Modern Tire Dealer - January 2024 by Endeavor Digital Editions

January 2024 | Vol. 105, No. 1 | $30 | www.moderntiredealer.com

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FORCES IMPACTING THE MARKET— AND WHAT YOU WILL SEE IN 2024 PRICING, SUPPLY, SELLOUT, TARIFFS AND MORE MORE FROM THE 2023 SEMA SHOW WHAT’S NEW IN EQUIPMENT, SOFTWARE AND TOOLS H OW TO FINE-TUNE FINE -TUNE YOUR STORE MANAGERS

AN INDUSTRY IN TRANSITION MTD’S FACTS ISSUE EXAMINES THE TIRE MARKET

January 2024 | Vol. 105, No. 1 | $30 | www.moderntiredealer.com

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626-536-2339 @PREDATORTIRES WWW.PREDATORTIRES.COM TRANSAMERICA TIRE CO.,LTD. marketing@transamericatire.com 5118 PARK AVE., SUITE 601, MEMPHIS, TN 38117

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32 The annual MTD Facts Issue provides an exclusive, comprehensive look at the tire industry. It all starts on page 32. Photo: MTD

DEPARTMENTS 4 Editorial

What’s in store this year? Tire dealers share outlook for 2024

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

8 Industry News

New year, new inventory levels Tire distributors and dealers are getting over ‘inventory indigestion’

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

18 Your Marketplace

Retail sellout remains flat Can winter weather turn the tide?

68 Business Insight

How to fine-tune your managers Set clear expectations and keep expectations high

70 Dealer Development

How to help your employees get ahead Are you paying your people what they need and deserve?

72 Mergers and Acquisitions

Spruce up and deep clean your financials Get things squared away before the sale

74 EV Intelligence

Do EV fires make you worry? Educate yourself to minimize the risks

76 Focus on Industry

Kumho aims for top of tier-two Products, logistics, distribution will help ‘cement’ standing

78 Focus on Industry

Kenda’s boot camp educates dealers Tiremaker focuses on local independents

80 Focus on Industry

Prinx Chengshan wants to be different From products to pickleball, tiremaker looks to lead

82 Focus on Industry

Omni United looks to ‘redefine premium’ Company plans to enter new segments

84 Products 86 TPMS Kia Carnival – 2024

92 Ad index on the cover: Illustration 19954180 © Nenad Cerovic | ID 54932193© Vilisov | Dreamstime.com Modern Tire Dealer is a proud member of:

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

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The Industry’s Leading Publication January 2024, Volume 105, Number 1

F E AT U R E S 21 Forces impacting the

market — and what you will see in 2024 Analyst John Healy talks pricing, supply, sellout, tariffs and more

60 More from the

2023 SEMA Show

What’s new in equipment, software and tools

MTD’s 58th Facts Issue

32 W orld sales leaders, sales margins and domestic tire shipments

34 Imports 36 Channel market share 38 Replacement PLT brand market share 40 OE tire market share 42 Dealer distribution 44 Brand distribution 46 Tire sizes 48 Tire pricing 50 Commercial tire market 52 Plant capacities 54 Automotive service 56 Mergers and acquisitions 58 Biggest dealers 3 1/16/24 2:57 PM

Editorial

What’s in store this year? TIRE DEALERS SHARE OUTLOOK FOR 2024 By

Mike Manges

s 2024 begins, thoughts turn to questions like, “Will this year turn out better than last year? Worse? The same?” MTD decided to ask our readers. In a survey of independent tire dealers that we conducted near the end of last year, we invited respondents to “tell us anything you’d like to share about 2023 and/or your outlook for 2024.” And boy, did they ever! We at MTD certainly can speculate on what 2024 will bring, but I thought you’d find what your peers are saying to be even more interesting. Here are their unvarnished, anonymous comments: “2023 has not been as strong a year. Lack of government pandemic money and higher interest rates have had an effect.” “Outlook positive for 2024.” “Overall, tire sales were flat to down in 2023, but pricing was way up. I don’t think it looks much better for 2024.” “2023 inflation is a killer. Election year 2024. Expect to be down.” “2024 can be a big year for tires and service now (that) we are somewhat back to normal every day after COVID and other world events.” “Seems to be slowing somewhat. We are prepared to move forward, offering the best service possible. We plan on continued growth even with the economy slowing and an election year coming up.” “Tough.” “Uptick in 2024.” “Hope it’s better than 2023.” “Competition is so fierce that dealers are selling just above cost. Tires are still in short supply.” “The end is near.” (Editor’s note: Let’s hope not!) “EV market should have growth capabilities. Overall, larger truck tires and large toy haulers seem to be strong for vehicles. The SUV market is very strong at this time. Will it continue?” “Inflation is making tire prices go up. Even with flat tire sales numbers with profit margins the same, the gross profit is looking better.” “Still optimistic on numbers, but feel there will be a slowing down sometime in 2024.” “2023 was fairly smooth and stayed steady throughout the year. Hoping 2024 remains on this path with a consistently growing customer base.” “Adding new store in 2024. Cautiously optimistic.” “Hopefully up.” “Stable in 2023. 2024 could be a roller coaster.”

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Quite a few respondents to MTD’s recent survey expect 2024 to be a prosperous year. Photo: MTD

“I see an upswing in medium commercial in 2024. I believe PLT will remain steady — possibly a slight increase.” ““Hopefully, 2024 is as good as 2023 was.” “Need to find more help, but it was very difficult to find in 2023. Hope it is better.” “2023 was an outstanding year for our four stores. Margins were good. Payroll was up, but manageable. Turnover has flattened out to normal. I’m not smart enough to predict 2024, but expecting a reasonably good year.” “2023 very good and 2024 will be even better.” “Overall sales good. Expect slight increase in 2024.” “As an optimistic person, I am hoping the economy can get out of its malaise and bring up our industry and others around us.” “It has been a great year for us. Looking forward to 2024.” So there you have it — right from the source! On behalf of the entire MTD team, I can tell you that we look forward to serving you in 2024. It’s our sincere hope that you — and your business — will enjoy your best year ever. Meanwhile, we hope you enjoy MTD’s 2024 Facts Issue! ■ If you have any questions or comments, please email me at mmanges@endeavorb2b.com.

MTD January 2024

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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 Apple Podcasts, Spotify, Google Podcasts, iHeart Radio, Amazon Music, Audible and MTD’s website. Download it today!

Sign up for Modern Tire Dealer’s eNewsletters to receive the latest tire news and our most popular articles. Go to www.moderntiredealer.com/subscribe.

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) 598-0375 EDITORIAL Editor: Mike Manges, (330) 598-0368, mmanges@endeavorb2b.com Managing Editor: Joy Kopcha, (330) 598-0338, jkopcha@endeavorb2b.com Associate Editor: Madison Gehring, (330) 598-0308, mgehring@endeavorb2b.com PRODUCTION Art Director: Erica Paquette Production Manager: Karen Runion, (330) 736-1291, krunion@endeavorb2b.com

The season for tire dealer meetings is heating up again. During last month’s Kumho Tire USA dealer meeting, the tiremaker displayed two concept tires, including the Fin-Sread, which includes a device that monitors various conditions and sends data to a cloud for quick access. Photo: MTD

Tracking the tiremakers Independent tire dealers are adept at monitoring trends both in the industry and at their own sales counters, but their livelihoods also depend on the moves that their tire manufacturing and distribution partners make throughout the year. Whether it’s new sales initiatives, executive leadership changes, mergers and acquisitions or even tire recalls, all the details matter. And MTD readers want to keep track of every move. 1.

Photos: MTD takes you inside Kumho’s dealer meeting

2. Photos: Kenda hosts 2023 light truck boot camp 3. What defines a tire’s tier? 4. Recall covers 1,900 Falken WildPeak tires 5. Toyo’s up ‘double digits’ in the U.S. 6. Beasley out, Burke in at Goodyear commercial 7.

8. What’s next for Sun Auto Tire & Service? 9. Kumho aims for the top of tier-two 10. TireHub opens regional distribution center

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

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SOCIAL MEDIA Like us Facebook: facebook.com/ ModernTireDealer

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 (877) 382-9187 moderntiredealer@omeda.com ENDEAVOR BUSINESS MEDIA, LLC CEO: Chris Ferrell President: June Griffin COO: Patrick Rains CRO: Reggie Lawrence Chief Digital Officer: Jacquie Niemiec Chief Administrative and Legal Officer: Tracy Kane EVP Transportation: Kylie Hirko VP Vehicle Repair: Chris Messer VRG Editorial Director: Matthew Hudson Modern Tire Dealer (USPS Permit 369170), (ISSN 0026-8496 print) is published monthly by Endeavor Business Media, LLC. 201 N Main St 5th Floor, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI, and additional mailing offices. POSTMASTER: Send address changes to Modern Tire Dealer, PO Box 3257, Northbrook, IL 60065-3257. SUBSCRIPTIONS: Publisher reserves the right to reject non-qualified subscriptions. Subscription prices: U.S. ($81.25 per year). All subscriptions are payable in U.S. funds. Send subscription inquiries to Modern Tire Dealer, PO Box 3257, Northbrook, IL 60065-3257. Customer service can be reached toll-free at 877-382-9187 or at moderntiredealer@omeda. com for magazine subscription assistance or questions.

Private equity firm acquires stake in Dobbs Tire

DIGITAL EDITION

ACCOUNT EXECUTIVES Darrell Bruggink dbruggink@endeavorb2b.com (608) 299-6310 Marianne Dyal mdyal@endeavorb2b.com (706) 344-1388 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

Printed in the USA. Copyright 2024 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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Industry News

New year, new inventory levels TIRE DISTRIBUTORS AND DEALERS ARE GETTING OVER ‘INVENTORY INDIGESTION’

Joaquin Gonzalez Jr., president of Tire Group International LLC, says that at the beginning of 2023, his company was “still trailing with high-priced inventory due to high freight cost paid in 2022.” Photo: TGI

s the new year starts, tire distributors and dealers are keeping a close eye on their inventory levels, which seemed to finally level out at the end of 2023. Joaquin Gonzalez Jr., president of Miami-Fla.-based Tire Group International LLC (TGI), and John Ziegler Jr., vice president of Massillon, Ohio-based Ziegler Tire & Supply Co., recently talked with MTD about their companies’ current inventory levels and plans to stay on top of inventory during 2024. TGI is primarily a wholesale-distributor, while Ziegler Tire wholesales tires and has 22 combined retail/commercial tire outlets. “At the beginning of (2023), we were still trailing with high-priced inventory due to the high freight cost paid in 2022,” said Gonzalez. “So our sell-in trailed our sellout” for all of the first and second quarters, he noted. “The second half of the year, we began to see things pick up and our sell-in increased sharply to keep up with demand. This is putting us at a 10% to 15% higher level in inventory than where we finished in 2022.”

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Ziegler said his company’s inventory levels “reduced somewhat” in 2023. “There was more inventory available in most types and brands (of tires), so there wasn’t the need to feel like you had to ‘load up’ to make sure we had the coverage. “That being said, inventory is still higher than we would want it to be.” Gonzalez says TGI ended 2023 in a “good position” with inventory as he and his team “transitioned all of the overpriced inventory we had in 2023 and replaced it with lower average cost” units. He credits TGI’s good position on inventory to the fact that the company did not “shy away from ordering as all of the uncertainty with the antidumping investigation unfolded.”

STABILITY AND PREDICTIONS

Gonzalez said he coined the term “inventory indigestion” to explain outof-whack inventory levels during 2022. “Every dealer in the supply chain began ordering more tires than they actually needed because demand never took a reprieve during the pandemic.

The price of freight became secondary to not having tires in stock.” This put a lot of pressure on distributors to offload overpriced inventory in a short amount of time. Gonzalez said this made the end of 2022 and the beginning of 2023 “difficult to manage.” He added that TGI readjusted minimum and maximum numbers across the board and “stuck to that strategy until demand would rebound and begin to out-pace supply once again. “We understood the discipline it would take, as well as the hits we needed to take in order to right-size our inventory in short order and get us to the other side of the curve as quickly as possible.” Ziegler said keeping a close eye on the turns in Ziegler Tire’s inventory helped to keep his dealership’s inventory stable. “We were able to order less units on a regular basis because availability was better,” he noted. “Imports were much more reliable in 2023 — getting back to more normal order-to-receipt times versus 2022, when international container shipping was a total disaster with pricing and the supply chain mess.” Going into 2024, Ziegler says his plan of attack is to continue to reduce inventory while maintaining turns so that “we have what we need, when we need it. “We also want to make more of a concerted effort to keep the right inventory in distribution center locations,” in order to alleviate pressure on retail/ commercial stores. (Ziegler Tire has three warehouses.) Looking ahead, Gonzalez predicted there will be some supply interruptions as dealers try to navigate pending anti-dumping decisions, but says “it shouldn’t be anything we aren’t already used to by now. “The key will be the impact these decisions will have on land pricing and supply chain origin,” he noted. — Madison Gehring MTD January 2024

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THE DEFINITION OF

PREMIUM

ACCESSIBILITY ILIT WE DON’T BELIEVE PREMIUM P R O D U C T S S H O U L D O N LY B E F O R T H E F E W. We hear you, and your customers. They need to maximize every dollar, and you want to make sure customers leave fully fitted with a complete set of new tires and add-ons. We’re here to help you make that happen. Together, we can offer premium tires to all your customers, at a price that will leave them with money to polish their rims.

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Industry News

Bites Sailun to build plant Sailun Tire Americas will enter a joint venture with Sailun Singapore to invest in the construction of a new tire manufacturing plant in Mexico. The new facility will have an annual production capacity of six million semi-steel radial tires, with a total project investment of $240 million.

TireHub opens regional D/C

Turbo fires up dealer program

his month, Turbo Wholesale Tires is launching the Lexani Ignite associate dealer program — the next step in the company’s evolution. A first for the Irwindale, Calif.-based company, Lexani Ignite is rolling out on a nationwide basis and has been designed “to appeal to dealers of all sizes,” Todd Pickens, Turbo Wholesale Tires’ chief commercial officer, recently told MTD. “In the last year, we’ve been rapidly growing and reaching brand new markets. A nationwide loyalty program was the next step in our growth plan. “It will run like a (tire) manufacturer’s program, where an associate dealer can go into a portal, see what they’ve earned, track how they’re doing and what they’re buying and get paid — a one-stop shop,” said Pickens. “They’ll use a password and ID and our sales reps will be able to go in and track sales, as well.”

TireHub has opened its first regional distribution center, a 360,000-squarefoot facility near Allentown, Pa. The new warehouse will service TireHub’s logistics centers in the northeastern United States. The company has 78 distribution centers in the U.S.

Goodyear’s Wells to exit Darren Wells, executive vice president and chief administrative officer at Goodyear Tire & Rubber Co., plans to retire by the end of February 2024. He has almost 20 years of service with Goodyear after returning to the tiremaker in 2018 as executive vice president and chief financial officer.

TBC adds Achilles brand TBC Brands LLC has launched its new product line, Achilles Tires, available in early-2024. The new tires include the Achilles Desert Hawk AT3 and Achilles Rugged Hawk for off-road driving; the Achilles Desert Hawk HT3, an all-season all-road tire; Achilles Street Hawk Sport; and the Achilles Touring Sport A/S, an all-weather tire.

Toyo extends agreement Toyo Tire U.S.A. Corp. and Ultimate Fighting Championship (UFC) have announced their continued partnership with a multi-year extension. The new agreement will provide the Toyo brand with exposure at UFC events.

RNR Tire Express expands RNR Tire Express has licensed a new franchise partnership with Evan, Ryan and Jeff Mouhalis in southeast Florida. They want to open 30 locations.

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Turbo Wholesale Tires’ new Lexani Ignite associate dealer program launched this month and is a nationwide loyalty program. Photo: Turbo Wholesale Tires

In addition to providing resources for its dealer members, Lexani Ignite is intended to help boost recognition and share of Turbo Wholesale Tires’ proprietary Lexani brand, as well as the company’s Lionhart and Rolling Big Power brands, said Pickens, who added that the new program “is part of our trek toward raising our brand awareness and moving up from the tiers we’re in. “We’ve had growth programs and trip programs, but nothing our customers could take to their customers. Now they have a program” that also can be accessed by their clients. Tire dealers can sign up for Lexani Ignite via their primary Turbo Wholesale Tires sales rep or can “independently start the application process on our www. LexaniIgnite.com portal.” Turbo Wholesale Tires, which is backed by private equity firm Kingswood Capital Management, does not have an enrollment goal for Lexani Ignite, preferring “quality over quantity,” according to Pickens. “Our goal is to partner with programming Lexani Ignite dealers, as opposed to targeting a specific number of new members. We anticipate the majority of our existing customers will be joining Lexani Ignite. “Dealers are busy and we understand that,” he noted. “They are looking for programs that allow win-wins — programs they can get behind. They want guidance, education, an easy way to track unit payout and a simple payment option. These are our highest-priority goals” with the launch of Lexani Ignite. Pickens said the program will continue to evolve, with an online dealer locator, a sales growth trip, other sales incentives and “additional partnerships all in the works. Lexani Ignite is a partnership between the independent tire dealer and Turbo Wholesale Tires.” MTD January 2024

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A LONG WAY

TOGETHER

WHEREVER YOU ARE, BKT IS WITH YOU No matter how challenging your needs, BKT is with you offering an extensive product portfolio for every field such as agriculture, OTR and industrial applications. BKT provides concrete, reliable and high-quality solutions to your requests and working needs. Wherever you are, BKT is with you.

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Industry News

Is the technician shortage getting better?

Bites Bridgestone hits milestone For the first time, Bridgestone Americas Inc.’s IntelliTire tire monitoring tool has surpassed 200 million tire pressure readouts in one year. The milestone was achieved in December.

ZC Rubber opens plant Zhongce Rubber Group Co. Ltd. (ZC Rubber) has unveiled the first passenger tire produced at its new 5G factory in Hangzhou, China. Dubbed “Future Factory v2.0,” the new factory utilizes digital technology and is “dedicated to producing premium tires” like electric vehicle tires, the company said.

Hankook studies EVs A survey by Hankook Tire America Corp. shows that cost and convenience drive the choice to buy an electric vehicle (EV). According to Hankook’s latest Gauge Index, 49% of potential EV buyers are most likely to consider cost before making a buying decision.

or the first time in 10 years, technical schools are seeing an increase in course completions, according to the TechForce Foundation. TechForce’s recently published 2023 Technician Supply & Demand Report shows that the overall technician workforce grew by 4.3% from 2021 to 2022, “outpacing the overall U.S. labor force’s growth,” which was 4%, for the first time. “While this is good news, the report still finds the gap remains,” as TechForce projects that nearly 800,000 new “automotive, diesel, collision repair, aviation and avionics technicians” are needed to meet demand over the next half-decade. “This number is down from last year’s projection of one million new hires deemed necessary,” says TechForce Foundation CEO Jennifer Maher. Auto service technician demand remains the highest, with 495,000 new technicians needed within the next five years. (The next highest-demand area, diesel engine technicians, will require around 152,000.) There are 2.6 jobs available for every auto service tech school graduate, according to TechForce research. “We need to do everything we can to inspire and support those who want to pursue the technician career path,” adds Maher, who notes that the TechForce Foundation will award more than $2 million in scholarships and grants this year.

Martin Wheel breaks ground

AACF helps worker The Automotive Aftermarket Charitable Foundation (AACF) recently helped an Interstate Batteries employee, Stefan Gonzalez, who lost his family home to a fire. The fund helps those in the automotive aftermarket who have experienced hardships. Within three days of the fire, AACF Executive Director Joel Ayres presented Gonzalez with a check.

Falken tires recalled Sumitomo Rubber USA LLC is recalling 1,900 Falken WildPeak tires due to a manufacturing error which may have resulted in a puncture in the tire’s sidewall. The tires include Falken WildPeak AT3W in size 265/70R17 115T and WildPeak HT02 in size LT235/85R16 116S.

ATD raises $1.8 million American Tire Distributors Inc. recently partnered with customers, vendors and associates for a monthlong fundraising campaign that raised $1.8 million for the Gary Sinise Foundation.

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“I am very pleased to be standing here today, kicking off this major project,” says Jimmy Yang, chairman of Kenda Rubber Industrial Co. Ltd. (center), who presided over a recent groundbreaking ceremony.

Photo: MTD

artin Wheel, a Kenda Rubber Industrial Co. Ltd. company, has broken ground on a new manufacturing facility in Kent, Ohio. The 200,000-square-foot facility will act as a manufacturing warehouse and office space for the company. “I am very pleased to be standing here today, kicking off this major project,” says Jimmy Yang, Kenda’s chairman, who presided over a recent groundbreaking ceremony. “The new facility will be very efficient because we will have manufacturing, assembly and our offices all in one space.” The plant is scheduled to open in 2024, according to Yang, who adds that it should be able to produce “at least 20,000 wheels a day. “We are very anxious and excited to move into the new facility because it is much bigger than our old ones and will let us be more efficient. “We hope to continue adding more jobs until we grow too big for this location and then it will be time for phase two. We want to open another facility and continue to grow.”

MTD January 2024

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Of f- road ca pa bility.

O n - road com fort .

Introducing the Open Country® R/T Trail — the newest member of the Open Country lineup. With more off-road traction than a traditional all-terrain, plus confidence-inspiring wet braking and handling, this versatile tire is ideal for light truck and SUV owners looking for a blend of on- and off-road capabilities. Its innovative tread pattern is designed to minimize road noise, while impact-resistant shoulder lugs offer protection and performance in rocks, sand, mud, and snow. The R/T Trail also comes with a 45,000-mile treadwear warranty and a 500-mile or 45-day trial offer. Open Country® R/T Trail Open Country M/T®

Open Country® R/T

Off -Road Maximum Traction

On-/Off -Road Rugged Terrain Hybrid M/T

Mud Terrain

ToyoTires.com/OpenCountry

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On-/Off -Road Rugged Terrain Hybrid A/T

Hybrid Rugged Terrain

Open Country® A/T III On-/Off -Road All Terrain

All Terrain

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Industry News

Private equity firm acquires stake in Dobbs Tire

Bites Hunter adds partner

Hunter Engineering Co. has announced its partnership with UpdatePromise, an automotive software provider. The partnership will allow service advisors quick access to Hunter’s Quick Check Drive and Quick Tread Edge autonomous inspection results.

Michelin wins award Michelin North America Inc. has won Caterpillar Inc.’s 2023 Supplier Excellence Award. The award recognizes Michelin’s commitment to “excellence and driving a culture of zero defects for customers,” according to Michelin officials.

Maxam goes tractor pulling Maxam Tire North America Inc. will be the title sponsor of the 2024 National Tractor Pulling Championship, which will take place this coming August in Bowling Green, Ohio. The competition has been around since 1962.

TBC names new CTO Darryl Maraj is TBC Corp.’s new chief technology officer and will report to TBC President and CEO Sam Kato. Maraj will lead TBC’s digital and information technology strategy, as well as value creation and innovation through data, according to TBC officials.

Tony Gonzalez Sr. has died Joaquin “Tony” Gonzalez Sr., a tire industry veteran who began his career in his native Cuba and continued it for decades after he moved to the U.S. in 1962, has died. He was 80. In 1971, he started his own business, Banner Tire of 36 Street. In 1973, he founded TCM International Inc., a large exporter to Latin America and the Caribbean.

Bauer Built adds directors Durand, Wis.-based Bauer Built Inc. has added six newly created regional director positions, all promotions of existing employees. The regional directors assumed their new roles this month.

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According to Jason Ellis, a managing director at Audax Private Equity, “Dobbs stood out as an attractive platform due to several factors, not the least of which include the quality of its operations, strong customer loyalty and employees.” Dobbs has 43 locations throughout Missouri and Illinois. Photo: Dobbs Tire & Auto Centers Inc.

udax Private Equity has acquired an ownership stake in Dobbs Tire & Auto Centers Inc., which has 43 stores throughout Missouri and Illinois. “The Dobbs family will retain equity ownership in the business moving forward,” Mike Collet, vice president, marketing manager for Dobbs Tire, told MTD, adding that no details of the transaction will be disclosed. With offices in Boston, Mass., and San Francisco, Calif., Audax Private Equity describes itself as “a leading, middle-market, growth-oriented investment firm with approximately $19 billion of assets under management, over 210 employees and 100-plus investment professionals.” According to Jason Ellis, a managing director at Audax, “Dobbs stood out as an attractive platform due to several factors, not the least of which include the quality of its operations, strong customer loyalty and employees.” Based in St. Louis, Mo., Dobbs Tire was founded in 1976 and employs 650 people. It’s the 25th largest independent tire dealership in the U.S., according to the 2023 MTD 100. “We’re excited to partner with Audax,” says Dobbs CEO Dustin Dobbs. “Our company has reached its most significant crossroad since my grandfather, Don Dobbs Jr., founded the company 48 years and 43 stores ago. “How excited he would be to see us join forces with Audax, which shares our vision for the company’s future and has the resources, knowledge and operational experience to help us realize our tremendous potential. “We look forward to accelerating our growth and serving more communities around the country, while delivering our nearly 50-year promise to sell high-quality tire brands and expert automotive services at competitive prices.” Audax is investing out of its latest flagship fund, Audax Private Equity Fund VII, which closed on $5.25 billion this past summer.

Toyo promotes Mizutani

oyo Tire Corp., parent company of Toyo Tire U.S.A. Corp., has promoted Tomo Mizutani to chairman and CEO of Toyo Tire Holdings of Americas Inc. He most recently served as chairman and CEO of Nitto Tire U.S.A. Inc., while also serving as president and CEO of Toyo Tire North America OE Sales LLC. As of Jan. 1, Keiko Brockel has taken on the role of president and CEO of Nitto Tire U.S.A. MTD January 2024

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NumbersThatCount

Relevant statistics from an industry in constant motion

44%

2023 estimate of vehicles in operation that were at least 11 years old. Source: Jefferies Financial Group Inc. Photo: Countryside Tire and Auto Service Inc.

$61,090

Annual mean wage for automotive service technicians in Washington, D.C. — a rate higher than any of the 50 states. Source: U.S. Bureau of Labor Statistics Photo: Ben Borchert

265 MILLION

Total number of service repair orders written by new car dealerships in 2022 Source: National Automobile Dealers Association

Photo: 15903768 | Linda Johnsonbaugh | Dreamstime.com

78,400

Number of tire recalls issued in 2023, potentially affecting 577, 571 units

Number of new automotive technicians employed from 2020 to 2022.

Source: National Highway Traffic Safety Administration

Source: TechForce Foundation

Photo: MTD

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Photo: MTD

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Yo u r M a r ket p l a ce

Retail sellout remains flat CAN WINTER WEATHER TURN THE TIDE? By

John Healy

ur recent industry checks with tire dealers indicate that retail sellout trends remain flat. Sellout in November 2023, the latest month for which data was available at press time, was approximately flat on a year-over-year basis, following negative trends seen in October, when a 1.9% decline was reported. While sellout trends are far from robust, we note just two months last year saw positive sellout trends — thus the November 2023 result is a slight improvement compared to the year. Looking closer at volume for the month of November on a regional basis, the Southeast region saw the strongest trends, growing 5.2% year-over-year. On the negative side, the Northeast region was down 3.1% on a year-overyear basis, marking the second straight month that the Northeast reported the weakest regional results in our survey. We note that in late-October, commentary from industry powerhouse Monro Inc., which is very wellrepresented in the Northeast market, indicated that its October same store sales trends on a month-to-date basis were down 5.4%, year-over-year, and it appears this trend continued into November, based on our recent survey. Based on feedback from the tire dealer community, it appears that the inf lationary environment and

macroeconomic uncertainty are still impacting retail sellout levels. We note that 10% of our independent dealer contacts saw positive demand trends in November, which was a solid sequential improvement from the net 40% of dealers who saw negative demand in October. While commentary over the past few months has pointed toward continued consumer trade-down, our November survey, in particular, showed consistent feedback that flat sellout levels were driven by consumers opting for lower-priced tires, rather than more expensive tires. While demand trends are always a bit finicky due to weather, calendar shifts, etc., dealers increasingly mentioned big box stores in our November survey as a curtailment to both tire demand and follow-up service offerings. That said, we continue to believe there is a hidden level of pent-up demand in the tire replacement market due to snowfall a year ago largely being consolidated into a few big storms, shortening the window for weatherrelated tire purchases. Given this, along with recent feedback indicative of improving demand for lower-tier tires, we see a scenario in which demand remains positive as vehicle owners pursue needed maintenance with winter weather on the

Snapshot of Dealer’s PLT Tire Volumes (Year-Over-Year Change) Sep22

Oct22

Nov22

Sep23

Oct23

Nov23

Average

Increase

43%

50%

57%

55%

20%

50%

40%

Flat

21%

20%

29%

17%

20%

10%

26%

Decline

36%

30%

14%

28%

60%

40%

34%

Total

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

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way. We also note the year-over-year comparisons will become increasingly easier, given the “green winter” seen a year ago.

TRADE-DOWN CONTINUES

Our recent survey of dealers indicates that tier-three brands were the most in-demand in November. The theme of consumer trade-down appeared to accelerate during the month as several dealers indicated the combination of elevated tier-one tire prices and the difficult macro environment pushed consumers toward lower-priced alternatives. More specifically, one dealer estimated that 10% of buyers at his location are shopping based on quality, while 90% are shopping based on price. As such, tier-one tires remain in last place in our tire tier rankings for the third consecutive month. Rounding out our tire tier rankings are tier-two tires, placing second during November following two straight months of being the most in-demand tier in our rankings. Frankly, these tire tier rankings are far from surprising, given feedback from our independent dealer contacts. With elevated prices for premium brands and the inflationary environment, we find it logical that consumers are trading down. Looking forward, we note consumers seem to change their preference for certain tires based on the current economic situation. We continue to believe that longer-term, consumers will opt for tier-two tires as they balance cost and performance, particularly in the current inflationary environment. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland, Ohio. Healy covers a variety of subsectors of the automotive industry. If you would like to participate in the monthly dealer discussions, contact him at john. healy@northcoastresearch.com.

MTD January 2024

1/16/24 2:57 PM

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Industry analysis

“Twelve months ago, the end consumer was beginning to feel the effects of both rising inflation and tire prices, which subsequently impacted sellout levels, while manufacturers were beginning to experience the effects of channel destocking at wholesalers,” says Healy: “Now we see channel inventory in a much healthier place.” Photo: MTD

Forces impacting the market — and what you will see in 2024

ANALYST JOHN HEALY TALKS PRICING, SUPPLY, SELLOUT, TARIFFS AND MORE By

Mike Manges

hat will have the biggest impact on your business in 2024? Retail sellout acceleration? Pricing? New tariffs? Investment in domestic tire supply? Changing consumer preferences? Or will it be something else, all of the above or a combination of factors? In this MTD exclusive, John Healy, who tracks the United States tire industry for Northcoast Research Holdings LLC, discusses these and other dynamics that will have an effect on your dealership. One thing is clear, he says: the tire industry is in transition. MTD: How would you describe the overall state of the U.S. tire market versus where it was approximately 12 months ago? Healy: We would describe the current state of the U.S. tire market as “clearer

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skies ahead” compared to a “cloudier” environment at this point a year ago. Twelve months ago, the end consumer was beginning to feel the effects of both rising inflation and tire prices, which subsequently impacted sellout levels, while manufacturers were beginning to experience the effects of channel destocking at wholesalers. Now we see channel inventory in a much healthier place, with consumers becoming more aware of needed auto maintenance, like new tires, particularly after the winter a year ago, which was lackluster in terms of weather-driven tire purchases. As we look ahead, we feel that a winter season full of precipitation can be the igniter to a strong winter and spring selling season. MTD: Retail tire sellout appeared to take a positive turn during the first half of 2023. What do you attribute this to?

Healy: Retail sellout trends are always a bit fickle, but the consistent commentary we have heard from dealers is that what little positive momentum we saw this year — particularly in the back half of the year — was driven by consumers pursuing needed automotive maintenance after deferring it throughout the end of 2022 and first half of 2023. Additionally, record high levels of new and used car auto loans — double digits, in many cases — is simply creating a bottleneck to vehicle affordability. This bottleneck should be a positive in the near-term for repair outlets, as consumers reinvest in their current vehicle as monthly payments on a new ride are simply out of reach for many. Separately, we have seen the most strength in tier-two and tier-three brand sellout. Thus we believe the comparative pricing environment for lower-tier tires versus premium brands is positively impacting sellout.

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Industry analysis tions from tier-one and tier-two brands. However, dealers tell us that pricing for opening price point and lower-cost imports is gradually coming down, which is welcome. At this point, most promotions/ deals in the market appear more oneoff to us rather than widespread. That said, we would not be surprised to see more premium brands give up some price at some point in 2024. MTD: What tire tier saw the most growth in 2023 — both consumer and commercial — and why? What do you expect to see in 2024?

“We get the feeling that distributors are taking on more inventory than earlier this year, though they are likely looking for some price concessions before committing to increased orders,” says Healy. Photo: MTD

MTD: One year ago, high inventory levels were a major problem for tire manufacturers, distributors and retailers. As these companies continue to work down their inventory levels, what impact is this having on sell-in? Healy: We would describe sell-in trends as marginally positive. At this point in the year, channel destocking appears to be largely complete. That said, we do not get the feeling distributors are willing to take on big orders at this time. With raw material inflation continuing to abate, we get the feeling that distributors are taking on more inventory than earlier this year, though they are likely looking for some price concessions before committing to increased orders. From our sense, dealers know that tire prices are likely to come down and they don’t want to bulk up their stock rooms ahead of these potential declines in unit prices.

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‘We see no catalyst which would move us away from our view that tiertwo tires will continue to be the most sought-after brands.’ MTD: We’ve heard that some tire manufacturers are rolling back price increases. Can you comment on what you’re seeing as it pertains to tire pricing? Healy: In terms of tiring pricing, it appears that distributors are cautiously approaching forward ordering in hopes of price concessions from falling raw material costs. That said, we ourselves have not yet heard of major price reduc-

Healy: Throughout 2023, tier-two tires were, on average, the most in-demand segment in our surveys, followed by tier-three brands. Said simply, we view this as confirmation of the consumer trade-down dynamic, not only in the tire industry, but also in other areas of consumer spending. Given the inflationary pressures stretching consumers’ wallets this year, we see it as logical and rational that auto owners are shifting toward less expensive brands and away from more expensive brands. Looking to 2024, we have long felt consumers will trend towards tier-two brands as they strike a balance between price and performance. Given a continuation of uncertainty in the broader macro environment, we see no catalyst which would move us away from our view that tier-two tires will continue to be the most sought-after brands in both 2024 and the long-term. MTD: Tire dealership mergers and acquisitions slowed down in 2023. Why? What factors influenced this? Do you expect to see any changes in the amount of M&A activity in the wholesale, retail and commercial tire segments in 2024? Healy: Frankly, M&A activity slowed in 2023 not only in the tire space, but across all industries we cover compared to the past several years. The catalysts are simply elevated valuations given over-earning in the post-COVID-19 era, elevated interest rates and capital market dynamics. As we look to next year, we expect M&A activity to be driven by the MTD January 2024

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Industry analysis What’s next for Goodyear?

Healy discusses new leadership, business unit sell-offs and more On Nov. 15, Goodyear Tire & Rubber Co. announced that Rich Kramer, its longtime chairman, CEO and president, will retire in 2024. The Akron, Ohio-based company also announced plans to sell its OTR tire and chemical businesses, as well as its Dunlop brand, and revealed that it’s looking to cut costs by $1 billion. John Healy follows Goodyear closely as part of his work at Northcoast Research Holdings LLC. Here are his thoughts on what could be next for Goodyear. On Rich Kramer’s retirement: “Rich has been there a long time, so it shouldn’t be altogether that surprising that at some point leadership is going to transition. I didn’t view that as something that was out of left field. The asset sale stuff, I think, was a little bit different.” On Goodyear trying to sell its chemical business: “I think there were some assets (of Goodyear’s business) — particularly retail — that people thought would have been easiest to remove or move on with. And that wasn’t one of the categories they chose. One of the categories they chose was the chemical business and admittedly, that surprised me a little bit because I’ve always kind of viewed the chemical business as core to tire making. But maybe you can do it in ways that are a little bit different and are less capital intensive? I think their thought is, ‘We can engineer and design the chemistry, but we don’t necessarily have to produce it.’ And maybe having someone (else) do the manufacturing of the chemicals and treat them as more of a sourced raw material than an internalized raw material … I think that’s what they’re thinking. They aren’t going to get away with a huge savings there, but maybe they’re realizing they can do this in a more efficient way?” On potential buyers of Goodyear’s OTR tire business unit: “There are a lot of good competitors in that business, large and small, and I think the view Goodyear has is, ‘It’s a good business, but it’s extremely cyclical, and maybe we’re in a position where maybe our scale isn’t where we like.’ My sense is that they will probably have an audience. The question to me would be is, ‘Will the Goodyear brand for OTR survive or will they end up selling manufacturing capacity and R&D items and designs and the team?’ It will be interesting to see if the Goodyear brand goes with it. I think, over the ages, in tire industry consolidation and divestitures, you’ve seen assets sold, but names kind of shared. It will be interesting to see how that develops. I don’t have a great handle on who would maybe be in and who would be out (as potential buyers) in that type of circumstance because I think it’s a pretty fluid situation. OTR wasn’t something I was hypothesizing in my head that was

24 2401_MTD_20-31_HealyQA.indd 24

“I think there were some assets (of Goodyear’s business) — particularly retail — that people thought would have been easiest to remove or move on with,” says Healy. “And that wasn’t one of the categories they chose.” Photo: Goodyear Tire & Rubber Co.

going to be likely sold. I thought things like automotive retail locations would be easier to separate and be monetizable.” On if there’s a tiremaker that might be in a good position to buy the Dunlop brand: “I’m not sure there’s a tiremaker in the U.S. that would be, but I think the Dunlop brand carries good weight in the middle of the globe — in Europe and the Middle East and Africa — so I’m sure there are manufacturers over there who would view that as accretive to their portfolio. In a sense, what Goodyear has shared with the investment community is that they’ve seen good interest in these assets. For a public company to go out and say, ‘These are the assets we’re hoping to sell and we expect minimum proceeds of $2 billion,’ that’s a pretty strong statement to make. So my view is they’ve had some preliminary talks with interested parties.” On whether Goodyear’s $1 billion cost cutting effort is achievable: “I would say $1 billion in cost removal is an aggregate number. It’s by the end of 2025. That’s what they’re hoping to accomplish. They’ve kind of laid out the broad gamut of things that’s going to contribute to that — whether it be people, whether it’s supply chain dynamics, whether it’s optimizing the footprint. Goodyear’s always been one that’s gone after cost reductions and I think they’re saying it again. Will these cost reductions actually show up in the numbers? I hope so. I can’t say it’s always been easy to identify them because so much always changes in this business, but I think when it comes down to realigning your supply chain, your footprint, purchasing and your people, yeah, you can take a lot of cost out. It’s a big company.” MTD January 2024

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Industry analysis interest rate environment. While capital markets are never expert predictors, current expectations are for interest rate cuts in 2024. If interest rate cuts materialize next year, we would expect an incremental boost to M&A activity in the tire space, as borrowing costs become less expensive. All considered, we view the pause in tire dealership M&A activity as not a byproduct of the auto sector or unit economics, but merely a function of macro items and financing costs. MTD: There were major acquisitions in the distribution channel in 2023. How does this change the landscape of the market going forward? Healy: This was not a surprise to us. Covering more geographies, having all the brands and being able to provide quick service — perhaps with multiple stops per day — are the new table stakes for distributors. Wholesale and distribution acquisitions across all areas of automotive have been a hot area over the last few years. While the number of sizeable entities is getting somewhat smaller, we

‘We would not be surprised to see more premium brands give up some price at some point in 2024.’ do think there is likely runway for more to come in some regions of the country. From our perspective, we’re not sure competition is changing from a price and availability standpoint, but I think the expectations from outlets regarding service/deliveries are rising and that is where competition will be fiercest in years to come. MTD: What’s your take on the changes that have taken place at TBC Corp., including TBC’s decision to exit company-owned retail? Will this prove to be a good decision and why? Healy: TBC’s sale of its stores to Mavis Tire Express Services Corp. was one of the bigger stories of 2023, as it relates to retail. From our perspective, tire retailing and distribution are tough and complicated businesses. Many constituents

have tried to dabble in some and all these areas at one point in time. Doing everything for everyone is a great longterm goal, but few have been able to do so in any industry. Given this, I think it makes sense for TBC to regroup and focus on other aspects of its model. I think TBC found a good partner in Mavis. I am optimistic this transaction will be a win for both sides. MTD: Some of the private equity firms that have acquired tire dealerships are approaching the normal point where they want to sell and move on. What are you expecting them to do? Healy: We expect private equity shops to review the state and the progress of their investments prior to looking for an exit. With the tire industry currently in uneven times, we could see them extending their time as they wait for higher exit returns. Additionally, we think activity will be tied to the financing market, as well. Financing a transaction at 6% is very different than 10%, in terms of capital costs. So from our standpoint, we would expect private equity to probably wait it out rather than sell during a less than favorable window of time. MTD: What advice can you give small and mid-sized independent tire dealers as they try to compete with private equity-owned competitors?

“We feel that tariffs are somewhat of a tough item to justify in some ways in the current environment,” says Healy. Photo: Dreamstime.com

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Healy: For small and mid-sized independent dealers, we would advise them to focus on good customer service and relations, along with high levels of transparency, to get customers to continue to return for future services. Best practices and local connections with customers will attract and retain business to help those smaller private dealers remain competitive. At the end of the day, consumers are people and people do business with people. Long-term success is driven by reputation and service. MTD January 2024

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Industry analysis Quick takes

How Healy views the world’s largest tiremakers For the second consecutive year, John Healy provides quick takes on some of the world’s largest tire manufacturers. Here are his thoughts: Michelin Group: The Michelin Man is pretty mighty. Financial results this year are probably at the top of the class, share gains in various areas of the market continue to take place and awards from product quality continue to flow in. Michelin keeps running the right plays at the right time. Bridgestone Corp.: Similar to a lot of entities in the tire industry, redrawing the shape of the manufacturing footprint and restructuring activities appear to be on the docket of things to do. That said, it seems like repositioning commentary is more about Europe than anywhere else. Moving upmarket and deeper into the premium space appears to be a focus, which seems to align with Bridgestone’s light truck tire strategy. Goodyear Tire & Rubber Co.: A giant in transition. New leadership will be announced at some point in 2024 and with it will come the implementation of some cost savings, product alignment and business unit repositioning efforts. Said another way, change is coming to Akron. Continental AG: A strong operator looking to regroup a bit. I believe it announced some plans for asset prioritization and some restructuring. So my guess is 2024 will be about rearranging the priorities a bit and narrowing the focus. Sumitomo Rubber Industries Ltd.: Getting bigger and expanding. I would put Sumitomo in the group of entities that is looking to gain more share in the U.S. They have ambitious growth and production plans for the U.S. market and appear to be pretty committed. MTD: The U.S. International Trade Commission is looking at applying tariffs to TBR tires made in Thailand, which happens to be the biggest exporter of TBR tires to the U.S. How will the Thailand TBR tariff investigation play out and if tariffs are applied, how will this impact the industry? Healy: The main question the investigation is seeking to answer is if lowertier Thai tires compete with highertier American-produced tires. If the commission determines that Thai tires do compete against American tires, they are more likely to implement and enforce a tariff on Thai tire imports.

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Pirelli & Cie SpA: Going global. Recent news relating to expansion and efforts to build in the Middle East are interesting developments. My sense is the uniqueness and quality of Pirelli’s product will remain paramount and the company will look to find regions of the globe where its brand can fit and reside. Hankook Tire & Technology Co. Ltd.: Looking to get bigger. I believe the company just announced updates and plans to grow capacity in its Tennessee production facility. Clearly, Hankook sees growth potential in the industry. Yokohama Rubber Co. Ltd.: Yokohama is gaining share in a tough market, which is not easy to do, but this team is doing it. Whether it’s truck tires, passenger, OE wins and even specialty and high-end OE wins, it seems like Yokohama is making inroads. I’m not sure why this momentum would slow in 2024. Toyo Tire & Rubber Co. Ltd.: New senior leaders were appointed for the company late this summer. While I believe most of the changes are internal movements, still change is change and I imagine these new executives will have their own view on aspects of the business and how to accelerate the growth Toyo’s business has seen. I think 2024 could be the year where these changes perhaps come to light for Toyo. Giti Tire Pte. Ltd.: Definitely an emerging player. I believe this fall, Giti won the opportunity to be the OE fitment with Volkswagen on an EV launch. To us, this is impressive! Previously, it seems that the legacy tire manufacturers were doing most of the winning on EV launches, so it was great to see Giti make some inroads.

If the tariff is enforced, we will likely see tire production in (Thailand) slow as we did with the implementation of tariffs on Chinese imports. Ultimately, if the tariff is implemented, we are likely to see another Asia-Pacific country begin producing and exporting lower-tier tires to the United States in the future. Additionally, we feel that tariffs are somewhat of a tough item to justify in some ways in the current environment. While TBR units are unique, we think that the Biden Administration is looking for ways to combat inflation and bring down costs. Having trade commissions/regulators push tariffs at this

time might be more counterproductive to broader, near-term goals. It will be interesting to see how this develops. MTD: We’ve heard that tire companies are already moving molds out of Thailand in anticipation of new tariffs. What are you hearing? Is the option of bouncing from one manufacturing country or region to another limitless? Healy: We believe that if the tariffs are passed, we are likely to see production shift to other low-cost, low-tariff countries. While it sounds like an easy solution, we believe that shifting MTD January 2024

1/16/24 2:57 PM

Industry analysis ‘M&A activity slowed in 2023, not only in the tire space, but across all industries we cover.’ production capacity is no easy task and requires extensive capital investments and projects to get production off the ground. We are likely to experience further investments in North America as manufacturers seek to avoid costly location changes in the future. MTD: A number of tire manufacturers announced significant investments in North American-based plants during 2023. Which investment, in your opinion, will be the most significant? Are tiremakers’ planned investments reflective of their optimism about future demand? If yes or no, why? Healy: We believe that planned

“We feel that updated and broader capacity additions in North America are justified since yesterday’s capacity cannot produce tomorrow’s tires,” says Healy. Photo: MTD

investments in North America are reflective of many factors. We feel that updated and broader capacity additions in North America are justified since yesterday’s capacity cannot produce tomorrow’s tires. We strongly feel

that unit demand will pick up in the years ahead, as replacement activity is accelerated by the deployment of electric vehicles. We feel that in some ways, this could be a gold rush opportunity for tire manufacturers,

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1/16/24 2:57 PM

Industry analysis are going to be retained in-market to meet the needs of the growing economics in region. MTD: How did the United Auto Workers (UAW) strikes affect tire manufacturers’ supply during the fourth quarter of 2023? Healy: We believe that the UAW strike had little impact on tire manufacturer supply due to the length — or lack thereof — of the strike. We think if the strike was prolonged, we could’ve seen a much more pronounced impact on tire manufacturers as new vehicle production was more adversely impacted. “We believe that the UAW strike had little impact on tire manufacturer supply due to the length — or lack thereof — of the strike,” says Healy. Photo: Dreamstime.com

with the replacement cycle perhaps being cut in half for some models of comparable vehicles. Beyond this, we see global demand as a driving force to more North American production. A result of globalization is

that emerging markets grow and become consumption markets. We feel that is happening in Asia, Latin America and Europe. Said another way, tires produced in those regions that come to North America at some point in time

MTD: During the strike, were tiremakers with non-union plants able to pick up share and if yes, how significantly? Healy: We have not seen any evidence to support that view. MTD: How will the settlement

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Industry analysis ‘For small and mid-size independent dealers, we would advise them to focus on good customer service and relations.’

tires; escalation of global conflicts, causing supply chain failures, while elevating prices and furthering an affordability crisis; and the risk that a ‘green winter’ could slow down seasonal tire purchases. MTD: What are the five biggest tailwinds for 2024, for both manufacturers and the distribution channel?

Healy: The five biggest tailwinds we see to the tire industry in 2024 are the continued decline of raw material prices; the end of the consumer deferment cycle; further adoption of EV and EV-specific tires; alleviation of macro-economic pressures, including but not limited to inflation and interest rates; and continued strength in travel trends increasing total miles driven. ■

between the UAW and the impacted car manufacturers affect the tiremakers that have union plants? How will a settlement impact tiremakers that have non-union plants? Healy: Following the settlement of the UAW strike, we saw auto manufacturers resume full production. Unionized tire plants may see the success of the strike as a signal to fight for higher wages and benefits during renewal years, potentially driving up manufacturer costs. As for non-union plants, we could see a push for higher benefits from workers potentially under the threat of unionization after witnessing the success achieved by UAW.

MANUFACTURING HIGH-QUALITY PRECURED TREADS AND RETREADING MATERIALS SINCE 1952

MTD: What impact, if any, will the ongoing war in Ukraine and the newer war in Israel have on the U.S. tire market? Healy: The impact we are likely to see is that of increased raw material prices and constrained supply as supply chains and manufacturing plants are impacted. If the wars escalate even further in new ways, there could be a much more material impact on raw prices — further straining manufacturers, distributors and consumers. Should the Israeli/Palestinian conflict escalate, we could see risks to manufacturing plants in the Middle East.

We provide world-class retread solutions to independent retreaders throughout the United States and Canada that includes over 70 different precured tread designs, commercial & OTR extruder strips, cushion, repair materials, and technical support.

MTD: What are the five biggest headwinds for 2024, for both manufacturers and the distribution channel? Healy: The five biggest headwinds for 2024 are the potential continuation of the consumer deferment cycle; macroeconomic pressures forcing consumer trade-down; the lack of tariffs on Thai imports, causing an influx of low-tier w w w . M o d e r n T i r e D e a l e r. c o m 2401MTD_PreQGalgo.indd 1

2401_MTD_20-31_HealyQA.indd 31

Pre-Q Galgo Corporation 4329 Bronze Way Dallas, TX. 75237 Ph # 214 330 7300 - Fax # 214 331 2222 E- mail: info@pre-q.com www.pre-q.com

31 12/15/23 10:33 AM

1/16/24 2:57 PM

2 0 24 MT D F a c t s I s s u e

An industry in transition MTD’S FACTS ISSUE EXAMINES THE TIRE MARKET

ollowing several extremely robust years, including a hardy 2022, the tire market in 2023 was marked by what many industry experts have characterized as a return to normality. Several issues that caused headaches for tire dealers and distributors abated — most notably inventory levels, which were sitting in a somewhat uncomfortable position as 2023 began. Dealers and distributors also experienced much-needed relief on pricing as manufacturers pulled back on price increases following several years of rapid-fire hikes. The rate of tire dealership consolidation slowed in the face of high interest rates and other factors. Consumer tire sellout levels fluctuated throughout 2023 and dipped near the end of the year, while cash-strapped and credit-maxed consumers continued to gravitate toward less expensive brands. And replacement commercial medium truck tire shipments modulated downward after a formidable 2022, which followed on the heels of a strong 2021. In the original equipment (OE) channel, the month-anda-half-long strike at the “Detroit Big Three” seemed to have negligible impact on tire manufacturers’ shipments, though OE units declined a bit in the passenger tire segment.

Ocean freight rates have stayed at more reasonable levels, at least as of press time, which benefits importers and others who sell off-shore-manufactured products. On the manufacturing side, raw material prices have been a bonus for tiremakers. And big expansions at several U.S. plants are expected to continue without interruptions, with new projects and phases having been announced. One unknown remains the possible application of tariffs on commercial medium truck tires made in Thailand. Other wild cards include ongoing wars in eastern Europe and the Middle East and the knock-on impact they could have on shipping and freight costs.

LOOKING AHEAD

Several trends that favor tire dealers and distributors are gaining momentum. With the average age of used automobiles at an all-time high, many vehicle owners who have deferred consumer tire replacement over the last several years are expected to return to the market. And ongoing moderation in inflation is expected to positively impact this trend. The uptick in miles driven seen last year also is expected to continue. (Cumulative miles driven increased by 5.6% in 2023, according to the U.S. Department of Transportation.)

32 2401_MTD_32-33_Facts intro spread.indd 32

World Leaders in New Tire Sales (Fiscal year 2023; in billions of U.S. dollars)

TIRE MANUFACTURER

2023

2022

Michelin Group

$28.9

$28.5

Bridgestone Corp.

$22.4

$23.1

Goodyear Tire & Rubber Co.

$17.1

$17.8

Continental AG

$14.9

$14.7

Pirelli & Cie SpA

$7.4

$6.9

Sumitomo Rubber Industries Ltd.

$7.1

Hankook Tire & Technology Co. Ltd.

$6.8

$6.4

Yokohama Rubber Co. Ltd.

$5.8

$5.7

Zhongce Rubber Group Co. Ltd.

$4.2

$4.1

Toyo Tire Corp.

$3.5

$3.4

Giti Tire Pte. Ltd.

$3.2

$3.1

Cheng Shin Rubber Ind. Co. Ltd. *

$3.0

$3.3

Orange cover.indd 20

*Cheng Shin does business as Maxxis International — USA

All estimates in this section are the result of MTD research, unless otherwise noted.

MTD January 2024

1/16/24 2:57 PM

U.S. Passenger Tire Shipments

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

Year

Replacement

2023

215.0

46.6

2022

216.1

41.5

2021

222.0

37.5

2020

202.6

36.2

Overall U.S. Replacement Tire Sales

2019

222.7

45.1

2018

217.0

47.0

In billions; total value of 2023 U.S. replacement tire market: $57 billion

2017

209.3

46.0

2016

207.7

49.0

2015

205.9

46.3

2014

206.6

44.0

2013

201.6

40.5

SEGMENT

2023

2022

Passenger

$37.6

$38.0

Light truck

$8.5

$9.0

Commercial truck

$8.4

$11.7

OTR

$1.8

$2.0

$.735

$.721

U.S. LIGHT TRUCK TIRE SHIPMENTS

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

Year

Replacement

Following a slight dip — from 29% in 2021 to 28.2% in 2022 — retail passenger tire sales margins appear to be on a modest upswing, showing a small gain in 2023. Retail light truck tire and medium truck tire margins also increased slightly last year. Wholesale passenger tire and medium truck retread sales margins were flat versus 2022 levels.

2023

34.0

5.8

2022

37.0

6.2

2021

38.1

5.6

2020

30.4

5.0

2019

32.0

5.9

U.S. AVERAGE Tire SaleS Margins

2018

31.1

5.6

2017

30.8

5.4

2016

31.4

4.9

2015

29.0

4.6

2014

28.8

4.4

2013

28.3

4.2

MARGINS FLUCTUATED

Segment

2023

2022

Passenger (retail)

28.5%

28.2%

Passenger (wholesale)

12.0%

Light truck (retail)

26.0%

25.0%

Medium truck

16.7%

16.5%

Retread (medium truck)

19.0%

SHIPMENTS MODERATED

1/9/24 3:40 PM

After several elevated years, U.S. replacement passenger, light truck and medium truck tire shipments have, for the most part, returned to more moderate levels. Replacement passenger tire shipments totaled 215 million units in 2023, a drop from MTD’s 2022 estimates. Meanwhile, replacement light truck tire shipments decreased by nearly 8.5%, year-over-year. On the commercial side, replacement medium truck tire shipments experienced the steepest decline from last year’s levels. Original equipment (OE) light truck tire shipments totaled 5.8 million units in 2023, a slight decline from 2022. OE medium truck tire shipments in 2023 were flat compared to 2022. And more passenger tires were shipped through the OE channel last year than during 2022. w w w . M o d e r n T i r e D e a l e r. c o m

2401_MTD_32-33_Facts intro spread.indd 33

U.S. Medium Truck Tire Shipments

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

Year

Replacement

2023

20.2

6.5

2022

28.0

6.5

2021

22.7

5.9

2020

18.5

4.5

2019

18.9

6.5

2018

21.0

6.2

2017

19.2

5.7

2016

18.4

5.3

2015

18.0

6.3

2014

17.3

5.8

2013

15.7

5.0

33 1/16/24 2:57 PM

Imports

Imports flex with the market CAMBODIA MAKES A BIG SPLASH

here’s a new world player in the making of tires for the U.S. passenger tire segment and overall consumer tire segment — Cambodia. The nation, sandwiched between Vietnam and Thailand, went from relative obscurity to the top 10 charts in 2023. Trade data shows Cambodia shipped almost as many light truck tires to the U.S. by May of 2023 than it had in all of 2022. By year’s end, Cambodia had sent more than 4.8 million passenger tires to the U.S., in addition to around 1.7 million light truck tires. (Cambodia ranked 20th among the world’s leading commercial truck and bus tire importers in 2023. In 2022, Cambodia didn’t export a single TBR tire to the U.S.) Globally, full-year estimates show passenger tire imports were mostly flat in 2023 compared to a year ago, up 0.2% to 159.8 million tires. The larger consumer tire market, which combines passenger and light truck tires, showed a slight decline in imports — 2.4%, with about 189.7 million tires, down from 194.4 million units in 2022. After the COVID-19 pandemic delivered record-breaking business in the medium truck tire market, the hills and valleys are transitioning to smoother ground. So even though every region on the largest exporters list shipped fewer tires to the U.S. in 2023 than the previous year, it’s important to put these numbers in perspective. With 16.9 million medium truck tires exported to the U.S., 2023 was the third largest year for TBR imports, according to government data that dates back to 2000. The 2023 units exceeded 2019’s levels by more than 2.4 million tires. One more thing to note about TBR tires. MTD readers might look across the charts on this page and make an assumption about the largest player, Thailand. That nation

remains atop the passenger, consumer and medium truck tire charts, but its activity in the passenger and consumer tire markets showed gains, while its medium truck tire shipments fell by 33.6%. That decline is not a result of the tariff investigation instituted last year by the United Steelworkers. Had that case been filed earlier in the year it might have made a difference in these numbers, but it was only filed in mid-October. There simply wasn’t time in the calendar for the numbers to reflect a market reaction.

2023 U.S. Passenger Tire Imports

2023 U.S. Medium Truck Tire Imports

Country

2023

2022

% Change

Country

2023

2022

% Change

Thailand

35.3

30.3

16.4

Thailand

6.6

10.0

-33.6

Mexico

22.6

21.3

6.0

Japan

2.2

2.5

-12.9

Indonesia

13.7

16.5

-17.0

Vietnam

2.0

3.0

-31.9

Vietnam

12.8

10.1

26.9

Canada

1.4

-4.3

South Korea

12.2

14.7

-16.9

China

1.0

1.6

-40.6

Plu

Canada

10.0

9.7

3.7

South Korea

0.7

1.1

-36.1

Japan

9.0

9.6

-5.6

Spain

0.4

0.5

-15.2

Chile

5.2

5.9

-11.3

India

0.4

0.7

-42.3

Cambodia

4.8

1.5

224.7

Brazil

0.3

0.4

-24.9

Malaysia

4.0

4.1

-2.0

Germany

0.2

0.3

-24.0

(in millions of units, rounded)

34 2401_MTD_34-35_Facts imports.indd 34

2023 U.S. Consumer Tire Imports (in millions of units, rounded)

Country

2023

2022

% Change

Thailand

41.0

36.8

11.6

Mexico

24.4

24.2

0.8

Vietnam

16.7

15.2

10.2

Indonesia

15.4

18.8

-18.0

Canada

14.3

14.2

0.9

South Korea

13.9

16.9

-17.7

Japan

11.3

12.2

-7.5

Cambodia

6.6

2.0

218.1

Chile

5.9

6.4

-8.4

Philippines

5.0

6.0

-15.3

Orange cover.indd 20

(in millions of units, rounded)

F W T

Fire

and

MTD January 2024

1/16/24 2:57 PM

Com Resu

2401MT

FOR WEATHERING THE WEATHER Firestone WeatherGrip™ tires are built for giving drivers more control in wet conditions

and maximum dry handling. With a full-depth tread pattern designed to cut through water, WeatherGrip ™ tires allow your customers to drive with more confidence year-round. Plus they perform with a comfortable and quiet ride drivers will appreciate for the long haul.

Comparison based on the Firestone WeatherGrip tire vs. the Firestone Champion Fuel Fighter tire from internal testing. Results may vary depending on proper tire and vehicle maintenance, road conditions and driving habits.

2401MTD_Bridgestone_Firestone.indd 1 2401_MTD_34-35_Facts imports.indd 35

1/9/24 2:41 1/16/24 2:57 PM PM

Channel market share

Independents move the most tires PLUS, A LOOK AT PRIVATE EQUITY’S INFLUENCE

t the retail level, nobody moved more units in 2023 than independent tire dealerships, which together enjoy 66% share of the consumer tire retail channel. Warehouse clubs gained some share last year, with Costco Wholesale Corp. adding a dozen locations and BJ’s Wholesale Club adding nearly 20 outlets.

U.S. CONSUMER TIRE RETAIL MARKET SHARE

PRIVATE EQUITY INVESTMENT

While private equity firms continue to acquire and/or invest in independent tire dealerships, only a handful of the tire dealerships listed on the 2023 MTD 100 are owned or controlled by private equity organizations. Here are the publicly known private equity-owned or controlled MTD 100 dealerships. They represent 3,118 tire stores or 34.8% of the total number of outlets (8,955) listed on the 2023 MTD 100.

CHANNEL

2023

2022

2021

Independent tire dealerships

66.0%

PRIVATE EQUITY-OWNED TIRE DEALERSHIPS

Auto dealerships

9.5%

9.0%

DEALERSHIP

OWNER

Mass merchandisers

9.0%

Warehouse clubs

8.5%

8.0%

Mavis Tire Express Services Corp.

Tire company-owned stores

6.0%

BayPine LP/TSG Consumer Partners LP/David and Stephen Sorbaro

Miscellaneous outlets

1.0%

1.5%

2.0%

Les Schwab Tire Centers Inc.

Meritage Group LP

Sun Auto Tire & Service Inc.

Leonard Green & Partners

Big Brand Tire & Service

Percheron Capital

WHOLESALE BREAKDOWN

Independents remain the dominant tire wholesale distribution channel in the U.S. Meanwhile, tire manufacturer-owned wholesalers continue to invest in their operations. In the last 18 months, TireHub LLC, which now has nearly 80 distribution centers, has added or relocated 13 of its warehouses and plans to open additional facilities in the Boston, Mass., and St. Louis, Mo., markets. National Tire Warehouse, the joint venture between Michelin North America Inc. and Sumitomo Corporation of America, has more than 100 distribution centers.

U.S. CONSUMER TIRE WHOLESALE SHARE CHANNEL

2023

2022

2021

Independent wholesale-distributors

80.0% 80.0% 80.0%

Tire company-owned

10.5% 10.0%

Miscellaneous outlets

9.5%

8.0%

10.0% 12.0%

DEALERS BY OUTLETS

MTD defines independent tire dealerships as tire dealerships that are not owned by tire manufacturers. Sixty-two percent of independent tire dealerships have one location, while 30% have 11 or more locations. (Tire dealerships must have had at least 11 locations to appear on the 2023 MTD 100 list.)

INDEPENDENT TIRE DEALERS (# OF OUTLETS) NUMBER OF OUTLETS

PERCENTAGE

Single location

62.0%

2-10 locations

8.0%

11+ (MTD 100 dealers)

30.0%

36 2401_MTD_36-39_Market Share_Replacement PLT.indd 36

CLUB HOPPING

Warehouse clubs — which include Sam’s Club, Costco Wholesale Corp. and BJ’s Wholesale Club Inc. — currently have 8.5% share of the consumer tire retail channel.

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

2023

2022

2021

Sam’s Club

600

Costco Wholesale Corp.

591

579

558

BJ’s Wholesale Club Inc.

252

233

219

OTHER TIRE RETAILERS

Walmart Auto Care Centers grew its footprint in 2023, adding around 20 locations, according to MTD research, while Pep Boys — Manny, Moe & Jack reduced its store count.

OTHER TOP TIRE RETAILERS IN THE U.S. RETAILER

2023 LOCATIONS 2022 LOCATIONS

Walmart Auto Care Centers

2,600

2,580

Bridgestone Retail Operations

2,226

2,200

Pep Boys – Manny, Moe & Jack

850+

919

Ford Quick Lane & Auto Centers

800+

790

Goodyear Tire & Rubber Co.

554

565

MTD January 2024

1/16/24 2:57 PM

2401MT

2401MTD_TurboTires_LexaniTires.indd 1 2401_MTD_36-39_Market Share_Replacement PLT.indd 37

1/9/24 1:46 1/16/24 2:57 PM PM

Replacement PLT brand market share

Trading down

MANY TIRE BUYERS OPTED FOR LESS EXPENSIVE BRANDS

ost passenger and light truck tire brands maintained f lat market share levels in the U.S. replacement channel during 2023 — with a few exceptions among some less expensive tire brands that gained ground. This comes as little surprise, given the economic challenges that many tire buyers continue to face. “Consumers are getting squeezed and credit card debt is high,” a top executive from a self-described “tier-three” tire manufacturer told MTD. According to the Federal Reserve Bank of New York’s recently published Quarterly Report on Household Debt and Credit, total U.S. household debt climbed to $17.2 trillion during the third quarter of 2023.

Orange cover.indd 20

38 2401_MTD_36-39_Market Share_Replacement PLT.indd 38

2023 REPLACEMENT PASSENGER TIRE BRAND MARKET SHARE

2023 REPLACEMENT LIGHT TRUCK TIRE BRAND MARKET SHARE

(based on an estimated 215 million units)

(based on an estimated 34 million units)

BRAND

2023 SHARE

BRAND

2023 SHARE

Goodyear

10.0%

Goodyear

8.5%

Michelin

10.0%

BFGoodrich

7.5%

Bridgestone

7.0%

Bridgestone

6.5%

Firestone

7.0%

Firestone

6.5%

Falken

5.5%

Michelin

6.5%

Continental

5.0%

General

6.0%

BFGoodrich

4.0%

Toyo

5.5%

Hankook

4.0%

Cooper

5.0%

Yokohama

3.5%

Yokohama

5.0%

Cooper

3.0%

Falken

4.0%

General

3.0%

Hankook

4.0%

Kumho

3.0%

Hercules

3.0%

Nexen

2.5%

Kumho

3.0%

Toyo

2.5%

Continental

2.0%

GT Radial

2.0%

Kenda

2.0%

Hercules

2.0%

Nexen

2.0%

Pirelli

2.0%

Nitto

2.0%

Sailun

2.0%

Pirelli

2.0%

Kenda

1.5%

GT Radial

1.5%

Multi-Mile

1.5%

Maxxis

1.5%

Nitto

1.5%

Multi-Mile

1.5%

Sentury

1.5%

Sailun

1.5%

Sumitomo

1.5%

Big O

1.0%

Big O

1.0%

Kelly

1.0%

Mastercraft

1.0%

Sumitomo

1.0%

Maxxis

1.0%

Others

10.0%

Uniroyal

1.0%

Others

10.5%

1/9/24 3:40 PM

MTD January 2024

1/16/24 2:57 PM

2401MT

2401MTD_Autel.indd 1 Share_Replacement PLT.indd 39 2401_MTD_36-39_Market

1/4/24 1:09 1/16/24 2:57 PM PM

OE tire market share

Still feeling the squeeze VEHICLE MARKET REMAINS CHALLENGING

espite the impact of a six-week long strike by the United Auto Workers, elevated retail prices and other factors, United States light vehicle sales volumes in 2023 were projected to hit 15.5 million units, an increase from 2022, according to a report by Cox Automotive that was published last month. That said, “just when the auto industry is looking to return to a sense of normalcy from the supply side of the equation, U.S. consumers in the market for a new vehicle in 2024 will continue to face affordability issues by way of high interest rates, tight credit conditions and slow-to-recede new vehicle prices,” says Chris Hopson, manager, North American light vehicle sales forecasting, S&P Global Mobility, in a December 2023 report.

2023 NORTH AMERICAN OE CONSUMER TIRE MARKET SHARE TOTALS BRAND Goodyear Michelin Continental Bridgestone Hankook Pirelli Firestone Falken Kumho General Yokohama BFGoodrich Nexen Toyo Others

2023 SHARE 2022 SHARE 21.9% 22.3% 18.7% 18.7% 14.5% 14.5% 13.3% 13.3% 7.7% 7.6% 3.9% 3.9% 3.7% 3.7% 3.6% 3.5% 2.5% 2.4% 2.4% 2.4% 2.1% 2.0% 1.8% 1.8% 1.7% 1.6% 1.2% 1.2% 1.0% 1.1%

2023 NA OE CONSUMER TIRE MARKET SHARE BMW

Brand

2023

2022

Pirelli

34%

Continental

2401_MTD_40-41_OE Market Share.indd 40

Subaru

Brand

2023

2022

Brand

2023 2022

34%

Continental

32%

Bridgestone

56%

26%

Pirelli

25%

Continental

27%

Bridgestone

25%

Bridgestone

14%

Falken

Dunlop

Michelin

11%

Goodyear

Michelin

Goodyear

Yokohama

Hankook

Cooper

Yokohama

Dunlop

Tesla

Yokohama

Ford

Nissan

Brand

2023 2022

Continental

40%

Michelin

25%

Goodyear

20%

Brand

2023

2022

Goodyear

24%

Brand

2023 2022

Michelin

24%

Continental

28%

Pirelli

10%

Continental

20%

Michelin

27%

Hankook

10%

Goodyear

14%

15%

Pirelli

Falken

Toyota

General

Bridgestone

Brand

2023 2022

BFGoodrich

Kumho

Bridgestone

25%

Bridgestone

Toyo

Michelin

25%

Toyo

Hankook

Goodyear

11%

12%

Continental

BFGoodrich

Brand

2023

2022

Goodyear

36%

Michelin

22%

Bridgestone

14%

Firestone

12%

Continental

Hankook

General

Pirelli

HONDA

Dunlop

Hankook

General

BFGoodrich

Dunlop

Toyo

Stellantis Brand

2023 2022

Falken

Goodyear

32% 33% 20 Orange cover.indd

Yokohama

Michelin

14%

Firestone

Bridgestone

13%

General

Firestone

Continental

Volkswagen

Yokohama

Brand

2023 2022

Continental

46%

14%

Brand

2023

2022

Falken

Michelin

25%

Nexen

Kumho

25%

BFGoodrich

Goodyear

12%

13%

17%

General

Hankook

11%

16%

Pirelli

Falken

Bridgestone

Nexen

Goodyear Bridgestone Continental

25% 17% 16%

Hankook

Yokohama

Kumho

Firestone

Pirelli

Hyundai/Kia

MercedeS-Benz

Brand

2023

2022

Hankook

40%

Kumho

30%

Nexen

21%

Continental

Volvo

Brand

2023 2022

Pirelli

50%

Continental

30%

Michelin

20%

MTD January 2024

1/16/24 2:57 PM

2401MT

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CONNECT WITH US! West – Chris Barry 310.251.9528

2401MTD_IndependentTireDealersGroup.indd 2401_MTD_40-41_OE Market Share.indd 41 1

East – Mike Burns 901.412.6606

1/5/24 9:11 1/16/24 2:57 AM PM

Distribution Dealer distribution

On locationlocation, location Location,

REGIONS THE MOSTARE – AND LEAST – TIRE DEALERSHIP LOCATIONS WHERE TIREWITH DEALERSHIPS CONCENTRATED

D W

espite conhereongoing are the United solidation, there are States’ roughly about 29,000 inde29,000 indepenpendent tire dealdent tire dealerership shipslocations located? in South the United The Atlantic States. region The concentrahas thebiggest biggest concentration is in thedealerSouth tion of(22%) independent Atlantic region. Here’srea ships. The New England breakdown of tirenumber dealergion has the smallest outlet distribution by asship a percentage of the total. The region anddrill individual state. below charts down into the details by region and state.

N ri

Independent Tire INDEPENDENT TIREBy Dealer Locations DEALERand LOCATIONS Region State BY (Based on 29,000 total) REGION AND STATE (Based on 29,000 total)

New England

West North Central 10% Missouri.............................................. 31% West North Central 10% Minnesota........................................... 18% 5%

Massachusetts.................................. 37% New England 5% Connecticut........................................ 23% Massachusetts.............................. New Hampshire.................................36% 16% Connecticut.................................... 21% Maine.................................................. 14% Vermont............................................... ..5% New Hampshire............................. 17% Rhode ..5% Maine.Island....................................... .............................................. 14% Vermont............................................. 6% Rhode Island. .................................... 8% 6% Middle Atlantic Pennsylvania...................................... 50% Middle Atlantic 9% New York............................................ 27% Pennsylvania.................................. New Jersey........................................44% 23% New York......................................... 34% NewNorth Jersey.................................... 22% East Central 15%

Ohio..................................................... 31% East North Central 14% Illinois.................................................. 23% Ohio.................................................. 30% Michigan............................................. 19% Illinois............................................... 24% Indiana................................................ 15% Michigan......................................... 19% Wisconsin........................................... 12% Indiana............................................. 15% Wisconsin....................................... 12%

42 03_MTD_Facts.indd 40

2401_MTD_42-45_Distribution Dealers.indd 42

Missouri........................................... 30% Iowa..................................................... 16% Minnesota....................................... 20% Kansas................................................. 15% Iowa.................................................. 17% Nebraska............................................. 10% Kansas............................................. North Dakota......................................13% ..5% Nebraska. ........................................ 10% South Dakota....................................... ..5% North Dakota.................................... 5% South Dakota.................................... 5%

South Atlantic 22% Florida...................................................29% South Atlantic 22% North Carolina..................................... 19% Florida.............................................. 29% Georgia................................................. 18% North Carolina................................ 19% Virginia................................................. 13% Georgia............................................ 19% South Carolina.................................... ..9% Virginia............................................. 13% Maryland............................................. ..7% SouthVirginia....................................... Carolina................................. 8% West ..3% Maryland........................................... 7% Delaware.............................................. ..1% West Virginia. ................................... 3% Washington, D.C................................. ..1% Delaware........................................... 1% Washington, D.C.............................. 1% East South Central 7% Tennessee............................................36% East South Central 7% Alabama............................................... 32% Tennessee....................................... 34% Kentucky.............................................. 23% Alabama.......................................... 30% Mississippi........................................... ..9% Kentucky.......................................... 23% Mississippi...................................... 13%

13% West South Central Texas..................................................... 63% West South Central 13% Louisiana.............................................. 14% Texas................................................ 64% Oklahoma............................................. 13% Louisiana......................................... 14% Arkansas.............................................. 10% Oklahoma........................................ 12% Arkansas......................................... 10%

8% Mountain Colorado............................................... 23% Mountain 8% Arizona................................................. 22% Arizona............................................. 24% Utah...................................................... 15% Colorado.......................................... 23% Idaho..................................................... 11% Utah.................................................. 14% Nevada................................................. ..9% Idaho................................................ 10% ..9% New Mexico........................................ Nevada.............................................. 9% ..7% Montana............................................... New Mexico..................................... 9% ..4% Wyoming.............................................. Montana............................................ 7% Wyoming........................................... 4%

12% Pacific California.............................................. 75% Pacific 12% 13% Washington......................................... California......................................... 75% 10% Oregon.................................................. Washington.................................... 13% ..1% Alaska................................................... Oregon............................................. 10% ..1% Hawaii................................................... Alaska................................................ 1% Hawaii................................................ 1% NUMBERS ARE BASED ON TIRE DEALERSHIPS’ SELF-DISCLOSURES AND ADDITIONAL MTD RESEARCH.

MTD January 2023

MTD January 2024

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1/16/24 2:57 PM

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2401MTD_Zafco.indd 1 2401_MTD_42-45_Distribution Dealers.indd 43

1/2/24 9:26 1/16/24 2:57 AM PM

Brand distribution

Brand distribution by the numbers BREAKING DOWN TWO MTD LISTS

ach July, MTD publishes the MTD 100 — a ranking of the largest independent tire dealerships in the United States, according to store count. The MTD 100 also lists the tire brands that each dealership on the list carries. Here are the most frequently mentioned brands on the 2023 MTD 100, how many dealerships sell them and the number of locations that sell each brand.

BRANDS LISTED ON THE MTD 100 2023 RANKING BRAND

DEALERSHIPS/ 2022 LOCATIONS RANKING

Michelin

90/8,414

BFGoodrich

77/7,572

Bridgestone

72/6,679

Continental

72/6,809

Uniroyal

68/6,081

Goodyear

67/8,292

Firestone

65/6,022

General

63/7,125

Yokohama

59/7,016

Cooper

57/7,413

Hankook

57/7,428

Toyo

44/3,575

RANKING BRAND

DEALERSHIPS/LOCATIONS

Dunlop

39/6,202

Continental

18/1,555

Falken

39/4,509

General

16/1,005

Pirelli

39/5,616

Michelin

16/1,232

Kumho

36/4,044

Yokohama

15/850

Kelly

34/2,782

BFGoodrich

13/543

Bridgestone 13/1,299

COMMERCIALLY SPEAKING

Similar to the MTD 100 chart, here’s a look at the most frequently mentioned brands on MTD’s 2023 Top 25 Commercial Tire Dealers list, which was published last October. Number of locations include both commercial-only and hybrid commercial/retail stores, as provided by commercial tire dealers who responded to MTD’s request for information.

COMMERCIAL TIRE BRAND DISTRIBUTION

Orange cover.indd 20

Nexen

31/5,232

Sumitomo

25/2,501

Firestone

13/1,319

Nitto

21/2,033

Goodyear

12/675

Nokian

21/3,496

Not listed

Hankook

11/559

Uniroyal

8/328

Double Coin 7/1,070

Falken

5/593

Kelly

5/350

Cooper

4/151

Toyo

4/883

44 2401_MTD_42-45_Distribution Dealers.indd 44

MTD January 2024

1/16/24 2:57 PM

2401MT

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2401MTD_K&MTire.indd 1 Dealers.indd 45 2401_MTD_42-45_Distribution

1/8/24 9:06 1/16/24 2:57 AM PM

Tire sizes

Size slowdown?

FEWER PASSENGER TIRE SIZES HIT THE MARKET IN 2023

ast year saw fewer new passenger tire sizes introduced to the market, based on the latest Tire & Rim Association data. One new 17-inch size, one new 20-inch size and one new 22-inch size were introduced in 2023 — significantly fewer than the 17 new P-metric sizes that were added the previous year. The total number of P-metric sizes now available equals 393, up from 390 in 2022.

MOST POPULAR REPLACEA LOOK AT OE SIZES MENT PASSENGER TIRE SIZES MOST POPULAR OE RANK SIZE % of total PASSENGER TIRE SIZES

AVAILABLE PASSENGER TIRE SIZES BY RIM DIAMETER 12-inch: 1

13-inch: 14

14-inch: 26

15-inch: 55

16-inch: 61

17-inch: 65

18-inch: 70

19-inch: 30

20-inch: 40

21-inch: 7

22-inch: 14

23-inch: 2

24-inch: 7

26-inch: 1

Source: Tire & Rim Association

Compared to the passenger tire segment, more LT metric sizes were added last year. Additions include one 14-inch size, one 15-inch size, two 17-inch sizes, one 19-inch size, three 20-inch sizes, two 22-inch sizes and one 24-inch size. All told, there are now 198 LT-metric sizes available, 11 more than the previous year.

AVAILABLE LT METRIC TIRE SIZES BY RIM DIAMETER 14-inch: 7

15-inch: 20

16-inch: 38

17-inch: 33

18-inch: 35

19-inch: 3

20-inch: 26

22-inch: 22

24-inch: 11

26-inch: 3

Source: Tire & Rim Association

The LT high-flotation segment only gained one new size — a 24-inch size — in 2023. The total number of LT high-flotation sizes available now equals 114.

AVAILABLE LT HIGH-FLOTATION TIRE SIZES BY RIM DIAMETER 14-inch: 2

15-inch: 22

16-inch: 2

17-inch: 22

18-inch: 18

20-inch: 24

22-inch: 9

24-inch: 10

26-inch: 3

28-inch: 2

Source: Tire & Rim Association

TURNING 18

When it comes to the most common replacement passenger tire sizes, 18-inch has caught up with 17-inch. There are three 17-inch replacement passenger tire sizes in the top 10, as well as an equal number of 18-inch sizes, thanks to 235/45R18 and 245/60R18 moving into the top 10. Size 225/65R17 still has the biggest share and an 18-inch size (235/60R18) is now part of the top five. Combined, the top 10 sizes make up 27.9% of the replacement passenger tire market.

46 2401_MTD_46-47_Tire Sizes.indd 46

225/65R17 5.8%

205/55R16 3.9%

215/55R17 3.6%

195/65R15 2.4%

235/60R18 2.4%

215/60R16 2.3%

275/55R20 2.0%

235/45R18 1.9%

There are four 18-inch sizes in the original equipment (OE) passenger tire size top 10, followed closely by two 19-inch sizes and two 20-inch sizes. Only one 17-inch size — 225/65R17 — remains in the top 10. The below sizes make up 35.6% of the OE passenger tire market.

225/60R17 1.8%

RANK SIZE

245/60R18 1.8%

275/60R20 6.5%

235/60R18 4.2%

Source: USTMA

MOST POPULAR REPLACEMENT LT TIRE SIZES

% of total

225/65R17 4.0%

235/45R18 3.8%

235/40R19 3.6%

Four of the 10 top LT-metric 6 235/65R18 3.0% sizes fall in the 16-inch cate225/60R18 2.8% gory, while an additional four 7 275/55R20 2.8% fall in the 17-inch category. 7 Two sizes — 235/65R16C 9 235/55R19 2.6% and LT285/70R17 — join this 275/50R22 2.3% year’s top 10, while another 10 size — 35X12.5R20LT — has Source: USTMA dropped out of the top 10 LT Orange cover.indd 20 MOST POPULAR OE LIGHT size rankings. The 10 sizes TRUCK TIRE SIZES listed below comprise 55.6% An 18-inch size —LT275/70R18 of the total U.S. replacement — is the most common OE light truck tire market. light truck tire size. RANK SIZE

% of total

RANK SIZE

% of total

LT265/70R17 8.4%

LT275/70R18

13.5%

LT245/75R16 8.2%

LT245/75R17

10.7%

LT275/70R18 7.4%

LT275/65R20

10.5%

LT225/75R16 6.6%

LT285/70R17

8.2%

LT245/75R17 6.0%

LT315/70R17

7.7%

LT235/80R17 4.1%

LT225/75R16

6.8%

LT265/75R16 4.1%

LT265/70R17

6.4%

235/65R16C 3.7%

235/65R16C

5.8%

LT285/70R17 3.7%

LT245/75R16

5.4%

LT275/65R18 3.4%

LT275/65R18

5.0%

Source: USTMA

MTD January 2024

1/16/24 2:57 PM

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2401MTD_ApolloVredestein.indd 2401_MTD_46-47_Tire Sizes.indd 1 47

12/5/23 1/16/24 9:16 2:57 AM PM

Tire pricing

Fewer price hikes took place in 2023 INCREASES TRACKED WITH RATE OF INFLATION

t the start of 2023, tire dealers told MTD they expected to see fewer price hikes during the year. This proved to be an accurate prediction. After a final round of price increases during the fourth quarter of 2022, many tiremakers pulled back on raising prices — or at least publicly announcing that they were implementing additional price increases. (Exceptions included Bridgestone Americas Inc., Michelin North America Inc., Pirelli Tire North America Inc. and Sumitomo Rubber North America Inc., all of whom went public with price hikes.) The fewer number of increases seen in 2023 correlates with the gradual moderation in overall inflation levels, according to JP Brooks, chief revenue officer for Duluth, Minn.-based Fitment Group, which analyzes millions of consumer tire data points pulled from independent tire dealerships, big box stores and other retailers. By the end of November 2023, the U.S. inflation rate had settled at 3.1% versus 7.1% one year before. And while the consumer price index (CPI) grew by 3.2% in October 2023, this “was down from 3.7% in September and slightly better than most economists were expecting,” noted Brooks. “At its peak, the CPI was at 9.1%. “Looking ahead, we see a normalization of price increases in raw materials and subsequently, a normalization of retail tire prices for the time being,” he added.

2023 PRICING BY REGION (LT265/70R17)

2023 AVERAGE ADVERTISED TIRE PRICES IN THE U.S. SIZE

MAJOR BRAND LOW-COST BRAND

OVERALL

195/65R15

$144.17

$75.54

$117.40

205/55R16

$164.07

$86.74

$142.89

215/60R16

$153.12

$90.82

$132.90

215/55R17

$195.06

$103.83

$162.32

225/60R17

$197.78

$114.26

$171.95

225/65R17

$198.87

$115.97

$176.89

235/60R18

$227.63

$137.86

$202.46

245/60R18

$240.94

$148.37

$212.47

275/55R20

$257.00

$172.59

$248.12

LT225/75R16

$233.04

$144.12

$200.45

LT245/75R16

$248.46

$157.86

$224.02

LT265/75R16

$265.82

$179.45

$244.14

LT235/80R17

$275.74

$176.80

$249.38

LT245/75R17

$275.24

$177.90

$245.77

LT265/70R17

$286.41

$187.72

$261.86

LT285/70R17

$318.09

$221.90

$303.07

LT275/65R18

$308.88

$218.96

$292.73

LT275/70R18

$307.91

$212.99

$296.73

Source: Fitment Group

REGION

OPENING

VALUE

BETTER

BEST

WINTER

East North Central

$199.06

$236.49

$274.81

$294.43

$248.18

East South Central

$208.31

$232.78

$273.58

$292.81

$250.86

Middle Atlantic

$183.67

$235.10

$273.21

$296.15

$248.20

Mountain

$191.67

$246.92

$277.39

$291.94

$262.34

New England

$185.71

$245.26

$282.41

$305.03

$270.24

Pacific

$197.69

$241.30

$274.83

$290.52

$258.23

South Atlantic

$186.81

$236.41

$272.28

$291.43

$250.22

West North Central $193.27

$237.76

$275.40

$294.82

$248.27

West South Central $193.15

$235.77

$270.44

$289.95

$252.15

Source: Fitment Group

48 2401_MTD_48-51_Tire_Pricing_Commercial_Market.indd 48

MTD January 2024

1/16/24 2:57 PM

ONLINE PRESENCE

Online tire retailing isn’t just for giants like Tire Rack, Discount Tire and tire manufacturers anymore. Independent tire dealerships are investing in their own online tire sales portals, as well. Here’s a look at two tires and what prices they were advertised on various websites shortly before press time.

2023 ONLINE TIRE PRICING YOKOHAMA AVID TOURING-S (225/65R17) WEBSITE PRICE

GENERAL GRABBER A/TX (LT265/70R17) WEBSITE PRICE

amazon.com

$142.65

amazon.com

$219.29

americantiredepot.com

$140.99

bigchieftire.com

$268.99

bigbrandtire.com

$140.99

cjtire.com

$251.99

bigchieftire.com

$176.99

discounttiredirect.com

$269.99

cjtire.com

$162.99

grismertire.com

$277.99

discounttiredirect.com

$155.00

hogantire.com

$277.00

grismertire.com

$146.99

jackfurriers.com

$297.99

hogantire.com

$160.00

mavistire.com

$272.99

jackfurriers.com

$180.00

monro.com

$293.99

mavistire.com

$154.00

prioritytire.com

$272.99

monro.com

$197.99

quicklane.com

$293.95

prioritytire.com

$143.61

samsclub.com

$250.88

quicklane.com

$176.95

simpletire.com

$272.99

simpletire.com

$124.97

telletire.com

$210.11

sullivantire.com

$184.00

tirebuyer.com

$272.99

telletire.com

$146.10

tirerack.com

$269.99

tireagent.com

$171.61

tires.com

$273.00

tirebuyer.com

$189.00

tireseasy.com

$272.99

tirerack.com

$158.31

townfair.com

$275.00

tires.com

$155.00

vipauto.com

$269.99

tireseasy.com

$152.46

Source: Fitment Group

townfair.com

$160.00

Orange cover.indd 20

1/9

Source: Fitment Group

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

2401_MTD_48-51_Tire_Pricing_Commercial_Market.indd 49

49 1/16/24 2:57 PM

Commercial tire market

Truck tire shipments took left turn

BUT NUMBERS STILL ECLIPSED 2020, 2019 LEVELS

f all product segments tracked by MTD, the U.S. replacement commercial medium truck tire segment experienced the largest decrease in 2023, ending the year at an estimated 20.2 million units. However, shipments were higher than in 2020, when MTD estimated that 18.5 million units were shipped, and in 2019, when MTD estimated that 18.9 million units had been shipped. In the original equipment channel, total 2023 commercial medium truck tire shipments were expected to equal last year’s shipment total of 6.5 million domestic units, a number tallied by the U.S. Tire Manufacturers Association. Prior to 2022, the last time that many medium truck tires were shipped at the OE level was in 2019. Medium truck tire retread production was slightly up in 2023, according to MTD estimates, totaling around 15.8 million units versus 15.5 million units during 2022. A return to stability in raw material, tread rubber and casing supply helped bolster retread output.

2023 U.S. REPLACEMENT MEDIUM TRUCK TIRE BRAND share

2023 U.S. AG TIRE MARKET SHARE — RADIAL REAR REPLACEMENT

(based on 20.2 million units)

(based on 298,680 units)*

BRAND

2023 SHARE

BRAND

2023 SHARE

Bridgestone

13.5%

BKT

27.0%

Michelin

13.5%

Firestone

25.5%

Goodyear

8.5%

Michelin

14.0%

Yokohama

8.5%

Goodyear

11.5%

Continental

8.0%

Alliance

9.0%

Firestone

7.5%

Titan

4.5%

Double Coin

5.5%

Ascenso

4.0%

Hankook

3.5%

CEAT

3.0%

Toyo

3.5%

Trelleborg

1.0%

Falken

3.0%

Others

0.5%

Sailun

2.0%

*Ag tire estimates as of Nov. 10, 2023

Roadmaster

1.5%

Sumitomo

1.5%

Zenna

1.5%

BFGoodrich

1.0%

Fortune

1.0%

General

1.0%

Gladiator

1.0%

Westlake

1.0%

Others

13.5%

2023 U.S. RETREADED TRUCK TIRE MARKET SHARE

Orange cover.indd 20

3.0%

1.5%

5.5%

(based on 15.8 million units) ■ Bridgestone/Bandag (45%)

21.0%

45.0%

■ Michelin/Oliver (24%) ■ Goodyear (21%) ■ Vipal/Marangoni (5.5%) ■ Continental (3%) ■ Others (1.5%)

50 2401_MTD_48-51_Tire_Pricing_Commercial_Market.indd 50

24.0%

MTD January 2024

1/16/24 2:57 PM

2401MT

Leading the World in Retread Technology

www.vipal-usa.com

2401MTD_Marangoni.indd 1 2401_MTD_48-51_Tire_Pricing_Commercial_Market.indd 51

www.na.marangoni.com

12/21/23 AM 1/16/24 10:23 2:57 PM

Plant capacities

Ongoing NORTH AMERICAN TIRE investment PLANT CAPACITIES TIREMAKERS MOVED FORWARD WITH BIG PROJECTS

everal tire manufacturers announced major investments in their North American tire production facilities and capabilities during 2023, while others are moving ahead with planned expenditures. Last month, Sailun Tire Americas announced plans to enter a joint venture with Sailun Singapore to invest in the construction of a new tire manufacturing plant in Mexico. (Sailun Singapore is a wholly owned subsidiary of Sailun Tire and TD International Holding, S.A.P.I. de C.V. in Mexico.) The new facility will have an annual production capacity of six million semisteel radial tires, with a total project investment of $240 million. This past summer, Nokian Tyres told MTD that it plans to double the annual production capacity at its Dayton, Tenn., plant by 2024 as part of its ongoing investment in the facility, which opened in 2019. Nokian is now manufacturing light truck tires at the plant, which runs 24/7, and says that by 2027, the factory will make up 25% of Nokian’s annual global production. (Nokian’s plant in Finland will generate 35% and its recently announced plant in Romania, which is slated to begin production in 2025, will manufacture the rest of what’s projected to be a total global, annual output of around 15 million units.) Nokian will have the capability to produce up to eight million units per year and then up to 12 million units annually at the Dayton facility, if the company chooses to add onto the factory’s existing footprint. Also last summer, Giti Tire (USA) Ltd. told MTD that its plant in Richburg, S.C., was preparing to enter phase two of its evolution, which will include capacity increases and the production of key sizes in several popular lines, as well as sizes the company has been producing overseas. In May 2023, Nexen Tire Corp., par-

52 2401_MTD_52-53_Plant_Capacities.indd 52

AS OF JAN. 1, 2024 (IN THOUSANDS OF UNITS) Company / Plant Location / Year Constructed

NonISO Passenger Light truck Truck Union Certified per day: per day: per day:

Others per day:

Total

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

0.04

La Vergne, Tenn., 1972

x x

5.8

Warren County, Tenn., 1990

9.4

Bloomington, Ill., 1965

0.3

1.9

Wilson City, N.C., 1974

Des Moines, Iowa, 1945 x

22.5

Aiken County, S.C., 1999

Joliette, Quebec, Canada, 1966

9.2

9.1

18.3

Monterrey, Mexico, 2007

6.8

Cuernavaca, Mexico, 1980

15.5

5.6

21.1

20.7

15.2

2.24

121.14

Total:

Carlstar Group LLC Jackson, Tenn., 2009

Clinton, Tenn. (Dico), 1974

Total:

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

Mount Vernon, Ill., 1973, 1988

12.5

13.5

10.3

44.3

Clinton, Miss., 2020

2.8

Total:

42.5

13.1

60.6

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

Total:

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

Fayetteville, N.C., 1969

10.5

41.5

Findlay, Ohio, 1917

64.5

Texarkana, Ark., 1964

Topeka, Kan., 1945

0.5

5.5

0.1

6.1

Lawton, Okla., 1978

Tupelo, Miss, 1984/1960

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

San Luis Potosi, Mexico 2017

Total:

16.4

203.9

16.5

15.1

270.5

12.9

13.9

12.9

13.9

11 40.9

Hankook Tire America Corp. Clarksville, Tenn., 2016

Total:

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

Total:

Michelin North America Inc. Ardmore, Okla., 1969

Dothan, Ala., 1979

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

Greenville, S.C. (C3M), 1996

Piedmont, S.C. (Tweel), 2014

37.5

3.4

9.5

25.5

10.7

36.2 36.7

36.7

8.7

0.07

MTD January 2024

1/16/24 2:57 PM

Company / Plant Location / Year Constructed

NonISO Passenger Light truck Truck Union Certified per day: per day: per day:

Lexington, S.C., 1981

Lexington, S.C., 1998

Spartanburg, S.C., 1978

Starr, S.C., 2013

Tuscaloosa, Ala., 1945

Others per day:

Total 26.5

26.5

0.1

6.4

0.01

19.7

5.5

25.2

18.1

Bridgewater, Nova Scotia, Canada, 1971

14.1

Granton, Nova Scotia, Canada, 1971

2.7

Waterville, Nova Scotia, Canada, 1982

0.5

7.5

Queretaro, Mexico, 2002

Leon, Mexico, 2018 Total:

0.4

4.4

181.4

33.5

13.4

0.68

228.98

1.7

1.1

2.8

1.7

1.1

2.8 1.2

Nokian Tyres plc Dayton, Tenn, 2019

Total:

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

1.2

Guanajuato, Mexico 2011, 2018

23.2

Total:

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

0.92

0.18

0.05

2.35

3.5

Unicoi, Tenn., 1997

0.3

0.5

0.05

0.25

1.1

1.22

0.68

0.1

2.6

4.6

Total:

Sumitomo Rubber USA LLC (Sumitomo Rubber North America Inc.) Tonawanda, N.Y., 1923

7.3

2.7

2.3

17.3

Total:

7.3

2.7

2.3

17.3

Titan Tire Corp. Bryan, Ohio, 1967

0.33

Des Moines, Iowa, 1943

11.25

Freeport, Ill., 1964

Total:

8.1

19.68

6.5

46.5

6.5

46.5

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

Total:

Yokohama Tire Corp. West Point, Miss., 2015

Salem, Va., 1968 Spartanburg, S.C., 2015*

25.7

1.1

26.8 0.07

0.07

Charles City, Iowa, 2012*

0.5

Total:

25.7

1.1

0.57

30.37

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

Total:

14.2

3.8

14.2

3.8

18 2.14

JK Tyre & Industries (formerly CIA Hulera Tornel) Mexico City, Mexico

0.14

Tultitlan, Mexico

1.5

0.5

Tacuba, Mexico

2.5

10.5

Total:

1.5

0.14

21.64

7.2

2.8

7.2

2.8

20 751.27

Corporacion de Occidente SA de CV Guadalajara, Mexico, 2005

Total:

533.12

88.18

56.6

73.37

Canadian Totals

U.S. Totals

13.1

13.5

78.6

Mexican Totals

95.7

32.4

8.1

0.14

136.34

TOTAL:

673.82

133.68

71.7

87.01

966.21

*Notes former Trelleborg Wheel Systems factory

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ent company of Nexen Tire America Inc., revealed plans to build a manufacturing plant in the southeastern United States that will start producing tires by 2029. The plant will represent an investment of $1.3 billion. When up and running, it will have a daily production capacity of 30,000 units, according to Nexen officials. The plant will be South Korea-based Nexen’s first tire factory in the U.S. and its first establishment of an overseas tire plant in nearly 10 years. Nexen also plans to boost its current global production capacity, which stands at around 45 million units a year, to 52 million units by 2025. At the outset of 2023, Michelin North America Inc. disclosed plans to invest around $220 million in equipment and technology at its three manufacturing plants in Nova Scotia to meet demand for electric vehicle tires, larger passenger and light truck tire fitments and fuelefficient commercial truck tires. Michelin says the investments will follow a multi-year plan.

EVOLVING PROJECTS

Investment at select Bridgestone Americas Inc. plants, as well as Hankook Tire America Corp.’s plant in the U.S., also continued in 2023. During the second quarter of 2023, Hankook told MTD that it was still ontrack to break ground on phase two of the expansion of its Clarksville, Tenn., plant. The investment will double the plant’s passenger and light truck tire production to 11 million units and give Hankook the ability to build commercial truck and bus tires at the facility, which opened in October 2017. In summer 2022, Bridgestone broke ground on a $550 million investment at its Warren County, Tenn., plant that will expand the facility by 850,000 square feet and enable TBR tires made there to be equipped with radio frequency identification tags. As 2024 starts, Bridgestone’s building expansion plans at the plant are underway. Volume increases are planned and are dependent on market demand. During 2023, Bridgestone broke ground on the $60 million expansion of its tread rubber manufacturing plant in Abilene, Texas. (Tread rubber production facilities are not represented on MTD’s North American tire plant capacity chart.)

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Automotive service

Running a successful shop

A LOOK AT TECH CERTIFICATION, EQUIPMENT INVESTMENT AND MORE

uto service remains a significant component of many independent tire dealerships’ revenue, with respondents to MTD’s latest Tire Dealer Automotive Service Study stating they expect to derive more than 40% of their total sales from it. More than half — 55%, to be exact — of study respondents report they have more than one location, with 12% operating two stores. Eleven percent of respondents revealed they have more than 10 locations.

PERCENT OF ASE-CERTIFIED TECHNICIANS 32%

19%

10%

8% 4%

TECH CERTIFICATION

Twenty-four percent of respondents told MTD that at least 50% of their technicians have earned Automotive Service Excellence (ASE) certification. Ten percent said that 91% to 100% of their technicians are ASE-certified.

TECH COMPENSATION

When asked about how their technicians are compensated, 43% of respondents revealed they pay by the hour, while 39% use a salary/ commission system.

Commission only 7%

Salary only 11%

Salary and Commission 39%

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None

1-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% 71-80% 81-90% 91-100%

EQUIPMENT INVESTMENT

Capital investment — and when needed, reinvestment — is important to many Tire Dealer Automotive Service Study respondents. Here’s a breakdown of the different types of shop equipment that dealers own and the percentage of dealers who plan to buy them.

SERVICE EQUIPMENt

Hourly 43%

EQUIPMENT

% OF DEALERS CURRENTLY USING

% OF DEALERS WHO PLAN TO BUY

Air compressor

100%

A/C refrigerant recycler

62%

Alignment rack

74%

Battery tester/charger

87%

Brake lathe (off-car)

54%

Brake lathe (on-car)

26%

Engine diagnostic analyzer

62%

Lift (all types)

85%

Nitrogen equipment

31%

Tire changer

100%

15%

Wheel balancer

100%

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Mergers and acquisitions

Tire dealership buyouts slowed in 2023 BUT THE BIG GOT EVEN BIGGER

here were fewer publicly announced tire dealership mergers and acquisitions in the United States than last year and the previous year. “Debt service cost is creating more challenges for the models to work, in terms of paying the multiples people were receiving,” Tony Puckett, CEO of Sun Auto Tire & Service Inc., told MTD last summer. High interest rates also played a role. However, many dealerships — including some of the country’s largest — continued to purchase other dealerships. Based on store count, the biggest deal of the year was Mavis Tire Express Corp.’s acquisition of nearly 600 NTB Tire and Service Centers and Tire Kingdom Service Centers from TBC Corp., which happened in June. The second biggest, based on number of locations involved, was Discount Tire’s purchase of Dunn Tire Corp.’s 25 retail stores in October, which expanded Discount Tire’s presence in Pennsylvania and facilitated the company’s entry into the New York market. Rounding out the five biggest acquisitions of the 2023 were Green Bay, Wis.-based Pomp’s Tire Service Inc.’s acquisition of Royal Tire Inc., a 20-outlet company with locations in Minnesota and North Dakota (April); Allen Park, Mich.-based Belle Tire Distributors Inc.’s pick-up of 18 Tireman Auto Service Centers in Ohio and Michigan (February); and Sun Auto Tire’s purchase of Tire Outlet, a 14-store retail chain in Jacksonville, Fla. (January). Best-One Tire Group acquired undisclosed stakes in both Cullman, Ala.-based McGriff Tire and Callaghan Tire, based in Bradenton, Fla. Audax Private Equity acquired an ownership stake in Dobbs Tire & Auto Centers. (Because these deals were not complete acquisitions, they are not listed here.)

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2023 U.S. TIRE DEALERSHIP MERGERS AND ACQUISITIONS Buyer

Acquired

# of outlets

Location (s)

Belle Tire Distributors Inc. Gills Point S Tire & Auto Greatwater 360 Auto Care Leeds West Groups McCarthy Tire Service Co. Inc. MFA Petroleum Co. Monro Inc. Monro Inc. Southern Tire Mart LLC Sun Auto Tire & Service Inc. Telle Tire & Auto Service Inc. Tire Discounters Inc. Tire Discounters Inc. Chapel Hill Tire Dawson Tire & Wheel Greatwater 360 Auto Care Greatwater 360 Auto Care K&M Tire Inc.

1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 2Q 2Q 2Q 2Q 2Q

Tireman Auto Service Centers Hogan Tire Co. Tire Tracks USA Midas franchise store Truck Fleet Repair Big O Tires retail stores Muscatine Tire & Auto Center QC Auto Service Heintschel Tire Tire Outlet Jerry’s Tire Sales Skip Cottrell’s Tire University Tire Durham Tire F&F Tire & Service Herod Family Auto & Tire Springdale Automotive Midtown Tire TBC Corp.’s retail-owned stores

18 5 14 1 1 13 1 4 1 14 1 1 1 1 1 2 4 1 595 (392 NTB

Ohio and Michigan Northern Maine Illinois Denver, Colo. Norfolk, Va. Kansas City, Mo. Muscatine, Iowa Iowa and Illinois Texarkana, Texas Jacksonville, Fla. Edwardsville, Ill. West Somerset, Ky. Loganville, Ga. Durham, N.C. Wisner, Neb. Medina, Ohio Louisville, Ky. Rochester, N.Y.

Mavis Tire Express Services Corp.

(NTB Tire and Service Centers and Tire Kingdom Service Centers)

McCarthy Tire Service Co. Inc. Pomp’s Tire Service Inc.

2Q 2Q

Southern Tire Mart LLC

Roli Retreads Inc. Royal Tire Inc. Country Tire & Wheel

Southern Tire Mart LLC

Telle Tire & Auto Service Inc. Tire Discounters Inc. Turbo Wholesale Tires LLC

2Q 2Q 2Q

VIP Tires & Service

Eastern Tire & Auto Service Inc. Flynn’s Tire Group

3Q 3Q

Left Lane Auto LLC

McCarthy Tire Service Co. Inc. McMahon’s Best-One Tire Steve Shannon Tire Co. Telle Tire & Auto Service Inc. U.S. AutoForce LLC

3Q 3Q 3Q 3Q 3Q

Bob Sumerel Tire Co.

Discount Tire

K&M Tire Inc.

Left Lane Auto LLC Service Tire Truck Centers Inc. Steve Shannon Tire Co. Straightaway Tire & Auto Straightaway Tire & Auto Telle Tire & Auto Service Inc.

4Q 4Q 4Q 4Q 4Q 4Q

Friend Tire Co. (from Yokohama Tire Corp.)

Tulare Firestone dba TF Tire & Service Auto Clinic Tire Barn Tire Wholesalers Inc. Marshfield Tire & Auto Service Center Herricks Garage Manordale Tires & Service Modica Bros. Tires & Wheel Center Dice’s Tire Service Berger Auto Parts & Service Inc. Krises Tire Car-Doc Automotive & Tire Pacific Tire Distributors Flynn’s Tire Group’s commercial division Dunn Tire LLC’s retail stores Point S USA distribution center

Florida, Texas and across locations and the mid-Atlantic, Midwest 203 Tire Kingdom and South locations)

1 20

Minnesota and North Dakota

Farmingdale, N.Y.

Bakersfield, Calif., Fresno, Calif. and Taft, Calif.

New Mexico, Tennessee, Texas, Florida, Missouri, Louisiana, Oklahoma and Utah

Tulare, Calif.

9 2 1 5

Lee’s Summit, Mo. Gainesville, Ga. Chicago, Michigan and Utah

Marshfield, Mass.

1 1 1

Rockport, Maine Delmont, Pa. Southeast Texas

9 1 2 1 1 4 3 outlets, one retread plant 25 retail stores

1 distribution center Logan Tire Service 1 Giant Tire Service 8 Cheney Tire 2 Wayne’s Automotive 1 Accurate Auto & Tire Service 1 Rasch Automotive Service Center 1

Carlisle, Pa. Fort Wayne, Ind. Troy, Pa. Maryland Heights, Mo. Oregon and Washington Ohio and Pennsylvania Western and central New York and Pennsylvania Denver, Colo. Logansport, Ind. New Jersey Watertown, N.Y. Grand Rapids, Mich. Maple Grove, Minn. Kirkwood, Mo.

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Biggest dealers

Big and bold

RANKING THE LARGEST TIRE DEALERSHIPS AND RETREADERS

s mentioned earlier, MTD defines independent tire dealerships as tire dealerships that are not owned by tire manufacturers. Here are the 10 largest independent tire dealerships in the U.S., as listed on the 2023 MTD 100. Rankings on the MTD 100 are based solely on the number of outlets that each dealership has.

10 LARGEST INDEPENDENT TIRE DEALERSHIPS # OF LOCATIONS

RANK

DEALERSHIP

HEADQUARTERS

TOP OFFICER(S)

Mavis Tire Express Services Corp.

Millwood, N.Y.

Stephen and David Sorbaro, co-CEOs

2,029

Monro Inc.

Rochester, N.Y.

Michael Broderick, CEO and president

1,299

Discount Tire/ America’s Tire/ Tire Rack

Scottsdale, Ariz.

Dean Muglia, CEO

1,137

Les Schwab Tire Centers Inc.

Bend, Ore.

Mike Broberg, CEO

463

Sun Auto Tire & Service Inc.

Tucson, Ariz.

Tony Puckett, CEO

424

Tire Discounters Inc.

Cincinnati, Ohio

Chip Wood, chairman

204

Big Brand Tire & Service

Moorpark, Calif.

Joe Buscaglia, CEO

202

Southern Tire Mart LLC

Columbia, Miss.

Thomas and James Duff, owners

178

10 LARGEST COMMERCIAL TIRE DEALERSHIPS RANK

DEALERSHIP

HEADQUARTERS

TOP OFFICER(S)

Southern Tire Mart LLC

Columbia, Miss.

Thomas and James Duff, owners

Best-One Tire Group

Monroe, Ind.

Mark and Larry Zurcher, co-CEOs

Pomp’s Tire Service Inc.

Green Bay, Wis.

Jim Wochinske, CEO

Snider Tire Inc.

Newton, N.C.

Marty Herndon, chairman/CEO

McCarthy Tire Service Co. Inc.

Wilkes-Barre, Pa.

John McCarthy Jr., president

Les Schwab Tire Centers Inc.

Bend, Ore.

Mike Broberg, CEO

Service Tire Truck Centers Inc.

Bethlehem, Pa.

Walt Dealtrey Jr., CEO and president

Purcell Tire & Rubber Co.

Potosi, Mo.

Roger Lucas, CEO

Boulevard Tire Center

Deland, Fla.

Earl Colvard, president

Parkhouse Tire Inc.

Bell Gardens, Calif.

Jim Parkhouse, CEO

As of October 2023 publication of MTD’s Top 25 Commercial Tire Dealers List

Belle Tire Distributors Inc.

Allen Park, Mich.

Jack Lawless, CEO

177

Pomp’s Tire Service Inc.

Green Bay, Wis.

Jim Wochinske, CEO

141

As of July 2023 publication of the 2023 MTD 100

To be ranked on the MTD Top 25 Commercial Tire Dealers in the U.S. list, the latest edition of which was published in October 2023, a dealership must sell medium truck tires, have at least one retread plant and provide 24/7 emergency roadside service. Dealers are ranked based on MTD’s estimate of their commercial sales.

In April 2023, MTD ranked the 50 top retreaders in the U.S. based on average amount of tread rubber used, not number of plants, which are listed on the below chart.

10 LARGEST RETREADERS IN THE U.S. # OF PLANTS

RANK

DEALERSHIP

HEADQUARTERS

TOP OFFICER(S)

Southern Tire Mart LLC

Columbia, Miss.

Thomas and James Duff, owners

Goodyear Tire & Rubber Co.

Akron, Ohio

Rich Kramer, CEO, chairman, president

Pomp’s Tire Service Inc.

Green Bay, Wis.

Jim Wochinske, CEO

McCarthy Tire Service Co. Inc.

Wilkes-Barre, Pa.

John McCarthy Jr., president

Snider Tire Inc.

Newton, N.C.

Marty Herndon, CEO/chairman

Purcell Tire & Rubber Co.

Potosi, Mo.

Roger Lucas, CEO

Best-One Tire Group

Monroe, Ind.

Mark and Larry Zurcher, co-CEOs

Love’s Travel Stops & Country Stores Inc.

Oklahoma City, Okla.

Greg and Frank Love, co-CEOs

Service Tire Truck Centers Inc.

Bethlehem, Pa.

Walt Dealtrey Jr., CEO and president

Parkhouse Tire Inc.

Bell Gardens, Calif.

Jim Parkhouse, CEO

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As of April 2023 publication of MTD’s 2023 Top Retreaders in the U.S. list. (Since then, Best-One Tire Group has added several retread plants to its network.)

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SEMA Show

More from the 2023 SEMA Show WHAT’S NEW IN EQUIPMENT, SOFTWARE AND TOOLS By

MTD Staff

hop equipment, tool, digital solutions and software suppliers showcased new products and services for tire dealers at the 2023 SEMA Show. Here’s a look. (In the December 2023 issue of MTD, we highlighted the new tires that were introduced and displayed at the event.)

SHOP EQUIPMENT/TOOLS

BendPak Inc. showcased its expanded Ranger line, displaying the new R80EX Tire Changer and the LS43B Wheel Balancer. The R80EX is a dual-assist, tilt-back tire changer that includes adjustable RimGuard clamps and TurboBlast bead seating. The LS43B wheel balancer uses Ranger’s Laser-Spot technology. It includes an LED rolling wheel weight display; tiered weight placement indicators; an ergonomic control board; and more. Ranger’s 3D Auto Data Entry system combines with DataWand and QuickTouch Data Arm, allowing technicians to automatically enter all wheel parameter settings in seconds flat, according to BendPak officials.

The Ranger R80EX Tire Changer from BendPak Inc. is a dual-assist, tilt-back changer. Photo: MTD

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CEMB USA/BL Systems’ SM 1100 center-post tire changer adapts for low-profile tires, run-flat tires, special custom wheels and other products, according to CEMB officials. It also has a leverless mount head and other features. Photo: MTD

The balancer provides simultaneous retrieval of static, dynamic and ALU1/ ALU2/ALU3 data. The LS43B has a maximum tire diameter of 43 inches. CEMB-USA/BL Systems showcased both the ER100 GT wheel balancer and SM 1100 tire changer. The ER100 GT comes with AutoAdaptive Mode software, which acquires the wheel’s weight and dimensions and “recalculates the tolerance value” to cancel any vibration, according to CEMB officials. The balancer also features CEMB’s One Plan Balancing Program, 3D Laser Scan and HubMatch, which clocks the radial force vibration highpoint. The SM 1100 center-post tire changer adapts for ultra-low-profile, run-f lat tires and special custom wheels. It has a leverless mount head for demounting high-performance runflats and commercial use multi-ply tires up to 40 inches in diameter and 12.5 inches wide.

During a demonstration of Hunter Engineering Co.’s new Ultimate ADAS product, Tommy Maitz, director of marketing for Hunter, told SEMA Show attendees, “We’re trying to demystify the notion that ADAS is scary. ADAS is not complicated.” Ultimate ADAS combines Hunter’s alignment technology “with an efficient and easy-to-use guided target placement system for around-the-vehicle coverage,” according to Hunter officials. “Gimbal-mounted lasers are the key component, replacing the inexact guesswork of strings, plumb bobs and tape measures to cut setup time by 70% for some procedures.” The gimbals and guidance provided by Hunter’s WinAlign software “dramatically increase target placement precision by automatically compensating for non-level floors, monitoring for placement errors and confirming accuracy with laser measurements each step of the way.” Hunter says many common, timeconsuming adjustments are automated — such as height, roll, pitch and yaw.

Ultimate ADAS combines Hunter Engineering Co.’s alignment technology with an efficient, easyto-use guided target placement system for comprehensive, aroundthe-vehicle coverage. Photo: MTD

MTD January 2024

1/16/24 2:57 PM

2401MT

OWN THE CROSSROADS NEW RXQUEST AT QX12 The perfect all-terrain tire for any season. The aggressive shoulder design increases off-road bite and provides extra protection while also providing a smooth, quiet ride for everyday driving. The all new RXQUEST AT QX12 features 3PMS (3 (3-peak mountain snowﬂake) designation to handle even the harshest weather conditions • AGGRESSIVE ALL TERRAIN DESIGN • 50K MILE LIMITED TREAD WARRANTY • AVAILABLE IN 35 POPULAR SIZES

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SEMA Show

The Mayhew Mini Pry Bar Set features a curved and straight blade option. The smallest pry bars measure around five-inches. Photo: MTD

“Of particular importance for both customer satisfaction and insurance purposes, Ultimate ADAS provides thorough and easily decipherable documentation of the exact procedures performed and exact target placement. Confirmations can be accessed or printed directly via HunterNet 2, Hunter’s customer portal. “Additionally, the Ultimate ADAS units can be moved as needed around the shop, with compact packaging to keep all the components together.” Mayhew Steel Products Inc. highlighted three new products: the Mayhew 2PC. Mini Pry Bar Set, the 3PC. Hammerless Set and the 4PC. Micro Hook and Pick Set. The mini pry bar set features a curved and straight blade option. The smallest pry bars measure around five inches. The pry bars are made for dash and door panel work and come with a tempered alloy steel shaft for durability. The 3PC. Hammerless Set is a spring-powered tool that can deliver up to 3,500 pounds of striking force. The set contains a prick punch/center punch tool, a 3/16 pin punch/hammer tool and a cold chisel/hammer tool. The tool works by placing it on the surface, pulling the spring back and releasing it for the striking force. The 4PC. Micro Hook and Pick Set features a straight pick, a 90-degree bent pick, a dual-angle pick and a micro hook — all designed to give access in tight, unique spaces. The set can be utilized for the

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removal or adjustment of hoses, moldings, clips, clamps, seals and O-rings. McGard displayed its Tailgate Lock, Chrome Lug Bolts and Jeep Wrangler Door Lock anti-theft products. The Tailgate Lock was made for easy installation with stainless steel and polycarbonate construction. “Once installed on the hinge of the tailgate, it never needs to be removed to open or close the tailgate,” say McGard officials. The Chrome Lug Bolts are made from original equipment manufacturer design and are available in wheel installation kits. Jeep Wrangler Door Locks help protect removable doors from theft. McGard officials say that the upper hinge nuts need to be replaced with McGard door locks for high security. “It also includes spin collars that will just keep spinning if attacked by gripping tools,” note McGard officials.

TPMS, DIGITAL TOOLS AND MORE

Anyline Inc. showed off its Tire & Vehicle Analytics platform, which provides actionable insights for automotive service providers, fleet operators and original equipment manufacturers. Tire & Vehicle Analytics scans the tire sidewall, tire tread, vehicle identification number, license plate, driver’s license and odometers, which can be tracked, analyzed and correlated with external data sources. Christian Plaichner, chief product officer for Anyline, says the platform can be used on any mobile device with a

Displayed during the SEMA Show, McGard Chrome Lug Bolts are made from original equipment manufacturer design and are available in wheel installation kits. Photo: MTD

“We’re excited to unveil Radius and with it, usher in a new era of connectivity and simplicity,” noted Stuart Schuette, president and CEO of American Tire Distributors Inc. Photo: MTD

camera and last year, the company collected 1.2 billion scans of vehicle data. The platform can also be used for fleets to “minimize downtime” and allows fleet owners to be more predictive and stop preventable injuries, Plaichner says. Anyline Tire & Vehicle Analytics also helps alert tire dealers to recalls or required maintenance. American Tire Distributors Inc. (ATD) launched Radius, a new digital hub designed to integrate tires, parts, services and solutions into one connected experience. According to ATD officials, Radius is comprised of a suite of tools “that seamlessly integrate into business operations to increase efficiency and optimize both sales and service. With a scalable and customizable experience, this automotive aftermarket marketplace provides access to what businesses need to serve their customers.” Through Radius, ATD customers can access “data-driven software tools that help streamline operations and reduce or eliminate stale inventory,” as well as programs “designed to offer a competitive edge through nationwide warranties, automotive and business retailers, discounts, training, growth bonuses and more.” Radius also provides training for tire dealership owners, managers, salespeople and technicians. ATD says it is “a proven sales model that helps tire dealers drive online sales volume, increase foot traffic and capture nationwide MTD January 2024

1/16/24 2:57 PM

SEMA Show

According to Christian Plaichner, chief product officer for Anyline, the new Tire & Vehicle Analytics platform can be used on any mobile device with a camera. Last year, the company collected 1.2 billion scans of vehicle data with the platform. Photo: MTD

online shoppers.” It provides access to volume rebates, discounts and loyalty rewards and is “a B2B2C e-commerce and back-office solution that provides

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product catalogs, pricing and real-time booking for tire installations.” And it “helps shops automate their customer marketing and communications with a full suite of tools, including personalized messaging campaigns, automated appointment reminders and customer reviews.” “We’re excited to unveil Radius and with it, usher in a new era of connectivity and simplicity to better serve our customers,” said Stuart Schuette, president and CEO of ATD. Autel introduced several new offerings during the SEMA Show, including the Autel ADAS Bay Max Vehicle Lift, a flush-mount scissor lift designed for ADAS calibration that offers“safer and more efficient mechanical repair and wheel alignments in a single, standard bay space,” according to Autel officials. “Compat ible w it h passenger cars and light trucks, this premium hydraulic lift is available in 12,000- and 14,000-pound capacity versions — both with front and rear opening runways and flipdown wheel stops.”

Autel highlighted several offerings during the SEMA Show, including the Autel MaxiTPMS TS900 and the Autel ADAS Bay Max Vehicle Lift. Photo: Autel

Autel also showcased the Autel MaxiTPMS TS900, a wireless, threein-one TPMS/diagnostics touchscreen tablet. Autel officials said the tablet can “activate, read and relearn all known TPMS sensors, including Tesla OE

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SEMA Show

The Bartec Tech600Pro (pictured left) TPMS tool was featured during the 2023 SEMA Show, along with its TDR100 tread depth reader companion, also from Bartec. Photo: MTD

sensors, and program the Autel-1 Sensor to replace 99% of the TPMS sensors on the road today.” The MaxiTPMS TS900 is also compatible with Autel’s BLE Sensor and offers “both basic, all-systems diagnostics,” plus advanced features. The tool can generate, print and share pre-scans, as well as post-scans. And Autel highlighted its MaxiFlash XLink, which is compatible with Autel

MaxiSYS Tablets, and its MaxiSYS MS908CVII, a wireless touchscreen tablet with advanced diagnostic coverage of light, medium and heavy-duty vehicles and an extensive service menu featuring more than 40 functions. Bartec USA LLC highlighted its Tech600Pro tire pressure monitoring system tool, along with its TDR100 tread depth reader companion. The Tech600Pro features a graphical user interface that is “efficient and intuitive,” according to Bartec officials. It has a wireless Vehicle Connection Interface, which allows for a faster setup time. Bartec’s Tech600Pro works with all original equipment sensors, major aftermarket sensors and more. The TDR100 is the Bluetooth companion to the Tech600Pro and the Tech550Pro, which is the cabled version of the Tech600Pro. This tool aligns with Bartec’s “Test Before Touch” strategy by giving a comprehensive overview to both the technician and customer about the vehicle’s status.

TireConnect’s newest tool helps streamline a tire dealer’s inventory replenishment system by showing the availability of tires at multiple wholesalers, giving dealers the option to automate replenishment, based on specific parameters of their own choosing. Photo: MTD

The wireless TDR100 gives measurement points and data on the actual tool, like the Tech600Pro, and in the technician’s inspection report. In addition, the TDR100 features a user-replaceable measurement pin. Bridgestone Americas Inc.’s Tire-

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DENNIS MCCARRON, PARTNER dennis@cardinalbrokers.com

M T D J a n u a r y11/30/23 2 0 23:13 4 PM

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“Right now, 3,000 stores use our Windows-based system ... and our goal is to move all those stores to our VAST Online cloud solution,” says Jim Fischer, vice president of sales and marketing, Kerridge Commercial Systems. Photo: MTD

Connect is“trying to remove pain points” for independent tire dealers, said Bridgestone Vice President George Silagadze. The latest innovation is designed to help dealers automatically replenish tire inventory as units are sold. And while larger tire dealerships likely already have their own platforms in place to manage inventory levels and replenishment, Silagadze noted this remains an unsolved problem for some smaller tire dealerships. Typically, those dealers are manually tracking tires sold each day and then looking for replacement units on multiple websites from various tire wholesalers, he noted. The latest addition to TireConnect allows dealers to note which wholesalers it wants to utilize, prioritize them, and also set inventory levels and replenishment guidelines for specific brands, lines and tire sizes. Dealers can see live inventory levels of their own warehouses for a particular product, as well as a product’s availability at its chosen wholesaler warehouses. And while all the information can be accessed and managed from the TireConnect platform, Silagadze said it can also integrate “with about 25 point-of-sale systems.” Dealers can also choose how automated they want the ordering to be. A dealer can review the data manually, approve orders before they’re placed or fully automate it.

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The system can also monitor the tires a dealer already has on hand and pick from that stock first, before reordering the product from a wholesaler. Kerridge Commercial Systems (KCS) updated its point-of-sale offerings with its VAST Online cloud solution, which puts all data in the cloud. According to John Fischer, vice president of sales and marketing for KCS, the VAST program was completely rewritten to make it into a true cloud solution. The customizable tire selling window can capture customer signatures and provide service providers with the correct information on different tire benefits, speed ratings, pricing, warranty and more “Right now, 3,000 stores use our Windows-based system, the VAST program, and our goal is to move all those stores to our VAST Online cloud solution,” said Fischer. The system also has license plate and VIN identification so technicians can access part images, vehicle specifications and installation information. Opus IVS, the intelligent vehicle support division of Opus Group, launched its ADAS Map software, which brings over vehicle build data from the company’s CCC One platform that conducts scans of the vehicle. The product also reviews the estimate and determines which ADAS calibrations apply to the vehicle. “It’s really a data product that helps the shop understand how vehicles (are) equipped with safety systems that need

The ADAS Map from Opus IVS integrates with the company’s Remote, Mobile and Calibration CoPilot platforms, which helps ADAS calibration providers “better service their customers,” according to Frank Terlep, vice president of ADAS services at Opus IVS. Photo: MTD

Schrader TPMS Solutions’ new TPMS Retrofit kit includes a solarpowered and wireless display and has the ability to convert units of measurement. It also provides individual axle placard settings, audio and visual warnings and several other features. Photo: MTD

attention and service,” according to Jim Fish, chief marketing officer at Opus IVS. The system provides vehicle identification number-specific ADAS calibration identification and original equipment service information. It also offers “estimation accuracy, streamlining repair planning and justifying reimbursements.” The ADAS Map integrates with the company’s Remote, Mobile and Calibration CoPilot platforms, which helps ADAS calibration businesses “better service their customers,” according to Frank Terlep, vice president of ADAS services as Opus IVS. Any service the calibration provider does “automatically ends up at the shop,” through this system so there are no “emails, paperwork or anything else that could get lost,” said Terlep. Schrader TPMS Solutions launched its Schrader TPMS Retrofit Kit and highlighted it during the 2023 SEMA Show. The new tire pressure monitoring system Retrofit Kit is Schrader’s OEquality TPMS option. Features of the new kit include a solar-powered and wireless display. It also has the ability to convert units of measurement, like Fahrenheit to Celsius. And it provides individual axle placard settings and real-time monitoring. ■ MTD January 2024

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Business Insight

How to fine-tune your managers SET CLEAR EXPECTATIONS AND KEEP EXPECTATIONS HIGH By

Dennis McCarron

n a well-run tire dealership, every year the owner and manager should formally sit down and discuss store performance and job performance. This conversation shouldn’t be an ambush or surprise to the manager. It should be a review of recurring informal conversations all year. If the owner has dropped the ball and has not been having these conversations all year, then the right thing to do is set goals for the upcoming year. We all know about setting sales goals, unit count goals and profitability goals. But what about your people? Employees should understand what behaviors are expected of them, especially those in charge of others. First, if you have a well-defined vision and mission, expected behaviors should mirror what is articulated in those statements. Mission statements are guidelines on how to conduct business on a daily basis and vision statements are about the desired future state of the company. Good vision and mission statements not only identify business results, but also how a business achieves them. The goals of employees should be defined in clear terms. As an industry, we are pretty good at making sure managers know the expected sales, gross profit, net profit, unit sales and other focus items, like number of alignments, filters, flushes, etc., but we are not typically as clear on employee behaviors. One of the first things you should look for in your manager is his or her ability to manage oneself. This is about improving strengths, discovering areas of what I call “intellectual arrogance” and acquiring new skills. Peter Drucker, who wrote about managing oneself, said, “We need to know our strengths in order to know where we belong. Focusing on things we do very badly rarely ever improves performance significantly.” Areas of intellectual arrogance, which everyone has, are things we think we are good at, but the reality is that no one else has that opinion. You may think you’re a good people person, but employees are afraid to bring up mistakes to you, or you may think you’re a good salesperson just because you are number one in your shop. Intellectual arrogance is best discovered through feedback. And the best way to describe how to do that is by using the tail analogy. If one person says you have a tail, they’re crazy. If two people say you have a tail, it’s a conspiracy. But if seven people say you have a tail, you ought to look behind and see your tail. Acquiring new skills is just like that. Going out and learning new things about your job can open up new areas of things you can be good at. You just never tried. Next, by far and above, one of the most critical skills a manager can have is adaptability. Can your store’s manager

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take a set of core skills and apply them differently, according to the situation? It’s long been said that there are four types of stores: big busy, big slow, small busy and small slow. Each of these stores requires different skill sets and focus. You can’t apply the same generic plan to all four scenarios. Additionally, managers need to adapt to their employees. Some like to talk. Some are quiet. Some like direct feedback. Others need more diplomacy. As a manager, it’s your job to adapt to them. Adaptability also includes emotional intelligence. Long gone are the days of a hot-headed manager yelling and screaming because he’s upset at someone or something. Employees, rightfully, will not tolerate that kind of behavior any longer.

‘We aren't really in the tire business. We are in the people business, from employees to customers to vendors.’ Emotional intelligence is the ability to recognize and manage your emotions and understand the emotions of others. People with high emotional intelligence recognize highly charged situations and focus on the problem — not who caused it and not who needs to be yelled at. It’s not about your own emotions. Those things can be figured out later when the tension dies down and the problem is solved. Today’s modern manager focuses on his or her team. That means prioritizing respect for individuals, respect for the process and overcoming challenges together. It’s perfectly OK to challenge your managers on how they can improve themselves and improve their team. Setting goals, like one ASE certification for each technician by mid-year, should be the store manager’s responsibility. Teaching someone how to do an alignment, if the manager possesses that skill, also is important. Reading a book on leadership and discussing it is a good goal, as well. We aren’t really in the tire business. We are in the people business, from employees to customers to vendors. Sure, it’s tire and auto service problems we usually solve, but how you do it matters most. ■

Dennis McCarron is a partner at Cardinal Brokers Inc., 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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Dealer Development

How to help your employees get ahead

ARE YOU PAYING YOUR PEOPLE WHAT THEY NEED AND DESERVE? By

Randy O’Connor

n the past, you’ve heard me speak about how our habits either help or hinder the results we see on a daily basis. The minutiae of our day-to-day tends to blind us a bit. We see what’s right in front of us and tend to bypass the greater perspective of what’s around us. Throughout the past few years, one of the top challenges facing owners has been the technician shortage. While it’s true that the average age of the ASE-certified technician has dropped significantly over the past few years as a result of many technicians retiring their sore hands and backs, that’s only part of the story. Wages, another important topic, are also a significant part of the equation. While we as owners and managers have paid attention to exactly how much wages have gone up, we likely haven’t paid attention to exactly how much the cost of living has gone up. In almost every tire dealership, the lowest-paid vehicle service employee is likely the general service technician. What’s interesting is that this position is almost always the one that we stand to gain the most from on a regular basis, since employees in this position see the largest percentage of vehicles. With proper processes and procedures — mainly rocksolid vehicle inspections — general service technicians stand to help find the services that consumers should know about to help maintain their vehicles and boost shop revenue. Sadly, these are also the employees who are most affected by the cost of living increases we’re enduring. Let’s discuss. Based on data from the 300-plus rooftops in our 20 Group, the average base hourly rate is $16.57 an hour. Most of these employees also get some sort of spiff. Let’s say with spiffs they end up at $19 an hour. Some, if not most, get a few hours of overtime each week — let’s say, for a total of 45 hours. In this example, their monthly gross pay is $3,907 and after taxes, they bring home around $2,930. On an annual basis, that’s $35,170 to live on. Now let’s look at some conservative cost of living estimates. Let’s say a one bedroom goes for $1,400 a month, transportation costs are $500, healthcare is $300, food is $400, phone is $100, internet is $100 and utilities are $200. These conservative estimates put a bare minimum cost of living at $3,000 a month. That’s without any actual “niceties,” like gym memberships, streaming services, nights out with friends and family, clothes, savings and incidentals. The fact that a large majority of our employees who are taking care of our customers’ second largest investment, their vehicles, are maybe able to live month to month — if they’re super-frugal — should be a very hard pill for us to swallow.

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Do your employees have performance bonuses that are tied to your dealership’s primary profit drivers? Photo: MTD

Now, I’m definitely not saying you should simply give raises. That has happened a ton over the last few years and it’s negatively affected payroll as a percent of gross profit because it wasn’t directly tied to production. However, we should be encouraged to find ways to give our team members a chance to get ahead of the cost of living curve. Do your employees have performance bonuses that are tied to your dealership’s primary profit drivers? Do they have the training available to get the skills they need to help improve your dealership’s productivity? Do they truly understand their pay programs and the behaviors they need to exhibit in order to maximize their earnings? Do you review these with them regularly? Do they have 75% or more control over the things that affect their income? If the answer to any of these is no, you’ve got some things to think about in order to separate your dealership from competitors who never take the time to understand how we either are or aren’t helping our team members get ahead in life. Pay isn’t everything until it prevents us from being able to do most anything that makes life fun and enjoyable. After all, we’re a team and helping each other succeed should be a top priority. ■ Tire and auto industry veteran Randy O’Connor is the Owner/Principal of D2D Development Group (Dealer to Dealer Development Group.) He can be reached at randy@d2ddevelopmentgroup.com. For more information, please visit www. d2ddevelopmentgroup.com.

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Mergers and Acquisitions

Spruce up and deep clean your financials

GET THINGS SQUARED AWAY BEFORE THE SALE By

Michael McGregor

ver the years, MTD has written and published columns about what tire dealers need to do from a physical store standpoint to prepare their businesses for a sale. These are things like freshening up the look of their showroom, deep cleaning the shop and restrooms, making sure the bay doors work properly, throwing out old equipment and so on. This column will cover things that tire dealers should do to get their books and financial situation squared away before putting up a business for sale. Let’s start with the income statement, as profitability drives valuations of all tire businesses whether they are retail, commercial or wholesale. The first line is sales. What all buyers want to see are increasing sales, not decreasing sales, so do whatever you need to get revenue increasing. For retailers, I’d use a combination of enhanced targeted marketing, coupled with better execution of the sales and inspection process. All businesses should have sales contests and new sales incentives if the old ones are not working. But don’t let higher sales come with lower gross profit margins. Increase pricing for tires and parts where you can and raise your labor rates if they are low. Price increases help goose the top line, too, you know. Next, focus on expenses. In most businesses, the big expenses are payroll, rent and marketing. Can you trim dead weight from the payroll without missing a beat? If yes, do it. Showing you can thrive with fewer people should allow you to add back those salaries from prior periods. Make sure that rent is set at fair market value. Get a broker’s price opinion or do an appraisal if you own the properties to help you arrive at fair market rent. Moving to fair market rent now helps solidify the property value and gives you time to make up for a profit shortfall if your rent needs to be increased. In marketing, as with any other expense, see what you can trim without impacting customer traffic and sales. I’d be doing less “institutional” marketing in favor of more targeted advertising that drives sales now. Don’t worry about your personal expenses being run through a business. All buyers have seen this. You just need to be able to prove that they won’t be there after a sale to get credit for those addbacks. All the above impacts the bottom line. But I’d also consider developing a short-term profit improvement bonus for all your location managers. This gets everyone focused on what matters most now.

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‘What all buyers want to see are increasing sales, not decreasing sales, so do whatever you need to get revenue increasing.’ I have no problem telling buyers that a client has implemented the above sales and profit enhancement program prior to a sale. As long as we’re transparent, there’s no issue. I would never hide it, however, as it will certainly come out in due diligence or after the sale from an employee. Now, let’s turn to the balance sheet. Cash is the first line of current assets. If you carry excess cash in the business and are not a C-Corp, cut yourself a check. You’ve already paid tax on it. If you are a C-Corp, dividend excess cash to the shareholders as there is no need to leave that cash in. With accounts receivable, just follow your normal policies and please don’t squeeze customers into paying early. Write off uncollectable receivables and use the write-off to minimize your taxes. If you don’t already do it, take a tire inventory and sell off the old stuff. I saw once where simply announcing a program of periodically costing down dead inventory and charging the store for it was all that was needed to get managers focused on moving out dead stock. I often see notes receivable to employees and family members on the books. Those will be your responsibility after a sale, so do what you can to collect those or write them off. Take an inventory of your shop equipment, tools, trucks, computers, software and furniture and fixtures. Make sure that the equipment you have is functional and useful in the daily operation of the business. You should have an equipment register or list as part of your general ledger. Make sure this matches exactly what you have in the store. Sell or scrap old useless equipment. It’ll brighten up the place and give you more room. Do make sure that you have been correctly paying sales taxes, as this can cause delays in the transaction process. Don’t let employee accrued vacation pile up. People not taking vacations as per your policy means the excess may be your liability at closing. Lastly, having clear ownership records is important for all organizations, but particularly so for old C-Corporations. Making sure that the stock ownership records are updated and not “cloudy” is important to buyers in a stock transaction. ■ 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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EV Intelligence

Do EV fires make you worry? EDUCATE YOURSELF TO MINIMIZE THE RISKS By

Craig Van Batenburg

ore electric vehicles (EVs) are being sold than ever before and the EV charging infrastructure is being installed at a faster rate in home garages, public parking lots and even businesses like your own. Does this make you worry about the risk of EV fires? Should you worry? Let’s look at some facts. According to U.S. government data, EV fires appear to occur less frequently than internal combustion engine (ICE) vehicle fires, with 25 fires for every 100,000 electric vehicles sold compared to 1,529 fires for every 100,000 ICE vehicles sold. Did you know that? According to an analysis by the National Fire Protection Association, vehicle fires caused 560 deaths, about 1,500 injuries and $1.9 billion in property damage in 2018, the last year I could find some data. The report includes all vehicle types. It did not differentiate between electric and ICE vehicles. The vast majority — 77% — of vehicle fires resulted from electrical or mechanical malfunctions. Eighty-eight percent of highway vehicle fires involved models from 2007 or earlier. In other words, vehicle age and maintenance appeared to play a significant role in whether a vehicle catches fire. This raises an important question about EVs, which are newer. Will EVs have more fires as they age?

A FIRE AT MY SHOP

I started my shop in a rented two-bay garage. Within five years, we had our first and only car fire. A newly hired mechanic was welding the exhaust on my used 1977 Honda Accord and he started the rear floor carpets on fire. That lift never moved so slowly! We were trained to push a burning car outside, if it was safe. We managed to do that, but the Honda was totaled. The Worcester, Mass., fire department showed up and I was humbled by the captain. Never again would I run a shop that was so unaware of the risks.

EV FIRES ARE DIFFERENT

While EVs may not catch fire as often as their ICE counterparts, when they do, they burn differently. EV fires burn hotter than gasoline. That means if an EV catches fire, it can pose a greater risk to objects around it. EV fires also can reignite as the electrolyte has everything within it to burn. It needs no oxygen. The risk of reignition means that tire and service shops, towing companies or other entities that transport, service or garage a damaged EV could face a heightened fire risk, as well. The key word is “damaged.”

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A LOOK AT BATTERIES

With an EV, you are replacing the gas tank with a battery, so comparing the internal combustion engine’s fuel (gasoline) with electric vehicles’ fuel (electricity) is a fair subject. We know gasoline and respect it. Most tire stores keep a close eye on fuel leaks. The smell alone will warn us of the danger. Once you know how to handle these hazards, the better off you are. Today’s lithium-ion batteries used in hybrid, plug-in hybrid and electric vehicles can burn or explode if they are defective or are physically damaged. That fact is well-known.

‘With understanding comes good decision-making. This certainly applies to EV service.’ Automotive Career Development Center, my EV technician training company, has seven plug-in vehicles. We have inside and outside level I and II electric vehicle supply equipment (EVSE), which are commonly called "chargers." Our understanding of the cells, modules and other components that make up HV battery packs helps lower the fear level, which is usually caused by a lack of understanding. Now, during a flood situation, there is a risk of an HV battery fire if the battery is in the vehicle’s cabin. Many hybrids and plug-in hybrids locate the Li-ion pack there. If the EV’s interior is submerged in salt water, watch out for smoke. If a fire occurs while a vehicle is charging, it is usually within an hour of being connected to an EVSE or DC fast charger. Get to know EV battery technology. There is a free twopart video series about Li-ion fires that we put together as a fundraiser to support foster teenagers. Go to https://www. fixhybrid.com/recorded-webinars/ and scroll down to the bottom and you will see "First Responders FREE." Click there, scroll up and educate yourself. With understanding comes good decision-making. This certainly applies to EV service. ■ 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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Focus on Industry

Kumho aims for top of tier-two

PRODUCTS, LOGISTICS, DISTRIBUTION WILL HELP ‘CEMENT’ STANDING By

Mike Manges

“W

e’re eager to cement ourselves as a top t ier-t wo ma nufacturer,” Shawn Denlein, Kumho Tire USA’s president of sales and marketing, said during Kumho’s recent dealer meeting The way Kumho will get there is through continued investment in product quality, logistics, brand equity and its distribution network, Kumho officials told attendees. (Kumho’s dealer meeting took place last month in St. Thomas, in the U.S. Virgin Islands.)

PRODUCT SIMPLIFICATION

“There are four things you have to have in terms of cementing yourself as a tiertwo manufacturer,” said Denlein. “You have to have quality products. You have to have a brand strategy. You have to have world-class logistics, particularly in today’s environment. And you need profitability — not just for yourself, but for your distributors. This is what gets us to the next level.” Kumho has made a concentrated effort to consolidate its product lines, which has proven to be a successful strategy, according to Denlein. “We’ve taken every single product where we had multiple treads and we’ve built one tread,” he told MTD during the meeting. Denlein cited the Kumho Solus TA51a as an example. “We took three treads — the TA11, TA31 and TA71 — and (combined) them into the TA51a. Consolidating down into one line really simplified the lineup from an inventory perspective — not only for us, but for the dealer and in reality, the retail salesperson behind the counter. There aren’t multiple treads on their screen.” Kumho also is investing in new products, including an all-weather tire, the Kumho Solus 4S HA32, which hits the market this month. The tire initially will be available in 26 sizes “and then in the middle of the year, we’ll come out with the remaining sizes.”

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“Another reason for our success is we’ve become extremely collaborative with customers and we’ve also become good listeners,” said Shawn Denlein, president, sales and marketing, Kumho Tire USA (right, with Larry Kull, west region vice president, U.S. AutoForce LLC.) Photo: MTD

The Solus 4S HA32 is Kumho’s first entry into the all-weather segment. “We expect all-weather to exceed 6% of the (consumer tire) market in 2024,” said Denlein. “That’s substantial and as I look at it, an opportunity for continued growth.” In addition, Kumho will introduce a rugged-terrain (R/T) version of its popular Road Venture light truck tire in 2025. The overall R/T segment, according to Kumho estimates, sits at around two million units, making it another high growth potential segment for the company. Denlein told meeting attendees that “a lot” of its consumer products for the U.S. market “are now being generated and led by our Akron (Ohio) research and development facility,” which is one of Kumho’s five tech centers worldwide. When asked about Kumho’s TBR program, Denlein told MTD that “we’re looking to get more supply and we’re also in the beginning stages of formulating a team” for TBR.

STRONG LOGISTICS

Kumho’s fill rate “was not good last year,” Denlein told dealers. “When COVID-19 (struck), we were one of the few companies that actually had product, but then it caught up with us and we ran out.” Fill rates have since dramatically improved. “Right now, we’re forecasting it to be around 84% to 86%.” Kumho’s global, annual manufacturing capacity is 62.4 million units. Previous capacity was 57 million units annually, said Denlein. Most of the company’s U.S. replacement channel tires are built in Vietnam. (Kumho has eight manufacturing plants worldwide.) The Vietnam plant, Denlein revealed, “is producing 12 million tires,” double its production rate at mid-2022. “We’re getting a larger share of our (U.S.) product from Vietnam,” with Kumho’s South Korea plants making up the difference. “Our Vietnam plant had a lot to do with” fill rate improvement, Denlein MTD January 2024

1/16/24 2:56 PM

told MTD. He added that Kumho is producing “less replacement products out of Macon, Ga, and we’ve moved molds to Vietnam,” leaving the majority of the Georgia factory’s production devoted to OE tires. However, that doesn’t mean Kumho is freezing investment in the Georgia plant. Denlein said the company will add 500,000 units of production at the facility next year, increasing its annual production from 3.2 million tires to 3.7 million tires. To help get products to U.S. customers, Kumho recently opened a new distribution center in Dallas, Texas. The facility is designed to “take the stress off” the company’s two other U.S.-based warehouses, which are in Rancho Cucamonga, Calif., and Atlanta, Ga. During the dealer meeting, Denlein also touched on Kumho’s OE strategy, revealing that the company has picked up new fitments. Right now, Kumho has 15 OEM partners, encompassing 54 models and 103 SKUs. “Nissan is a good example” of

Kumho’s recent OE channel growth, he noted. “Volkswagen is a good example. We still do Kia and Hyundai. Over 30% of our business is OE. There are other brands that don’t have the impact that we have at OE, so for pull-through, it definitely helps.”

DISTRIBUTION STRATEGY

“Another area we’ve focused heavily on is retail, which fuels everything,” Denlein told MTD. “In 2022, 51% of our business was retail. Now it’s almost 66%, which is a huge increase when we talk about volume.” In the U.S., Kumho has added 80-plus customers since 2018. “That would be retail and wholesale,” noted Denlein. (Some of the country’s largest tire distributors and dealerships — including K&M Tire Inc., U.S. AutoForce LLC, Discount Tire, Dunlap & Kyle Co. Inc., Tire Discounters Inc. and others — sent representatives to Kumho’s dealer meeting.) Denlein said Kumho’s dealer channel growth “equated to over a half-point

Kumho recently opened a new distribution center in Dallas, Texas, that will “take the stress off” the company’s two other U.S.-based warehouses. Photo: MTD

of gain in market share this year, which is pretty substantial.” The company continues to grow its Fuel associate dealer program, which has more than 2,000 members. While Kumho is happy with that number, company management is more focused on how well members comply with the program’s requirements, according to Denlein.

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Focus on Industry

Kenda’s boot camp educates dealers TIREMAKER FOCUSES ON LOCAL INDEPENDENTS By

MTD Staff

t’s probably fair to say that many tire dealers and their employees do not drive their vehicles on off-road trails for a hobby, yet many are selling offroad light truck tires to people who do. Since most consumers depend on tire dealers for advice, how do dealers know what to tell them? That’s one of the reasons why American Kenda Rubber Co. Ltd. has been holding its Light Truck Boot Camp for the past 10 years. The event, held recently in Arizona, is a combination of classroom sales training and off-highway driving, spread out over a three-day timeframe to help educate the company’s tire dealer partners. It’s Kenda’s way of increasing brand sales among its dealers, while giving them valuable light truck tire sales and marketing tips. Brandon Stotsenburg, vice president of automotive for Kenda, acknowledges that Kenda is an “upper tier-three brand” that is competing against tiertwo brands. While at the Boot Camp, dealers drove off-road on Kenda tires — including the Klever A/T2, Klever R/T and Klever M/T2 — as well as “the higherpriced, tier-two competitors that also focus on this off-highway market segment.” Before customers drove 10 stock Jeep Rubicon SUVs off-road for two days, Kenda set the stage with a half day of sales training. Ed Koczan, senior sales manager for Kenda, said it’s the job of tire dealers to educate customers. He put a twist on the industry’s well-known “70/30 rule,” which says that 70% of the time, consumers have no brand preference and 30% of those who do can be influenced to change their minds by the tire dealer. Koczan said he has his own “20-2060 rule.” He told dealers that 20% of the time, the consumer is only interested in price. Twenty percent of the time, customers are “brand-specific.” And 60% of the time, customers walk

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American Kenda Rubber Co. Ltd. customers attended the company’s recent Boot Camp event In Arizona. (Pictured, from left to right, are Joe Cambria Sr., North Gateway Tire; Brandon Stotsenburg, vice president, automotive, Kenda; Brent Hershberger, Holmes Tire; Joe Hershberger, Holmes Tire; and Rich Rogenski, Westside Tire & Service.) Photo: MTD

into a tire dealership and simply say, “I need tires.” The crucial point, says Koczan, is to apply proper sales counter intelligence when talking with the consumer. He pointed out “five ways we see stores losing sales and profits:” 1. Price is always a race to the bottom. He advised dealers to provide a quality tire at a value price and stay focused with programs from tire manufacturers that will help maximize profitability; 2. Don’t be an order taker, but instead sell up. Koczan said it cements dealers as trusted advisors when they can offer a tire that will perform better for only a few dollars more; 3. Slow down the sale. Koczan said many customers will wait to buy a tire if they trust the retailer. This allows the tire dealer to sell a specific brand that works better for the customer, while

making a better profit. (Kenda’s associate dealer program is called Kenda Traction) 4. Avoid selling the “flavor of the month,” which could cause warranty problems down the road, particularly if a tire was a spot buy and no longer available to the dealer, according to Koczan, and; 5. Don’t let the business run the owner. Koczan said if the focus is more on putting out a dealership’s daily “fires” instead of managing its overall business, a dealer can lose profit margins. Both Koczan and Stotsenburg told dealers that Kenda focuses on selling its tires through the local independent tire dealer, not larger dealers. They pointed out that Kenda is barely mentioned as a brand carried by the 2023 MTD 100 list of top dealers. MTD January 2024

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Focus on Industry The North American Prinx Chengshan team is doing all that it can to differentiate itself from other players in the value tire market. From left, Nicole Moore, Pete Salvan, Samuel Felberbaum and Ken Coltrane. “We’re really trying to differentiate ourselves,” Felberbaum says. Photo: MTD

Prinx Chengshan wants to be different FROM PRODUCTS TO PICKLEBALL, TIREMAKER LOOKS TO LEAD By

Joy Kopcha

rinx Chengshan Tire North America Inc. is focusing on ways to differentiate itself from other value-tier tiremakers. That means the Fortune and Prinx brands both are rolling out unique tread patterns. It means Prinx Chengshan is investing in consumer marketing to drive consumers into tire dealerships in the U.S. and Canada, and doing that in a unique way. (Pickleball, anyone?) It also means both brands are offering comprehensive product lines that combined will have 450-plus SKUs that cover passenger, light truck, trailer and commercial truck tires by the end of 2024. And, those tires are all produced in factories owned by the brands’ parent company, Prinx Chengshan (Shandong) Tire Co. Ltd., which company leaders say provides steady production. Most of the tires for North America are built in a three-year-old factory in Thailand. Samuel Felberbaum, president of the

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business in North America, says, “Our goal is to continue to grow both brands. We see (a) huge light at the end of the tunnel. The growth for both brands is really good.” Ken Coltrane, vice president of marketing and product development, says the first Fortune and Prinx tires entered North America in August and September of 2020. In the three years since, six million passenger and light truck tires have entered the North American market. In the beginning, sales and marketing for the Prinx brand was handled by TBC Corp. But that agreement between the two companies ended on June 1. So now Prinx Chengshan is working to push both brands into the market. Coltrane says, “One things dealers are going to see going forward is that it really is two different brands. Our latest tires, the Prinx HiSeason and the Fortune ClimaFlex, are two different tread designs. We’re not taking

one tread design and just slapping a different name on a sidewall. That’s an initiative we’re taking as we develop new product lines and as we go to second-generation product lines.” When the company launches new all-terrain tires in July 2024, those, too will feature unique designs. (In 2021, it launched rugged-terrain tires under each brand that had unique patterns.) The differences will extend beyond the tires’ looks. “Both brands will have a different feel,” Felberbaum says, noting different marketing agencies are working on each brand and marketing materials will have distinct looks. “We’re really trying to differentiate ourselves,” he says. The tiremaker is currently working to extend its dealer network throughout the U.S. and Canada.Pete Salvan, vice president of sales, says there’s been “positive growth on both fronts.” Felberbaum says, “We’ve really diversified our customer base, espeMTD January 2024

1/16/24 2:56 PM

cially with having the Prinx brand back. We still have lots of room to grow in Canada — lots of room to grow in the Midwest. We have lots of room to grow in every part of the country.” Coltrane noted growth also comes in the form of extending the product line with existing customers as well. “One of the things about our range, it lets us get in the door with people. This new four-season (tire) may get us in the door with somebody we’re not currently doing business with.” Felberbaum adds, “And when you deal with us, it is not an all-or-nothing proposition. If you could buy some TBR from us, we want you to buy it. If you could buy some passenger product, we want you to buy it. We don’t come in and say you have to buy everything.” Salvan says, “We believe people are going to have a positive experience and we will grow our business with them because of that positive experience. We’re trying to be easy to do business with. The easier you are to do business with, the more business you’ll do.”

One differentiator the two brands will offer is an investment in consumer marketing. It is already well underway with the Fortune brand, which is the official tire of USA Pickleball. The brand’s first TV commercial aired during the national championships in November and as a result of filming that commercial, the brand has a trove of videos it can use to drill down to the point of sale. Salvan says the company is working to make the Fortune and Prinx brands “best in class,” and the marketing investment is part of that. Nicole Moore, director of marketing, calls it another differentiator in the value tier. Felberbaum says, “At the end of the day, it’s push-pull. We have to work with distribution and direct retailers to sell, to push the product in, but then we’ve got to help pull it through. The only way we can pull it through is by having some brand recognition. So when (dealers) say (to a customer), ‘How about a Prinx tire? How about a Fortune tire?’ if we’re doing our things

right, we’re hopeful people are going to recognize that and get a great, highquality tire at a fair, value price.” All of the effort and energy Felberbaum and his team are putting into both brands comes with other forces at work in the marketplace. One of the big unknowns revolves around tariffs. Because most of the tires Prinx Chengshan brings into the U.S. market are made in Thailand, the current anti-dumping investigation of truck and bus tires imported from Thailand brings uncertainty. An existing tariff on passenger and light truck tires from Thailand is also in the midst of its annual review. Coltrane says, “We don’t think the U.S. truck tire market is being injured by truck tires from Thailand.” Felberbaum says the threat of a tariff “creates a lot of uncertainty for our customers who are planning what they’re going to carry. For us right now, it’s business as usual. (Customers) really can’t plan because it’s unknown. I think that’s the biggest challenge.”

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Focus on Industry

Omni United looks to ‘redefine premium’ COMPANY PLANS TO ENTER NEW SEGMENTS By

Mike Manges

.S. Sareen, CEO and president of Omni United (S) Pte. Ltd., which makes Radar brand tires, wants to change the way people think about “premium” tires. “When I ask people, ‘What is premium?’ everybody has their own definition,” says Sareen. “Premium, in my mind, means features, benefits and performance.” This philosophy puts Radar brand tires in a growth position, especially as consumers continue to gravitate toward less expensive tires, according to Sareen. “The market is moving away from the majors and into tier-two, tier-three and tier-four,” he says. This shift is happening for two reasons, he believes. “One is because of inflation and disposable income becoming tight. The second is that the quality of products is improving.” Sareen says this trend will help fuel Radar’s expansion as Omni United continues to roll out new products in response to evolving demand. “As we move forward, we’re coming up with newer designs and products for newer applications. “When the market moved toward big demand” for light trucks, “we followed the market,” introducing an all-terrain tire, the Radar Renegade X, last year. The Radar Renegade X fits wheels ranging from 17 inches to 24 inches in diameter and is available in eight sizes, with six more hitting the market during the first quarter of 2024. “We’ll add more (sizes) as the market needs,” says Sareen. Omni United also plans to expand its Radar Electric Vehicle (EV) lineup with the launch of a new EV tire in 2024. The company’s EV range currently includes its All Season EV tire, as well as EV fitments in its Dimax and RPX lines — all introduced in 2023. The All-Season EV is available in five Tesla fitments, fitting wheels ranging from 18 inches to 22 inches in diameter. EV-compatible Dimax and RPX

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products are available in five sizes, ranging from 15- to 17-inch wheel diameters. Omni United is “putting” its EV tires “initially in strong EV markets, like California,” says Sareen. “We’re not just throwing it out there, as in, ‘Here’s a product, here’s a price, do what you want with it.’ “We’re going down the chain, educating the wholesaler on where he can price the product and make money off it and then going to the retailer.” As an example, “we have a Tesla wrapped up in Radar (branding) that goes to dealers every day. Our sales guys are taking that car from retailer to retailer. “Recently, a dealer did a side-by-side comparison” of a Radar EV tire and another product “and saw a significant difference” in performance. “He asked our distributor in Sacramento, Calif., ‘How many (of these) tires do you have?’ “That’s what I mean by premium accessibility,” says Sareen. “That’s where we’re going.” Sareen also believes consumers should have access to aesthetically pleasing tires. Omni United is partnering with Italy-based design house Giugiaro to develop new products. Sareen refers to the Renegade X “as a very attractive” tire. “Why should the consumer get the ‘same-same-same’ all the time? Why not give them better designs? “I want to democratize it (and) make it as widely available to people as possible. Why should a great design only be available to a few?” Radar brand tires are produced at multiple plants, according to Sareen. “We have manufacturing in four countries: China, Thailand, Indonesia and India. And we’ll start manufacturing in Europe soon. “We buy capacity from plants and those negotiations are always on,” he says. “So if there’s a plant that exists and

“As we move forward, we’re coming up with newer designs and products for newer applications,” says G.S. Sareen, CEO and president of Omni United (S) Pte. Ltd. Photo: Omni United (S) Pte. Ltd.

there’s capacity, we’ll approach (the owner of the plant) and take capacity. “When we go into Plant A, we’ll give them a full blueprint of how our products are made. We set our own standards.” In the U.S., most of Omni United’s distribution is through wholesalers, “but we also (supply) large national retailers like Discount Tire and Pep Boys. “We’re also forever improving our supply chain capabilities.” Omni United has mixing warehouses in different countries. The company’s U.S.-based mixing warehouse is in Dallas, Texas. Tire dealers in the U.S. will see Omni United enter new segments, says Sareen. “We’re coming out with an all-weather tire next year. “We’re now testing (the tire), which will launch in Europe first in the middle of next year, and then in the U.S. “We’ll put that in the market as a replacement for all-season tires — again, not charging the consumer an arm and a leg,” he adds. MTD January 2024

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Products

Kumho launches Solus 4S HA32

Yokohama introduces Sport EV

Atturo rolls out all-weather AZ810

Kumho Tire USA has launched its new Solus 4S HA32 grand touring allweather tire for passenger cars, CUVs and SUVs. Key features and benefits of the tire include a 60,000-mile treadwear warranty and road hazard protection; an hourglass visual wear indicator that helps identify when winter performance has decreased; 3D interlocking sipes to improve shoulder block stiffness; a new grip compound developed with pine resin to decrease braking distances; and more. The tire is also 3-Peak Mountain Snowflake-certified and fits wheels ranging from 15 inches to 19-inches in diameter. KUMHO TIRE USA www.kumhotireusa.com

Yokohama Tire Corp. is launching the Sport EV, its first-ever ultra-high performance all-season tire for electric vehicles (EVs). It will be offered in 10 sizes, fitting wheels ranging from 18-inches to 20-inches in diameter. Features and benefits include a refined contact area that equalizes pressure distribution to promote long, even wear; maximized sidewall construction for optimal handling and a smooth ride; a new, all-season compound that enhances the tire’s overall performance; and more. YOKOHAMA TIRE CORP. www.yokohamatire.com

Atturo Tire Corp. is combining the attributes of high-performance with all-weather dependability in the new AZ810. The tire is designed for sedans and coupes, as well as CUVs, SUVs and light truck applications. The tire features the 3-Peak Mountain Snowflake symbol, along with an asymmetrical tread pattern and three circumferential grooves with swooping channels, 3D sipes and plenty of biting edges. Atturo says all of these features enhance snow traction. The tire’s compound and tread pattern fight through snow, but also provide traction, grip and precise handling in wet conditions akin to Atturo’s AZ850 summer UHP tire. ATTURO TIRE CORP. www.atturotire.com

Prinx debuts HiSeason 4S tire Toyo unveils Open Country EV tire Toyo Tire U.S.A. Corp. has introduced the all-new Open Country A/T III EV, an electric vehicle-specific all-terrain replacement tire designed for electric trucks and SUVs. Key features and benefits of the tire include an aerodynamic sidewall; an optimized tread pattern to reduce rolling resistance; improved durability; and long tread life. The tire will fit 18- to 24-inch wheel diameters. Its first LT size, LT275/60R20, will be available in February 2024. Other sizes are planned to be released later in 2024. TOYO TIRE U.S.A. CORP. www.toyotires.com

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Prinx Chengshan Tire North America Inc. has announced its new HiSeason 4S HS1 all-weather passenger tire. The new tire has earned 3-Peak Mountain Snowflake certification and will be available in 61 sizes, “including 23 of the most popular sizes,” when it hits the market during the first quarter of 2024, according to Prinx officials. The tire sports a unique profile design with ladder-shaped grooves between tread blocks that enhance stiffness for optimal driving stability; increased sipe density and “snow plow” elements at the bottom of its lugs that boost traction when driving on snow-covered surfaces; and more. PRINX CHENGSHAN TIRE NORTH AMERICA INC. www.prinxtire.com

Nokian relaunches Nordman brand Nokian Tyres Inc. has introduced the first products from its standalone Nordman brand, the Nordman North 9 and the Nordman North 9 SUV winter tires. The Nordman North 9 and the Nordman North 9 SUV come in studded and non-studded versions. Features include digitally optimized studding; lightningshaped Snow Grip Boosters in the center of the tread that provide sharp edges to dig into snow; an aggressive tread pattern that sports 3D siping; and more. The line encompasses 32 sizes to fit wheels ranging from 15 inches to 20 inches in diameter. NOKIAN TYRES INC. www.nordmantires.com MTD January 2024

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Products

Michelin adds LT tires to Defender line

SRNA launches Falken all-weather tire

Michelin North America Inc. has released two new light truck tires, the Defender LTX M/S2 and the Defender LTX Platinum. The Defender LTX M/S2 uses Michelin’s updated Evertread 2.0 compound to provide better treadwear performance and grip in wet and snowy conditions. The Defender LTX M/S2 will have 53 sizes with coverage on all 2013 or newer pickups and SUVs. The Defender LTX Platinum tire offers six 20-inch wheel sizes with a 70,000-mile warranty and an all-new tread pattern and compound derived from Michelin’s heavy truck technology. MICHELIN NORTH AMERICA INC. www.michelinman.com

Sumitomo Rubber North America Inc. (SRNA) has introduced its first-ever all-weather touring tire, the Falken Aklimate. According to SRNA officials, the new Falken Aklimate “was designed to complement a variety of vehicles, from sedans to SUVs to modern electric vehicles. Popular fitments include Chevrolet Suburban/Tahoe, Chrysler Pacifica, Ford Explorer, Honda Civic, Hyundai Kona, Lexus RX, Mercedes Benz GLC, Nissan Versa, Subaru Forester, and Toyota Camry.” The tire is available in 88 sizes, fitting wheels ranging from 15-inches to 22-inches in diameter. SUMITOMO RUBBER NORTH AMERICA INC. www.falkentire.com

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Horizon Tire has rolled out the latest product in its Crossmax line, the AT-1, which is available in 15 popular sizes. The Crossmax AT-1 boasts a variety of features, including wide and deep grooves with switchback tread blocks for optimal traction. The product is backed by a 50,000-mile treadwear warranty and is available in sizes including LT265/70R17, LT285/70R17, LT265/75R16 and 275/55R20. HORIZON TIRE INC. www.horizontire.com

Hankook expands Dynapro line

Goodyear introduces Wrangler Boulder MT Goodyear Tire & Rubber Co. has introduced the newest addition to its Wrangler tire line, the Wrangler Boulder MT, which has been designed for off-road driving in tough terrains like mud, sand and rocks. The tire was engineered with three-ply Duraply Technology for protection against damage to sidewalls and treads. Additional features of the tire include an aggressive shoulder design with a big, upper sidewall feature for enhanced grip; Tractive Groove Technology; a large void tread design with built-in stone ejectors; and three-ply Duraply Technology. GOODYEAR TIRE & RUBBER CO. www.goodyear.com

Horizon rolls out Crossmax AT-1

Omni releases Radar Renegade X Omni United (S) Pte. Ltd.’s brand, Radar, has introduced its Renegade X all-terrain tire in partnership with GFG Style. The tire is designed and engineered for off-road driving on mud, rocks, gravel and sand. The “stealthinspired” aesthetic is paired with a cut-, chip- and tear-resistant compound and a triple-tie bar for lateral stability. The Renegade X is currently available in eight sizes ranging from 17- to 24-inches with six more sizes coming in the second quarter of 2024. OMNI UNITED (S) PTE. LTD. www.omni-united.com

Hankook Tire America Corp. has expanded its popular Dynapro line with the addition of the Dynapro HPX all-season touring tire for SUV applications. The Dynapro HPX features a variety of innovations, including a new, all-season compound “to spread ground pressure,” according to Hankook officials; the company’s 3D GripKontrol sipes for improved snow braking, wet braking and handling versus its predecessor; and knurling technology and optimized, multi-pitch sequencing for enhanced driver comfort. The Dynapro HPX will be available in 39 sizes, fitting wheels ranging from 16-inches to 22-inches in diameter, with speed ratings up to V. HANKOOK TIRE AMERICA CORP. www.hankooktire.com

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TPMS

Kia Carnival — 2024 DESCRIPTION & OPERATION

The tire pressure monitoring system (TPMS) monitors the pressure and temperature inside the tire 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, and the system detects the pneumatic pressure of the tires and warns the driver if the pneumatic pressure drops below the standard level. Messages from the data are shown in the cluster through a warning lamp. The ECU performs an ERROR evaluation of the input and output signals, receives pressure data from the wheel sensors, determines the condition of the tires, and delivers the warning messages to the driver via the CAN line or hardwire control line.

TPMS Light ON/OFF Conditions

Lamp ON: The lamp turns ON when

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

1 4

TPMS Fault Warning Lamp

Warning Conditions and Display: When the system detects a defect in the external operating environment (low battery voltage, abnormal vehicle speed, etc.), the warning lamp blinks for about one minute and then turns ON. Lamp OFF: The warning lamp turns OFF when the DTC is resolved. The DTC is automatically resolved when the system does not receive fault signals for 30 or more ignition cycles after it changes from the previous fault code. CAUTION: If this condition occurs while driving, you should check the cause of the fault even after the DTC is resolved.

3 2

Follow the tightening sequence shown here. Photo: Mitchell 1

(Turn the ignition 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. If the vehicle starts within 19

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“Securing the Deming Grand Prize is a phenomenal achievement for CEAT and a resounding testament to the relentless dedication and unwavering commitment of every member within our organization. I wish to extend profound thanks and heartfelt gratitude to our invaluable partners for their unwavering support.” MR. AMIT TOLANI Chief Executive, CEAT Specialty

“What makes me feel really good is when our farmer customers call in and they want that ‘CEAT Tire.’ That’s the key to making inroads in a market . . . when you have a tire that people ask for by name.” BRAD SCHMUCKER Owner, Millersburg Tire Service | Ohio (Has been carrying CEAT for the past six years)

On Oct. 3, 2023, global tire company CEAT announced that it was awarded the Deming Grand Prize, considered one of the highest achievements in TQM (Total Quality Management). In doing so, CEAT became the first tire company and one of only 33 companies globally to receive the prestigious award. The Deming Grand Prize recognizes companies that set and achieve challenging business objectives and strategies that are customer focused and quality oriented through the practice of TQM principles, concepts and techniques.

What This Means for our Customers Achieving TQM excellence at the highest-level means CEAT Specialty is fulfilling its primary mission to provide high quality tires at a better value to North America’s farmers and ranchers. While the CEAT tire brand is over 100 years old, CEAT Specialty has been in North America for just six years. During that time, feedback from tire distributors and dealers, as well as farmers and ranchers, has been outstanding.

Comprehensive Line of Ag and OTR Tires The CEAT FARMAX tractor tire line has received rave reviews for dependable traction, low soil compaction, good roadability and long tread wear. On the technology front, the CEAT Torquemax, designed for high power tractors, is available in both VF and IF versions. CEAT Spraymax tires, designed for self-propelled sprayers, are another game changer and are also available in IF and VF versions. In the final analysis, every tire dealer wants happy customers, along with profitable margins and dependable customer service from their tire suppliers. CEAT Specialty delivers on all counts. To learn more, send an email to csti@ceat.com and visit www.ceatspecialtires.com.

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TPMS

Follow the arrows to remove the sensor housing.

Remove the screw using a torx driver, as shown here.

Photo: Mitchell 1

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 indica-

tor 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 more than 19 minutes, the indicator turns off automatically.) Lamp ON: It is on simultaneously with the tread lamp. It indicates the

position of tires with low pressure/ air leaks. Lamp OFF: OFF simultaneously with the tread lamp. If the wheel position changes while driving, the system assumes the previous state, but the warning light illuminates correctly when the current driving position is determined.

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TPMS NOTE: Tread warning lights and wheel position warning lights may light up due to sudden changes in the outside temperature (especially in winter) and influences from driving. When the warning lamp turns on, check the inflation pressure and then inflate the tire to the specified tire pressure.

System Defect

General operation: The system detects many input elements to identify potential defects. The priority of a defect depends on its cause. Some defects cannot be diagnosed with DTC. 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. Function: By detecting the pressure, temperature, acceleration and battery condition, transmit information to ECU by a wireless RF. Wheel location is recognized by comparing the wheel Pulse of ECS (ABS) and acceleration values of the sensor (High Line). Structure and features: There are four sensors mounted in each wheel of the vehicle. Frequency conversion type is FSK, and High Line is used in common. Modes: Shipping mode, stop mode, drive mode, and automatic location learning mode. Valve type: Snap-in type [rubber valve] Screw: Screw T10 [Continental Certified Parts] MCU: ATIC 149 [Infineon] Battery type: CR2032 Type

TPMS LEARNING

TPMS Automatic Location Learning

The wheel angular velocity of wheels is different from each other in the following cases: 1. Slip for each axis occurs differently. 2. Rotation radius (the radius of curve) for each wheel is different. 3. Tire wear, internal pressure, tire specifications, etc. for each tire are different. TPMS sensor transmits the RF signal only in a specific phase (the angle of the tire) in the learning mode. w w w . M o d e r n T i r e D e a l e r. c o m

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TORQUE SPECIFICATION Component

Ft.-lbs.

(N.m)

kgf.m

Wheel hub nut

79.6 - 94.0

(107.9 - 127.5)

11.0 - 13.0

TPMS receiver checks each tire phase (tire angle) information on receiving RF signals from the sensor. Every time RF signals from sensor IDs 1, 2, 3 and 4 are received, the ID with the highest correlation among the phase of each collected wheel is transmitted. (In other words, each time RF signal is received, the phase of the tire is transmitted to the most constant wheel.) TPMS sensor transmits the RF signal at intervals of 16 seconds in the learning mode. After stopping or parking for more than 19 minutes, automatic learning function in every driving position is performed. The mode is converted to Parking Mode when stopped or parked for more than 15 minutes. When acceleration of over 4g (15-20 km/h) is detected in Parking Mode, it is converted to First Block Mode.

TIRE PRESSURE SENSOR REMOVAL AND INSTALLATION Wheel Removal and Installation

Removal/Installation 1. Remove t he wheel and tire. NOTE: When using an impact wrench, final tightening torque should be checked using a torque wrench with the vehicle tires not being fully loaded with the vehicle weight. 2. When installing, tighten the hub nuts as indicated in the image on page 86.

TPMS Replacement

1. Remove the tire. 2. Remove the screw using torx driver (A) as shown on page 88. CAUTION: W hen 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 housing as shown in the image on page 88.

4. Using a valve mounting tool, pull the sensor housing through the hole. NOTE: Cut the rubber under the valve. 5. Apply the surface of the new valve with lubricant and install it in the valve hole of the wheel. Specified lubricants: Soap water or YH100 (Lubricants for tire installation) NOTE: After applying lubricant, install the valve within five minutes. (After five minutes, relubricate.) CAUTION: If the lower part of the TPMS sensor valve is not properly mounted on the wheel, sealing will not work properly. All of the valleys of the valve body must be pulled through the hole. 6. Apply soapy water or the appropriate lubricant to the upper and lower beads of the tire. 7. Place the TPMS sensor at 5 o’clock from the head of the tire changer to mount the bottom bead. 8. Rotate the wheel clockwise and press the tire at 3 o’clock to mount the lower bead. CAUTION: Mount the tire on the wheel so the bead hits the edge (at 6 o’clock) behind the sensor. 9. To install the top bead, press the tire at 3 o’clock and turn the wheel clockwise. 10. Inflate the tire until the bead gets fully set. 11. Adjust the tire pressure according to the standard pressure for the tire size: 235/65 R17 : 240 kPa (35 psi) 235/55 R19 : 250 kPa (36 psi) 12. In case of TPMS sensor failure, TPMS sensor learning is required. Replace the failed sensor with a new unit and perform TPMS sensor learning. ■ 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.

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“Winning MTD’s prestigious Tire Dealer of the Year Award is a tremendous honor. We appreciate this great recognition!” — Jon Langerak, president and CEO, Wonderland Tire Co.

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WE WANT TO HEAR FROM YOU! Nominate a candidate for MTD’s 2024 Tire Dealer of the Year Award Established in 1993, Modern Tire Dealer’s Tire Dealer of the Year Award is the oldest, most prestigious honor of its kind. Each year, Tire Dealer of the Year Award candidates are evaluated in ﬁve categories: WHY BIGGER ISN’T ALWAYS BETTER SECRETS OF SERVICE ADVISOR SUCCESS

1. BUSINESS SUCCESS 2. MARKETING SKILLS 3. MANAGEMENT SKILLS

‘W--HAV--ALONG-----VISION’ JON LANGERAK – MTD’S TIRE DEALER OF THE YEAR – IS BUILDING WONDERLAND TIRE FOR THE FUTURE

4. INDUSTRY KNOWLEDGE 5. COMMUNITY INVOLVEMENT

September 2023 | Vol. 104, No.9 | $10 | www.moderntiredealer.com

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

DEADLINE FOR ENTRIES IS MAY 24, 2024. To nominate, go to: www.moderntiredealer.com/awards For more information, contact MTD Editor Mike Manges at mmanges@endeavorb2b.com

DON’T MISS YOUR CHANCE TO RECOGNIZE AN OUTSTANDING TIRE DEALER! 2401_MTD_86-91_TPMS.indd 91

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

PAGE

WEBSITE

1-800EveryRim OEM Wheels

www.1800everyrim.com

31 Incorporated

www.31inc.com

Accelus Tires

www.accelustires.com

ACDC

www.fixhybrid.com

Aftermarket Auto Parts Alliance Inc.

info.myplace4parts.com

American Omni Trading

www.american-omni.com/cropmax

American Tire Distributors

www.atd.com

Ascenso Tires North America

www.ascensotiresna.com

Atturo Tires

www.atturo.com

Autel

www.autel.com

BKT USA Inc.

www.bkt-tires.com

Cardinal Brokers

www.cardinalbrokers.com

CEAT Specialty Tyres LTD.

www.ceatspecialtires.com

Continental Tires

www.smartchoicetires.com

Firestone Tire

www.firestonetire.com

Gaither Tool Company Inc.

www.gaithertool.com

Greenball Corporation

www.greenballtires.com

Hunter Engineering Company

www.hunter.com/alignment-machines

Independent Tire Dealers Group

www.itdgusa.com

K&M Tire Inc.

www.kmtire.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Kumho Tire

Outsert

www.kumhotire.com

Lexani Performance Tire

www.lexanitires.com

Linglong Americas Inc.

www.linglongtire.com

Marangoni Tread NA

www.na.marangoni.com

Maxxis Tires

www.maxxisaccelerate.com

Nitto Tire U.S.A. Inc.

www.nittoenthusiastcircuit.com/apply

Pre-Q Galgo Corporation

www.pre-q.com

Prinx Chengshan Tire North America

Cover Tip

www.fortunetireusa.com

Radar Tires

www.radartires.com/premium

Ranger, A Division of BendPak

www.bendpak.com/trusensor

Ranger, A Division of BendPak

www.bendpak.com

RoadX Tires

www.roadxtires.com

Sentury Tire USA

www.delintetbr.com

Sutong Tire Resources Inc.

www.sutongctr.com

The Carlstar Group

www.carlstar.com

Tireco Inc.

www.milestartires.com

TireHub

19-20

www.tirehub.com

Toyo Tires

www.toyotires.com/OpenCountry

Transamerica Tire Company Ltd.

IFC

www.predatortires.com

Vredestein Tires

www.vredestein.com

Western Tires Inc.

www.jktyre-usa.com

WheelerShip LLC

www.wheelership.com

Yokohama TWS North America Inc.

www.trelleborg-tires.com/en-us

Zafco

www.armstrongtire.com/moderntiredealer2024

ZC Rubber America Inc.

www.arisuntires.com

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MTD January 2024

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2401MT

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