate our business.”

Garcin said tire dealers will continue to be needed “to educate consumers that all tires are not the same.”

At the same time, dealers can provide additional services to consumers and “enrich the experience for the end users.

“That’s why I mentioned connectivity.

We could have those partners embedded into these connected offers. Think of all the services around tire management, tire maintenance.

“They are really part of our strategy. We don’t want to operate the service ourselves.

That’s why we have those partnerships in place.” — Joy Kopcha

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Industry News

Flynn’s opens larger warehouse in Pennsylvania

Bites Kumho adds warehouses In April, Kumho Tire USA plans to open a distribution warehouse in Dallas, Texas.

It’s the first of two facilities planned in the next three years. Another warehouse is expected to open in Franklin, La., in April 2026. Combined, they will have the capacity to hold more than one million tires.

Belle Tire adds store Allen Park, Mich.-based Belle Tire Distributors Ltd. has opened a store in Huntley, Ill., the company’s 15th outlet in the state. The new store spans 10,000 square feet and has 10 service bays.

Big O Tires plans 10 stores Big O Tires expects to add 10 locations during the first quarter of 2023. They will be located in North Dakota, Washington, Iowa, Arizona and Tennessee. That growth in the quarter will nearly match the 11 new stores that the TBC Corp.owned brand opened in all of 2022.

Monro buys five locations Monro Inc. has completed a five-store acquisition that includes four stores in Iowa and one in Illinois. The company bought four QC Auto Services locations, plus Muscatine Tire & Auto Center in Muscatine, Iowa. In total, they are expected to add $6 million in annualized sales.

LWG grows in Denver Leeds West Groups has acquired a Midas franchise in Parker, Colo., its ninth Midas location in the Denver, Colo., metro area. Terms of the deal were not disclosed.

VIP hosts tech sessions As part of ongoing training efforts, Lewiston, Maine-based VIP Tires & Service recently hosted three separate, handson training events to offer specialized information to more than 200 employees.

The company hosted its annual Master Tech Summit, a tire forum and a day-long safety symposium.

Black’s Tire holds meeting For the first time since January 2020, Black’s Tire Service Inc. hosted an inperson sales and leadership event. More than 600 members of the Black’s Tire Service team, along with their spouses and assorted vendors, attended.

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“The new warehouse will have more choices for customers and will be easily accessible via the turnpike and surrounding highways,” says Spencer Shearer, manager of the new Flynn’s Tire Group distribution center.

Photo: Flynn’s Tire Group

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he Flynn’s Tire Group wholesale division, FTW, has relocated its Greensburg, Pa., warehouse to a warehouse in New Stanton, Pa., that offers more than triple the square footage and tire storage capacity than the previous location.

The new distribution center is a 150,000-square-foot facility and features 22 loading docks, as well as large training and conference rooms.

“The new warehouse will have more choices for customers and will be easily accessible via the turnpike and surrounding highways,” says Spencer Shearer, warehouse manager, FTW. It also features new technologies for FTW aimed at increasing storage density, enhancing productivity and ensuring tracking accuracy.

Flynn’s Tire Group has experienced a rapid rise in demand for tires and first responded to this growth in 2020 by opening a 150,000-square-foot warehouse in Masury, Ohio. With the new facility in New Stanton, Pa., FTW’s total warehouse space measures approximately 400,000 square feet.

In the last two years, FTW has increased its fleet of delivery trucks and tire sales by more than 50%. In 2022 alone, FTW distributed more than 1.4 million tires. The company has 450,000-plus consumer tires in stock and 70 fleet vehicles serving Pennsylvania, Ohio, New York, Maryland and West Virginia.

“This investment in building and technology allows us to serve our customers more effectively and give our customers and our associates a better overall experience,” says Joe Flynn III, president of Flynn’s Tire Group.

Goodyear to cut 5% of workforce

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oodyear Tire & Rubber Co. says it will slash 5% of its global staff “in response to a challenging industry environment and cost pressure driven by inflation.”

The Akron, Ohio-based company says around 500 jobs will be eliminated by the end of the second quarter. Some eliminations have already taken place.

“Our fourth quarter results fell short of our expectations given a significantly weaker industry backdrop, particularly in Europe,” says Rich Kramer, Goodyear’s chairman, CEO and president.

These actions “are in addition to cost synergies related to the integration of Cooper Tire. The company expects to record pre-tax charges associated with these actions of approximately $55 million, primarily relating to cash severance payments that are expected to be substantially paid during the first half of 2023.

“The rationalization and reorganization will result in a quarterly run rate benefit of approximately $15 million, beginning in the second quarter. Savings in the first quarter are expected to be $5 million.”

According to Goodyear, “global replacement tire industry demand remained weak in the fourth quarter.”

MTD March 2023 3/7/23 8:22 AM

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Industry News

Bites Virginia Tire goes to school Virginia Tire & Auto LLC sponsored the inaugural session of the Women in Trades Lunch and Learn Series at Osbourn High School in Manassas, Va. Julie Holmes, co-CEO of the growing dealership, talked to young women about careers in the tire and auto repair industry.

Right to Repair returns Four U.S. House members reintroduced the Right to Equitable and Professional Auto Industry Repair (REPAIR) Act to Congress to ensure the “preservation of consumer choice, a fair marketplace and safe operation of vehicles.”

Canada targets lead weights The Canadian government has announced plans to curtail the manufacturing and sale of lead wheel weights. Companies have until Feb. 3, 2024, to transition to alternative materials, such as steel.

BP to buy TravelCenters BP plc plans to purchase TravelCenters of America Inc. in a deal estimated at around $1.3 billion. It includes the company’s truck stops and convenience stores, as well as the TA Truck Service business it has built since late 2016.

BKT unveils E-Ready logo Balkrishna Industries Ltd. (BKT) recently unveiled its E-Ready logo, which will appear on products the company makes for electric-powered equipment. BKT says the designation represents a breakthrough in the path toward solutions for electric mobility.

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he Independent Tire Dealers Group LLC (ITDG) has named Jason Rook its next president and CEO. Rook will replace Dave Marks, who is retiring this year after leading the group for the past five years.

Rook assumed his new role on Feb. 1.

Rob Slagle, chairman of ITDG’s board, says Rook “brings a wealth of experience and expertise to the position and is well-suited to lead ITDG into the future.”

Prior to joining ITDG, Rook had worked for Tube Slagle, chairand Solid Tire since 2013 and was promoted to CEO Rob man of ITDG’s board, of that company last year. Before working at Tube says Jason Rook and Solid Tire, he worked at St. Louis Wholesale Tire. (pictured) “brings a “We believe that Jason will be an excellent leader wealth of experience and expertise to the for ITDG and will continue to build upon the strong position and is wellfoundation that Dave has established,” says Slagle. suited to lead ITDG “We look forward to working with him as we continue into the future.” to serve our members and drive the success of the Photo: ITDG independent tire dealer community.”

Rook has an extensive background in the automotive industry, with more than 20 years of experience in sales, marketing and management.

ITDG officials say he is “passionate about helping independent tire dealers succeed and is looking forward to working with the ITDG team to support and grow the organization.”

“I am honored to have the opportunity to lead ITDG as its new president/ CEO,” says Rook. “I am excited to work with the talented team at ITDG to continue providing value to our members and helping them thrive in this competitive and dynamic business environment.”

Rook and Marks will work together to ensure a smooth transition.

In a separate move, longtime ITDG associate Chris Barry was promoted to vice president of sales.

Barry joined ITDG in 1998 and since then has helped the group grow from $16 million in total purchases to more than $344 million in 2021. ITDG has 164 members who represent more than 1,000 locations throughout 45 states.

Pep Boys has a new CEO

Prinx adds roadside help Prinx Chengshan Tire North America Inc. has introduced the Fortune Tires’ Premium Tire Roadside Assistance Program for ST radial tires. The benefits include 24/7 roadside assistance, replacement of flat tires with a spare or if a spare is unavailable, a towing service is provided at no expense up to $100 for up to three years after purchase.

Tire Discounters grows Tire Discounters Inc. has acquired Skip Cottrell’s Tire, a single-store location in West Somerset, Ky. The deal gives Tire Discounters 16 stores around Lexington.

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ITDG names Jason Rook president, CEO

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ep Boys — Manny, Moe & Jack has named Scott Collette its new CEO. Collette has assumed day-to-day leadership of the company, which has more than 900 stores throughout the United States and Puerto Rico.

Collette most recently was chief operating officer of home improvement retail chain Menards.

In his new role, Collette will “prioritize retention and recruitment efforts, while bringing a keen focus on talent development and workplace culture to Pep Boys,” say Pep Boys officials.

“Under Collette’s leadership, the company is looking to expand and grow its footprint with a focus on strategic, high-growth markets.

Scott Collette has taken the helm as CEO of Pep Boys.

His priorities will include retaining and recruiting employees.

Photo: Pep Boys

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Industry News

Bites Canton Bandag closes

Speakers, Hall of Fame induction highlight CTDA event

Canton Bandag, one of the oldest Bandag retreaders in existence, has closed after 60 years in business, Dave Richards Jr., the dealership’s president, told MTD. Over the years, Canton Bandag had expanded into manufacturing solid antique rubber tires, truck wheel polishing and other market segments.

Gust named to committee Dick Gust, CEO of the Tire Industry Association, has been appointed for a second time to serve on the U.S. Department of Commerce’s Environmental Technologies Trade Advisory Committee. The appointment runs through August 2024.

VAA preps for meeting The Virginia Automotive Association will host its annual convention and trade expo, April 21-23, at the Williamsburg Lodge in Williamsburg, Va. The event’s opening keynote speaker will be Kelley Earnhardt Miller, daughter of seven-time NASCAR champion Dale Earnhardt.

Apollo supports skiing Apollo Tyres Ltd. has partnered with the Alpine World Ski Championships and the company’s Vredestein’s brand served as the official sponsor of the 2023 FIS Alpine World Ski Championships.

Latin Tyre Expo on the way The Latin Tyre & Auto Parts Expo is gearing up for its 2023 show, which will take place June 14 -16 in Panama City, Panama. Organizers say the expo will host a “record-breaking” 500-plus exhibiting manufacturers.

CEAT earns award CEAT Ltd.’s plant in Halol, India, has been awarded the Lighthouse Certification by the World Economic Forum. CEAT Ltd. is the parent company of CEAT Specialty Tires. The award recognizes companies that use technology to transform their businesses for sustainability.

Love’s to expand in 2023 Love’s Travel Stops will expand the footprint of both its truck care businesses and retreading operations. The company plans to add 15 Love’s Truck Care and Speedco locations, as well as two new retreading plants, in the year ahead.

14 2303MTD_8-15_News.indd 14

Ken Kevorkian said a key to his success was a saying that he often used, which is “never be afraid of work. Let work be afraid of you.”

Photo: MTD

G

uest speakers and a hall of fame induction highlighted this year’s California Tire Dealers Association (CTDA)/1-800 EveryRim New Year Luncheon, which took place in late-January.

Dick Gust, CEO of the Tire Industry Association, and Steve Swanson, speaking on behalf of the Specialty Equipment Market Association’s Wheel & Tire Council, outlined the various programs and initiatives that they are providing for their members.

(Swanson also is the national sales manager for styled wheels at the Carlstar Group.)

Ken Kevorkian, who owned United Vulcanizing in Los Angeles, Calif., for 50 years and was one of the first members of the CTDA, was inducted into the association’s hall of fame during the event.

Kevorkian took over the reins of United Vulcanizing in the 1950s from his father, after having served with the military in Korea.

United Vulcanizing had one location from which it sold new tires and produced retreads for passenger, light truck and truck tires. Kevorkian said the company shut down its retreading operation in the mid-1980s when he added automotive service to his retail operation.

In addition to running his business, Kevorkian participated heavily in the CTDA and served as its president in 1993 and 1994.

Approximately 80 people attended the luncheon, which was held in Santa Fe Springs, Calif. Next year’s CTDA luncheon is set for Jan. 18, 2024. ■

O

C

MTD March 2023 3/7/23 8:22 AM

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3/7/23 8:22 AM 1/25/23 3:59 PM

NumbersThatCount

Relevant statistics from an industry in constant motion

31%

Percentage of products or services sold by Michelin in 2022 that had been introduced to the market in the last three years.

SOURCE: MICHELIN GROUP

Photo: Michelin

13.7 MILLION

Total number of new vehicles sold in 2022 SOURCE: COX AUTOMOTIVE

Photo: Pexels

$11.7 BILLION

Value of the 2022 commercial truck tire market SOURCE: MTD FACTS ISSUE

Photo: MTD

139

15%

SOURCE: MTD 2022 TOP RETREADERS LIST

SOURCE: O’REILLY AUTOMOTIVE INC.

Photo: MTD

Photo: Randy Hazelton Photography

Number of retread plants operated by the top 10 U.S. retreaders

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Increase in inventory per auto parts store at the end of 2022 compared to 2021.

MTD March 2023 3/7/23 8:22 AM

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The Stormblazer Crossover is a hybrid tire created for popular CUV/SUV vehicles in 70+ sizes. With dual sidewall design options and a 55K Mileage Warranty, this tire has the durability drivers expect. Our most popular PLT sizes are currently available, with a 12-Ply rating in specific sizes. For factory direct and warehouse programs call 305.621.5101. For dealer inquiries visit Landsailtires.com. @landsailtires *Specific sizes only

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3/7/23 AMPM 1/24/238:22 2:15

Yo u r M a r ket p l a ce

Retail sellout remains soft WEAK WINTER HURTS EARLY 2023 DEMAND By

John Healy

R

ecent check-ins with tire dealers leave us with the view that retail sellout trends continue to show softness on a year-over-year basis. This marks a second straight month of negative retail sellout.

Looking more closely at volume for the month of January, on a regional basis we note the Mid-Atlantic region reported the strongest year-over-year growth, up low-single digits. The Northwest region performed the weakest, falling by mid-tohigh single digits during January. Dealers indicate that less severe winter weather, as well as manufacturer price increases, were the key catalysts to unit underperformance to begin 2023.

Dealer commentary suggests consumer demand for passenger and light truck replacement tires in January was flat on a net basis compared to January of 2022. Zero respondents indicated they saw positive demand year-over-year, which compares to December’s reading of minus-25% and November’s reading of plus-43%. While trends in tire retailing are always a bit finicky and can be impacted by weather or a calendar shift, December’s trends seem to continue into 2023.

Dealers continue to struggle to obtain the right level of inventory, as 33% of respondents indicated inventory was below normal, consistent with trends from the previous month. Dealers also pointed to less severe winter weather, as well as the rising cost of tires, as factors which drove flat demand in January. One unexpected

bright spot has been the introduction of new tread patterns, which dealers say have had a positive effect on business.

Dealers had previously said they were worried 2023 would be a difficult selling environment, especially without some help from the winter weather. Thus far, this scenario appears to be playing out. Our contacts are worried about the environment going forward. And with the bulk of winter weather likely behind us, this paints a less-than-ideal picture for the consumer replacement tire industry.

While we continue to believe volumes in the long run will become more closely aligned with the current level of GDP growth, we will be closely watching macroeconomic conditions. Additional Federal Reserve interest rate hikes could spur further GDP declines.

AWAITING A MILEAGE REBOUND

Given volatile industry conditions, we look at several data points to assess the demand for travel by automobile, which correlates to tire usage and wear. Miles driven in January dropped 5.4% yearover-year, following a 9.7% decline in December and a 7% drop in November.

Miles driven has declined each month since March 2022, when U.S. fuel prices increased following the Russian invasion of Ukraine.

Despite the price of gasoline falling for nearly six months, our index has seen no measurable increase in miles driven.

Snapshot of Dealer’s PLT Tire Volumes (Year-Over-Year Change) Nov21

Dec21

Jan22

Nov22

Dec22

Jan23

Average

Increase

50%

64%

38%

57%

13%

44%

41%

Flat

17%

15%

38%

29%

49%

12%

27%

Decline

33%

21%

24%

14%

38%

44%

32%

Total

100%

100%

100%

100%

100%

100%

100%

Gasoline prices acted similarly in 2010 to 2016 and we saw miles driven bottom out six months after gasoline prices reached $4 per gallon. If gas prices follow this historical track, we believe when prices reach an average of $3 per gallon, miles driven should return. This will benefit sectors related to passenger tires and aftermarket auto parts. Until then, we suspect the passenger replacement tire market will experience headwinds.

TIER-TWO HOLDS ITS LEAD

From a mix point of view, tier-two and tier-three tires were the most-in demand in January. This continues a long-term trend, as tier-two tires were the most in-demand or tied for the most in-demand in nine of twelve months in 2022. January marked the second straight month where demand for tier-three tires tied that of tier-two tires.

For the second straight month, tier-one tire brands finished last in our survey.

Given rising prices for tires — and all consumer goods — January’s tier rankings are not a surprise to us. Dealers indicate the pricing spread between tier-one and tier-two brands has grown so large following recent pricing actions that they’ve seen consumers trade down.

In our view, this a current reality of the replacement tire market. Prices have simply become too high for some consumers to justify buying more expensive tires.

Looking forward, we note consumers seem to change their tier preference in line with the current economic situation.

Volatility has resulted in swings in the rankings over the last three months. Over the long run, we believe consumers will opt to tier-two tires as they strike the balance between performance and value. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland. Healy covers a variety of subsectors of the automotive industry.

SOURCE: NORTHCOAST RESEARCH ESTIMATES

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MTD March 2023 3/7/23 8:22 AM

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This tire is designed for severe snow conditions and meets the USTMA and TRAC snow traction performance requirements.

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20" 245/50R20 255/50R20 255/55R20 265/50R20

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3/7/23 8:22 AM 2/22/23 10:32 AM

Winter tires

Is 3-Peak Mountain Snowflake the ultimate in winter tire certification?

NOT NECESSARILY. SOME MANUFACTURERS BELIEVE IT’S JUST A STARTING POINT By

“The 3PMS (designation) is a good measure for acceleration traction on medium-packed snow,” says Phillip Schrader, product manager, touring and U.S. winter tires, PLT replacement business unit, Continental Tire the Americas LLC. “However, it leaves out other important winter driving performance attributes, such as braking and turning on snow-covered surfaces, as well as ice traction.”

Photo: Continental Tire the Americas

Mike Manges

M

any tire dealers refer to the 3-Peak Mountain Snowflake (3PMS) designation when selling winter tires — and even all-season products — to customers. While 3PMS certification might help close the sale, is it the ultimate validation of winter tire performance? Or can tire dealers — and buyers — expect to see a classification that goes beyond 3PMS? MTD recently posed that question to tire manufacturers, importers and marketers, whose answers varied widely.

(Several tire manufacturers and marketers declined to participate.)

Brandon Stotsenberg, vice president, automotive, American Kenda Rubber Industrial Co. Ltd.: Tires stamped with

20 2303MTD_20-29_WinterTires.indd 20

3PMS have different criteria to achieve the certification based on the United States/ Canadian standard versus the European Union (EU) standard. It is self-certified by the tire manufacturer to meet the minimum performance designated for 3PMS, which provides upgraded performance in colder temperatures with better medium-packed snow acceleration in the U.S. and braking in the EU. Although end users want to also have better performance on ice, slushy conditions and potentially deeper snow, the current criteria do not account for those conditions. Many tires stamped with 3PMS will perform better in these conditions, but actual performance will vary. We believe that creating more criteria to provide better-certified winter performance will (enable) the consumer to have more

Although end users want to also have better performance on ice, slushy conditions and potentially deeper snow, the current criteria do not account for those conditions.

Brandon Stotsenberg, vice president, automotive, American Kenda Rubber Industrial Co. Ltd.

confidence with the tire industry and its products. Additionally, providing stronger oversight to assure that tires self-certified by manufacturers will consistently meet the established standards will provide the end user better confidence, as well.

MTD March 2023 3/7/23 8:21 AM

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Winter tires

J Downey, senior manager, product and pricing, Apollo Tyres Ltd.: Based on performance, winter tires can be (divided) into two categories — performance winter tires and ice/snow winter tires. Performance winter tires are designed to deliver a high level of snow traction with a minimum trade-off in other performance and they can satisfy the needs of drivers who will face cold, wet and snowy conditions.

For this category, 3PMS is the ultimate certification, which indicates the tire is suitable for severe snow conditions.

Ian McKenney, senior product manager, consumer product strategy, Bridgestone Americas Inc.: A 3PMS rating requires achieving a targeted degree of acceleration in medium pack snow conditions beyond that of an all-season tire before it can be marked on the sidewall and it currently represents the highest level of winter tire performance certification. However, 3PMS-rated tires do not necessarily represent peak snow or winter performance.

There is still a differentiation in winter performance from an all-season tire with a 3-peak rating and a dedicated winter tire. At this time, there are no imminent regulations that would further differentiate these winter characteristics.

“While 3PMS-certified tires are good at lowtemperature braking and cornering and clearing slushy muck or mixed-condition snow at higher speeds, they cannot match the winter performance of traditional winter tires,” says Chris Jenkins, programs and marketing manager, automotive division, Maxxis InternationalUSA. Photo: Maxxis International-USA

22 2303MTD_20-29_WinterTires.indd 22

“To designate a tire with the 3PMS symbol, the tire must maintain standards, including a certain level of grip on a surface covered in mediumpacked snow,” says Michiel Kramer, director, product marketing, consumer, Goodyear Tire & Rubber Co. Photo: Goodyear Tire & Rubber Co.

It is possible that advances in tire technology and testing methods could lead to new certifications.

Chris Jenkins, programs and marketing manager, automotive division, Maxxis International-USA

Phillip Schrader, product manager, touring and U.S. winter tires, PLT replacement business unit, Continental Tire the Americas LLC: The 3PMS is the minimum standard for winter performance, which our winter products typically outperform by a wide margin.

All-weather tires, on the other hand, perform much closer to this minimum standard, which highlights the differences in winter performance between true winter and all-weather tires.

The 3PMS (designation) is a good measure for acceleration traction on medium-packed snow. However, it leaves out other important winter driving performance attributes, such as braking and turning on snow-covered surfaces, as well as ice traction.

To measure ice traction specifically, a new test certification that measures ice grip performance will accompany most of our new winter tire lines in the future. Passenger tires designed for use in ice conditions that meet or exceed the ice grip index of 1.18 as compared to the 16-inch standard reference test tire will qualify for the ice grip symbol, in addition to the M+S and 3PMS. Lou Monico, vice president of sales, Giti Tire Canada: 3PMS refers to a symbol on a winter tire that indicates it has been tested and meets certain performance criteria for use in severe snow conditions. Tires with the 3PMS symbol are designed to provide better traction and handling in winter conditions and they are often required by law in areas with severe winter weather.

A new category of winter tires is the ice tire or ice performance tire, which has both the 3PMS symbol and an additional ice designation marking. Th is designation indicates that the tire has passed specific tests for braking and handling on ice, in addition to meeting the winter performance criteria for snow. Ice tires are designed with special tread patterns and rubber compounds that can provide improved grip and handling on icy surfaces. If your customers frequently drive in areas with icy conditions, an ice tire may provide additional safety and peace of mind during the winter months.

MTD March 2023 3/7/23 8:22 AM

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L

Winter tires

Michiel Kramer, director, product marketing, consumer, Goodyear Tire & Rubber Co.: The 3PMS designation is an indicator that a tire has a strong level of winter performance, per the U.S. Department of Transportation’s requirements.

Several tiremakers, including Goodyear, are developing all-season tires with 3PMS designation. These are tires that carry the 3PMS symbol, but can be used year-round.

These products offer more snow traction than a traditional all-season tire, and they are a great alternative for customers.

However, for someone who drives in harsh and unpredictable winter conditions, such as during a winter travel advisory, Goodyear would still highly encourage motorists to consider a dedicated set of winter tires. To designate a tire with the 3PMS symbol, the tire must maintain standards, including a certain level of grip on a surface covered in mediumpacked snow.

Moonki Cho, product manager, Hankook Tire America Corp.: 3PMS is the industry standard when it comes to grading a tire’s performance in severe snow conditions.

Through a grading process known as the

“The 3PMS marking represents more rigorous winter tire performance certification, as it is awarded to tires that have passed specific performance tests in winter weather conditions compared to M+S, which is a more generic indicator which does not have any specific performance tests it has to pass,” says Jayden Lee, head of product marketing, U.S./Canada, Pirelli Tire North America Inc. Photo: Pirelli Tire North America Inc.

24 2303MTD_20-29_WinterTires.indd 24

“A tire that just meets the 3PMS level is a good step up in winter performance from most all-season tires, but has nowhere near the traction and control of a dedicated winter tire,” says Aaron Neumann, product development manager, Nexen Tire America Inc. Photo: Nexen Tire America Inc.

ASTM F1805-20 testing method, this procedure enables the accurate measurement of the driving traction of a tire while traveling in a straight line on snow- or icecovered surfaces. In order to obtain a 3PMS symbol and meet U.S. Tire Manufacturers Association (USTMA) requirements, a tire must achieve a traction performance index of 110 or higher. At Hankook Tire, we conduct the test through an authorized external assessment authority.

Chris Jenkins, programs and marketing manager, automotive division, Maxxis International-USA: 3PMS is a winter tire performance certification that measures a tire’s acceleration traction on medium-packed snow. It is expected to provide improved snow traction beyond a standard M+S-branded all-season tire, but it is not a replacement for dedicated winter tires. 3PMS-branded all-season and all-terrain tires cannot match the traction of dedicated winter/snow tires in all winter weather conditions.

While 3PMS-certified tires are good at low-temperature braking and cornering and clearing slushy muck or mixed-condition snow at higher speeds, they cannot match the winter performance of traditional winter tires — studless or studdable.

It is not clear if there will be something beyond that in terms of industry-recognized winter tire performance verification or certification in the future. However, it is possible that advances in tire technology and testing methods could lead to new certifications or performance standards.

Farell Scott, product category manager, Michelin passenger and winter tires, Michelin North America Inc.: The 3PMS certifies a tire on snow traction. The 3PMS symbol indicates tires meet or exceed the minimum snow traction requirements needed to determine if a tire is fit for use in severe snow. However, we know dedicated winter tires must perform well beyond minimum traction levels and for more than just snow conditions, because winter conditions are more than just snow. So understanding how a tire performs on ice conditions is equally important, as well as considering the tire’s performance in wet (conditions and) slush and overall handling.

As tire technology continues to improve, all-season tires that meet the 3PMS requirement offer customers an additional tire choice to handle their specific winter climates. These tires do not replace true, dedicated winter tires that typically offer better cold weather, snow and ice performances. To help differentiate between all-season tires that have 3PMS and dedicated winter tires that have 3PMS,

T

M

MTD March 2023 3/7/23 8:22 AM

2303

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3/7/23 AMPM 2/15/238:22 1:11

Winter tires

a recent, industry-established ice grip symbol has been adopted. Passenger tires that meet or exceed the ice performance criteria qualify for M+S, 3PMS and an ice grip symbol, identified by a pictograph of a mountain with ice. The new ice grip symbol has been introduced in Europe and is expected to roll out in North America in the future.

Aaron Neumann, product development manager, Nexen Tire America Inc.: A 3PMS marking does not represent maximum winter performance. It is more a minimum. A tire that just meets the 3PMS level is a good step up in winter performance from most all-season tires, but has nowhere near the traction and control of a dedicated winter tire.

There are many sub-categories of winter tires that qualify for the 3PMS marking, which I will list here, from best to worst: studded arctic winter tires for Scandinavian countries and far north regions; non-studded Arctic tires for those same regions where studs are banned; ice tires with semi-porous treads; alpine winter tires, which sacrifice a little snow and ice performance for more wet and dry performance for those who venture into the snow only on weekends; and finally, all-season and four-season tires that meet

Nokian Tyres has recently adopted a new ice grip standard and the ice grip marking indicates that superior level of winter performance.

The 3PMS (designation) signifies a tire has met certain performance conditions in winter weather, but it’s a starting point — a helpful way to know a tire is an option for areas that experience winter conditions.

However, (3PMS) does not capture all aspects of a tire’s winter performance, including braking and cornering. As a result, tires with the symbol may still vary in quality and we encourage consumers to research other factors before buying a tire with 3PMS. “When a tire carries the 3PMS symbol, it communicates to the consumer that it has improved traction over the standard M+S rating,” says Nick Gutierrez, sales director, Sentury Tire USA. Photo: Sentury Tire USA

However, [3PMS] does not capture all aspects of a tire’s winter performance, including braking and cornering.

Steve Bourassa, director of products, Nokian Tyres Inc.

minimum winter performance levels but can be used year-round.

An all-season tire that meets 3PMS is still a remarkable tire in the balance of performance it can deliver and for that reason, they represent the top 10% of the all-season tire market. But the best dedicated winter tires out there can deliver up to 50% more traction and control on snow and ice. The downside, of course, is that dedicated winter tires do not perform well outside of winter conditions and need to be taken off in the summer.

“At this time, 3PMS is the certification that most would look to (in order to) ensure the safety of drivers in extreme weather conditions,” says James McIntyre, vice president of sales, Canada, Sailun Tire Americas.

Photo: Sailun Tire Americas

26 2303MTD_20-29_WinterTires.indd 26

Steve Bourassa, director of products, Nokian Tyres Inc.: The 3-Peak Mountain Snowflake is not the ultimate indicator of winter tire performance. It’s a helpful tool, but an additional tool is now available — an ice grip marking that signifies strong braking on ice, too.

Jayden Lee, head of product marketing, U.S./Canada, Pirelli Tire North America Inc.: Currently, there are two tire markings signifying snow performance — the M+S marking and the 3PMS marking. The 3PMS marking represents more rigorous winter tire performance certification, as it is awarded to tires that have passed specific performance tests in winter weather conditions compared to M+S, which is a more generic indicator which does not have any specific performance tests it has to pass. The 3PMS symbol identifies that the tire has passed a minimum traction rating in the snow, but the certification doesn’t cover braking or other performance attributes.

Right now, there are no industry standards beyond (the) 3PMS marking and no plans in the future for introducing something beyond that level of certification for winter performance.

James McIntyre, vice president of sales, Canada, Sailun Tire Americas: At this time, 3PMS is the certification that most would look to (in order to) ensure the safety of drivers in extreme weather conditions. The mountain snowfl ake symbol is an easy way for a consumer to know the tire will perform at an increased level of traction.

There are generally three types of tires that would carry the 3PMS symbol — allweather, all-terrain and winter products — with winter tires having the best traction in winter/snow conditions, based on their tread design and compounding.

MTD March 2023 3/7/23 8:22 AM

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Winter tires

Nick Gutierrez, sales director, Sentury Tire USA: When you are at altitude, the weather can change fast. These changes can happen more quickly than the Department of Transportation can send out warnings or implement mandatory chains. For this reason, it is important to recommend the right snow tire for your customers.

When a tire carries the 3PMS symbol, it communicates to the consumer that it has improved traction over the standard M+S rating.

Today, the industry does not offer a higher rating than 3PMS. However, drivers can attain performance beyond this certification by purchasing tires that also have a nano-silica compound, in addition to the 3PMS (designation.) When you combine these two features, drivers can rest assured that they have maximized performance, stability and safety in the snow. Until the USTMA identifies a higher certification, combining these two features is the best recommendation for drivers.

Tsuyoshi Johnson, product manager, PCR tires, Falken Tires, Sumitomo Rubber North America Inc.: Just because a tire has earned the 3PMS certification does not mean it’s fully capable of handling the harshest winter conditions. For a tire to earn the industry’s severe snow rating, it must perform at a rate of 112% when compared to the standard reference test tire (SRTT).

We’re seeing more and more all-weather tires starting to earn this certification by performing at a level above this mark.

However, this does not mean all-weather tires deliver the same winter traction expected from a dedicated winter tire.

Winter tires typically perform somewhere between 130% and 150% above the SRTT. Andrew Hoit, executive vice president, brand division, Tireco: Although 3PMS proves the tire has passed an industrystandard traction test, it’s not enough to be named the ultimate in winter tire performance certification because the standard testing is not comprehensive and does not demonstrate the tire has a well-rounded winter performance.

It would be great to see additional testing requirements to indicate the performance levels.

28 2303MTD_20-29_WinterTires.indd 28

“For a tire to earn the industry’s severe snow rating, it must perform at a rate of 112% when compared to the standard reference test tire,” says Tsuyoshi Johnson, product manager, PCR tires, Falken Tires, Sumitomo Rubber North America Inc. Photo: Sumitomo Rubber North America Inc.

Joaquin Gonzalez Jr., president, Tire Group International LLC: When it comes to weather-specific applications in tires, compounding is paramount. Specific to snow, dedicated winter tires will provide the most balanced performance across the different road conditions. When it comes to severe conditions, the 3PMS certification ensures the compounding used will maintain its qualities even at below-freezing temperatures — making it the highest-level certification you can currently get on a winter tire.

Chris Tolbert, director of sales, Trimax Tire: Retailers and consumers have an understanding that 3PMS represents a tire technology for winter weather conditions and safety confidence. I’m sure as vehicles keep evolving with technology and electric vehicles, there will be an even more superior advancement.

With global warming in North America, the four seasons have shifted and

“Although the 3PMS (designation) proves that the tire has passed an industry-standard traction test, it’s not enough to be named the ultimate in winter tire performance certification,” says Andrew Hoit, executive vice president, brand division, Tireco.

Photo: Tireco

changed. All-weather product lines with advances in technology should continue to grow.

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Winter tires

Ray Ramirez, owner of Utopia Tire & Auto Repair in Frisco, Colo., says you have to understand the customer and your surrounding environment when selling winter tires. “We live in a mountain community and the customers who live here understand and know that winter tires work,” he notes.

Photos: Utopia Tire & Auto

Consumer education sells winter tires DEALERS SHARE EFFECTIVE WINTER TIRE SELLING STRATEGIES By

Madison Gehring and Joy Kopcha

F

or many, the winter tire market might seem like a world of its own.

Tire dealers may think they need to use different techniques when selling these products to consumers.

But in reality, many dealers say that selling winter tires boils down to listening to customers’ needs and matching the right tire to their driving patterns.

Ray Ramirez, owner of Utopia Tire & Auto Repair in Frisco, Colo., says the most effective strategy is to really understand your customers and your environment.

“We live in a mountain community and the customers who live here understand and know that winter tires work,” says Ramirez, whose dealership sells Nokian brand products.

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“However, we do get a good stream of tourists coming through who don’t have a lot of faith in — or education about — winter tires.”

Don Rutherford, wholesale manager at Alyeska Tire, which is based in Anchorage, Alaska, and has eight stores, says that he promotes the stopping capability of winter tires.

“A studded tire will stop first,” he says.

“A studless winter tire will stop second.

An all-weather tire will (go) beyond that studless tire. And an all-season tire will (travel) all the way across a (street) intersection before it stops.”

Ramirez says winter tires make up about 40% of Utopia Tires’ total revenue.

Rutherford says that in 2022, winter tires made up 42% of his company’s sales.

(Alyeska Tire also carries Nokian brand winter tires.)

Providing educational materials — both online and in-person — also is important, according to Ramirez.

“Have education materials on your website,” he advises. “Show third-party sources that demonstrate the stopping power and braking distance of cars with winter tires versus cars with non-winter tires.

“If I quote third-party statistics, it’s better than me sitting there (stating) my opinion.”

Ramirez says it helps if salespeople are driving on winter tires, too, so they can speak from experience.

Rutherford notes that having a good point-of-sales system has been “crucial” to his company’s success because it keeps track of sales and inventory. (He bases next year’s order of winter tires on the past three years’ worth of sales data.)

“I place the order a year in advance — around February — and then by next June and July, I start getting shipments in and by September, I am starting to sell the winter tires. By Oct. 30, our inventory is almost eliminated.”

As of last month, Rutherford had plenty of winter tires left to sell — enough to get Alyeska Tire through the rest of the season.

It also helps to anticipate questions that customers will ask, says Ramirez, who adds that the best way to ensure repeat winter tire business is to educate vehicle owners.

“The customer is going to come in here asking if winter tires actually work,” he says. “If we have a video on our website demonstrating the stopping capabilities of a winter tire, then the question is answered already.

“Once you create a market that is educated, they come back to you again and again.”

ROOM FOR MORE

Andrew Harpole is a firm believer in consumer education.

As one of the new owners of Shervin’s Auto and Tire Care in Jackson, Wyo., Harpole says longtime customers who are familiar with the benefits of winter tires and are accustomed to driving on them will not go a season without them.

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Winter tires

Two generations of the Shervin family operated the dealership for more than 50 years before Harpole and two business partners, Marc and Ciara Malone, purchased it last year. Marc is the store’s manager.

The Bridgestone Blizzak and Firestone WinterForce are big sellers for Shervin’s Auto and Tire Care.

“People bought Blizzaks from the Shervin brothers for enough years that the tire has a pretty loyal following in Jackson. People understand it. They’re fine with swapping (tires) every six months.”

The Jackson market is unique in that it serves not just the local community of 10,000 people and the larger Teton County population of 23,000, but also travelers who visit Grand Teton National Park and Yellowstone National Park each year.

Harpole says there’s room in his market for all-weather tires, too.

He has a customer who lives and works in East Jackson and is “more of a procras-

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Don Rutherford, wholesale manager at Alyeska Tire, which is based in Anchorage, Alaska, says it is important for his team to educate customers about the stopping ability of different types of tires.

Photos: Alyeska Tire

tinator than proactive when it comes to taking care of her car.”

He doesn’t think the traditional seasonal tire swap is ideal for her.

“She’ll be fine in the (Bridgestone) WeatherPeak,” which is an all-weather product, he says.

“I feel very comfortable putting someone in those tires.”

Another Shervin’s Auto and Tire Care customer is a hockey mom who drives “all over creation all winter for tournaments.”

She’s a better candidate for dedicated winter tires, he explains.

Harpole says the nine-bay dealership has the capacity to store about 2,000 tires, and also relies on deliveries from warehouses in Denver, Colo., and Salt Lake City, Utah.

“We’re having one of our best snowfall years in quite a while. It is a matter of life and death in these parts” during the winter months, making it essential “that you have the best tire possible.”

2/22/23 10:27 AM

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The power of alternative financing PROVIDE AN OPTION FOR YOUR UNDERSERVED CONSUMER By

Joy Kopcha

J

ust as you are uneasy about the economy and how it might affect the customers who walk in your door, the tires you sell and the automotive repairs your technicians complete, consumers are anxious about how to pay for those service tickets.

Represenatives of secondary financing companies say now is the time to offer another payment option.

consumers typically do not qualify for primary financing like store-branded credit cards, they need other options to pay over time. For a vast majority of tire and auto retailers, having alternative financing options increases sales and conversion rates from the get-go. Plus, dealers that advertise these financing options early and often are bringing in new customers who were previously underserved.

MTD: It seems alternative financing is more popular in lots of categories. How is that affecting sales in tires and automotive?

MTD: What’s the forecast for tires/ automotive sales via alternative financing in the next three to five years?

Mary Jones, CEO, EasyPay Finance: Customers now expect more options and access to financing that works for them.

Across categories, this translates to notably improved metrics if products can be purchased through a tailored and structured approach that matches customer need.

It’s a growing trend that underscores the importance of tires and auto businesses incorporating alternative financing at the point of sale. All options are not created equal, however, so it’s essential to partner with a provider who understands the space, wants what is best for your shared customers and provides you with exceptional service.

Jones (EasyPay Finance): We expect strong and sustained growth in this sector. Consumers have made their choice clear. They want financing options and the flexibility to pay over time. We are particularly optimistic because we work with our merchant partners to provide training and resources designed for long-term success. We speak the language of the customer and introduce a lasting solution to an otherwise perceived decline in service options.

Reid Bork, chief revenue officer, Katapult Holdings Inc.: With more individuals living paycheck to paycheck due to the current macroeconomic climate, there is greater demand for solutions that will meet consumers wherever they are on their economic journey — a demand we expect to continue to grow in 2023 and beyond.

Shawn Sieck, chief sales officer, Koalafi: Nearly one out of two U.S. consumers has a credit score below 660, unscorable credit or no credit score at all. Since these

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Bork (Katapult): Lack of access to credit is not a niche issue. More than 30% of American consumers are overlooked by traditional financing options. This leaves millions of consumers unable to obtain essential durable goods when needed. As a result, big-ticket items that impact quality of life remain out of reach, including tires.

When it comes to replacing or buying new tires, when there is a need, it’s typically immediate. Unfortunately, this isn’t an expense that most consumers plan for.

Lease-to-own (LTO) offers consumers the additional flexibility they may need to purchase the tires that will get them to work or wherever they need to go, while keeping their monthly expenses in check.

Sieck (Koalafi): With higher interest rates and inflation, we expect more consumers to choose to pay over time for larger purchases, especially necessities like new tires or repair work. To maximize sales, tire retailers and repair shops must incorporate these alternative financing options within their sales processes and point-of-sale systems. The simpler it is for the dealer and the customer, the better it is for everyone.

Image: 1145857377 | ISerg | Getty Images

Alternative financing

MTD: For tire dealers who haven’t yet added an alternative financing option, what’s one point you’d make to urge them to sign up this year?

Jones (EasyPay Finance): You’re leaving sales on the table. It’s as simple as that.

If you aren’t actively offering financing options (primary and secondary/ alternative) to your customers, they will go to your competitors that do. With the right financing partner, it is easy to learn and develop a comfort level with the well-established options that exist today.

There is little to no barrier to entry and significant upside once in place.

Bork (Katapult): For retailers, LTO options are vital, helping them reach a large, loyal consumer base and enabling formerly excluded consumers to obtain the goods they need, including tires and automotive parts. According to a Katapult survey, 54% of Americans are more likely to shop with a merchant that offers flexible payment options. Flexible payment options are often the only way for non-prime consumers to obtain necessary durable goods, especially as many traditional lenders tighten their lending criteria or increase interest rates.

By opening up financial opportunity through LTO, retailers can also cultivate strong customer relationships for enduring loyalty and retention. At Katapult we see 50% of our customers come back to make a repeat purchase.

Sieck (Koalafi): We surveyed over 2,000 non-prime consumers who financed a high ticket purchase with Koalafi in 2022.

Sixty percent of them wouldn’t have made a purchase if there was no alternative financing option for them. Ensure every customer has a path to pay over time.

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Image: 1145857377 | ISerg | Getty Images

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3/7/23 8:21 AM 2/23/23 8:24 AM

Marijuana legalization

Marijuana in the workplace

WHAT YOU NEED TO KNOW — FROM REGULATIONS TO TESTING AND DISCIPLINARY ACTIONS By

Bill Ford

UNDERSTANDING LEGALIZATION

To help you understand your rights as an employer, as well as state regulations, we have provided the following definitions and summary of regulations.

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Image: 1395172810 | dvulikaia, 1154815679 | bob_bosewell | Getty Images

T

ire dealers are challenged with recruiting and retaining staff from an ever-shrinking pool of qualified candidates.

They also are challenged with ensuring a safe work environment, which is heavily regulated by Occupational Safety and Health Administration (OSHA) federal and state regulations.

Employees expect to work in a safe environment.

Tire dealers want to ensure that their employees provide the highest quality of service. They also want to ensure that their customers’ vehicles are not damaged while being serviced and that staff can test drive the customer’s vehicle in a safe manner on roads and highways.

As if operating a profitable business isn’t hard enough, tire dealers must now manage the legalization of medical and recreational marijuana.

Thirty-eight states and the District of Columbia have legalized the use of medical marijuana. Additionally, 22 states and the District of Columbia have legalized the use of recreational marijuana.

Marijuana remains illegal under federal law.

But it is apparent that Congress does not want to weigh in on federal regulations regarding marijuana.

They prefer that states regulate the use of marijuana, which continues to confuse employers, employees and consumers.

However, there is light on the other side of the smoke. With the right tools and policies, you can successfully navigate the challenges that the legalization of marijuana creates.

Medical marijuana is available only by prescription from a licensed medical professional and is used to treat a variety of medical conditions such as pain, anxiety, nausea, glaucoma, etc.

If you operate in a state where medical marijuana is legal, you are required to consider accommodation for registered marijuana users. Policy, however, should dictate the need of an employee to be fit for duty.

MTD March 2023 3/7/23 8:21 AM

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Marijuana legalization

Policy should require that job applicants and employees communicate to you they have any prescription to include medical marijuana.

We suggest a fit-for-duty exam be performed by the Your managers, employees employee’s medical provider to determine if the employee must know the rules can perform the essential functions of the job in a safe and productive manner. If accommodations are requested by the It is recommended that you and your medical provider, then you must determine if you can reasonmanagers communicate openly with ably accommodate those accommodations. applicants and employees regarding No state law gives any employee the right to use, possess or your dealership’s policy, as well as the be impaired by marijuana on work premises or during working rules and regulations regarding both hours of employment. If there is reasonable suspicion to believe medical and recreational marijuana. an employee is impaired and such individual tests positive for Your managers and employees need marijuana, adverse action may occur. In addition, a positive to know that just because marijuana is legal for either or result for marijuana can result in adverse action if testing is both reasons, this does not give an employee the “license” required by federal or state law, you receive federal funding or to use and/or be under the influence while at work or during an employee works in a safety-sensitive position. working hours.

In essence, you should treat medical marijuana as any other Further, employees need to know that if they are ever prescription medication. If a medical marijuana card is pretested and test positive for THC — the psychoactive found sented during the application phase or during employment, it in marijuana — then disciplinary action can be taken, up is recommended that you ensure the employee is fit for duty by to and including termination. They also need to know that requesting the employee share with his or her medical provider certain products can contain traces of THC and although the the essential functions of the job. This includes physical and employee may not be under the influence at the moment, a mental requirements. Then the medical provider will let you substance abuse test can result in a positive. know whether the employee can perform essential functions with or without accommodation. who are considered under the influence and intoxicated can be This is no different than an employee having a prescription for traditional medication that would prevent that person from removed from any job, up to and including termination. You performing a job in a safe manner. Just because a job applicant are free to test applicants and employees and if they test positive for recreational marijuana, you are free not to hire them and or an employee has a medical marijuana prescription does not you are free to take disciplinary action up to mean that they are fit for duty. It behooves you to ensure that employees are, in fact, and including termination. fit for duty and capable of performing their A majority of states have updated various jobs in a safe manner. regulations regarding substance abuse to include In essence, you Also remember that you cannot summarmedical and recreational marijuana and what should treat medical ily not hire or separate the employee simply employers can and cannot do. For example, in the marijuana as any other for having a prescription for marijuana. states of Iowa, Kansas, Louisiana, Minnesota and Recreational marijuana simply means prescription medication. Vermont, employees cannot be terminated simply marijuana that is grown and sold for recbecause they tested positive for the first time. In reational purposes to adults over the age of these states, an employee must be provided the 21, pursuant to applicable state laws. Recreational marijuana option of seeking treatment. If the employee refuses or does also means that any part of the cannabis plant, living or not, is not complete a designated treatment program or completes the treatment program successfully and tests positive again, then used as an intoxicant for the reason of enjoyment or pleasure.

If you operate in California, Connecticut, Missouri, Montana, the employee can be terminated.

Most states are “mixed” states, which have legalized both Nevada, New Jersey, New York and/or Rhode Island, you must medical and recreational marijuana. And as stated above, many take care before taking adverse action against applicants or states have even more complicated rules and regulations regardemployees who are recreational marijuana users. These states ing testing and the use of drugs, including marijuana. prohibit discrimination in hiring, termination and other employment decisions simply based on an employee’s consumption of WHAT YOU CAN DO marijuana while off the job.

At a minimum, one in eight workers actively uses recreational Employers operating in any state where marijuana is legalized for recreational purposes are expected to simply treat marijuana marijuana. Two-thirds of Americans favor making marijuana usage legal. These two facts create a real challenge for your the same as alcohol. Neither substance is legal to be possessed business. So what can — and should — you do to navigate this? or consumed on the job or during working hours. Employees

Communicate openly and often

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3/7/23 8:21 AM 3/1/23 1:12 PM

Marijuana legalization

First and foremost, there isn’t a one-size-fits-all solution.

Policies, procedures and practices must be customized based on many factors to include state laws, your personal beliefs regarding marijuana use, safety, customer service standards and more.

The following topics must be carefully considered when establishing policies and practices to not only comply with state marijuana regulations, but also in hiring and retaining a high-quality workforce.

To test or not test? Most employers have implemented some form of substance abuse testing policy. SESCO Management Consultants has been an advocate of substance abuse testing for as long as I can remember. I would have never thought after all these years I would say to a client, “It is recommended that Photo: 1132681519 | Hailshadow | Getty Images you challenge your substance abuse testing policy as it relates to marijuana.”

Traditional drug testing policies happen at the pre-employand more employers appear to be treating marijuana use like ment stage, the post-accident stage, at random and if there is alcohol and ignoring off-duty recreational use. a reasonable suspicion that justifies intervention. With the These substance abuse testing policy changes are becoming legalization of marijuana, we have recommended clients chalmore common because of the lack of reliable testing available lenge their random and pre-employment testing practices, to determine whether an applicant or employee is under the unless required by a federal or state law or Department of influence of marijuana. Unlike alcohol testing, which can clearly Transportation regulations. identify whether or not an applicant or employee is under the I’ll never forget a few years ago, when a large client called influence, marijuana testing provides for either a positive or a requesting that we develop a very comprehensive substance abuse negative result. program, including random testing, for his business. He told Although research is conflicting, it is widely known that an me he vowed he was going to eradicate drugs in his workplace. applicant or an employee can test positive for using marijuana After the program was implemented, the within the last 30 to 60 days. The challenge for owner called me 30 days later. I asked him employers is conducting pre-employment and how the first round of random tests went. He random testing for marijuana use. You just don’t said, “We had four employees test positive.” know when the applicant or employee used the Although research is He went on to say that his general manager drug. And with it being legal in most states conflicting, it is widely of 30 years, his right-hand man, had tested in one form or another, testing for marijuana known that an applicant creates a number of “hoops” and processes that positive for cocaine. He then asked me how he or an employee can could keep him while terminating the other an employer must consider to avoid breaking three who had tested positive. This created the law. test positive for using a difficult situation that potentially put the Each employer must determine whether they marijuana within the business owner at legal risk. wish to implement a substance abuse program last 30 to 60 days.

Pre-employment testing. As a matter of to include pre-employment and random testbackground, there are various types or differing and/or to include marijuana. We are not ent panels of drug tests to choose. These range from a five-panel recommending either/or and certainly if you do elect to conduct test, up to a 14-panel drug test. The “panel” refers to either a pre-employment and/or random testing to include marijuana, drug or a family of drugs included in the test. As the panel levels we can assist you in establishing a compliant policy. Safety and increase, more types of drugs are typically screened. For example, workers’ comp costs are still critical issues and a comprehensive a 13-panel drug test screens for 13 of the most frequently abused substance abuse program can go a long way in reducing these prescription drugs (Xanax, Fentanyl, Ritalin, Valium, etc.) and significant costs. illicit drugs (cocaine, PCP, quaaludes, etc.).

Reasonable suspicion. Regardless of the legalization of medical The most common, least expensive test is a standard five-panel and recreational marijuana, employers do not have to tolerate drug test which screens for five illicit drugs, including marijuana. on-the-job use or intoxication. Reasonable suspicion testing is (Sometimes screening for alcohol also is requested.) More and critical as employees can’t come to work impaired. Additionally, you owe it to the rest of your employees, who expect a safe more employers are utilizing 10, 12 or even 13-panel tests.

We are finding that employers in many industries are not place to work. conducting pre-employment drug testing; are conducting preMost employers want to test based on reasonable suspicion employment drug testing, but are having marijuana dropped and out of concern for the health and safety of their employees. from the panel; or if the applicant tested positive for marijuana, It is ideal to train managers on ways to observe and determine are not considering it as part of the hiring consideration. More whether someone might be under the influence. Please note

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MTD March 2023 3/7/23 8:21 AM

Marijuana legalization

the words “might be.” The employee does not have to be legally impaired to be tested.

If you reasonably believe that someone may be a threat to themselves or others in the workplace and they are under the influence, it is always best and safest to conduct a substance abuse test. If they are not under the influence and know they will test negative, the employee will typically cooperate. If the employee refuses the test, your policy should state they are voluntarily resigning, effective immediately. (Of course, if they test positive, you have options which should be thoroughly discussed with your HR department or a third-party advisor.)

Testing based on reasonable suspicion could be prompted by the following: • Suspicious odors; • Odd employee movements, such as staggering or twitching; • Eyes that are dilated or watering; • Unusual facial expressions and a flushed complexion; • Confusion and slurred speech; • Irritability and argumentativeness; • Drowsy, slow or unusual poor performance; • Abnormal behavior for that individual.

Post-accident is another test that is strongly recommended.

Most workers’ comp programs either recommend or require a workplace substance abuse program that includes a testing protocol. If an employee tests positive after an accident, this will go a long way in a complete denial of workers’ comp and as such, reducing significant employer liabilities and costs.

Most employers will implement a basic threshold of when to test post-accident. Basic papercuts and the like typically are not sent for post-accident testing. More serious accidents and/ or injuries are sent for tests. These can include back strains, cuts, dropping parts or tools on feet, back and body strains, slip and falls with subsequent pain, etc. You are better off taking an employee to be tested and/or taking them to the local emergency room or urgent care center than not.

implementation or allow systems to go stale and out of date.

You cannot be reactive, but must be proactive in developing and maintaining these systems.

Wrongful termination lawsuits and legal intimidation are on the rise, especially among younger generations. Many believe they “know” their rights and are not afraid to contact a federal or state agency or a lawyer.

However, as stated above, compliance is attainable and affordable and an organization can attract and retain excellent employees which, frankly, removes a lot of these employment liability issues. But this must be a priority.

The employer-employee relationship is ever-changing. To navigate the challenges, SESCO recommends the first step you should take is to have a competent employment and HR specialist conduct a review of at least your employee handbook, policies and procedures. You will then have the peace of mind to at least understand where you are in terms of compliance, as well as effective policies and procedures in place. Then you can establish a roadmap to address identified needs.

Bill Ford is the president and CEO of SESCO Management Consultants, the oldest human resource and employee relations consulting firm in America, with many tire dealership clients. Ford can be contacted at (423) 764-4127 or bill@sescomgt.com.

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2/16/23 9:32 AM 3/7/23 8:21 AM

Auto service

Vehicle prep can spot problems early GETTING CARS READY FOR SUMMER INCLUDES GOING BEYOND NORMAL PROTOCOLS By

Madison Gehring

Cronan adds that the summer is when most people are driving and traveling more — meaning more wear and tear on vehicles and tires. He says a good starting point for preparing vehicles for summer driving would be in April.

PREVENTIVE MAINTENANCE

Cronan says prepping vehicles in the springtime limits the number of automotive problems that could arise in the summer.

“A lot of things get overlooked in the summer because people think their car is driving fine and they’re not too concerned with getting a flat tire in the middle of the summer, whereas if it’s minus30 degrees outside people aren’t happy to deal with those issues.”

A frequent problem that Linder Tire Service sees in the warmer months is battery problems.

“I think there may be a misconception by people because they think winter will bring more battery problems, but the heat index in the summer is just as likely to push a battery to its limits.”

Another common maintenance service that should be performed before warm weather arrives is air conditioning, according to Cronan.

He says that other services depend on where a vehicle is in terms of mileage and age.

Cronan adds that some vehicles may need a coolant flush or an A/C inspection and a flush and “you don’t see a lot of that in the winter.”

HOW TO PREP CARS

Josh Cronan, assistant manager at Linder Tire Service Inc., which is based in Iowa City, Iowa, believes in maintaining a customer’s vehicle year-round, but says April is the best month to begin summer vehicle preparation.

Photos: Linder Tire Service

S

ummer is just around the corner and for tire dealers who operate in colder weather regions, that means getting customers’ vehicles ready for warm weather driving.

Different maintenance and preparation services are needed to keep them running smoothly.

Josh Cronan, assistant manager at Linder Tire Service Inc., a three-location dealership that is headquartered in Iowa City, Iowa, says maintaining clients’ vehicles is something that should be done year-round.

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Cronan says there are two types of customers and it is important to know what kind of customer you are working with when maintainCronan says there are ing their vehicle.

“The first customers are the two types of customers — those who are on top customers who are on top of of everything and those everything and know the ins who need more guidance. and outs and need very little He believes it is important to know what type of guidance,” he says. customer an employee is “Then you have the customers talking to before selling a who don’t care to know anything tire or service. about it and are relying on us to keep them informed on what they need to do and when.

“And this is where I think certain shops go wrong. They have a protocol in place for a certain aspect of maintenance and some customers don’t understand the terminology — let alone what you are actually doing to prep their car.

“So it falls on the employees to educate customers that don’t know and guide customers (so they) have a better understanding.”

Cronan suggests doing full inspections on vehicles even when they are just there for a “simple oil change” in order to catch problems.

Some of the “hands-on” prevention Cronan and his team are doing includes air pressure checks and coolant leak checks.

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3/7/23 8:21 AM 2/17/23 9:16 AM

Auto service

Knowing when to sell

ride control service SHOULD YOU WAIT UNTIL THE CUSTOMER NOTICES A PROBLEM? Mike Spitale, manager of the Van’s Auto Service & Tire Pros store on the east side of Akron, Ohio, says his team notices a spike in ride control service in the springtime after “people go through the winter hitting potholes and driving on unstable roads.”

Photo: MTD

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Auto service

By

Madison Gehring

R

ide control has always been important to vehicle maintenance, but these services aren’t always the easiest to market to customers.

Mike Spitale, manager of the Van’s Auto Service & Tire Pros store on the east side of Akron, Ohio, says customers usually recognize when the ride of their vehicles diminishes, so they know when attention is needed.

“It’s easier to make the sale on ride control services when the customer can already feel, hear or see a problem,” says Spitale.

“It’s easier to have a customer come in with a specific complaint regarding ride control and having them be able to feel or hear the difference in the ride when they drive out of the dealership” following ride control service.

That said, it’s always a good idea to fully inspect every vehicle, he adds.

STORING DATA

Spitale says that every vehicle that comes into Van’s Auto Service & Tire Pros gets a full vehicle inspection for free.

Then Spitale and his team inform the customer of the conditions of their “wipers, battery and belts, and (we) then let them know what maintenance services we recommend.”

His shop provides “a complete, overall condition report and we do it with equipment that allows us to take photos of the vehicle and directly send those photos to the customer’s email or phone,” he says.

“This way, the customer can see what we see and have a better understanding of why we are making recommendations.”

Not every customer acts on every recommendation right away.

“Most customers are happy to know what the matter is.

Whether they’re going to fix it right now or not isn’t always an important thing, but at least we’ve made the customer aware that there is an issue.”

If a customer decides not to move forward with the service, Spitale stores data about the vehicle in the business’ point-ofsale system.

Spitale’s team makes a note of the declined service and the date when the customer came into the dealership. The next time the customer comes into the store, the system notifies the staff of the previously declined service and the technician can see if the customer is interested in reassessing a repair this time.

“And it could be any service that a customer is coming back in for, like an oil change or tire rotation,” says Spitale. “Once our system registers the customer, that denial of service notification will alert our technicians.”

SPRINGTIME SPIKE

Listening to the customer is critical, according to Spitale. “If a customer complains of a noisy disturbance while driving, it kind of gives my guys a good idea (about) where to look and we key in on that area,” he says.

“Then we take photos (and) we can go back and show the customer, ‘Look, this is what was causing that noise in your car.’”

ELECTRONIC CONTROL

Ride control components and service have become more sophisticated over time, says Spitale.

Ride control service “has been a part of car repairs for over 100 years, so it’s nothing new.”

For the most part, components like shocks and struts still look the same and still attach to the car the same way.

But a lot of the newer vehicles have electronic ride control features.

“So in those cases, it’s an advanced shock or strut going on the vehicle and when you’re dealing with that, it’s about a $1,000 to $1,500 higher cost than regular struts and shocks.”

sales@trimaxtire.com

Spitale says his team sees a spike in ride control services performed once the weather starts getting a little bit warmer.

“After people go through the winter hitting potholes and driving on unstable roads, they start to notice their cars aren’t driving like before or they’re making a noise they haven’t made before.”

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2/16/23 9:21 AM 3/7/23 8:21 AM

Business Insight

We need to chat – and sooner than you expect AI WILL BE A GAME-CHANGER AT YOUR DEALERSHIP By

Dennis McCarron

A

t the end of 2022, the news cycle was focused on an artificial intelligence (AI) program that students were using in college classes.

Given minimal information, the program — called ChatGPT — could replicate a student-authored research paper, complete with references that bypassed any known university-owned software that checks for copied material.

A few weeks later, lawyers were trying to ban the use of this program to formulate arguments in court cases.

Because ChatGPT was so good at this, it poses a threat to the human lawyers’ future earnings potential.

What makes this AI program different than others is that it truly learns.

It doesn’t just use a sophisticated Excel spreadsheet or table, run an algorithm and spit out a likely answer. It engages and feeds off data. It thinks and responds like a human would — at the speed of a massive supercomputer.

What does this have to do with the tire industry?

First, let’s look at the history of technological advances in the automotive space. In 1886, the first car was invented.

In 1908, Henry Ford industrialized the process of manufacturing automobiles, making car ownership far cheaper while producing enough so the majority of people could own one.

Three years after that came electric ignition. From there and over the next 60 years, we saw coil springs, radios, power steering, air conditioning, cruise control and anti-lock brakes — astronomical technological growth given the time period.

Over just the next nearly 30 years, we saw the advent of digital displays, con-

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nected cars, airbags and hybrid vehicles, and in just 20 more years, cameras, automatic parking, advance driver assistance systems and more appeared.

But you know what hasn’t really changed a whole lot? How to get your car serviced. You call and make an appointment or you just show up at a shop. A person asks, “What can I do for you today?” The service advisor and customer exchange information and reach an agreement. In the case of diagnostics of any kind — including noise or an engine light — a technician has to review the information collected and return a probable answer.

There will be a period of adjustment and figuring out how best to incorporate true AI. This process is about to get a wake-up call. And based on the fact that computers’ abilities double every one-and-a-half years, ChatGPT could be interacting with your customers and diagnosing vehicles in a very different way.

Imagine a computer program that can read and understand a customer’s request, access the internet and scan every known mention of a similar problem and then price and prioritize the most likely solutions. Or imagine a program that connects via Bluetooth or the internet and communicates with the vehicle directly.

This will be a game-changer. And the ability for this AI program to improve won’t be measured in years. It will be measured in months. That’s nearly vertical improvement. The big question is, “When will it start?”

That I can’t answer. I don’t have a crystal ball, but I do know what I’m looking at right now.

Should you be worried? Science fiction movies aside, this could mark a revolution for our industry.

As an industry, we are woefully understaffed and the talent pipeline is bone dry.

And as humans, we also make mistakes.

I would guess that ChatGPT or a similar program will be introduced in some capacity to replace humans somewhere along the automotive service cycle within the next 10 years.

I also don’t want to over-reach here, either. Many times, new technology is introduced — only to fall short of expectations. (Remember when computers were going to eliminate paperwork in shops and offices?)

Undoubtedly, there will be resistance.

Many operators in this industry are still behind in implementing digital vehicle inspections, something which is long overdue as a standard.

Amazon’s “hive” technology of delivering packages is still a long way out.

There will be a period of adjustment and figuring out how best to incorporate true AI into the service writing and diagnostic process.

But there’s a huge upside in getting this process started. Don’t sleep on how fast this tech will take hold. ■ Dennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com). To contact McCarron, email him at dennis@cardinalbrokers.com.

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3/7/23 8:21 AM 2/16/23 9:27 AM

Mergers and Acquisitions

What’s up with all these C-corps?

WHY SOME SLEEPY CPAS NEED TO BE FIRED By

Michael McGregor

T

here really is no good reason for most small, privately held tire dealers to be organized as C-corporations (C-corps) anymore.

The problem with this in M&A is that most buyers want to purchase a seller’s assets so they can be marked up and depreciated or amortized, plus buyers don’t want to unknowingly buy hidden liabilities they might incur when buying stock.

From a C-corp seller’s perspective, in an asset sale the seller is taxed three to four times. First, the corporation pays income tax on the gain. Second, the shareholder pays a dividend tax to get the money. And third, since C-corps are considered passive investments, the seller also pays a 3.8% NIIT (Obamacare) Tax. Fourth, in states that also have a state income or capital gains tax, a C-corp seller of assets gets taxed again. A seller of a profitable C-corp is far better off with a stock sale.

I’ve been involved in three stock sales of tire businesses, so they can be done. But your buyer had better really want your business and you had better seek active competition in your selling process to pressure a buyer to make that stock sale happen. It is far easier if a C-corp changes to an S-corp or LLC five years prior to selling.

Jonathan Wilfong is a partner at Focus Investment Banking and was also a former partner at the tax and accounting firm Price Waterhouse. Wilfong explains that prior to 1974, owners of closely held companies, even sole owners, preferred C-corps because you could have tax deductible pension or profit-sharing plans that were “top heavy.”

With as few as two participants, says Wilfong, “An owner could make a million dollars, take out $200,000 in taxable salary and then put $800,000 in a retirement plan — and get a tax deduction so that the C-corp income was zero.”

With the 1974 Employee Retirement Income Security Act (ERISA), the government eliminated top-loaded, discriminatory plans. “All of a sudden, one of the big tax advantages to a C-corp simply evaporated,” says Wilfong.

Back then, C-corps were also exempted from paying tax on the first $125,000 of income. Wilfong recalls representing the multi-location company Pick ‘N Pay Shoes. “They had several thousand stores at one time and every location was a separate C-corp,” he says.

“This was simply good tax planning, but Pick ‘N Pay Shoes had 20 people in a tax department doing thousands of corporate returns and state returns annually. This exemption

was phased out in the early 1970s as a result of the Tax Reform Act of 1969 and another good reason to be organized as a C-corp went away.

“Now here’s where I always get upset at CPAs,” continues Wilfong. “They came out with S-corps — and we also now have LLCs — and said, ‘If you don’t have more than 35 individual shareholders, we’re going to tax you at your individual rates with a complete pass through. And by the way, you’ll still have the corporate protection against liabilities that C-corps are known for.’

“With most closely held corporations, as soon as they came out with the S-corp rules, any CPA worth his salt should have immediately advised his clients to convert. I’ll tell you why. The government also said, ‘We don’t want to penalize everybody that converts.’

“Technically, there would be a step-up in the cost basis if you had equipment that’s fully depreciated and in writing up other assets, you’d have what they call a builtin gain. The government said, ‘Well, we don’t want to penalize people doing that, but we also don’t want them to convert to an S-corp the day they sell their corporate entity, so we’re going to give them five years.’

“If you could get five years distance between your S-election and when you were a C-corp, then no harm, no foul when you sell. It’s like you were always an S-corp for capital gains tax purposes,” says Wilfong.

“I sat in a client meeting four years ago with a managing partner of a regional CPA firm and three of his partners and basically told them, ‘You gave incompetent professional services. You all should be ashamed and embarrassed what you did to this company by letting them stay as a C-corp. Granted, there weren’t S-corps around when the company was founded, but you replaced a local CPA who didn’t know the difference and you picked this client up eight years ago. The first thing you should have told him to do is convert to an S-corp and now he’s paying the price.’

“The client took me aside and said, ‘Man, that was kind of harsh.’

“I said, ‘Well, listen, unless we can figure a way out, if this is going to cost you a million bucks in taxes, you tell me, was it too harsh?’ And he was like, ‘Oh no.’” ■

It is far easier if a C-corp changes to an S-corp or LLC five years prior to selling.

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

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3/7/23 8:21 AM 2/15/23 2:37 PM

Dealer Development

Dealers achieved gross profit gains in 2022 HERE’S HOW THEY DID IT By

Randy O’Connor

R

ewind to the first quarter of 2022. There was an abundance to labor rates than parts margins, though auto parts shortages of factors affecting the retail market. And the buzz was in 2022 likely didn’t help.

In 2022, the building blocks within the mix of business changes that we were most certainly in for a tough time as the made throughout the year showed up rather profoundly. price of most everything we could want or need was The average sales dollars per invoice increased to $348 per now at an eye-popping and almost excruciating level.

On top of that, new car sales were plummeting due to the invoice, a 13% lift. Gross profit dollars per invoice cruised to chip shortage. Used car sales were on the fast track to hitting $181 per invoice, a 14% lift. top pricing. The price of gas was a super-hot topic, too.

All told, the total gross profit percent for members of the Then things started to change, Miles driven, both consumer Dealer-to-Dealer Development Group jumped an entire percentand commercial, were on the rise. Consumers were spending age point from 51% to 52%. more and opening more credit accounts, while allowing their While a 1% change in gross profit percent may not sound balances to increase — in some cases, by 10% to 13%. like much, it’s a huge shift when taking into consideration the Meanwhile, the big wild card, international tension, had average spread across 300 locations. yet to fully play out yet. (Sadly, it still hasn’t played out and we Also consider that the average sales per location for a member of our group came in at $2.62 million, a 5.2% lift year over year. should all keep our fingers crossed.)

Altogether, on average, that 1% gross profit lift gave members So looking back on 2022 — and everything that could have, an additional $150,000 per location to play with. That average should have, and actually did transpire — how did we, the tire was with almost all members seeing significant improvements. dealer community, do? Let’s look at some numbers.

The results I’m going to share with you come directly from an So how did our members spend those extra dollars? Whether exclusive group of 56 tire dealership owners, by choice or force, pay rates increased — and representing more than 300 locations from thankfully so. across the United States. All sell tires and We benchmark payroll as a percent of gross One tire dollar at 24% profit — not sales or labor. provide auto service and have anywhere from one store to 66 locations. team members as the most imporisn’t quite as valuable tantWeandview Most are longtime members of the Dealersignificant piece of any tire dealer’s to-Dealer Development Group. Some have business. It just makes good sense. as a part dollar at been with the group for as many as 12 years.

In 2022, we saw the average payroll percent 52% and a service of gross profit remain relatively flat, indicating How did they perform?

Let’s start at the top by examining mix that those additional gross dollars we discussed labor dollar at 100%. of business. earlier landed in team members’ pockets, as Generally, the healthier your mix of parts they should. and service labor sales to tire sales, the healthier your gross From a non-payroll operating expense perspective, we saw profit line. some operational discipline even in the face of inflation, as a percentage of sales that was quite flat year over year, coming in Why? No two dollars are created equal on the gross line.

One tire dollar at 24% isn’t quite as valuable as a part dollar at at 20% of sales.

52% and a service labor dollar at 100%. (The more service labor This is a healthy equation for a healthier net line — and that’s and parts dollars you have for every tire dollar, the healthier exactly what happened. your gross dollars and percentages are.)

While the markets over the past few years have given us plenty In 2022, we saw parts and service gain significant ground. to wonder about, most of us — certainly those who are utilizing Tires, as a percent of total sales, took a 2.5% dip. Parts picked the strength of other independents around them to help build up 0.5%, while service labor grabbed an impressive 2% more their businesses — proved that 2022 was a really solid year for versus 2021. the independent tire dealer.

From a mix perspective, this is a healthy indicator that owners Here’s to making 2023 the best it can be! ■ had a greater share of each dollar at their disposal to distribute Tire and auto industry veteran Randy O’Connor is the Owner/Principal of D2D Development Group to either payroll, non-payroll operating expenses or the net line.

(Dealer to Dealer Development Group.) He can be reached at randy@d2ddevelopmentgroup.

This also is an indication that a greater share of attention went com. For more information, please visit www.d2ddevelopmentgroup.com.

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MTD March 2023 3/7/23 8:21 AM

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3/7/23 8:21 AM 2/23/23 1:19 PM

EV Intelligence

The cost of entry into the EV market

AN IN-DEPTH LOOK AT REAL-WORLD NUMBERS By

Craig Van Batenburg

I

get asked this question almost every week. “What will it cost me to enter the high-voltage world of electric cars and light trucks?” That world has three major types of vehicles — hybrid (HEV), plug-in hybrid (PHEV) and electric vehicle (EV).

If you have been reading my articles in this magazine, you may have some insights already into this new and not-so-new technology. For easier reading, we will use the term EMV to describe HEVs, PHEVs, and EVs. (There are also a small number of fuel cell vehicles.)

And remember — when servicing EMVs, marketing must be considered. Your community needs to know what you are doing. Before you invest any money, research your competition, know the EMV count in your area and have a plan. That should include your website, participating in auto service programs at local schools and buying a company EMV. It also might be time for a new logo or even a new wing on your building. And get some buy-in from your technicians.

To ballpark the cost of entry, let’s break this down into three levels of service. It is assumed you are starting from scratch and have not entered that market yet, so we will start with the least expensive and easiest-to-attain level of service.

LEVEL 1: MINOR SERVICE AND TIRES

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LEVEL 2: HYBRIDS AND REMOVAL OF HIGH-VOLTAGE PARTS

This is a big step up from level one. Now you are replacing high-voltage parts, like a HEV battery pack or a high-voltage air conditioning compressor. Some of these jobs will require more equipment, like a new refrigerant machine that can handle R1234yf coolant and works with high-voltage compressors, as well as insulated tools, some new pullers, specialized tools for Toyota inverters and a digital scope that is safe to use on HEVs. The cost to move up to this level can be in the thousands to over $20,000, if you include technical training and factory scan tools. At this point, we have avoided the EV market.

That is next.

You will only continue to see more EVs at your dealership.

Once you have safety training done, including using the proper lift points on the EMV’s frame, and own the proper personal protective equipment (PPE), the next step is securing safe testing equipment. About $2,000 to $3,000 will take care of basic PPE and equipment, such as three high-voltage safety glove kits, a couple CAT III 1000 volt meters and leads, safety cones, some signage, a good HEV-EV book and a tool box to store it all in.

Your average new aftermarket scan tool should be enough.

If your scan tool can take care of a new internal combustion engine-powered car or truck, it most likely will take care of a popular HEV. In-person training is best when it comes to high-voltage safety, as the electrocution risk is always there. Finding that training is possible, so seek out what you can. If in-person training isn’t an option, webinars are the next best thing. Books, recorded videos and such may work, too. Many videos are free and paid by advertisers or under $200. Books range from $30 to hundreds of dollars. Don’t forget the local library. My company, Automotive Career Development Center (ACDC), is one of many companies that provides EV training.

52

The work you will do at this level is simple preventive maintenance, wipers, tires, suspension, alignments, some brake work, fluids, oil changes and whatever you feel you can handle. Anyone working on EMVs must have some basic safety training. On a modern electric car or electric light truck, a high-voltage orange cable is often within 10 inches of a cabin air filter. Air conditioning work involves high-voltage systems.

LEVEL 3: PLUGGING IN

This level can cost you another $10,000 to $20,000.

A level I and II EVSE (Electrical Vehicle Supply Equipment) — usually called a “charger” by those with little knowledge of the subject — will be needed to charge and test the high-voltage battery grid charging system. That will cost $2,000 to $4,000. A “break-out box” also will be needed.

That will cost around $1,000. A high-voltage battery pack lift table and fixture will be required to remove battery packs that can weigh over 1,200 pounds. That will cost $5,000 to $8,000.

More tools and equipment will cost $5,000 to $10,000. Training your HEV techs on the new technology used in pure electric cars and trucks will run around $4,000 to $10,000. There may be some state and/or federal funding to help you with training, EV chargers and more, so check into that.

At ACDC, we’ve always been ahead of the curve. Our reputation was — and is — known and respected. You will only continue to see more electric vehicles at your dealership.

Is this the time to invest in your future? ■ Craig Van Batenburg is the CEO of Van Batenburg’s Garage Inc., dba Automotive Career Development Center (ACDC), which is based in Worcester, Mass. A 50-year automotive service industry veteran, Van Batenburg provides training for facilities that service — or want to service — electric and hybrid vehicles. For more information, see www.fixhybrid. com or email him at craig@fixhybrid.com.

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It’s allowed us to keep things in stock and available to our clients so that they know that we can provide reliable service.

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At Mighty, we’re here to help your business make the most of every day and every bay. That includes in-person inventory management customized to your service needs.

Have the right products, at the right time, without having money sitting on the shelf. We’ll be there to help make it happen and to make sure you’re thrilled with the results.

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3/7/23 8:21 AM 2/27/23 3:07 PM

Focus on Dealers

K&M Tire associates greet attendees at the company’s annual Dealer Conference and Trade Show in Las Vegas, Nev. Photos: MTD

K&M Tire promises more perks in 2023 BIGGER WAREHOUSES, ENHANCED PROGRAMS ARE ON THE WAY By

Mike Manges

K

&M Tire Inc.’s Mr. Tire program is growing and the wholesale-distributor is encouraging the group’s 1,600 members to take advantage of the perks and benefits available to them.

That was one of the main messages that the Delphos, Ohio-based company pushed at its recent 2023 Dealer Conference and Trade Show in Las Vegas. Nev., which was attended by more than 1,000 people. (The theme of the event was “All-In.”)

More than 150 dealers joined K&M Tire’s rapidly expanding Mr. Tire program during 2022.

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More than 150 dealers joined the Mr. Tire program during 2022, Gene Bova, K&M Tire regional sales manager, told event attendees.

Bova said that $3 million in total benefits were paid last year to Mr. Tire dealers who participated in various programs offered by K&M Tire.

“In 2022, our customers earned more than $500,000 in purchase incentives.”

Bova informed attendees that “another way to build profit is through our ag and commercial volume bonus programs.”

K&M Tire’s ag tire program paid out $500,000 in 2022, while the commercial program paid out $400,000, according to Bova, who encouraged Mr. Tire dealers to also “look at” parts rebates offered through the program.

“And not every dealer knows that K&M has a tire parts and equipment division. Most of these products are stocked at your local K&M warehouse.” (K&M Tire has 34 distribution centers — the newest of which opened this past January.)

Last year, K&M Tire offered “15 exclusive sellout rebates,” representing eight tire brands. This year, five “boost programs” are available to Mr. Tire dealers. These programs “can help salespeople earn more dollars per tire,” noted Bova.

He also discussed several digital marketing resources that are available to Mr. Tire dealers.

MTD March 2023 3/7/23 8:21 AM

Focus on Dealers

According to K&M Tire research, “70% of web traffic comes from mobile devices” and nearly 60% of users “will never return to a website that isn’t mobile-friendly.”

K&M Tire provides free websites to Mr. Tire members, said Bova. “Your site is a 24/7 salesperson to engage customers anytime.”

GOLDEN ADVICE

This year’s K&M Tire event included a variety of info sessions and seminars, including one that provided advice on acquiring, retaining and developing employees and another that shared best practices for boosting cash flow.

“Hiring has changed” in the wake of COVID-19, Sherri Miller, CEO and founder of the Center for Extraordinary Success, a consultancy based in Ft. Wayne, Ind., told attendees.

“The most profitable organizations spend more than 25% of their time investing in and engaging (with) their employees. If you don’t have a development program today, I highly encourage you” to create one.

“It doesn’t have to be a complex system. And there’s no wrong answer. Just doing it is a major step forward.”

Jon Zurcher, chief operating officer of Best-One Tire Group, shared tips for increasing cash flow, including raising service rates and other methods that will help dealers counter the escalating cost of doing business.

Even small increases in service rates can yield large, incremental gross profit gains, Zurcher told attendees.

“In our retail stores, we’re targeting $125 an hour for mechanics’ rates,” he said.

“Another thing we’re focused on is doing good vehicle inspections. We want to be the ones to Keith Schnipke, co-owner point out an issue” on a vehicle of Kalida, Ohio-based Schnipke Brothers Tire, that needs attention. and his wife, Deb, enjoyed Charging for shop supplies is the busy K&M Tire trade another way to boost the bottom show in Las Vegas. line, he advised.

“The best way to protect your business is to protect its ability to generate cash.”

‘WE LIKE TO STAY BUSY’

K&M Tire customers can expect more service enhancements in 2023, Cheryl Gossard, the company’s president, told MTD. “We’re constantly looking at whatever we are currently offering and ways to improve it,” she said. “We have improvements coming for our online ordering system. We’re going to add features to it.

“Of course, we’re always looking at our warehouses. It seems like every year we’re moving one to a bigger warehouse. We have a couple of those coming in 2023.

“We’ve been talking for years about enhancing our inventory management system. We started that in 2017 and slowly have been adding it to every location. We’re constantly trying to make improvements for our customers.”

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1/13/23 3:29 PM 3/7/23 8:21 AM

Focus on Dealers

The 2023 dealer meeting of Point S owners included more than 550 dealers and guests. It was the group’s largest dealer gathering in its history.

Photos: MTD

Point S plans to nearly double store total in five years CO-OP WANTS 500 STORES ACROSS 50 STATES By

Joy Kopcha

P

oint S tire dealers in the United States closed the 2022 books with a 10% increase in sales and a multi-faceted plan to keep those increases coming.

That plan includes rolling out the welcome mat for new dealers who are looking for extra buying power, but aren’t necessarily ready to rebrand and commit to the blue and green way of life.

Clint Young, chief operating officer for Tire Factory Inc., the cooperative that manages the Point S brand in the U.S., says the group has adopted four growth initiatives. Two are defensive moves to retain the dealers and stores already in the cooperative. Two more are designed to bring more dealers into the fold.

On the defensive end, Point S is offering $10,000 to existing owners who are ready to exit if they sell their store to another Point S dealer. Current dealers also can earn a $10,000 referral bonus if

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Brandon and Diana Haltiwanger are among the newest Point S tire dealers.

They joined the group this fall and will rebrand Forrest’s Tire Service into Forrest’s Point S in Johnston, S.C. They joined in the retro-’80s party during the recent Point S meeting as the group looked back on the decade when the co-op’s predecessor, Northwest Tire Factory, began.

they recruit and refer another tire dealer to join the cooperative.

In addition, Point S is offering assistance to existing dealers who open another location.

“Some are very brave about taking that leap,” says Young, while others have held themselves back because of some steps in the process, whether that be site selection or Small Business Administration paperwork.

But the biggest move for Point S USA — and the one that signals an about face from recent efforts — is the creation of an associated dealer program, which would allow tire dealers to join the Point S network of dealers without rebranding.

Young says the new program gives Point S some flexibility in welcoming new members. More dealers and locations means the group can continue to bulk up its purchases and secure competitive agreements with suppliers.

Tire dealers also can use the program as a test toward gradual full membership in the group.

Chris Cornelius, current chairman of the Point S board of dealers, expects the program to result in more stores joining the Point S network.

“We’ve created such a powerful branding and back-up (system),” says Cornelius.

“It’s a baby step.

“My view is they get in and if in three or four years they don’t want to rebrand, it’s not on them — it’s on us. What are we missing?

“We’ve got independent dealers out there struggling and they don’t need to be,” he notes.

Often times, Young says, dealers struggle with back-end tasks, such as IT and marketing. They are attracted to Point S “if we can lift a lot of that burden.”

The program, which was rolled out to members in August, is already working.

Of the record 28 new stores the cooperative opened in 2022, 12 are associated dealer locations, says Young.

There are now 275 Point S locations across 29 states, including two states where the group hasn’t operated previously — Alabama and South Carolina.

Those new markets represent the group’s continued efforts to grow eastward. And at the annual dealer meeting at the end of January, where the cooperative celebrated its 40th anniversary, Tire Factory Inc. CEO Walter Lybeck announced the group’s bold goal for the MTD March 2023 3/7/23 8:21 AM

Focus on Dealers

As part of the cooperative’s 40-year anniversary celebration, Point S honored longtime, legacy dealers, including Clair and Anne Thueson, who are the founders of Clair and Dee’s Point S in Rexburg, Idaho.

next five years — 500 stores throughout 50 states.

Brandon and Diana Haltiwanger are among the newest Point S dealers. Brandon’s father started the couple’s business, Forrest’s Tire Service, 46 years ago and the second generation took over ownership of the Johnson, S.C., dealership eight years ago.

The company is a single-store operation that sells tires in all sizes, from passenger and light truck to ag, OTR and small tires.

Brandon Haltiwanger says his top need was “to buy better.” But he’s already discovered there’s more to Point S. “We’ve always been alone. We’re not alone anymore.”

The Haltiwangers are currently the only Point S members in the state of South Carolina. They’ll begin rebranding their store soon.

Chip and Patti Preston have a few more years of Point S experience behind them.

He is the operations manager for Sterling Quality Point S in Clinton, Utah, and also part-owner of another store, Woodruff Point S, which is based in Ogden, Utah.

He’s been a part of the cooperative for two decades and says in recent years, as more Point S stores have opened in Utah, consumers have begun to recognize and become familiar with the Point S brand.

“Point S gives us national recognition,” says Preston, but he acknowledges it has taken time. “It’s been quite a switch to get to this point.”

He appreciates the Point S brand’s high standards. Sterling Quality Point S was among the group’s “top shops” in 2022 — meaning it met branding and appearance standards during a comprehensive site review.

“Point S holds us to a standard. It’s a brotherhood. For us to buy (tires) with the big guys, that’s something we couldn’t do on our own.”

Chip and Patti Preston have 20 years of history with Tire Factory and Point S. Even though Sterling Quality Point S in Clinton, Utah, is an automotive service-heavy location, with tires only accounting for 30% of overall sales, Chip says the buying power of Point S is critical to his daily business.

Clint Young, chief operating officer for Point S, says the cooperative has created programs to entice existing dealers to consider expansion. “Some are very brave about taking the leap.”

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Focus on Industry

The new Sailun Ice Blazer WSTX has V-shaped tread blocks and 3-D siping to perform in snowy, icy or wet conditions. The tire also carries the 3-Peak Mountain Snowflake symbol. It comes in more than 60 sizes and is made for wheel diameters ranging from 14 inches to 20 inches.

Photo: Sailun Tire Americas

Sailun launches WSTX Ice Blazer winter tire

TIRE IS EXCLUSIVE TO THE CANADIAN MARKET, AVAILABLE IN 60-PLUS SIZES By

Madison Gehring

S

ailun Tire Americas is promoting its new passenger and light truck winter tire, the Ice Blazer WSTX, which is available exclusively in Canada.

The tire, which will replace the Sailun Ice Blazer WST1, originally debuted in the fall of 2022.

Sailun recently held a ride-and-drive in Mirabel, Quebec, so tire dealers could test drive the product.

The new tire has V-shaped tread blocks and 3-D siping to perform in snowy, icy or wet conditions. It also bears the 3-Peak Mountain Snowflake symbol. It comes in more than 60 sizes and is made for

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wheel diameters ranging from 14 inches to 20 inches.

The main upgrades on the Ice Blazer WSTX compared to the Ice Blazer WST1, according to Sailun officials, include an “enhanced and modernized contact patch; additional springs and siping; and the latest compound and tire technologies.”

“The tread design gives the tire a wide grip and reduces sliding by letting water and slush pass through the tread,” says David Pulla, national sales manager, PLT, Sailun.

He says the tire’s 3-D siping helps control pressure distribution while driving and its silica-reinforced compound allows

the tire to handle “the extreme colds of Canada winters” without losing its shape or stability.

The Ice Blazer WSTX comes in a studded version, as well as a non-studded version. (The tire can use 12- or 13-millimeter studs.)

Sailun provided those options to comply with winter tire laws in different Canadian provinces, plus regional weather conditions.

“In southern Ontario, it is illegal to have your tires studded,” says Tomas Cleary, Sailun’s manager of marketing and communications.

“But if you go further north, then customers are going to need a studded tire. We wanted to make this a coastto-coast tire (that will) be available to anyone in Canada.”

Tire dealers got to see the Ice Blazer WSTX perform in real winter weather conditions against other competitive winter tires.

The Ice Blazer WSTX comes with a two-year road hazard replacement program or “3/32nds of tread life and 60-month coverage on workmanship and materials.”

Cleary and Pulla say for now, the tire is exclusive to the Canadian market, but there may be talk of bringing it to the United States in the near future.

MTD March 2023 3/7/23 8:21 AM

2302M

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Focus on Dealers

Northwest passage NORDNESS REFLECTS ON 30 YEARS AT HELM OF THE NWTDA By

Mike Manges

I

ndependent tire dealers in the Pacific Northwest lost one of their most ardent champions when Dick Nordness, longtime executive director of the Northwest Tire Dealers Association (NWTDA), recently retired.

Nordness capped his 30-year stint at the helm of the association by overseeing its merger with the Northwest Auto Care Alliance (NWACA), which is a member of the national Auto Care Alliance, a growing federation of state and regional automotive trade associations.

Dick Nordness (left), longtime executive director of the Northwest Tire Dealers Association, recently received a lifetime achievement award from the Tire Industry Association (TIA), presented by TIA CEO Dick Gust.

Photo: TIA

Few people know the Northwest tire market better than Nordness, who began his tire industry career in 1968, working in BFGoodrich’s Portland, Ore., office.

Even fewer people are in a better position to reflect on the changing challenges of running a state tire dealer association.

Consolidation hasn’t had as much of an

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impact in the Northwest as it has in other parts of the country, according to Nordness, who says that the area remains “pretty much an independent’s market.”

He cites Tire Factory Inc. — the cooperative of tire dealerships that manages the Point S brand — as helping “smaller independents stay competitive. And even the way Point S operates now — its members are still independent.

“And of course, Les Schwab is still a major player in the Northwest. When I started out in this business, Les Schwab was basically a central and eastern Oregon operation. I’ve seen them grow tremendously.” (Bend, Ore.-based Les Schwab Tire Centers Inc. now operates 460 locations, according to MTD research.)

One thing that changed over the years is what the NWTDA offered its members.

Nordness cites trade shows as an example.

“When I first started with the association, trade shows were a big part of what we did,” he says. The NWTDA hosted its own show each year.

“I was looking over some old files recently and saw a (flyer) for our 1989 event. We had independent tire dealers come in from all over Washington and Oregon and even further away, like Montana and Idaho. We even had people from British Columbia and Alaska.”

The show generated enough cash to help Nordness keep membership dues low.

Over the years, more wholesalers and dealer groups began to stage their own shows, he recalls. “And each of those groups has their own programs for dealers. A lot of what trade associations did was taken over by distributors.

“And of course, those distributors were our members, too, so we couldn’t scream too loud,” he says with a laugh.

“The final killer” of the NWTDA’s annual show “was COVID-19. We were

less than a week away from opening the show in March 2020 when the governors of Oregon and Washington shut everything down.”

Over the decades, the NWTDA also battled legislation that would have harmed its members, says Nordness.

“When I first started with the association, we were dealing with studded and scrap tire issues. And I think in those two areas we did a great job.

“It seemed like almost every legislative season — whether it was Washington or Oregon or sometimes both — there was a bill that would have banned studded tires.

But we fought successfully to keep them.”

The association identified other areas where it could have a positive legislative impact.

“We were among the first states — even before California — to have scrap tire laws, working with industry and government to promote rubberized asphalt” and other applications.

“Working with state legislators, we were able to come up with a program to clean up scrap tire piles.

“My predecessor at the NWTDA, Keith Rowbathom, who was a great protector of the independent tire dealer, always said, ‘If we don’t have anybody watching the hen house, a fox is going to get in.’”

Training has also been critical.

“We picked up on training early on,” says Nordness. “In 1998, I became a certified instructor for the Tire Industry Association’s commercial truck tire training program.”

Nordness believes that the NWTDA’s merger with NWACA was the next logical step for the association, which under his direction has grown to represent around 400 retail tire outlets throughout Oregon, Washington, Idaho and Alaska.

The coupling will give association members access to even more programs and services, which is important to Nordness on a personal level.

“These aren’t just members,” he says.

“Over the years, they’ve become friends.

We’ve helped them stay competitive in the marketplace.

“Knowing we’ve been part of their success” has been gratifying. “It’s been good to work with them.”

MTD March 2023 3/7/23 8:21 AM

Products

Yokohama UHP tire is available in 51 sizes

Ortho voice assistant helps techs

Bridgestone has all-position radial for tough conditions

Yokohama Tire Corp.’s new Advan Neova AD09 ultra-high performance tire is available in 51 sizes, for wheels ranging from 15 inches to 20 inches in diameter.

The Advan Neova AD09, which replaces the Advan Neova AD08R, has an all-new tread pattern, plus Yokohama’s strongest and most rigid casing construction.

It’s made with a high-silica compound that helps with wet grip, cornering and braking. The tire’s chamfered grooves provide extra wear resistance, while the large tread blocks provide more rubber to grip the road and track.

YOKOHAMA TIRE CORP. www.yokohamatire.com

Ortho is a voice assistant for the aftermarket. The portable, hands-free solution gives technicians and service advisors access to quick repair data and provides answers in less than five seconds. Technicians can use Ortho from a service bay by using the opening line of “Hey Ortho.” From torque to fluid types and amounts and maintenance intervals to technical service bulletins, Ortho has details on hundreds of specs available in an instant. Answers are displayed on the screen and also read aloud using a text-to-speech function.

RAIN TECHNOLOGY INC. www.heyortho.com

Bridgestone Americas Inc.’s M863 all-position radial tire is designed for increased durability for on- and offhighway fleets. The M863 was made for tough trucks, concrete mixers, dump trucks, construction fleets and logging trucks. The M863 has an aggressive tread for fleets that want to utilize the same product in several positions. Four belts provide durability and the premium casing offers retreadability. Stone rejector platforms keep stones from piercing the belt layer, while block sipes promote traction.

BRIDGESTONE AMERICAS INC. www.bridgestone.com

Define your standard.

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Products

Hercules updates allseason touring tire

Sleeves protect wheels on Milwaukee Tool sockets

Atturo expands with UTV tires

The Hercules Roadtour Connect PCV allseason touring tire from American Tire Distributors Inc. replaces two touring tires in the Hercules lineup, the Roadtour 855 SPE and Roadtour 655 MRE. The new Roadtour Connect PCV is available in 39 sizes. The tire features a nylon over-wrap to improve durability and wear. Added silica enhances the tire’s wet and snow performance compared to the previous Roadtour tires. The contact patch has been optimized for a quiet, predictable ride.

AMERICAN TIRE DISTRIBUTORS INC. www.herculestire.com

Milwaukee Tool has added half-inch drive lug nut wheel sockets to its line of Shockwave Impact Duty sockets. The sockets feature a strong, non-marring sleeve to protect wheels during tire changes. The sleeve protects against crackling or shredding and is colorcoded to distinguish between metric and SAE sizing. The sockets also have a plastic insert, which keeps the lug nut from marring while it is used. The sockets meet ASME standards to ensure proper fi t to the fastener.

MILWAUKEE TOOL www.milwaukeetool.com

Atturo Tire Corp. has entered the powersports market, bringing two patterns inspired by its light truck tire lineup into the sport and recreational UTV categories. The Trail Blade X/T SxS and the Trail Blade Boss SxS are specifically designed for the demands of modern side-by-side owners and their vehicles. Both tires feature steel-belted radial construction. The Trail Blade X/T SxS became available in the fourth quarter of 2022, with the Trail Blade Boss SxS following in the first quarter of 2023.

ATTURO TIRE CORP. www.atturo.com

JohnDow adds oil container drainer

Fortune tire from Prinx made for the last mile

Autel tool measures tire, brake disc wear

JohnDow Industries has introduced its newest oil handling product, the Oil Container Drainer, to help automotive repair businesses safely and easily drain oil containers before recycling. Technicians can place bottles upside down on the drainer pegs and excess oil drains into a drum. The drainer can hold up to 18 bottles. Hooks stabilize larger bottles for easy drainage and adjustable feet help secure the container onto a drum.

(The drum is not included.) The drainer is made of heavy-duty steel and two side supports keep the lid open at 45 degrees.

JOHNDOW INDUSTRIES INC. www.johndow.com

Prinx Chengshan Tire North America Inc. has added sizes to its Fortune brand product designed for commercial light truck applications in the last mile delivery segment. The Tormenta LMD FSR103 is an all-weather, commercial highway light truck tire for commercial vans and other multi-purpose vehicles. The tire is available in fi ve sizes: 185/60R15C 6PR 94/92T; 195/75R16C 8PR 107/105R; 205/75R16C 10PR 113/111R; 225/75R16C 10PR 121/120R; and 235/65R16C 10PR 121/119R. PRINX CHENGSHAN TIRE NORTH AMERICA INC. www.fortunetireusa.com

Autel has introduced the MaxiTPMS TBE200, a hand-held tread depth measurement device that integrates with Autel’s MaxiTPMS ITS600 tool. The laser-enabled tool provides technicians with quick tread wear and disc wear measurements without having to remove the tire. The full-color touchscreen display shows replacement and service recommendations for tire rotation and alignments. Users can document tire wear and damage and scan the tire identification number. It can be used on its own or with an Autel TPMS tablet.

AUTEL U.S. INC. www.autel.com

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TPMS

Hyundai Elantra – 2023 DESCRIPTION & OPERATION

The Tire Pressure Monitoring System (TPMS) monitors the pressure and temperature inside the tire in order to warn the driver of changes in pressure which may influence the operation of the vehicle.

The TPMS control module analyzes wireless information from sensors. The system detects the pneumatic pressure of the tires and warns the driver if the pneumatic pressure drops below the standard level.

Lamp OFF The warning lamp turns OFF when the DTC is resolved. DTC is stored as a past breakdown.

SYSTEM DEFECT

General Operation The system detects many input elements to identify potential defects. DTC is deter-

TIRE LOW-PRESSURE WARNING LIGHT

The lamp turns ON when the tire pressure decreases below the standard level. And the warning lamp turns OFF when the tire pressure exceeds the pressure required to turn off the lamp.

You need the right TPMS tool right now.

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When the system detects a defect in the operating environment, the warning lamp blinks for about one minute and then turns ON. NOTE: • If this phenomenon occurs while driving, you should check the cause of the fault even after the DTC is resolved.

(Turn the ignition switch from OFF to ON. Then, check the lamp status.)

• The warning lamp turns off once the DTC is resolved. The warning lamp stays on until you complete the check necessary to resolve the DTC. • If the DTC is resolved, the warning lamp turns OFF during the same ignition cycle.

CAUTION: If the vehicle starts within 19 minutes after the replacement of the wheel of the stopped vehicle, the TPMS Malfunction Indicator on the instrument cluster illuminates.

• The above symptom is due to communication failure between the BCM and the replaced TPMS ID. • This communication failure indicator turns off in 19 minutes after the vehicle stops through the BCM’s automatic learning process of TPMS ID. (When driving the vehicle after stopping for over 19 minutes, the indicator turns off automatically.)

Learn more: www.AutodiagnosTPMS.com

Autodiagnos TPMS SE Tool Full-featured TPMS service.

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Autodiagnos TPMS D Tool Diagnostics, TPMS service and tire service in one unit.

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TPMS mined by the cause of the problem. Certain defects are not diagnosed as DTC. The following are major defects: • In order to diagnose more symptoms of the fault when the ignition line malfunctions, you must check the warning lamp when you turn the ignition on.

• Check whether the warning lamp turns on and then off.

MEMORIZING THE TIRE PRESSURE SENSOR ID

Automatic Location Learning Perform • After stopping or parking for more than 19 minutes, automatic learning function in every driving position is performed.

• The sensor is converted to Parking Mode when stopped or parked for more than 15 minutes. When acceleration of more than 15-20 km/h is detected in Parking Mode, it is converted to First Block Mode.

Fig. 1 When removing the sensor, use a Torx driver to remove the screw.

Photo: Mitchell 1

Fig. 2 The arrows show the correct direction to remove the sensor body.

Photo: Mitchell 1

TIRE PRESSURE SENSOR REMOVAL AND INSTALLATION

Removal And Installation 1. Remove the wheel and tire.

2. Remove the screw with Torx driver (A), as shown in Fig. 1.

CAUTION: When installing the bead brake, make sure that it does not come in contact with the TPMS sensor. Be careful not to damage the TPMS sensor when installing the bead brake near the TPMS sensor.

3. Remove the sensor body (A) in the direction of the arrow, as shown in Fig. 2.

4. Use the valve mounting tool to pull out the valve until it is entirely out of the lower hole.

CAUTION: Do not reuse the snap-in type TPMS sensor.

NOTE: Cut the rubber at the bottom of valve with a knife.

5. Apply lubricant to the surface of the new valve, and then mount it through the valve hole of the wheel. Specified lubricants: soap water or YH100 (lubricant for tire insert).

NOTE: After applying the lubricant, it should not be longer than five minutes until the valve is mounted. If the lubricant is applied for more than five minutes, apply lubricant again.

CAUTION: The TPMS sensor valve bottom is not properly sealed if it is not fully mounted on the wheel, as shown in Fig. 3. Make sure that the valve body is pulled entirely through the hole.

Fig. 4 To fit the bottom bead, position the sensor at the 5 o’clock position relative to the head on the tire changing machine.

Image: Mitchell 1

Fig. 3 Make sure the valve body is pulled fully through the hole.

Photo: Mitchell 1

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TPMS 6. Apply soapy water or lubricant to the upper/lower bead section of the tire.

7. To fit the bottom bead, position the sensor at the 5 o’clock position relative to the head on the tire changing machine, as shown in Fig. 4.

8. Rotate the wheel clockwise, and push down on the tire at the 3 o’clock position to fit bottom bead.

CAUTION: Place the tire on the wheel so the bottom bead touches the edge of the wheel after the sensor (6 o’clock).

9. Push down on the tire at the 3 o’clock position and rotate the wheel clockwise to fit the top bead, as shown in Fig. 5.

10. Inflate the tire until beads seat.

11. Adjust the tire pressure according to the recommended tire pressure for the vehicle.

12. If the TPMS sensor malfunctions, you must perform TPMS sensor learning. Replace any faulty sensors and perform TPMS sensor learning. ■

TORQUE SPECIFICATIONS Component

(N.m)

Ft.-lbs.

Wheel Lug Nut Torque

107.9-127.5 N.m

11.0-13.0 kgf.m, 79.6-94.0 lb-ft

Information for this column comes from the tire pressure monitoring systems data in ProDemand, Mitchell 1’s auto repair information software for domestic and import vehicles.

Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com.

Fig. 5 Before inflating the tire, push down on the tire at the 3 o’clock position and rotate the wheel clockwise.

Image: Mitchell 1

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

PAGE

WEBSITE

ACDC

41

www.fixhybrid.com

Aftermarket Auto Parts Alliance Inc.

49

www.ultimatevehiclegiveaway2023.com

Alligator

65

www.alligator-tpms.com/mtd

American Omni Trading

25

www.thunderertireusa.com

Apollo Vredestein Tires Inc.

21

www.vredestein.com

Apollo Vredestein Tires Inc.

43

www.apollotrucktires.com

Aston Technologies

55

www.astontechnologies.com

Atturo Tires

5

www.atturo.com

Autel

9

www.autel.com

BendPak Inc.

51

www.bendpak.com/ergochair

BKT USA Inc.

11

www.bkt-tires.com

California Tire Dealers Association

33

www.catiredealers.com

Continental Corporation

63

www.autodiagnostpms.com

General Tire

13

www.generaltire.com/promotion

GT Radial

23

www.gtradialsmartprogram.com

Hunter Engineering Company

61

www.hunter.com/alignment-machines

K & M Tire Inc.

19

www.kmtire.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Kumho Tire USA Inc.

34-35

www.kumhotire.com

Linglong Americas Inc.

7

www.linglongtire.com

Maxxis Tires

27

www.maxxisaccelerate.com

Mighty Auto Parts

53

www.mightyautoparts.com

Milton Industries

57

www.miltonindustries.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Prinx Chengshan North America Inc.

39

www.fortunetireusa.com

Sentury Tire USA

17

www.landsailtires.com

Tireco Inc.

29

www.milestartires.com

Transamerica Tire Company Ltd.

IFC

www.predatortires.com

Trimax Tire

45

www.trimaxtire.com

Western Tires Inc.

31

www.jk-usa.com

WheelerShip LLC

37

wholesale.wheelership.com

Yokohama Off-Highway Tires America Inc.

15

www.yokohama-oht.com

ZC Rubber America Inc.

47

www.arisuntires.com

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We are facing an uncertain economy.

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Grow your business, even in uncertain times, with No Credit Needed* payment solutions from American First Finance (AFF).

MORE NEW CUSTOMERS • Grow your Business Multi-channel marketing campaigns to find & approve new customers • Search Engine Optimized Leads High-intent customers funneled to your business • AFF Website Leads Customers are pre-approved on our website & funneled to you

No upfront cost.

No strings.

No surprises.

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HIGH APPROVAL RATES • Proprietary Decisioning Optimized for growth, you get a decisioning engine built on proprietary data for your business • Enterprise Credit Facility Scalable funds to serve the increase in credit-challenged consumers • Fast Funding Your business gets paid in full within 48 business hours

MORE REPEAT CUSTOMERS • Repeat Customers Email & text campaigns to drive a higher volume of repeat business • Pre-approvals Customers have spending power to get the services they need from your business • Data-Optimized Offers Data-science models give the right customers the right offer at the right time

For more information on AFF and the benefits of partnership, call, email, or scan the QR code.

833.688.1951 getmorecustomers@americanfirstfinance.com

AmericanFirstFinance.com

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