Modern Tire Dealer - February 2012

OTR tire manufacturers announce GIANT plans Become your fleet customers’ solution provider THE INDUSTRY’S LEADING PUBLICATION

Supplement to Modern Tire Dealer

How to market and sell UHP on the Web February 2012 | Vol. 93, No. 2 | $10 | A Bobit Publication | www.moderntiredealer.com MTD_Feb2012_bellyband.indd 1

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OTR tire manufacturers announce GIANT plans Become your fleet customers’ solution provider THE INDUSTRY’S LEADING PUBLICATION

PERFORMANCE TIRES & WHEELS

How to market and sell UHP on the Web February 2012 | Vol. 93, No. 2 | $10 | A Bobit Publication | www.moderntiredealer.com

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The Industry’s Leading Publication February 2012, Volume 93, Number 2

Departments 4 Editorial Women really are from Venus: But they are finally in the majority, so act accordingly

6 Online Traffic report: Here’s what’s popular on MTD’s website

8 News/views The retreaders who became Hercules: It’s 60 years and counting for Hercules Tire & Rubber Co.

16 Ludwig Report

Features

18 Internet marketing

Selling UHP tires on the Web takes A LOT of time

Strong new car sales lead to better replacement tire demand

35 Counter intelligence Make ‘em earn it. Show your sales team how a little more gross profit every day adds up fast

24 Your customer, the next generation

52 Business insight

26 Roadside riches

54 Business insight

How a 29-year-old shops for UHP tires

The Blackburn family is turning selling refurbished OE wheels and hubcaps into a national enterprise

Leave your store! How SalesMinded dealers make prospecting calls that pay off

A Twittering tire dealer — you are kidding, right?

Here are some things to consider about Twitter

57 TPMS

30 A technological balancing act

Crossfire service aims to please: Replace valve stem sealing grommets during TPMS service

Mounting and balancing equipment and procedures evolve to handle today’s high-tech vehicles

59 Focus on industry

Commercial Tire Dealer™

60 Focus on industry

41 On the record with off-the-road tire makers

They have big plans in 2012. Some might say GIANT

45 CSA and truck tires

It’s time to step up and become your fleet customers’ solution provider

49 Commercially Viable

X-Ice Xi3: white and green — North American Michelin dealers get a grip on X-Ice in Quebec

Hankook prepares to launch ‘The One’ dealer program: Meeting attendees get updates

62 Focus on dealers Expand and deliver: K&M Tire focus on wholesale growth

63 Focus on industry The BFG Tweets are in: BFGoodrich tests the g-Force Sport COMP-2, asks for comments

70 Your turn Greed is the reason tire prices are so high

64 Products 66 Quik-Link 67 Classified

Modern Tire Dealer is a proud member of:

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Editorial

Women really are from Venus But they are finally in the majority, so act accordingly

W

hat percentage of your customers are women? Fifty percent? Eighty percent? More than 80%?

There is no national average, although many in the automotive industry, including tire manufacturers, have offered guesses over the years. The number has been close to 50% for as long as I

By Bob Ulrich can remember, and it was always used in this context, regardless of how much time had passed: “Women now make up 50% of your customer base!”

That would make me laugh, because in one of Modern Tire Dealer’s issues in 1919, a dealer was quoted as saying women made up 50% of his business! My guess is that number hasn’t changed much for a very long time; everyone just thinks it has.

That is until now. Lately, the number actually appears to be moving up. And as the number increases, it’s more important than ever to understand how women think.

Bridgestone Americas Tire Operations LLC says 50% of the drivers in the United States are women. However, they are responsible for 83% of all consumer purchases, and are actively involved in their car maintenance and purchasing decisions 90% of the time.

“The majority of women make the decision themselves on what tires to purchase,” says the company. Interestingly, only 46% of Bridgestone tire purchasers are women, the company says.

Delia Passi, CEO and president of Medelia Inc. and author of “Winning the Toughest Customer,” believes that when it comes to car maintenance, a women’s influence may be higher than 95%. She created the WomenCertified program to help tire dealers and other retailers cater to this growing market.

“Women now buy the majority of all new cars sold in America,” she says. They tend to involve more people in decision making, which explains why they are twice as likely as men to make referrals.

“Women follow more elaborate processes to decide and buy,” she writes in her book. “They tend to expect more service and more nuanced communication than other customers might.”

Women take longer to make the decision. They need

more input. They expect more attentive service. And they require more follow-up. With men, “it’s about direction and action: Let’s get to the point, solve the problem, close the sale and move on,” she says.

See? Men really are from Mars, and women really are from Venus, as the book by John Gray suggests.

AskPatty.com has a certification program of its own and has been mentoring tire dealers like MTD’s 2011 Tire Dealer of the Year, Nick Mitsos, CEO and president of Mountain View Tire and Service Inc., for years. Last month, K&M Tire Inc., a wholesale distributor based in Delphos, Ohio, announced a partnership with AskPatty.com.

At the 2011 SEMA (Specialty Equipment Market Association) Show in Las Vegas, Nev., Cooper Tire & Rubber Co., with help from AskPatty.com, embarked on a new marketing campaign aimed at child safety.

“We tracked four key consumer groups and found that there’s an information gap when it comes to women and tire maintenance,” says Hal Gardner, Cooper’s vice president of marketing communications and intelligence. “Through our surveys, we learned that women need more tire information and we came up with the ‘Precious Cargo’ campaign with a focus on caution and safety.”

According to Cooper’s survey of U.S. mothers, only 1% of the respondents consider tire maintenance a priority when they think of keeping their children safe. Less than 1% reported automotive maintenance as a tactic to ensure their child’s safety.

Adding to this disconnect between you and your female customers is this telling stat from Cooper Tire: 74% of women feel automotive marketers could understand them better. Wow. It all comes down to relationships, and the sooner you understand that women and men have been different since the Garden of Eden, the better.

As the late Josephine Roberts, manager of United Tire Stores in Indianapolis, Ind., once advised our readers, “Women never know exactly what they want when they start out to buy something. They like to look around a great deal.

“With men it’s different. They know what they want and they know what price they want to pay and it is not difficult to do business with them.” That was in 1919. ■ If you have any questions or comments, please e-mail me at bob.ulrich@bobit.com.

Women involve more people in decision making... they are twice as likely as men to make referrals.

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Online

Traffic report Here’s what’s popular on MTD’s website

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hich company is the largest tire maker in the world? What are the details on the new Michelin North America Inc. passenger tire? Which company’s tires came out on top in testing by police?

What are the details on Hankook Tire America Corp.’s new associate dealer program? What went on at the K&M Tire Inc. dealer trade show in Las Vegas? Which company, Goodyear Tire & Rubber Co. or Titan International Inc., had the better stock performance in 2011?

Dealers’ inquiring minds wanted to know the answers to these questions, as these were the topics of the most-read news items on the www.moderntiredealer.com web- Andy Dhugga (left) of New Millenium Tire site last month.

Centre, Ontario, Canada, and Steve Nerheim, For the answers to these ques- Waukegan Tire & Supply Co. Inc., Waukegan, tions, check out our website. See Ill., take a break at the Hankook meeting.

“And the largest tire maker in the world is...,” on Jan. 12; “Michelin debuts long-life Defender passenger tire,” on Jan. 9; “Nitto, Cooper and Firestone score well with police,” on Jan. 16; “Hankook announces associate dealer program,” on Jan. 29; “K&M put on a really big show in Las Vegas” on Jan. 23; and “Goodyear vs. Titan: and the 2011 winner is...” on Jan. 2.

In addition to these top news items, you’ll find the latest braking news on the tire industry.

You also can find a digital version of the current issue of MTD, industry facts and figures, a Web poll, archived Tire Dealer of the Year articles and much more.

And be sure to leave your comments. Some examples of which can be found in this issue’s Your Turn department on page 70.

Michelin debuted its new Website readers responded to a recent Bob Ulrich long-life passenger tire, editorial on tire prices. the Defender, at the auto (For more information on the Hankook dealer program, show in Detroit, Mich. see pages 60-61 in this issue. Plus, additional K&M dealer trade show information can be found on page 62.)

For the latest news items, website readers’ comments and handy links for additional information, go to www.moderntiredealer.com. ■

Total access — totally free www.moderntiredealer.com

3515 Massillon Road, Suite 350 Uniontown, Ohio 44685 (330) 899-2200, fax (330) 899-2209 Web site http://www.moderntiredealer.com Editor: ROBERT J. ULRICH Bob.Ulrich@bobit.com Managing Editor: LORI L. MAVRIGIAN Lori.Mavrigian@bobit.com Senior Editor: BOB BISSLER Bob.Bissler@bobit.com Contributors: Auto Service/Technical: MIKE MAVRIGIAN Training/Tire Service: KEVIN ROHLWING Industry Analyst: SAUL LUDWIG Art Director: NEAL WEINGART Neal.Weingart@bobit.com Production Manager: KAREN RUNION Karen.Runion@bobit.com Publisher: GREG SMITH Greg.Smith@bobit.com South and Texas: GREG SMITH Greg.Smith@bobit.com (330) 899-2200, fax (330) 899-2209 Midwest: MICHELE VARGO Michele.Vargo@bobit.com (330) 899-2200, fax (330) 899-2209 West Coast: JOHN DYAL The Dyal Company John.Dyal@bobit.com (760) 451-5026, fax (760) 451-5039 West Coast: MARIANNE DYAL The Dyal Company Marianne.Dyal@bobit.com (760) 451-9216 Automotive Aftermarket: DAN THORNTON djtinc@gmail.com (734) 676-9135, mobile (313) 410-0945 fax (734) 675-6744 Classified Sales: DONNA STEWART Donna_Stewart@cox.net (405) 513-6794, fax (360) 406-7576 Reprint Sales: KAREN RUNION Karen.Runion@bobit.com (330) 899-2200, fax (330) 899-2209 Customer/Subscription Service: (888) 239-2455, fax (888) 274-4580

Modern Tire Dealer is a Bobit Publication Executive offices: 3520 Challenger St. Torrance, CA 90503 Chairman: Edward J. Bobit CEO & President: Ty F. Bobit Chief Financial Officer: Richard E. Johnson

MODERN TIRE DEALER (ISSN 00268496) (CDN IPM #40013413) (USPS #369-170) is published monthly by Bobit Business Media, 3520 Challenger St., Torrance, California 90503-1640. Periodicals postage paid at Torrance, CA 90503-9998 and additional mailing offices. POSTMASTER: Send address changes to MODERN TIRE DEALER, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks for address changes to take effect. Subscriptions in the U.S. and its possessions, $65; Canadian, $99; Int’l surface mail, $99; Int’l airmail, $198. Single copies, $10, except the January Facts Issue, $30. Address all subscription correspondence to MODERN TIRE DEALER, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks to receive your first issue. Please address Editorial and Advertising correspondence to MODERN TIRE DEALER, 3515 Massillon Road, Suite 350, Uniontown, OH 44685-6217. The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. For your information: We sometimes make our subscriber information (i.e. fax, e-mail or mailing address) available to carefully screened organizations whose products and services may be of interest to you. If you prefer not to have your information made available, please write MODERN TIRE DEALER, P.O. Box 1068, Skokie, IL 60076-8068.

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News/views

The retreaders who became Hercules It’s 60 years and counting for Hercules Tire & Rubber Co.

By Bob Bissler n 1952, 21 northeastern U.S. retreaders formed a co-op and purchased the Atlas Rubber Co. From that humble beginning, Hercules Tire & Rubber Co. was born.

“The company was founded in Stamford, Conn. They were retreaders and focused on buying rubber for retreading,” says Bill Trimarco, CEO and president of Hercules Tire & Rubber Co. “But as the industry and their businesses developed, they realized they were also selling passenger tires and if they worked together, they could buy better. We think they were the industry’s first buying group.”

The group started buying tires in 1958.

Trimarco says one of the early significant moves the buying group made was to start doing business with Cooper Tire.

“Cooper was one of the companies they had approached to buy tires from,” Trimarco explains.

“Cooper already had a brand called ‘Hercules’ that they weren’t using. So in the early ’60s the name Hercules was given to the group.”

Hercules Tire & Rubber Co. celebrated its 50-year relationship with Cooper in 2010.

That relationship led to the next significant move by Hercules Tire. In 1966 the company moved to Findlay, Ohio, which just happens to be where Cooper Tire is headquartered.

By the early ’70s, the group took its quest for value to Asia. It was a bold move at a time when negative stereotypes prevented many

consumers from appreciating the quality of certain Asian products.

“We started a relationship with Toyo in 1973,” says Trimarco. “In 1979, Hercules began a relationship with Kumho. Ten years later we started buying in China and we were one of the first to do that, in 1989. So we have a history of pursuing value.”

Old stereotypes aside, Trimarco says today the quality of Asian automotive products is widely known. And he’s proud of the fact that Hercules took advantage of that quality years ago.

Trimarco made his mark on the company’s history when he took over as CEO and president in early 2009. He says one of the biggest challenges he faced at that time was promoting the Hercules brand.

“We were not emphasizing the Hercules brand the way we should have been,” he explains.

“What I’ve done is brought more clarity and focus in the direction of the company. We are really focused on developing the Hercules product line and brand. We believe it is the leading value of private brands in the North American market.”

As the company begins its next 60 years, there are plenty of plans for 2012.

“In the first half, we will have line extensions for our Roadtour and Tour 4.0 touring tire lines,” he reveals.

“In the second half, we will introduce two or three programs supporting completely new lines.” ■

The company has been headquartered at its Findlay, Ohio, facility since 1966.

Brand building was a priority when Bill Trimarco came on board as CEO and president of Hercules Tire & Rubber Co. in 2009.

I

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Hercules milestones 1952: Twenty-one northeastern U.S. retreaders form a co-op and buy Atlas Rubber Co. 1958: The group starts buying tires together, becoming what is believed to be the first private buying group.

1960: Cooper Tire & Rubber Co. begins producing tires for the group under the name “Hercules.”

1966: Hercules moves its headquarters to Findlay, Ohio, to be more centrally located to its dealers and close to Cooper.

1973: Hercules becomes Toyo’s first U.S. account.

1979: Hercules becomes the first offshore customer of Kumho Tire Co. Ltd. for bias truck tires and eventually radial passenger tires.

1987: The first Tire Dealer’s Warehouse (TDW) location opens in Compton, Calif.

1989: Hercules enters the Chinese market to manufacture tread rubber and source tires.

1997: Hercules acquires Treadway Export and Tire Specialists, now known as Hercules Tire Canada and Hercules Tire International.

2001: Hercules exits its original business of retreading.

2005: FdG Associates partners with management to purchase Hercules Tires.

2010: Hercules opens the North China Warehouse.

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News/views

More for Mopar Magneti Marelli delivers non-Chrysler parts

By Bob Ulrich

M

agneti Marelli Aftermarket Parts and Services SpA takes its name very seriously.

The Italian company supplies more than 35 premium product lines and over 35,000 part numbers to repair facilities worldwide.

In the United States, the company partners with Chrysler Group LLC’s nearly 2,400 Mopar dealers. In the past, the parts have covered Chrysler, Jeep, Dodge, Ram and Fiat vehicles exclusively. will fine-tune the car parc coverBut Mopar dealers wanted “We age,” says Maggioni (left). “Mopar more, according to Dino Mag- dealers are asking for line extensions gioni, CEO of Magneti Marelli. all the time,” adds Berardi (right).

Last year, the company promised the dealers it would supply parts for non-Chrysler vehicles. “Approximately 25% of the cars that visit Mopar dealers are not Chrysler cars.”

Magneti Marelli literally has delivered on its promise, with 18 additional product lines and part numbers for Ford, General Motors, Toyota, Honda, Nissan, Hyundai and Kia vehicles. Pietro Berardi, vice president of the company’s North American Aftermarket subsidiary, says the new parts are for the most popular applications.

“We offer a mix of premium new and remanufactured parts at competitive prices. For the dealer, it is a tremendous opportunity to grow their businesses.”

Maggioni adds that the company will fine-tune the car parc coverage as needed.

In addition to the replacement market, the 93-year-old company supplies original equipment manufacturers and Formula One race teams with Magneti Marelli and private brand products. It also runs a network of repair garages in Europe and South America.

The company has 77 plants Packaging for Magneti (and 37 research and development Marelli parts has been centers). With two plants in the U.S. redesigned. The boxes are slimmer, with part numbers and two in Mexico, Magneti Marelli on the side. Other parts are produces 95% of its parts for the shrink-wrapped (above).

North American market nearby. ■

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News/views

bites

Titan signs $100 million deal Titan Tire Corp. has signed a multiyear OTR tire supply contract with Caterpillar Inc. The three-year agreement begins this year. The value of the contract in today’s dollars is expected to exceed a minimum of $100 million.

Apollo hits million milestone Apollo Tyres Ltd. recently produced its millionth truck-bus radial (TBR) at its manufacturing facility in Chennai, India. Production there went from 250 tires a day in April 2010 to 4,000 a day now. Truck-bus radials account for 19% of the total commercial vehicle tires produced

by Apollo.

Mitas plant is on schedule Pavel Charvát, president of Mitas Tires North America Inc., says the company is only a few months away from producing farm tires in Charles City, Iowa. Charvát, 55, also was named plant director last October.

Gateway Tire makes the switch The Gateway Tire & Service Middle Tennessee Region has decided to switch their wheel weight inventories over to a non-lead solution. “We know that it is only a matter of time before the state of Tennessee or the U.S. Environmental Protection Agency bans lead wheel weights,” says Garth Bouldin, regional retail manager. “It is important for us to get out in front of the issue, be proactive, and be able to switch out our 11 locations on our own timetable.”

Hennessy partners with exporter Hennessy Industries has partnered with Hockman-Lewis Ltd., an international export management company, to manage the sales and marketing of the Coats, Ammco and BADA brands throughout Southeast Asia and the Pacific Rim. Marangoni named ‘outstanding’ Marangoni Tread North America Inc. has been recognized twice by the state of Tennessee for its contributions. U.S. Representative Jim Cooper (5th District), recently presented to Marangoni CEO and President Bill Sweatman Special Congressional Recognition for outstanding contributions to the state’s economic development.

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Investment firm acquires Pep Boys Pep Boys — Manny, Moe & Jack has entered into a definitive merger agreement under which it will be acquired by investment firm The Gores Group.

Total enterprise value of the transaction is $1 billion. Under the terms of the merger agreement, The Gores Group will acquire all the outstanding common shares of Pep Boys for $15 per share in cash.

Pep Boys’ board of directors has unanimously approved the merger agreement and recommended that Pep Boys’ shareholders approve the transaction. It is expected that Mike Odell, Pep Boys’ president and chief executive officer, and other members of the senior management team will continue in their roles with the company after the completion of the transaction.

“Partnering with The Gores Group delivers a significant premium for Pep Boys’ shareholders and ensures a strong foundation for us to continue our expansion,” says Odell. “Our board firmly believes that this transaction is in the best interests of all of our stakeholders and delivers an ongoing commitment to excellence for our customers and employees.”

Texarkana union ratifies Cooper agreement The United Steelworkers (USW) Local 752L overwhelmingly ratified a new fouryear labor agreement with Cooper Tire & Rubber Co. The local union represents the company’s Texarkana, Ark., tire plant.

The agreement, which affects approximately 1,500 union members, received a 1006-to-141 endorsement.

In addition to wage and benefit changes which will be implemented over the course of the four-year accord, the company plans additional investment in the plant.

Representatives from both Cooper and the USW are optimistic for the future of the Texarkana facility, “and the ability of the plant employees to be even more productive under the terms of the new contract.”

According to the 2012 Modern Tire Dealer Facts Issue, the Texarkana facility has the capacity to produce 24,000 passenger tires and 8,000 light truck tires per day.

TIA ‘powers’ new TPMS Manager software The Tire Industry Association (TIA) and Tiremetrix LCC have launched a new, enhanced version of the Tiremetrix TPMS management software, TPMS Manager.

The new product will be called “TPMS Manager—Powered by TIA.” The software features new content focused on TPMS training and TPMS service tips for passenger and light truck tire service technicians. “This launch is very important for the tire industry, because now technicians can get immediate access to the knowledge base of TPMS service from TIA,” says Joe Donehue, president of Tiremetrix.

Donehue says the interface allows a tire shop to easily navigate the process of selling and servicing TPMS. “The recent clarification from the National Highway Traffic Safety Administration regarding the “make inoperable” clause only further demonstrates the need for accurate TPMS service information, delivered at the point of sale.”

TPMS Manager—Powered by TIA is available to tire retailers as a monthly or annual subscription. The monthly fee for a location license is $39.95 for TIA members.

Monthly subscriptions are available for non-TIA members as well at $59.95 per month.

Those interested in evaluating the TPMS Manager—Powered by TIA software may request a limited free trial by contacting Chris Marnett, TIA training director, at cmarnett@tireindustry.org.

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News/views

bites

Cooper acquires Serbian plant Cooper Tire & Rubber Co. has finalized its purchase of the assets of a tire-making facility in Krusevac, Serbia. Cooper says it elected to invest in Serbia not only because of its significant economic potential, but also for its quality workforce, geographical advantages and Serbian government support.

K&M acquires Don’s Tire Wholesale tire distributor K&M Tire Inc. has purchased the assets of Don’s Tire in Cross Plains, Wis. Following the purchase, Leo Wherley, owner of Don’s Tire, joined the K&M Tire sales team. He will serve as a part-time outside sales representative in Wisconsin.

Nitto sponsors in-flight movie Nitto Tire has partnered with All Nippon Airways on the in-flight movie “Snow Dream — Roots of Sapporo Snow Festival.” The 21-minute documentary takes a historical and entertaining look at this loved and popular winter festival.

TIA vouchers from Bartec TIA is taking its Automotive Tire Service (ATS) Certification Course on the road, and Bartec USA is offering an ATS registration form and a tuition voucher with every new Tech400SD TPMS tool shipped. The tuition voucher, when combined with the special sponsorship tuition rate, means a $200 discount for this class.

Sullivan opens 56th store Sullivan Tire Co. Inc. has opened a new Sullivan Tire & Auto Service outlet in Bridgewater, Mass. It is the company’s 56th retail location.

Prior to the Bridgewater location, the company opened stores in Marlborough, Stoughton and Gloucester, Mass. Sullivan Tire is 11th on the Modern Tire Dealer 100 list.

DENSO debuts website DENSO Sales California has announced the availability of its new mobile version website at densoaftermarket.com. The new mobile version is live and is designed for the latest mobile phones using iOS or Android mobile platforms.

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Kumho re-ups with the Lakers and Heat Kumho Tire U.S.A. Inc. says it is fully committed to its sports marketing platform. To prove it, the company recently signed on as the “official tire” of the National Basketball Association’s two most high-profile teams for the second consecutive year.

The Los Angeles Lakers and the Miami Heat are part of a Kumho stable of partnerships that include the NFL’s New York Jets and Buffalo Bills; the United States Soccer Federation’s men’s and women’s teams; and the University of The halo ring on the scoreboard at the Southern California college football team. Staples Center promotes Kumho tires.

Some of the advertising elements So do the shirts worn by the Los Angeles Laker cheerleaders. included with the Los Angeles Lakers partnership are in-arena signage (including the center scorer’s table), LED ribbon, the main scoreboard lower halo ring and Kumho video spots played on the main scoreboard. There also will be celebrity signature contests on full-page Kumho ads placed in Lakers game programs; digital advertisements on Lakers.com and Facebook; an ad on ESPN radio; and more.

Bauer Built buys Walker commercial division Bauer Built Inc. has purchased the commercial division of Omaha, Neb.-based Walker Tire and Auto Service, reports Jerry Bauer, president.

Walker Tire and Auto Service has been in business for over 60 years in Omaha and will continue to operate its retail and wholesale locations, which are not any part of this transaction.

This acquisition is the result of an ongoing effort by Bauer Built to expand its existing operations as part of its overall growth plan. The purchase will give the company a better presence in the Omaha market and also strengthen its presence across Interstate 80 in the Midwest, the company reports.

Dave Coufal, Bauer Built’s vice president of sales for its west region, will be overseeing activities at this location. A number of the former Walker commercial division employees stayed with Bauer Built as well.

Bauer Built is the 41st largest independent tire dealer chain in the U.S., according to the Modern Tire Dealer 100, and is the 14th largest retreader in the U.S.

7 megatrends from Goodyear’s Kramer Rich Kramer, chairman, CEO and president of Goodyear Tire & Rubber Co., listed seven “megatrends” at the 2012 Goodyear Dealer Conference in Orlando, Fla., Jan. 19-21. “They are “really what’s going to shape the industry and impact both our businesses,” he said. (Look for more on the meeting in our March 2012 issue.)

1. Growth in emerging markets.

2. “The mature markets will continue to grow.” Kramer said it is important to key on the segments growing within those markets.

3. HVA (high value added) in mid-tier. “By 2016, virtually all cars will have HVA tires on them.”

4. With government regulations and OEM demands, “the green trend is here to stay.”

5. Tire labeling. Tie labeling will be coming to Europe in 2013, and the National Highway Traffic Safety Administration continues to review it. “I’m not sure when it will come, but it will.”

6. Internet changing buying behavior.

7. Changes are evolutionary, not revolutionary. This allows the company to be more efficient, take advantage of opportunities and move forward. ■ MTD February 2012 2/14/12 3:03 PM

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Ludwig Report

Strong new car sales lead to better replacement tire demand

N

o snow — that was the making up for a lack of upkeep during the recession. Retreaded problem for dealers in tire sales, which had previously been strong, fell 3%. northern climates in December as retail tire sales at those Tire prices continue to rise, but for how much longer? dealerships were very weak. Some In comparing the month of December 2011 with November reported to me that comp store 2011, average costs for size 215/60R16 major brand tires sales volumes last month declined were up 1% while selling prices also were up 1%. The average by more than 15%. Wow. While dealcost for a 215/60R16 private brand tire was flat while selling ers in more temperate climates didn’t prices were up roughly 2%. In December, tire prices yet again have the snow issue, sales remained climbed, but how much longer will it last? sluggish nonetheless as miles driven have continued to decline by about By Saul Ludwig Truck pricing again seen as very firm 2% vs. the same months a year earIn December 2011, 56% of passenger tire dealers saw lier. While I still predict that 2012 volume at retail will improve, pricing as very firm while another 25% saw it as normal. The it is more likely to begin in 2Q12. As I noted last month, strong remaining 19% saw it as aggressive. Similarly, 62% of truck new car sales lead to better replacement demand, and it is the tire dealers saw pricing as very firm. Twenty-three percent continuing strength in new car sales that leads to my guarded of truck tire dealers saw pricing as normal and the remaining optimism for replacement tire sales this year. On the pricing 15% saw it as aggressive. front, I believe that there are no new price hikes on the horizon as raw materials have come down a bit. But conversely, I do not Dealers AUG SEP OCT NOV(R) DEC(P) DEC(10) expect tire prices to recede. Manufacturers will cut production to prevent an inventory Passenger tire buildup as it is better for them to absorb costs Will improve 36% 50% 43% 33% 38% 17% of less than full plant utilization than to have Will worsen 18% 8% 0% 13% 6% 33% too much inventory that invariably leads to Will stay level 46% 42% 57% 53% 56% 50% price cutting. And as to the coming expiration Truck tire of the Chinese tariffs in September, I do not Will improve 36% 45% 38% 25% 39% 75% expect them to be maintained at any level, Will worsen 9% 9% 0% 8% 7% 25% even in this election year.

Will stay level 55% 46% 62% 67% 54% 0%

How dealers view their near-term business

Monthly survey

R-Revised

P-Preliminary

A number of independent tire dealers were surveyed concerning current business trends. Except for tire prices and costs, the results of the December 2011 survey are compared with those of December 2010.

Optimism remains for the next six months

According to our dealer survey, roughly 56% of passenger tire dealers believe business will stay about the same over the next six months while 38% believe it will improve. The remaining 6% believe it will worsen. As for truck tire dealers surveyed, 54% see business staying level while 39% see business improving. Seven percent see business getting worse.

Passenger tire sales were weak, truck sales show strength

According to dealer reports, on average, retail sales of new replacement passenger tires were down 3% when compared with December 2010. Much of this slowdown is due to a mild winter which is lowering demand for snow tires. As one dealer stated, “Let it snow!” Truck tire sales jumped as volumes were up 5%. Truck tire sales have been strong as truck fleets are still

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Passenger tire inventories turn higher as sales fall

Forty-four percent of passenger tire dealers believed inventories were too high for current business levels, while 31% of surveyed dealers believed inventories were in line with current business levels. The remaining 25% of dealers felt inventories were too low for current demand. Roughly 62% of truck tire dealers we surveyed indicated inventories were in line with current business levels, while 31% felt inventories were too low. The remaining dealers (7%) felt inventories were too high.

Service business remains strong in slow growth market

Dealers who provide automotive service reported that 31% of revenues, on average, were generated by service during December. Dealers reported service business grew by 7%. ■ Analyst Saul Ludwig is a managing director with Northcoast Research Holdings LLC based in Cleveland, Ohio. He concentrates on the tire and chemical industries. He has been writing for Modern Tire Dealer since April 1975.

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UHP marketing

Internet marketing Selling UHP tires on the Web takes A LOT of time

L

ocally, nationally or globally, the World Wide Web is becoming a necessary part of marketing and selling high performance tires. At the very least it can add to your bottom line.

High performance tires are defined as H-rated tires with aspect ratios of 70-series or lower. UHP tires are V-rated and higher.

However, there is some overlap between the two categories — and the sub-segments within them. As we wrote last year, there were four categories in the performance segment 25 years ago: UHP, high performance, performance and cosmetic. Today, there are no fewer than six categories for summer tires alone.

“UHP used to define a segment,” says Rick Brennan, vice president of market-

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ing for Kumho Tire U.S.A. Inc. “Now it defines a speed rating. And that doesn’t mean anything to the consumer. That’s why you are seeing all these mini-segments cropping up.”

It comes down to how each dealer defines high and UHP tires in his or her market. It may be even more important on the Web. In 2011, 32 million high performance tires were shipped to the aftermarket in the United States. That number is relatively flat compared to 2010.

Another 29.7 replacement UHP tires were shipped, up 14%. Combined, high and ultra-high performance tire shipments were up 6.5% — while the overall replacement passenger tire market was down slightly.

Read all about it

Before you can market and sell high and ultra-high performance tires online, you have to embrace your website. If you don’t have a website, customers can’t find you. If you don’t keep it up–to-date, it will downgrade your ability to help them.

According to Jeff Wallick, program/ marketing manager for K&M Tire Inc., 4% of all tires are sold online. “Expect that to double and triple in the next few years.”

Your tire suppliers can help you make your website viable. That includes both tire manufacturers and wholesale distributors like K&M Tire.

Then you need to start climbing the Google search list. Google is by far the largest search engine, but the tips here

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apply to all search engines. How do you get your website listed on page one? It all starts with quality content.

In his article “The Internet is your best friend: effective Web-based marketing for retailers, Mitchell Schafer says content is king. “The copy you write for your pages must be stellar. It must be easy to read, grammatically correct and it must be relevant.”

Schafer says that if a Web page has a lot of content relevant to its topic, it will rank well with search engines.

Getting other relevant sites to link to your page also is important. “To search engines, a vote from a related field is more important than an unrelated field,” he says.

The more votes you have, the more a search engine will value your page.

“Google looks at sites and pages for the most relevant result possible. If your page is the most relevant out there and others vote for it by linking to it, then your page will rank highly within Google.”

Trying to get on page one — and staying there — takes a lot of work, says Greg Basich, Web editor for Bobit Business Media’s Auto Group.

“You can’t just do it five minutes a day.

It takes a couple hours a day. If you can’t put that much time into it, then you’re better off outsourcing it and paying for it.”

You also can buy your way onto page one with the help of Google Adwords, the sponsored ads that appear at the top and side of most search results.

“You can buy a top listing by using Adwords,” says Schafer. “If your page is relevant, Adwords will cost you less money. You only pay when someone actually takes action and clicks on your ad.”

What if you are a local retailer? How do you target your marketing to customers in your area without competing against nationwide retailers and wholesalers for page one positioning?

According to Google, 97% of consumers search for local businesses online. To take advantage of this, you can register your business on Google Places for free; same with Yahoo Local, MerchantCircle and Insider Pagers. And make sure you specifically mention UHP tires in any product or service listings in your business profile.

Schafer, who owns Mobile Edge in Lehighton, Pa., sums up his advice with a question: Do you tell every customer who comes into your store to check out your website?

Who’s on first?

Who are the best UHP performance tire marketers in the aftermarket? If you search for “ultra-high performance tires” on Google or Yahoo, the first few entries are either sponsored by wholesale distributors or tire manufacturers promoting specific brands.

American Tire Distributors Inc. (ATD) was number one in the Google listings with TireBuyer.com. Here is why ATD says the consumer should purchase tires online from the website: “TireBuyer.com is backed by a massive distribution system.

We currently operate over 80 distribution centers in nearly 40 U.S. states totaling nearly 10 million square feet of warehouse space. With over seven million brand new products in inventory, each distribution center carries millions of dollars in available inventory from most major tire and wheel brands.”

That can sound pretty compelling to a tire-buying consumer.

The “Dunlop performance tires” entry is listed second on the Google search engine. The www.dunloptires.com link takes the buyer directly to the UHP page. The “Goodyear performance tires” entry is third, and is linked to the “Find my tires” page on www.goodyear.com.

At number four is The Tire Rack (website www.tirerack.com), which is linked directly to its UHP summer tire page. Another wholesale distributor, TireTeam.com Inc., (www.tireteam.com) is fifth. TireTeam is the internet sales division of T&Z Tire Wholesalers.

Sears Holdings Corp., Pep Boys-Manny, Moe & Jack and Wal-Mart Stores Inc. have prominent listings. So does Amazon. com(!), craigslist, speed shops, Godspeed Wheels, West Coast Corvette and two Chinese companies.

The first retail tire dealer listed during the Yahoo search was Sports Car Tire, a one-store operation based in Wilmington, Del. (www.sportscartire.com). The link to Sports Car Tire appeared on page six of the search. Next was Perfection Tire and Auto Repair, a 19-store chain based in Spokane, Wash. (website www.perfectiontire.com).

Perfection Tire was listed on page 18 of the search results list.

Google and other search engines also take into account involvement in social media. Do you need to be on Facebook or YouTube? That’s another story for another time. ■

Quik-Link: 800-687-1557 ext. 12110

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High/ultra-high performance market share by brand High performance (Based on 32 million units)

Brand Goodyear Michelin Bridgestone Yokohama Kumho Hankook Falken BFGoodrich Continental Dunlop Nexen Toyo Firestone Pirelli Cooper General Kelly Nitto Sumitomo Others UHP

2011 15.5% 12.0% 8.0% 8.0% 7.5% 6.5% 5.5% 5.0% 4.0% 4.0% 4.0% 4.0% 3.5% 3.5% 3.0% 2.0% 1.5% 1.5% 1.0% 3.5%

(Based on 29.7 million units)

Brand Goodyear Michelin Bridgestone Falken Hankook Continental Pirelli Yokohama BFGoodrich Kumho Nexen Toyo Dunlop Firestone Cooper Delinte Nitto Sumitomo General Velozza Others

2011 14.5% 14.0% 10.0% 8.5% 6.0% 5.5% 5.0% 5.0% 4.5% 4.5% 4.5% 4.0% 3.5% 2.5% 2.0% 1.5% 1.5% 1.5% 1.0% 1.0% 2.0%

Because numbers are rounded to the nearest half-percent, the total may not equal 100%. Brands must have at least 1% of the total market segment in shipment numbers to be listed at 1%.

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UHP marketing

Your customer, the next generation How a 29-year-old shops for UHP tires

H

ow does your average Internet shopper shop for ultra-high performance tires? To find out, we asked someone who seemed to fit that description how he bought tires for his 2004 BMW M3.

He was happy to help us out, although he requested that we didn’t use his name. We’ll call him Bob. Bob is 29 years old and lives in Redondo Beach, Calif.,

Our shopper shopp sh opper er end ended ed up cho choosi choosing osing ng the least least expensive expen ex pensiv sive e “max “max performance summer tire” on his list for his 2004 BMW M3.

with his wife and baby girl. He works as a Web producer in his family’s business.

“Every time I’ve gone to a tire shop looking for performance tires, they haven’t been in stock. That’s a waste of my time,” he says. “I didn’t ask what they would have charged for the tires, but expect that the cost would have been more than the price I found them listed for online.”

Now he shops on the Internet. When asked how he bought his last set of high performance tires, Bob laid out a 14-step process that started with research on the Web. 1. Usually, I begin the process at night, after work, after dinner, and after attending to all my other family responsibilities.

2. If it’s the first set of replacement tires for my car, I search on www.tirerack.com or another website to figure out what size I need. I could go into the garage or outside to check, but then I’d need to find a flashlight and it might be cold outside, and I’d probably get dirty touching the tires. Going online and checking the fitment seems the best way to find out. I also can learn from the comments if others are using a particular size and getting better results from it, possibly better handling or grip.

3. For this particular car, the wheels aren’t standard. They were upgraded to the staggered M3 CSL wheels, so I searched “e46 m3 csl tire size” on Google.

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4. In the Google search results, I saw this link relating to the CSL tire fitment: www.e46fanatics.com/forum.

Most people were recommending to run a 245 front and a 275 rear.

5. Then I returned to www.tirerack.com to see the available tires.

6. I unselected “All performance categories” and checked the “Extreme,” “Max” and “Ultra-High Performance” summer tire categories (and wondered what the difference was between them). I then had 13 results from which to choose.

7. First, I checked off three or four tires and did a quick price comparison. The prices generally ranged from about $200 to more than $400, which meant the total could be almost $1,700! That’s a lot of money even for a guy with an M3, so I stayed away from the really expensive tires and didn’t add them to the comparison.

8. The four brands that I chose to compare were: Michelin Pilot Super Sport, Continental ExtremeContact, Bridgestone Potenza RE-11 and Hankook Ventus V12 evo.

9. I liked the customer data that I saw, especially the “would you buy again” rating, and from what I read, the Pilot Super Sport appeared to be the best of the bunch. At $275 per front and $311 per rear, they were about the most expensive, just $12 less than the Potenza’s. The Hankook’s were the least expensive ($196 front/$239 rear), totaling more than $300 less than the Potenza’s. I decided on the Hankook tires.

10. I wanted to make sure I was getting the best price (including shipping). Tire Rack had them for $196.

A quick search showed another place online had them for $168. Then I found them for just $161.93 at website www.discountedwheelwarehouse.com. Sold!

11. I knew there was a tire dealer near my office, so I checked Google Maps to get the address and phone number: Allen Tire on Hawthorne Blvd. Great.

12. I ordered the tires online and had them shipped to the tire shop c/o me. I made sure I had the packages tracked by UPS so I knew when they would be there.

13. Once I got the tracking info in my e-mail, I called the tire shop to set up an appointment. (Most of the time, I’ll set this up the day after the expected arrival of the tires since they usually are delivered late afternoon.)

14. The day of the appointment, I was in and out in less than 30 minutes — and had time to get some food before getting back to the office.

“I’ve done this about four or five times and have been satisfied with the results,” says Bob. “I’ll usually return to the same tire shop for the install if they are clean, not overpriced and, most importantly, on schedule.” ■

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Wheel sales

Roadside riches The Blackburn family is turning selling refurbished OE wheels and hubcaps into a national enterprise

By Bob Bissler

J

im Blackburn Sr. is a man who doesn’t pass up an opportunity. And it was opportunity that took him from being an Archway cookie truck driver to the owner of a leading provider of new, used and refurbished OE wheels and hubcaps.

In the 1960s and ’70s, he often saw lost hubcaps and wheel covers along the roadsides of northeast Ohio.

But he saw more than hubcaps. He saw opportunity.

“I would stop and pick up hubcaps I’d see at the side of the road,” he explains. “The business was founded around 1970, because that’s when I started selling them on the weekends at flea markets and swap meets. I opened the first actual store in 1985.”

That first location eventually became four locations, all in Macedonia, Ohio. Besides being strategically Blackburn (left) and brother Jimmy (right) worked weekends located near the metropolitan areas of Akron and Torrey and summers as children with their father Jim Sr. (center) at BlackCleveland, the city of Macedonia is the Blackburn burn’s Hubcap & Wheel in Macedonia, Ohio. family’s hometown. Eventually, Jim Sr.’s sons Jimmy and Torrey joined the family business.

Jim Sr. says he’s retired, but he’s at the business nearly every Both boys grew up working summers and weekends with day. He still stops for hubcaps and wheel covers along the roads. their father. Jimmy came on full-time in 1993, followed by All those hubcaps and wheels have added up over the years.

Torrey in 1996. Today Jimmy and Torrey are co-owners of Along with the need for additional space, Blackburn’s had to Blackburn’s Hubcap & Wheel Inc. evolve with changing markets. The business had always been a The company has evolved into a wholesale operation that retail operation, but now the company is mainly wholesale. To provides new, used and high-quality refurbished hubcaps and handle increasing volumes of inventory, the company moved wheels. With fast shipping, Blackburn’s is a one-stop source into a new 155,000-square-foot building in 2010 just one mile for the wheel needs of any retailer repairing cars. away from the old location. The new facility has 7,000 square feet of office space.

How does a small retailer of hubcaps and wheels evolve into a wholesale enterprise? In Blackburn’s case, it had a lot to do with changes in the way people started to rely on their local tire and service center.

“Once upon a time we were 95% retail-oriented,” explains Jimmy. “When we changed our focus and became more wholesale oriented, we started to supply tire and service centers.

That’s where the real change started to occur.”

Jimmy says that was in the early 1990s.

The industry evolved out of wheel covers into aluminum alloy wheels. After 1995, Cadillac had no hubcaps.

“There was a mind set change at that point where a retail customer was used to going to a Blackburn’s custom-made conference room table features some of the fam- hubcap center and buying a wheel cover, and ily’s favorite hubcaps and wheels collected over the years by Jim Sr. they could just snap it on,” Jimmy explains.

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Wheel sales “Then as the market changed over to wheels, it became more involved.

You have to put a tire on the wheel; and then it has to be mounted and With big volume comes big customers, balanced. So the focus started to and taking care of them is a priority at change and the retail customer Blackburn’s Hubcap & Wheel Inc., Macestarted to rely more on their tire donia, Ohio. and service center relationship.”

“We have a grading system,” says JimThat relationship became a prime my Blackburn, who co-owns the business opportunity at Blackburn’s. Graduwith his brother Torrey. “Our grading ally they began to change focus and scale always runs one step above the market to wholesale customers. industry. Our goal is that when they get “(Tire and service centers) ala wheel from us, we’ve exceeded what ready have a captive audience with their expectations are.” employees Becky Prekler the retail customer,” says Jimmy.

In order to exceed expectations, Black- Blackburn’s and Guy Esposito pull a wheel for an “Even though we changed our burn’s will take what may be called an active order from Blackburn’s finished focus, there was a change in the A-grade wheel at other companies and goods inventory. industry also of how they would rate it a B-grade wheel. It may have just a actually acquire this product.” minor cosmetic flaw on it. In many cases vendors with certain specialties.

Over time, the Blackburn’s “If it’s chrome, painted, machined or it’s still going to be nicer than what the wholesale customers started to polished, that will depend on where we customer has on the car. bring in repeat business. “We “When the customer gets it, we want get it restored,” he says. started picking up some tire centers To handle all that inventory, Blackburn’s them to be surprised so we always grade and service centers and they called not only needed a special facility, but also one step down,” explains Jimmy. every day of the week,” says Torrey.

The business model at Blackburn’s special racks to put the inventory on.

“Then you build a relationship “We developed special racks that will includes maintaining a large inventory. and they can start promoting that “If you’ve got a replacement wheel, hold as much as you put on them,” says Blackburn’s can get you a wheel. we’ve already got it ready to go. We’ll Jimmy. “Being made of wood, they’re Up to that point the service centers send it to you, you do the changeover more forgiving to the wheel as opposed weren’t even promoting it as an and send us back the damaged wheel,” to a metal rack that could actually scratch add-on product.” or damage the wheel. At any given time, says Jimmy.

The company sells 100 wheels The restoration that exceeds what can our inventory revolves around 100,000 for every wheel cover. Many rebe done at Blackburn’s is sent to different wheels.” furbished wheels in Blackburn’s inventory are OE wheels that were either rejected or are overruns. Its inventory also includes The Blackburns have positioned their company over the years 25,000 antique and classic wheels. to cover a wide variety of wholesale and consumer applicaBlackburn’s is currently in a state of transition. The company tions. The word is spreading that tire dealerships can utilize is firmly established as a leading regional provider of new, used Blackburn’s as a fast and thorough wheel source for customers’ and refurbished OE wheels. Now it is going national with that needs. Blackburn’s gets 50% of its business within a 100-mile distribution of OE wheels. radius, so the biggest area of potential growth is nationally.

To help make that happen, the company recently launched “We have our eyes way up in the sky,” says Todd Deranek, a revamped website (www.blackburnswheelfinder.com). The director of sales and marketing. “Now we’re in the process of site features an improved Wheel Finder function. going from a regional distributor to a national distributor.” ■

Under-promise, over-deliver

3 top sellers at Blackburn’s Hubcap & Wheel Wheel 2006 Mazda 6 17-inch alloy 2011 Camaro 20-inch polished alloy 2010 Impala 17-inch alloy

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Delivered cost from Blackburn’s $138.60 $226.10 $138.60

Suggested sell price $198 $389 $198

OE list price $393 $753 $718

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Mounting and balancing

A technological balancing act Mounting and balancing equipment and procedures evolve to handle today’s high-tech vehicles

By Bob Bissler

I

t’s a procedure that’s been performed on vehicles since they were called “horseless carriages.” Service technicians have been demounting, mounting and inflating tires for years.

For today’s modern automotive marvels, equally modern high-tech tire changing machines have made the process easier than in days past. But there are many factors that technicians must consider before attempting to demount, mount, inflate or balance a passenger or light truck tire.

Industry groups such as the Rubber Manufacturers Association (RMA) and the Tire Industry Association (TIA) help keep techs informed on the latest practices and procedures. Both groups have guidelines to make mounting and balancing tires a safe, efficient and profitable procedure (see www.rma.org and www.tireindustry.org).

And equipment suppliers are continually creating new and better equipment. Here’s a rundown of some of the equipment suppliers’ latest offerings.

Robert Bosch wheel balancer portfolio Robert Bosch LLC says its portfolio of advanced wheel balancers ranges from compact, tech-friendly balancers to sophisticated electronic and laser-actuated units.

The WBE 4110 compact wheel balancer offers an invisible weight mode for hiding weights behind spokes and a weight optimization mode that reads wheel imbalance.

Lastly, the WBE 4510 wheel balancer has a laser sensor that provides fully automated measurements for tire width, run-out and tire symmetry.

Corghi USA EM9380 wheel balancer Co r g h i U S A’s EM9380 wheel balancer has been specifically designed for the North American market. The main characteristics of this machine include ac- Corghi USA’s EM9380 wheel curacy, robustness balancer debuted at the 2011 and quick cycle speed, SEMA Show and was designed for the North American market.

Corghi reports.

The EM9380 electronic wheel balancer features a monitor for cars, lightweight transport vehicles and motor vehicles. Rapid and precise, it handles high work loads.

Hennessy Industries has added the BL300, BL400 and BL500 to its BaseLine by Coats tire changer family.

Bosch’s portfolio of wheel balancers range from compact, tech-friendly balancers to sophisticated electronic and laser-actuated units.

The WBE 4140 wheel balancer features an easy-to-read upright LCD monitor, with intuitive and straightforward steps illustrated on the monitor.

The WBE 4230 features an easy-to-read color LCD display and exact attachment of all concealed adhesive weights using the electronic Easyfit data recording arm.

The WBE 4430 offers automatic, precise and quick wheel data input via electronic data sensor arms, and features an Easyfix data recording arm for measuring rim diameter.

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New Coats BaseLine tire changer models Hennessy Industries has added three new models to its BaseLine by Coats tire changer family. The BL300, BL400 and BL500 are ideal for shops where tire service is an important, but not primary, source of business. All four BaseLine models offer reliable, economical alternatives to pre-owned equipment.

The BL300, BL400 and BL500 service both steel and alloy wheels. Each tire changer comes with an airpowered side bead loosener, and X-shaped tabletop and bead-sealing jets to assist with inflation.

The BL400 and BL500 also include a fully articulating Robo-Arm helper device to easily mount stiffer sidewall tires.

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Hunter TCX575 tire changer

Hunter Engineering Co.’s TCX575 tire changers now include the new PowerOut side-shovel bead loosener system. The PowerOut system provides fingertip beadloosening controls outside of the wheel on the shovel handle.

This ergonomic design eliminates the foot-pedal control Hunter’s ‘s TCX575 tire that often forces technicians changers now include the into awkward positions when new PowerOut side-shovel loosening beads, says Hunter. bead loosener system.

By operating the loosener at a more efficient and comfortable position, technicians gain additional power, speed and control.

Snap-on John Bean RFV 2000 Snap-on Equipment’s John Bean RFV 2000 Automated Diagnostic Wheel Balancer obtains the complete profile of the tire and wheel in one spin cycle. Patented optical imaging predicts if tire and wheel harmonics will interact with suspension harmonics to create vehicle vibrations.

The John Bean RFV 2000 incorporates “stripe of light” technology that provides advanced measuring processes to eliminate the need for mechanical measuring devices.

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With three-dimensional data obtained from optical cameras, the RFV 2000 provides a three-dimensional scaled color display of the tread, sidewall and wheel.

A weight for every need

When performing tire repair services, repairers still see a lot of lead wheel weights today.

Not for long. With anti-lead regulations gaining momentum in an evolving marketplace, lead alternatives are the wave of the future. Here are some of the choices to consider.

Snap-on’s RFV 2000 provides a three-dimensional scaled color display of the tread, sidewall and wheel.

3M Wheel Weight System The 3M Wheel Weight System combines a lead-free wheel balancing material with 3M Acrylic Foam Tape adhesive. The product provides an all-in-one, securely attached wheel weight balancing system.

The 3M Wheel Weight System is designed to have less impact on the environment than standard lead wheel weights. The product consists of a flexible, conformable material available in an easy-to-use, self-dispensing package used with a stand and cutting device.

Quik-Link: 800-687-1557 ext. 12114

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Mounting and balancing tion reduction than clip-on weights. The adhesive backing provides compatibility for flangeless, performance wheels and low-profile tires.

The product line is available in low-profile heights. While the weights are primarily for trucks, IMI does have an XACTBalance line for cars and light trucks.

The adhesive used to attach 3M wheel weights is designed to work on a variety of surfaces.

Features include 3M’s Attachment Tape technology for dependable attachment. The system provides an all-in-one, securely attached wheel weight balancing system.

IMI XACTBalance IMI’s XACTBalance truck weights consist of free-moving steel particles in a flexible thermoplastic shell.

The particles move and adjust to changing speed, load and tread wear by targeting the exact location of imbalance, for the life of the tire.

IMI says XACTBalance offers a 40% to 60% greater vibra-

XACTBalance truck weights have free-moving steel particles in a flexible thermoplastic shell.

Hennessy’s BADA Tape-A-Weights Hennessy Industries’ BADA division recently launched three new styles of steel Tape-A-Weight products. In addition to BADA’s 7026FE style of low-profile steel strip-and-roll products, the company now offers 7025-FET, 7025-FE and 7024-FE products.

The 7025 FET steel Tape-A-Weight product is 25 standard profile strips with Tape-On-Top strips of quarter-ounce segments. The 7025-FE steel Tape-AWeight product is 25 standard profile strips of quarter-ounce segments with no Tape-On-Top. The 7024-FE steel Tape-A-Weight product from the value line is 16 standard profile strips of quarter-ounce segments with economy coating and no Tape-On-Top. All three new Tape-A-Weight styles are manufactured at BADA’s Bowling Green, Ky., plant and feature BADA’s premium-quality adhesive backing, say Hennessy officials.

Perfect Equipment wheel weights Perfect Equipment Inc. offers a full catalog of weight types in steel and zinc, including clamp-on and adhesives,

Perfect Equipment’s steel clip-on wheel weights have a corrosion resistant coating.

3M delivers to OEMs Auto W8t Apply System applies wheel weights automatically In what may be a paradigm shift in the way wheel weights are attached during vehicle manufacturing, 3M Co. has partnered with Esys Corp. to develop the Auto W8t Apply System using 3M’s lead-free wheel weight material.

According to 3M Co.’s Kurt Schreiber, the system can put two 3M highly flexible, polymer composite wheel weights on a wheel in 10 seconds during the manufacturing process. “It’s a game changer,” says Schreiber, manager of 3M’s General Motors Corp. account. “For the first time, OEMs can finally automate the process in their assembly plants.”

Late last year, 3M announced that three GM plants are using the automated system on a limited basis. They are located in Arlington, Texas, Fairfax, Kan., and Oshawa, Ontario.

“We had to make sure the automated system was not only viable and sustainable,

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but also saved money,” says Schreiber.

“The new system allows you to robotically apply a wheel weight. You can’t do it with a traditional segmented wheel weight. Conceivably, with our cut-tolength material on a roll, you can get an exact balance every time.”

He adds that there will be additional assembly plants featuring the Auto W8t Apply System in 2012. The system is not exclusive to GM. Three other General Motors plants also are using 3M wheel weights for the first time, just not in a fully automated process. They are located in Lake Orion and Lansing, Mich., and Bowling Green, Ky. GM is not the only OEM to make the switch: BMW of North America LLC (in Esys designed this Auto W8t Apply System to enable robotic application of 3M Spartanburg, S.C.) and Ford Motor Co. (in Genk, Germany) also are new 3M wheel wheel weights in original equipment manufacturers’ assembly plants. weight customers.

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Mounting and balancing for light passenger vehicles all the way to heavy-duty equipment.

“We are finding in our market that there are huge misconceptions about the proper ways to install non-lead wheel weights,” says Greg Parker, marketing manager at Perfect Equipment Inc. “In the old days, you truly did just ‘bang on’ lead wheel weights. Wheels were mostly steel and lead is malleable.”

Parker says that as lead weights disappear, the industry needs to learn that zinc and steel clip-on wheel weights must be installed with a soft-head hammer to avoid damage, rather than a metal hammer.

Perfect Equipment has added the new Pvalue lineup of steel clip-on wheel weights to its product lineup.

Featuring a five-year corrosion resistant coating, an OE manufacturer approved clip design and a lower cost per unit, this lineup of products is positioned for the price conscious buyer.

The P-value series is available in all eight standard clip styles with ounce increments from 0.25 ounce to 3 ounces and gram increments from 5g to 60g.

aftermarket applications. The company also offers lead weights, while there is still a market for them. Plombco says it likely will produce more steel weights as lead disappears.

“Most of the corporate decisions that have been made with original equipment manufacturers have veered toward steel,” says Mark Aiken, Plombco vice president of sales and marketing. “What you see happening is a lot of the independents choosing zinc. Part of the reason for that is people look at a zinc weight and it looks like a lead weight, so for them it’s a more natural transition to go that way.”

Wurth’s most recent addition to its wheel weight line is steel 10- and 20-pound rolls in various increments.

Plombco’s lines of zinc and steel weights are made both for original equipment and the aftermarket.

Plombco Inc. zinc and steel weights Plombco Inc. offers a complete line of zinc and steel products for OE and

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Wurth strip/roll zinc and steel weights Wurth USA Inc. offers full-line wheel weight steel and zinc programs. The company’s wheel weights are available individually, in strips and as roll packaging.

Wurth’s wheel weight line offers steel 10– and 20-pound rolls in 1/4-ounce, 1/2-ounce and 5-gram increments. A mounting stand is optional. It is a nowaste, cutting, or measuring system with OE adhesive. The company says the most important feature to this addition is Wurth’s commitment to expanding non-lead options to customers.

“As suppliers we need to maintain our commitment to non-lead wheel weights and continue to drive programs which educate our customers on the benefits of non-lead wheel weights,” says Daniel Molinari, product manager. ■

MTD February 2012 2/14/12 11:06 AM

Counter intelligence

Make ’em earn it Show your sales team how a little moree gross profit every day adds up fastt

A

s a former regional vice president running a group of retail tire and automotive outlets, rarely a week went by that a store manager wasn’t asking me for an equipment upgrade or a new piece of equipment. The manager’s reasoning and promise was usually the same, “If I had this piece of equipment, blah-blah-blah... and we’d make more profit.” Today, I wish I had By Wayne Williams $10 for every $100 we wasted on equipment that either didn’t perform as promised, required consistent maintenance, or simply never caught on and was pushed into the corner of the shop and abandoned.

Once, while I was contemplating several equipment purchases, I was complaining to Mr. D, a retired Firestone West Coast regional director working three days a week for our company as an advisor, storyteller and voice of reason.

Mr. D said to me, “Make ’em earn it.” At first I thought he meant after the purchase, but he meant before the purchase.

Mr. D was talking about generating additional gross profit dollars before the purchase and immediately afterwards.

We operated a 12-bay store in Montclair, Calif., a highervolume store where the manager was asking for a second alignment machine. He was a determined, smart store manager, and a very profit-motivated individual. Back in the day, the alignment machine he wanted meant we’d have expensive concrete work on top of the cost of the machine.

To “earn it,” (the second alignment machine), we set a goal of generating additional gross profit ahead of our purchase through two means: additional “alignment” dollars, and additional “balancing” dollars.

Though the store did a good job in these categories, we set a goal of generating 20% of the purchase price of the project before we ordered the equipment, and 120 days after installation to pay the remaining 80%. We announced the goals to the sales and service team, and with a great deal of pride, the additional dollars starting flowing immediately.

We instituted a simple counter card program that read: FREE Rotation and Balance Check!!

We performed rotation and balance checks on vehicle after vehicle, charging only for rebalancing out-of-balance tires.

The store team monitored their results daily, and it became apparent rather quickly that we had better contact a cement

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contractor and the Hunter alignment sales rep because the dollars were rolling in.

And 120 days after the installation, the entire ti project j t was completely funded or had generated enough additional gross profit dollars that we proudly stated we owned the machine free and clear.

The team generated the dollars, made the extra sales effort and achieved its goal; they earned it. As with most organizations, there’s a grapevine; word got around, and it became standard practice for planned equipment purchases to have a plan to “earn it.”

I tell you this story because at the Specialty Equipment Manufacturers Association show in Las Vegas a few months ago, I stopped in to see several equipment manufacturers and check out the new advances in design and technology.

I was blown away. The technology, accuracy and ease of use that is built into some of today’s equipment is incredible.

A rep working the Snap-on booth was friendly and knowledgeable (not always a given) about a balancer and walked me through several processes. These machines are built to balance tire and wheel assemblies (and to print money).

I was around when the Chevy Corvette came with original equipment 16-inch tires, size 255/50R16. I remember thinking, “Could they get any bigger?” Today, the Corvette ZR1 comes with size 285/30R19 on the front and 335/25R20 on the rear. You may not be able to rotate them, but balance is more important than ever.

While watching the demonstration by the Snap-on rep, all I could think of was how to sell this service and how to make money with it.

The terminology he was using to explain the service and its benefits was making bells go off in my head. If this service can be effectively communicated to consumers at the sales counter (counter intelligence), there is a tremendous amount of gross profit available (low-hanging gross) on a worthwhile service.

I was thinking I would institute a simple counter card program (check out this counter card easel in the photo).

I’ve learned a lot from some great people in this business.

I learned how to make a profit in a retail store and how to make more profit year over year.

I’ve learned how to generate more gross profit with a little focus and a little additional effort. I’ve learned that a little more gross profit every day adds up fast.

I’ve learned you have to “earn it.” Thanks, Mr. D! ■ Wayne Williams is president of ExSell Marketing Inc., a “counter intelligence” firm based in La Habra, Calif. He can be reached at exsellmkting@gmail.com.

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Commercial Tire Dealer™

On the record with off-the-road tire makers They have big plans in 2012. Some might say GIANT

By Bob Ulrich

W

ould you consider a 20% increase in sales big?

Domestic replacement OTR tire sales were up that much in 2011 compared to 2010.

Pricing was up, too. The average price of an OTR tire in the United States rose 16.5%.

Coupled with the increase in tires, sales totaled $553 million last year.

Demand certainly outpaced supply. Bridgestone Americas Inc. broke ground on a radial OTR tire plant in South Carolina, and says it expects to produce large and giant tires in 2014. A number of other manufacturers have announced expansion plans for existing plants, including Titan Tire Corp. in Brazil.

Ah, but what will happen in 2012? To find out, Modern Tire Dealer asked top executives from OTR tire manufacturers to share their large and giant tire plans with you.

In addition, they boldly made predictions on what you can expect to happen in the OTR tire segment in the near term.

Six tire makers participated: Bridgestone, Double Coin Holdings Ltd., Yokohama Tire Corp., Goodyear Tire & Rubber Co., Michelin North America Inc. and Titan Tire.

(See the sidebar on the next page for more on the executives who answered the questions.)

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MTD: What are your company’s plans for the large and giant OTR tire market in 2012 in terms of new products?

Angie Jones (Bridgestone): Bridgestone has a number of new products rolling out in 2012. In particular for the large and giant OTR tire market, we will expand our line of the Firestone DuraLoad to include the 35/65-33 in both L4 and L5 depths.

The DuraLoad was first introduced in size 45/65-45, featuring a larger footprint, unique sidewall protection and a new design for extended wear life. Initial field results have been positive, with longer overall life and durability.

The patented sidewall protector has demonstrated its effectiveness in reducing sidewall damage from rock cuts and snags, reducing expensive removals.

Our new Premium Pattern in the 27.00R49 size is the VREP (for V-steel Rock E-Premium). The VREP features a unique tread pattern to offer longer tread life combined with a high durability casing to provide reduced cost per OTR market size: hour compared to traditional U.S. replacement OTR tire units rock patterns. shipped... 42 Aaron Murphy (Double Coin): In 2012, Double CSA and truck tires: Coin is in normal production It’s time to step up and become your of all radial OTR products fleet customers’ solution provider... 45

ALSO IN CTD

Commercially Viable... 49

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OTR tires and sizes up to 49-inch rim diameters. We’re MTD: Do you plan to increase large and/ U.S. REPLACEMENT in testing modes on both 37.00R57 and or giant OTR tire production?

OTR TIRE UNITS SHIPPED 40.00R57 E4 products and should see them Jones: Bridgestone Americas Inc. has 2011 265,000 in standard production in 2012. With our recently announced the construction of a 1.5 2010 223,850 testing procedures taking place in multiple million-square-foot Aiken ORR (off-road 2009 185,000 applications with multiple compounds to radial) manufacturing facility at a greenfield 2008 283,000 develop performance driven products, we site in the Sage Mill Industrial Park in Aiken won’t release the product until it meets County, S.C. The facility will manufacture Source: Modern Tire Dealer Facts Issues, 2009-2012.

Double Coin’s quality standards. We also large and ultra-large ORR tires, size range plan to announce new patterns and sizes 27.00R49 through 59/80R63. for our grader tire in 2012.

Additionally, through our Kaizan process of continual Gary Nash (Yokohama): In bias, some size expansion improvement, Bridgestone plans to continually optimize continues in “niche” large and giant OTR markets... to meet production in all of our OTR facilities globally, including our the needs of our customers. Radial expansion is on-going in OTR plant in Bloomington, Ill. large radial tires, with new products added each year. Giant Murphy: As the global market dictates, Double Coin will radial tire expansion, starting with 49-inch radials, is almost respond with the appropriate production levels. As we review ready for mass production. New products currently under industry and internal indicators for large and giant tire demand, development are 51- and 57-inch radials, which will take it tends to point to steady and strong demand in the future. some time. The 63-inch development is always a possibility.

Nash: Yes, the market demand, both U.S.A.-Mexico and John Hunt (Goodyear): We are proceeding with our conversion to our new RM line of large haulage OTR tires — 49-inch rim diameter to 63-inch rim diameter — which was introduced in 2010. We are adding molds to replace older designs. We also continue to ramp up production of our 63-inch rim diameter OTR tire, which was unveiled in 2011.

Bruce Besancon (Michelin): Last year, we unveiled the XDR2 haul truck tire at the CONEXPO-CON/AGG trade show in Las Vegas. In 2012, we expect to continue expanding this line by adding a wider range of sizes.

Paul Hawkins (Titan): We are expanding several of our giant OTR product lines in 2012 to provide a more robust set of sizes. Specifically, we are adding to our LDR 250 product line for the Caterpillar 994 loader. We are also adding the Large OTR tire sizes range from 29 to 49 inches. Giant OTR 46/90R57 to the MFT 007 line and a 33.00R51 and 40.00R57 tire sizes range from 45 inches (loader) to 63 inches (haulage). Some refer to the 63-inch tires as “super giant.” to the DTH4 line.

The major players in the U.S. replacement OTR tire market Our distinguished “panel” of OTR tire company executives who participated in this article are: • Angie Jones, general manager, mining and strategic services, the Bridgestone Commercial Solutions Division of Bridgestone Americas Inc.; • Aaron Murphy, vice president of China Manufacturers Alliance LLC, the U.S. subsidiary of Double Coin Holdings Ltd.; • Gary Nash, vice president, OTR sales, Yokohama Tire Corp.; • John Hunt, manager of sales and marketing, off-the-road tires, Goodyear Tire & Rubber Co.; • Bruce Besancon, director of marketing, North American earthmover tires, Michelin North America Inc.; and • Paul Hawkins, vice president of OTR sales, Titan Tire Corp.

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globally, has created a “severe shortage” in all large and giant OTR products, both bias and radial. The economic downturn in 2009 severely impacted production, which has been slow to recover due to re-training the work force that was reduced during the economic crisis. However, Yokohama has fully recovered, and now, production has improved dramatically — but not enough to meet U.S. and global demand. The production increase will come mostly in the radial sector.

Hunt: We do not disclose production capacity information.

Besancon: We are always evaluating the market and working to meet customer demand. In 2011, we announced a $200 million dollar expansion to increase tire building capacity.

Hawkins: Yes, we are increasing our capacity and will continue to do so every year until the demand is being met.

In talking to the major haul truck OEMs, they see their fleet sizes increasing by 50% over the next five years, which, if true, means a significant growth in replacement tire sales. These trucks use 51-inch and larger tires, so we’re ramping up our capacity in these sizes.

MTD: How would you describe global demand for OTR tires entering 2012?

Jones: We are seeing a steady increase in tire demand in

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OTR tires

Goodyear’s line of RM (for rock mining) giant OTR haulage tires are available in 49- through 63-inch sizes.

An Akuret accounting Del-Nat brands 25-inch OTR tires Del-Nat Tire Corp. doesn’t participate in the large and giant OTR tire markets with its own brand, choosing to partner with Guizhou Tire Co. Ltd. (bias) and China Manufacturers Alliance LLC (radial) instead.

However, according to Randy Gaetz, vice president of sales and marketing, the company is heavily involved in the small OTR tire market with its Akuret line.

“We will continue to stock and sell a full line of 25-inch radial and bias OTR tires,” he says. “North American demand continues to be strong, especially in the 25-inch segments.”

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the large and giant sectors driven by strong commodity prices and continued growth in developing countries.

Small and medium demand is also increasing. Bridgestone is investing over $2.5 billion in combined capacity expansions to help prepare for the demand in the OTR market.

Murphy: Global demand in both the OEM and replacement channels is strong for Double Coin products.

Nash: Extremely strong. The global demand is making it difficult to supply the needs of U.S.A. and Mexico customers. However, we have been able to manage due to customer loyalty.

Hunt: Demand for large haulage tires has been very robust globally, primarily due to the up-sizing of fleets to larger trucks and the expansion of open pit mining projects. Demand for smaller sizes has been strong, as well, driven by OEM forecasts for more mining production over the next several years.

Besancon: Global demand for all mined commodities was strong in 2011, which resulted in continued high levels of tire demand. As we move into 2012, we continue to see this trend but are always keeping our

eyes and ears open to see which way the market is headed.

Hawkins: Global demand is very strong. The mining companies are ramping up a lot of new projects that were slowed down in 2009 when the recession first hit. So, it was a great year for us and everyone else that supplies products to the mining industry.

MTD: How about the demand for off-the-road tires here in the U.S.?

Jones: In some sectors, U.S. demand is higher than in other countries, but the best way to look at the issue is global demand.

Tire manufacturers are all facing the same increasing global demand; U.S. needs are a big part of that demand.

Murphy: North American demand for small radial OTR products was steady through 2011. Based on our forecasts from Double Coin customers, it will stay that way in 2012. As for the large and giant tire needs, (demand is) good, and dealers/ users are excited about our upcoming offerings.

Nash: It continues to be extremely strong, with back orders increasing each month. Our parent company, Yokohama Rubber Co. Ltd., continues to support the U.S. and Mexico markets.

However, supply continues to be limited due to global demand.

Hunt: North American demand is following the same path as global demand. Open pit mining production is up in the United States, but the majority of growth has been in Canada.

Besancon: The U.S. market has rebounded from 2009 and, in 2011, continued to see demand rise.

Hawkins: U.S. demand is also very strong. Nearly all of the market segments we serve have shown a strong demand with the exception of home building and aggregates, but we’re beginning to see them rebound as well. ■

MTD February 2012 2/14/12 11:13 AM

CSA program

CSA and truck tires It’s time to step up and become your fleet customers’ solution provider

By Kevin Rohlwing

I

f you spend any time with fleets, you’ve probably heard about the CSA program, or Compliance, Safety, Accountability. CSA is the new initiative from the Federal Motor Carrier Safety Administration (FMCSA) to measure the on-road safety performance of carriers and drivers. Unlike the old SafeStat system that was based on out-of-service violations, crash reports and certain moving violations, CSA uses data gathered from all roadside inspections to assign a Safety Management System (SMS) score in seven different BASIC areas. BASIC stands for the following Behavior Analysis and Safety Improvement Categories: • Unsafe driving, which is focused on things like speeding, reckless driving, improper lane change and inattention.

• Fatigued driving, which centers on hours-of-service violations and incomplete or inaccurate log books.

• Driver fitness, which addresses the lack of training, medical cards or experience.

• Controlled substances/alcohol, which covers the use or possession of drugs and/or alcohol including prescription medication.

• Vehicle maintenance, which is focused on the inspection criteria outlined by FMCSR Parts 393 and 396.

• Cargo-related, which looks at improperly secured, overloaded or spilled cargo.

• Crash indicator, which is based on the history that includes frequency and severity.

The ultimate goal of CSA, SMS and the BASIC areas is to reduce the number of commercial motor vehicle (CMV) accidents on our nation’s highways. By assigning a score in each BASIC, enforcement officials get a much clearer picture of the overall safety performance of the fleet.

Additionally, the drivers are also given an SMS score, and while it cannot be used to revoke a commercial drivers license (CDL), it can have a detrimental effect on future employability if the scores are poor.

In a nutshell, there is no place for a deficient fleet or driver to hide under CSA, which means both parties have a vested interest in operating vehicles safely.

Each BASIC category includes a series of violations that are assigned a severity rating that ranges from one to 10 with 10 being the most severe. Again, it’s important to recognize that CSA is designed to reduce accidents, so the

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FMCSA has determined that the 10-point violations are the most likely to result in a CMV crash. Here are some examples of violations that result in 10 points: • • • • • • • •

Reckless driving.

Speeding 15 mph over the posted limit.

Speeding in a construction zone.

Operating a CMV while texting.

Driving after being declared out-of-service.

Driver uses or is in possession of drugs.

Release of hazardous material from a package or container.

Package not secured in the vehicle.

As you can see, most of the 10-point violations are directly related to and/or under the control of the driver. Under the old SafeStat system, most of these offenses would not have resulted in any penalties unless there was an accident.

With CSA, every moving violation and inspection that takes place on the side of the road or at a weigh station has the potential for serious consequences for the driver/fleet that is operating a vehicle in an unsafe manner/condition or transporting cargo that is not properly secured.

While the vehicle maintenance BASIC is the only one of the seven categories that is more or less under the direct control of the carrier, drivers are still responsible for conducting the inspections using the criteria in Federal Motor Carrier Safety Regulation (FMCSR) Parts 393, 396 and Appendix G to Subchapter B which covers the Minimum Periodic Inspection Standards for new tires and retreads. For a complete listing of these inspection guidelines, visit the rules and regulations sections of the website www.fmcsa.dot.gov.

Another important point that must be made when

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CSA program discussing the changes that are associated with CSA is the fact that every vehicle maintenance violation stays with the fleet for a period of 24 months.

Like I said before, there is no place to hide under this new program, so a fleet that historically operates poorly maintained equipment has virtually no hope to improve its SMS scores unless it makes significant changes to its maintenance program.

And since the SMS score is a percentile that ranks the fleets in comparison to other carriers of similar size, it will take months (if not years) of clean inspections for a carrier to noticeably reduce its score.

The most severe tire violations are assessed eight points because FMCSR has determined that they are more likely to lead to a CMV accident. The eight-point violations are as follows: • • • • • • • •

Flat tire or fabric exposed.

Ply or belt material exposed.

Tread and/or sidewall separation.

Flat tire and/or audible air leak.

Cut exposing ply and/or belt material.

Steer tire tread depth less than 4/32-inch.

Drive, trailer, dolly tread depth less than 2/32-inch.

Bus tire regrooved/retreaded on front axle.

Unfortunately, neither FMCSR nor CSA specifically defines any of the violations so one enforcement officer’s definition of a flat tire may differ from another. The Commercial Vehicle Safety Alliance (CVSA) is the organization that sets the North American standard out-of-service criteria and they occasionally refer to FMCSA regulations.

The 2011 handbook states, “FMCSR code references... are simply recommendations to help inspectors find an appropriate citation.” CVSA does not use the term “flat tire,” but the

handbook does reference FMCSR 393.75(a)(3) which simply says, “No motor vehicle shall be operated on any tire that is flat or has an audible leak.”

The CVSA criteria that refers to this regulation identifies an out-of-service tire as one that, “has noticeable (e.g. can be heard or felt) leak, or has 50% or less of the maximum inflation pressure marked on the tire sidewall.”

Making matters even more complicated is the fact that this verbiage appears in the CVSA handbook immediately following the 50% rule, “NOTE: Measure tire air pressure only if there is evidence the tire is under-inflated.”

Of course, the guidelines for evidence of under inflation are also completely subjective, so an officer can pull out the old boot-o-meter and use it to establish probable cause for a pressure check. The bottom line is that the generally accepted definition of a flat tire is 50% or less of the maximum inflation molded on the sidewall regardless of the load being carried.

But the confusion and vague nature surrounding tire violations do not stop with the eight-point flat tire condition. Here are the three-point tire violations: • • • •

Regrooved tire on front axle.

Tire load weight rating /under-inflated.

Weight carried exceeds tire load limit.

Tire under-inflated.

Like flat tires in the eight-point category, the three-point under-inflated tires are equally undefined. This becomes particularly troublesome for fleets that run inflation pressures that are lower than the maximum limits molded on the sidewalls of the tires.

Technically, a CMV cannot carry more than 20,000 pounds on an axle and no more than 34,000 pounds on tandem axles.

While there are no exposed sidewall cables on this injury so it cannot be cited for a violation, it should still be submitted for a spot repair.

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If this tire develops a sidewall bulge after inflation, the blue triangle will inform the officer that it is the result of a repair so the only question will be whether it is within the 3/8-inch limitation. Without the blue triangle, it is another eight points.

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CSA program Another issue that must be addressed is the “pencil bulge” that can occur in the sidewall as the result of a puncture repair.

While the industry is getting closer to releasing guidelines for reinforced shoulder repairs, will commercial tire dealers be creating more problems for their customers when these properly installed repairs result in a small sidewall bulge that the aggressive officer defines as a sidewall separation?

CVSA references 393.75(a)(2) when it identifies an out-of-service tire as, “Any tire with visually observable bump or knot apparently related to tread or sidewall separation.”

Then the following verbiage appears in the 2011 handbook, “EXCEPTION: A bulge (due to a repair) of up to 3/8-inch (9.5 mm) in height is allowed. The bulge may sometimes be identified by a blue triangular label in the immediate vicinity.” Vulcanizing these blue triangles on the sidewall is not commonplace in the truck tire repair industry, but I believe that they are more important than ever now that CSA has changed the rules for drivers and fleets.

Additionally, since the repair technician cannot determine if a puncture repair will result in a sidewall bulge, the best practice may be to Here is another example of a truck tire that does not appear to be a install blue triangles on both sidewalls in the area safety violation, but the appearance is severe enough to cause most law enforcement officials to take a closer look. of every repair just in case. After all, a sidewall bulge associated with a section repair is relatively According to the Tire and Rim Association (TRA) Yearbook, easy to identify as opposed to a standard “plug and patch” that a 295/75R22.5 Load Range G tire in a dual application can may not be visible to the average person. carry 4,300 pounds at 75 psi, which is suffi cient to carry the maximum allowable weight of 4,250 pounds per tire in Education is the solution a tandem application. That same Load Range G tire has a CSA is not necessarily going to change the procedures for maximum load of 5,675 pounds at 110 psi. retreading and repairing tires. But it is already changing the So using the CVSA and FMCSR definitions, a tire would be way that tires and retreads are inspected after they are placed unable to support the load below 75 psi and becomes flat at in service.

55 psi. Change the vehicle to a single axle and the minimum Minor cosmetic issues that were overlooked in the past have inflation pressure for the maximum load becomes 95 psi while become much more important under the new SMS. the flat pressure of 55 psi does not change. Confused? You And while FMCSA does not specifically define every BASIC, haven’t seen anything yet! the CVSA already has out-of-service definitions in place that In another example, if a cut in the tire or retread does enforcement officials have used for years. not visibly expose the ply material but after probing the cut Education appears to be the solution and the industry is with an awl the officer discovers that steel is still technically doing everything it can to get the word out to drivers and exposed, is that still eight points against the fleet and driver? the law enforcement community. But the commercial tire This should ultimately result in the increase of spot and dealers and retreaders must also recognize that they play a reinforcement repairs as fleets attempt to limit the number more important role in helping their fleet customers comply of tire-related violations. with CSA guidelines.

And does a small void or crack at the edge of the bond line In the past, tires and retreads that were in a marginal condion a precure retread constitute a tread separation? Without tion posed minimal risk to the carrier. specific definitions of “exposed” or “separation,” it’s reasonNow that the rules have changed and the consequences able to assume that some enforcement officials will just have become more severe, it’s time for dealers and retreaders assess the eight points even though the industry would not to step up to the plate and become solution providers rather consider something that is minor or cosmetic to be a major than just another supplier. ■ safety hazard. Precure retreaders will have to be more careful than ever during final inspection because even the slightest Kevin Rohlwing is senior vice president of training for the Tire imperfection at the bond line may be enough for an officer Industry Association (TIA). He can be reached via e-mail at to issue a citation. krohlwing@tireindustry.org.

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Business insight

Leave your store!

How SalesMinded dealers make prospecting calls that pay off

By Doug Trenary

was using for new tires and service on his cars. First call in November, nothing — the owner wasn’t in, and Trent could never make a better teaching point than to offer told me he really wasn’t planning on going back. But some real results — increased sales, profits and new Trent got some fresh wind in his sails after the December customers with their new dollars — that several retail training meeting. He made a SalesMinded decision and store managers shared with me recently. It happened at started both calling on the phone and calling on that same owner four additional times the following week — and nothing.

Then he got a phone call from the lot owner. His current shop could not turn a car around on the day he needed it to deliver to a customer. But Trent and his store team could — he picked up the car and his service team turned it around and delivered it back in two hours. OK, no big deal, right? Wrong. The lot owner was so happy he immediately sent over 20 additional cars for a mix of tires and service — and a whopping grand total of 164 cars in December!

Think Trent’s call persistence and the performance of his store service team made a difference? Check this out: The lot owner spent $25,000 in December, and $15,000 of that went to Trent’s store’s bottom line! And that’s not all. Not only is that pace continuing, but the lot owner also gives Trent’s business card to each customer who buys a car and tells Sometimes you have to step up to the plate to spur growth for your business. them Trent’s store is the best when they need tires and service! a training session for one of my independent tire dealer Here are a few more prospecting success stories from customers, a client who has 12 stores. the session.

We had completed his first store manager’s training Skip S. also has already opened several new accounts. In session in December, and this was the follow-up session. one of them, he got out of the store and called on a plumbThe first step of the day was having each store manager ing business that the dealership had used for some work. stand up and present the results of his Personal Action Skip had never met the owner, so he made the sales call.

Plan committed to in December. At that training session, Net result: $3,000 in service sales on one of the plumbing we focused on issues like leading/empowering your store company’s trucks, and two alignments from two employees team, the power and value of world-class service and of the same company. I suggested to Skip to take a pizza prospecting for new business. lunch over for the whole company, and give out his card Trent W. really never had made any outside sales calls, and maybe some coupons. He’s in the process of setting that but got fired up and made a commitment to do just that up at this writing. Skip’s targets: The remaining 11 trucks in December after our meeting. He had, however, called in the fleet and the remaining 13 employees’ personal cars on a used car lot a couple of blocks away in November to and trucks. Pretty powerful prospecting! talk with the owner and do some discovery on who he Mark S. also made some commitments to action at

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MTD February 2012 2/14/12 11:28 AM

the December training meeting — and followed through. He sat down and made a prospect list of 10 key companies in the area — all small businesses. Then he set aside half a day each Wednesday to go out and make sales calls. Then he did follow-ups, put together tire and service proposals, met with his store service team to discuss his new initiative, and asked each new contact he was able to make for their business.

Mark’s results at this writing since December: $2,800 in new sales from four new accounts — and the commitment to get their repeat business. Here’s the best part: Mark now has a new “accountability partner” — his store team! They eagerly ask him each Wednesday after he returns to the store: “How did it go — did you get us any new business?”

Everyone’s excited with the new work, and attitudes and teamwork are completely different. Mark told me he would now never let his team down. Translation: He’s now in the business of making prospecting calls each week that are yielding new, profitable business.

He told me, “I’m not going to sit around anymore and just wait for customers to come in — I’m going out to drive them in!” Powerful.

Here are the key SalesMind points to take from these incredible stories, and I’m going to write a follow-up column next month to detail out each important point: • Make a fresh commitment as a store manager (and the same if you or your team are in wholesale and commercial) to a prospecting/sales call campaign to local businesses/fleet prospects in your area.

• Get your store team empowered to handle the reins when you are out making calls and quit making excuses that “I just have to be in the store.”

• Obviously, take your business cards, a pad for notes, and maybe a coupon or special for 10% off an oil change or alignment — or a special deal sheet on new tires.

• Start in the morning first thing on your call day to get the calls in — and don’t put it off until 4 p.m. or you’ll never do it!

• Prepare the questions in writing you’ll ask those you meet inside the business — how many employees, fleet cars or

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trucks (if they have them), who they use for tires and service, etc.

• Ask for the owner — start at the top!

He or she is the one who makes the buying decisions and gives you permission to make a sales presentation to the staff.

• Finally, deal with the emotions of prospecting on new businesses. Picture yourself going in to just “visit.”

Visiting people is no big deal. That’s better than picturing in your mind that you have to make a cold call!

In one way I’m amazed at results like this — but in another, I’m not. Because I know for a fact if you make outside sales calls, somebody will buy. Take a swing at it!

The great thing is that your company can get these amazing results, too.

My pledge to you is your sales and profits will take a nice jump if you can get yourself or your store managers to just leave the store! ■ Doug Trenary, president of Doug Trenary’s Fast-Track Inc., is an award-winning author, speaker and teacher who has helped companies of multiple sizes, including independent tire dealerships, increase sales and productivity since 1985. His book, The SalesMind, focuses on how to establish strong positions with yourself, your buyers — and your time.

E-mail Trenary at info@dougtrenary.com or call (404) 262-3339.

Trenary’s book is available for purchase at www.amazon.com.

Quik-Link: 800-687-1557 ext. 12122

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2/14/12 11:28 AM

Business insight

A Twittering tire dealer – you are kidding, right?

Twitter can be a silly waste of time. But, the mere fact that it exists means it can make you money. Here are some things to consider

By Roger McManus

L

et’s be honest from the start. You do not care about Twitter. Despite all of those who promote the efficacy of “social media,” you sort of laugh at the idea of being Tweeted what someone did on their lunch hour. It is laughable, really.

Unless they were thinking about shopping for tires on their lunch hour. That might interest you. But, really, how often does that happen — and, who is going to endure 2,000 Tweets to see that one? Well, set that aside for a minute, because it might not be so laughable — or impossible — in a few minutes.

Let’s get back to our cynical reality: You don’t really care a thing about Twitter itself. That is, of course, unless it is a means to an end. And, that “end” is growing your business by whatever means possible.

You have heard how “every business needs to be on Twitter,” but you have just not ever quite seen how it could work for you. Business people who are not currently actively using Twitter fall into three categories: 1. They consider it a silly waste of time and have never given it any serious consideration.

2. They tried it and found it a silly waste of time and gave up on it.

3. Or they have an idea it might not be a silly waste of time, but are still trying to find time to learn how to do it effectively.

Surprise! It might not be a silly waste of time, after all.

I should tell you that I came from the “silly waste of time” camp, myself. But I have become a convert. Let me offer you a few examples of Twitter conversations I had previously considered “silly wastes of time.”

“I love Mexican food!”

“My bookkeeper is so far behind! It is driving me crazy.”

“The family is headed to Arizona next month. What’s there to do besides the Grand Canyon?”

“I need a new POS system and I am overwhelmed!”

“Response to our last direct mail piece was terrible!”

“Chrissie is looking at where to go to college. Thinking about State, but wants something smaller.”

“My tires are looking terrible! May not pass inspection.”

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All of this “boring stuff ” is personal small talk, randomly distributed to a broad range of people who may or, more likely, may not care one whit about what is being said.

But, if you are the owner of a Mexican restaurant, temp service, travel agency, retail electronics business, local ad agency or the admissions director of a small local college, such “small talk” would not be so boring, would it? And, that last comment about shopping for tires might get you to sit a little taller in your chair.

The fact is, you can search for these types of messages — even with geographic limitations — to find people in conversation about your specific area of interest. And, in modern Internet protocol, it is not considered rude to “butt into” a conversation at any time.

More about ‘small talk’

So many people scoff at Twitter as a lot of electronic “small talk.” That is as opposed to all those serious e-mails people pound out every day, of course. Or, the scholarly messages shared on Facebook. But, the fact is, Twitter is far more “normal” in human communication than either of those. Take, for example, a typical meeting of friends introducing someone new. The conversation might go something like this.

“Hey, Joe. Meet Pete.”

“Hey, Pete. Where do you live?”

“We live over in Pleasant Ridge, not far from the big mall.”

“Oh, Sally and I were over there last month. There was this great little Mexican restaurant. Amazing!”

“You must mean Pedro’s. Yeah, we love it there! Did you ever try their sopapillas? They are great!”

“No, we rarely have any room for dessert.”

Not exactly a serious discussion about the state of the world. But, Joe and Pete found some common ground on which to base further discussion. Without that, Joe and Pete meet and pass without connecting at all.

Small talk is how humans interact! It sounds very normal when it happens in the natural flow of life. Yet, it feels odd when you are doing it on the Internet. That is unless you understand that, by doing it using Twitter, you get the chance to inject yourself, your personality and your opinions into conversations with people whom you would never otherwise meet. It completely shifts the mind-set about marketing online.

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2/14/12 11:29 AM

Business insight Take the conversation between Joe and Pete a step further.

Suppose you were walking by and overheard the conversation about Mexican food. Suppose further, you owned a Mexican restaurant of your own. It would not be totally unheard of to grab a couple of business cards and interject, “Hi, guys, I overheard you talking about one of my favorite subjects. If you are ever in the Kenwood area, drop in to see me. We might get you to start talking about us!”

Making “small talk” on Twitter is a very highly leveraged way to talk “normally” to thousands of people at one time.

Furthermore, it allows you to instantly jump in on conversations relevant to your business!

Pricking up your ears

Spencer is an old dog we rescued from the shelter a few years ago. He likes to sleep on the hassock in front of my chair. He can be completely asleep and some small sound will make his ears pop up. He may not even open his eyes, but his ears are like radar.

Humans do that, too, even if they don’t know it. I lived most of my life in Greensboro, N.C. I live in Las Vegas now.

With the tourists and conventioneers in town, every so often I will hear “North Carolina” or “Greensboro” or even another North Carolina city. Depending on the situation, of course, I will quite often stop and inject myself into the conversation by asking, “Who’s from North Carolina here?” It is a friendly, comfortable way of meeting strangers. Occasionally, these conversations extend themselves into friendships.

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If people had been talking about Seattle, I could have heard them just the same, I just wouldn’t notice. And so it is with Twitter. Decide what you want to “hear” and go find new friends. They could become customers.

There is much to learn

There is not enough space in this article to teach you how all this works. But there are tons of resources online that will take care of that. The point of this article is to clarify why Twitter can be an important net in which you can catch lots of new customers. It is not all just a silly waste of time.

Amazing fact: You can actually hire “ears” As I was preparing this article, I was doing a little research.

It turns out there are actually services that will monitor traffic on Twitter and immediately respond on your behalf. They do this locally, regionally or nationally after gaining enough information about your business to pull it off.

One tire industry-specific source of such “ears” is Wayne Croswell of WECnology LLC (wayne@WECnology.com), another Modern Tire Dealer contributing writer. ■ McManus is author of Entrepreneurial Insanity in the Tire Industry, a recently published book that challenges business owners to examine why they opened their businesses and if they are achieving the personal freedom that business ownership was supposed to deliver. It is available at www.EnSanityPress.com or from Amazon. You can write to McManus at roger@ensanitypress.com or read more at www.TheTireBusiness.biz.

MTD February 2012 2/14/12 11:29 AM

TPMS

Crossfire service aims to please Replace valve stem sealing grommets when performing TPMS service SUBJECT VEHICLE: 2005-08 Chrysler Crossfire.

RELEARN PROCEDURE? Yes, directions follow.

SPECIAL TOOLS NEEDED? Yes, a Chrysler DRB-III scan tool; a Relearn Magnet (8821).

The tire pressure monitoring system (TPMS) on the 2005-08 Chrysler Group LLC Crossfire utilizes a warning light in the instrument cluster and transmitters that are located in the valve stem of each tire. The transmitters communicate the tire pressure condition to the Universal Garage Door Opener/ tire pressure monitor (TPM) module, which is located in the headliner near the inside rearview mirror.

This module has a microprocessor controller that can monitor the transmissions from tire pressure sensors/transmitters any time the ignition switch is in the “on� position. If a tire has low air pressure, an indicator light on the instrument cluster is illuminated. The TPMS does not determine which tire has a low pressure condition.

The TPMS operates by monitoring a radio frequency transmission from the tire pressure sensor/transmitters located in each wheel (integrated with the valve stem). When a vehicle reaches a speed of 20 mph, centrifugal force created by the wheels rotating closes a roll switch inside each sensor, powering up the circuitry. To facilitate transmitting the radio signal to the module, the valve stem acts as the antenna for the tire pressure sensor/transmitter.

To remove a sensor, follow these steps.

1. Remove the tire and wheel assembly from the vehicle.

Remove the balancing weights from the wheel. Remove the cap from the valve stem. Remove the core from the valve stem. Allow the tire to fully deflate. CAUTION: The tire pressure sensor must be removed from the wheel and dropped into the tire prior to breaking the bead and demounting the tire. Failure to do this will greatly increase the risk of damaging the sensor when servicing the tire.

2. Remove the nut mounting the valve stem of the tire pressure sensor to the wheel. Drop the sensor into the tire. CAUTION: When breaking the top and bottom bead of the tire off the wheel, care must be used so the bead breaking mechanism on the tire changer does not damage the wheel. This includes the surface of the wheel flange on the inside of the wheel.

3. Using the tire changer manufacturer’s procedure, first break down

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Figure 1

Figure 2

the upper bead of the tire. Then break down the bottom bead of the tire. CAUTION: When demounting the upper tire bead from the wheel, the proper procedure must be used. Not using the proper procedure will result in damage to the wheel and tire.

4. Demount the upper bead of the tire from the wheel. The upper bead must be fully demounted from the wheel to remove the tire pressure sensor from the inside of the tire.

The bottom bead of the tire does not need to be removed from the wheel. Pull upward on the tire. Reach inside the tire and remove the tire pressure sensor.

Quik-Link: 800-687-1557 ext. 12123

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TPMS To install a sensor, follow these steps.

NOTE: When installing a tire pressure sensor, replace the sealing grommet at the valve stem base before installing the sensor in the wheel. Also, be sure that the surface of the wheel that the grommet seals against is clean and not damaged.

1. Wipe the area clean where the sensor sealing grommet contacts the wheel.

Make sure the surface of the wheel is not damaged. NOTE: Once tightened, the gap between the sensor and the wheel must be even on both sides as shown in Figure 2. If the sensor rotates (clockwise), damage to the sensor

Figure 3

can occur when mounting the tire.

Tighten the nut to 35 in.-lbs. (4 N.m).

2. Install the tire pressure sensor on the wheel. See Figure 1. Install the special sensor mounting nut. When tightening the tire pressure sensor nut, hold the sensor so that it does not rotate.

3. Mount the upper bead of the tire on the wheel. Inflate tire(s) to the proper specification. Install the original or an OEM replacement valve stem cap on the valve stem. Using a soap solution, check that no air leak is present where the valve stem mounts to the wheel.

4. Balance the tire/wheel assembly, using the correct procedure for using the wheel flange mount and stick-on wheel weights. Install the wheel and tire assembly on the vehicle.

5. Register the identification code for the new tire pressure sensor into the TPMS module.

6. To verify the TPMS functionality, connect the Chrysler DRB-III scan tool to the vehicle. Drive the vehicle at 25 mph for at least two minutes.

While having an assistant monitor the scan tool, verify the operation of all four tire pressure sensors.

To retrain a sensor, follow these steps.

WARNING: In the following procedure, Relearn Magnet (8821) is used. Death or

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MTD_50-59.indd 58

serious injury can occur if magnetically sensitive devices are exposed to the retraining magnet used in the TPMS. Magnets can affect pacemakers.

NOTE: If a tire is changed (tire rotation), one or more tire pressure sensors fail, or if the TPMS module is replaced, the TPMS needs to relearn tire pressure sensor IDs. To perform this procedure, a Chrysler DRB-III scan tool and a Relearn Magnet (8821) must be used.

1. Connect the Chrysler DRB-III scan tool to the vehicle’s Data Link Connector located beneath the instrument panel, near the steering column.

2. Using the scan tool, access “Chassis System.”

3. Once in “Chassis System,” select “Miscellaneous Functions.”

4. Select “Train All Mode” from the menu selections. Select “Yes” to continue.

5. Place Relearn Magnet (8821) over the valve stem for the left front wheel.

6. Each sensor/transmitter will automatically sense the presence of the magnet and begin transmitting.

When the tire pressure sensor on each wheel has been programmed, the DRB-III will automatically beep and direct you to the next wheel to be programmed. Move the magnet to each of the remaining wheels as directed by the scan tool.

7. Remove the magnet from the last tire to be programmed (left rear wheel).

8. Once “Training Completed” is displayed, exit the program function screen and use the following to verify TPMS functionality. a. Verify TPMS module programming is complete by viewing the “Input/ Output Display” selection of the DRB-III and confirming the tire pressure sensors are trained. b. Verify TPMS module programming is complete by viewing the “Sensor Display” selection of the DRB-III and confirming the tire pressure sensor pressure readings are accurate. ■ Information for this column comes from Mitchell 1’s ”Tire Pressure Monitoring Systems Guide” for domestic and import vehicles through 2010.

Headquartered in Poway, Calif., Mitchell 1 has provided quality repair information solutions to the automotive industry for more than 80 years.

For more information, visit www.mitchell1.com.

MTD February 2012 2/14/12 11:29 AM

Focus on industry

X-Ice Xi3: White and green North American Michelin dealers get a grip on X-Ice in Quebec

By Bob Bissler

A

s part of its official launch of the new X-Ice Xi3 winter tire, Michelin North America Inc. brought 350 of its Canadian and U.S. dealers to Quebec, Canada, to test it in tough winter conditions.

The company brought in racing instructor Richard Spenard and his team of professional driving instructors to the Mecaglisse motorsports complex in Quebec’s Laurentian Mountains. There, each day for one week groups were given the opportunity to test the tire against leading competing tires.

Spenard’s team set up courses that included many of the road conditions northern drivers face in the winter: pure ice acceleration and stopping; snow covered driving with cornering; and ice and snow comparison driving on worn (to 4/32-inch) tires.

Dealers were also able to learn all the details of the new tire, and how it was designed to be an improvement of its predecessors, the X-Ice 1 launched in 2004 and the X-Ice 2, launched in 2008.

The new X-Ice Xi3 is manufactured using third-generation, winter-grip technology. On ice, the tire delivers 17% stronger grip and stops 7% shorter. On snow, the tire provides 6% better traction and stops 3% shorter.

“In developing the X-Ice Xi3, we researched consumers worldwide on what they expect in a winter tire,” says Stephanie Beaudoin, training and development manager for Michelin North America (Canada) Inc. “What we learned is that they want good snow braking, good ice braking and good traction. They also want enduring performance, long mileage and good highway handling.

Another big factor: they want the tire to be ‘green.’”

In order to meet the green requirement, Michelin engineers designed the tire with the company’s Green X technology. The result is a tire that is highly efficient, with low rolling resistance, for reduced carbon monoxide emissions.

“Longevity is imporStephanie Beaudoin, training tant for consumers; it’s and development manager for Michelin North America one of the top criteria (Canada) Inc., points out the in shopping,” says Ron differences between the XMargadonna, Michelin’s Ice Xi3 and its main competisenior technical marketing tors during a ride and drive manager. “Longevity is event in Quebec, Canada.

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Michelin features four key technologies in the X-Ice Xi3’s tread block: the Cross Z sipe enables stable handling; the Block Edge provides grip on snow and ice; Micro-Pumps absorb water, which improves tread contact; and FleX-Ice, a rubber silica-based compound for enhanced braking.

one of our pillars and we take longevity very seriously. As you look at these tires, others get to the 4/32-inch level of wear much more quickly than the X-Ice 3.”

Michelin says it achieves a higher level of longevity with special tread block technology. This includes the Cross Z sipe that enables stable handling and the Block Edge that provides more grip on snow and ice.

In addition, Micro-Pumps absorb water, which improves tread contact. FleX-Ice, a rubber silica-based compound, offers unsurpassed braking, says Michelin.

Backed by a 40,000-mile limited tread wear warranty, the tire will be available this fall in 33 14- through 18-inch sizes. Michelin adds that the sizes will cover more than 90% of the Canadian and American winter market for cars and mini-vans — with complementary dimensions still available in X-Ice Xi2 tires. ■

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Focus on industry

Hankook prepares to launch ‘The One’ dealer program Meeting attendees are updated on new plants, tires and marketing plans

By Greg Smith

A

new associate dealer program, strong demand and fill rate issues highlighted Hankook Tire America Corp.’s annual dealer meeting in Punta Canta, Dominican Republic, in January.

Code named “The One,” Hankook’s associate dealer program is set to launch April 1, with sign-ups taking place during February and March. Hankook executives told Modern Tire Dealer that planning for this program started in the second quarter of 2011. Details are still being worked out for the program.

Dealers were told that accrued co-op funds would be utilized to help provide marketing support at the retail dealer level. There will be three different levels of support, based on sales volume and product pattern sales for associate dealers.

Associate dealer incentives for the program will include travel awards and promotional incentives. Distributors will benefit due to increased brand awareness at the retail store level, inCourtland Michaels told dealers creasing premium product OE placements continue to play sales and being able to utilize and important role in consummotivational tools for the ers’ brand awareness. dealers to sell more Hankook tires, Hankook dealers were told. The program will have its own website that will allow distributors to monitor their associate dealers’ progress toward goals. The site also will feature an online training component and product information. Dealers can receive POS materials as well as use the site’s built-in ad builder.

Executive outlook

Soo Il Lee, company president, summed up the 2011 tire industry when he said, “I believe it was kind of similar to riding a roller coaster last year; up one time and down the next.”

Lee told Hankook dealers that 2011 saw record sales for Hankook Tire America Corp. — $1.2 billion in U.S. and Canada with $1 billion in the U.S. alone — as well as the parent company, Hankook Tire Co. Ltd., totaling sales of nearly $5.9 billion globally. Much of the increase for sales

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came due to price increases. Lee said unit increases were probably in the 5% range.

For 2012, Hankook is looking to have sales of $1.4 billion in the U.S. and Canada, with U.S. sales being about $1.2 billion.

Despite this success, Lee said “the cost of raw materials skyrocketed throughout 2011, although currently it has stabilized a little bit. Tire makers, consequently, could not help but increase their prices, affecting consumer demand and subsequently sales volume.

“I admit that last year our fill-rate was less than I would have liked, and I would like to apologize for that. In 2012, we will do everything we can; increase our production capacity and allocation to this market, make investments in bigger and better distribution centers, and operate our new back-order system,” Lee told dealers.

Lee continued to express his desire to have “our own factory located in the Americas” which would be an ultimate effort to improve Hankook’s service to its customers.

No time frame for the plant was mentioned, Lee said a second associate brand (Aurora is the other) could however. be launched in the fourth quarter, Currently, Hankook depending on Chinese tire tariffs. has two new plants under construction, with a total investment for both of about $1.3 billion. The Indonesian plant will begin shipping passenger and light truck tires in late 2012. Once fully running in 2014, this plant will produce 5 million tires per year. Hankook has said that 50% of the production will be targeted for North America.

The other plant started construction in the first quarter of 2011 and should be completed by 2015. The plant, located in China, will produce 11.5 million passenger, truck and bus tires per year when fully operational. All the tires are to be used for Chinese consumption. The company believes that this capacity will free up other plants to redirect more product to North America.

Overall, Hankook Tire Co. Ltd. should have a total capacity of 90 million units this year, 93 million next year and a big increase to 103 million units in 2014.

MTD February 2012 2/14/12 11:47 AM

Courtland Michaels, director, corporate accounts, told dealers that original equipment placements continue to play a strong role for enhancing the brand among consumers. In 2011, the company had tires fitted on cars and light trucks that experienced a solid 10.26% increase in market share.

Future plans

Hankook will continue to invest in its marketing communications to build its brand. For 2011, the company increased spending by 75% over 2010 levels. For 2012, there will be a double digit increase, but not near the 75% level, according to Lee. The company is expanding its Major League Baseball home plate signage program to 26 teams, adding the New York Yankees, San Francisco Giants, Seattle Mariners and Los Angeles Angels for 2012.

“These aggressive and smart marketing investments will not only enhance our brand positioning, but also help your business with Hankook to be more successful,” Lee told dealers.

Lee finished his remarks at the meeting by emphasizing Hankook’s core business culture, “relationship and continuity.”

“As you know, the tire business is not

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a short-term lucrative business like the high-tech electronics or fashion industries. This business can only be successful by making long-term continuous efforts and giving steady and consistent satisfaction to all our partners.

“I believe that the pursuit of a short-lived, quick profit cannot succeed in our line of business.”

Lee also noted, “Actions speak louder than words... even though there is still a long way for us to reach the level of a top tier tire company, we will do our utmost efforts to get there, making you, our esteemed partners, successful with us.” ■

Quik-Link: 800-687-1557 ext. 12125

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Focus on dealers

Expand and deliver K&M Tire focuses on wholesale growth

By Bob Ulrich

K

&M Tire Inc. has 12 warehouses serving 21 states.

It needs more to properly service its dealers, says President Ken Langhals.

The warehouses are located in Delphos and Toledo, Ohio; Lincoln Park and Grand Rapids, Mich.; Chicago, Ill.; Madison, Wis.; Macon, Ga.; Minneapolis, Minn.; Bismarck, N.D.; Omaha, Neb.; Wichita, Kan.; and Des Moines, Iowa.

The company plans to open three more in 2012.

“We want to open one in central Nebraska because Omaha is right on the eastern border. We need another one in the Kansas City area because Wichita is probably

‘We’re looking for opportunities to grow.’ — Langhals 200 to 250 miles from Kansas City. For us to really service the Kansas City area, we need something in that area.

“The other is in the Fargo, N.D., area. Bismarck to any of our other locations is probably 600 miles. It’s up there by itself. We want something between Minneapolis and Bismarck.

North Dakota is really booming with the oil fields.”

Langhals says K&M is in talks with three different regional wholesalers.

“In 2012, I feel fairly confident we will come to an agreement with at least one. We’re looking for opportunities to grow.”

plans to increase the number of franchises to 403 by January 2013 through “calculated” growth. The keys are to: • support and recruit a high-caliber, upper echelon dealer base; • maintain exclusivity through a rigid dealer selection process; • implement continuous improvement processes; • build Mr. Tire brand recognition; • build consumer trust through retail excellence; and • create new and stronger vendor partner relationships.

“We’re looking at growing in existing states and hopefully bringing it into new states,” he said.

Mr. Tire dealers offer Cooper, Mastercraft, Continental, General and Hankook tires. Bonnie Marlow, assistant program/marketing manager, said K&M is looking at adding brands to the program.

K&M is backing the program with a new website and an emphasis on online marketing and branding. “It’s a cornerstone of the program to keep up on the latest trends in the industry,” said Wallick.

K&M Tire acquired the Mr. Tire program in 2010 when it purchased Triton Tire & Battery from Universal Cooperatives. ■

More Mr. Tire stores

K&M Tire welcomed 175 of its customers — including Mr. Tire dealers — to Las Vegas, Nev., for its annual dealer trade show. The event was held Jan. 19-20, 2012, at Bally’s Las Vegas Hotel & Casino.

There are 278 Mr. Tire franchise dealers in 17 states. Jeff Wallick, program/marketing manager, told the dealers in attendance that K&M

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Dan Lungrin, station manager for Hi Line Co-op in Elsie, Neb., looks over BKT implement tires (BKT offered $3 off its front and implement tires as part of a K&M trade show special). “Seventy percent of our business is fertilizing. So basically, we’re buying a lot for our own equipment and our customers.”

MTD February 2012 2/14/12 11:48 AM

Focus on industry

The g-Force Th g-F Force Sport Force Sportt COMP-2 Spo COMP COM P 2 tire P-2 tiire increases BFGoodrich Tires’ coverage in the UHP market to 82%.

The BFG Tweets are in

BFGoodrich tests the g-Force Sport COMP-2, asks Twitter followers to comment

M

ichelin North America Inc. recently launched the BFGoodrich g-Force Sport COMP-2, the newest tire in the BFGoodrich ultra-high performance

tire lineup.

At the company’s launch event held at the Auto Club Speedway in Fontana, Calif., tire dealers were invited to put the product through the paces of challenging road course and track conditions. They also were invited to visit the Twitter website and tweet about it at #BFGComp2.

Twitter poster CindiLux says, “Just finished day #5 of on track driving w/ the new #BFGComp2 tire at Calif Speedway.

Amazing NEW tire....wow.”

Poster RikDaddy was so excited he Tweeted he put together his own 14-minute-long in-car video from the #BFGComp2 tire testing event.

“Wet track with #BFGComp2 awesome! Feel sorry for the cones!” tweets gilly1a Craig Gilmour. Tweeter mself_21 Michael Self says, “Awesome day working with @BFGoodrichTires and the #bfgcomp2. The tire on a WRX STI is killer!”

While the Tweets are still coming in, the company is preparing for April 1, when the BFGoodrich g-Force Sport COMP-2 will be offered in 46 sizes ranging from 15 to 20 inches in diameter.

It replaces the BFGoodrich g-Force Sport tire.

The g-Force Sport COMP-2 lineup includes fitments for classic and modern muscle cars, sports cars, sports sedans, tuner and imports. An additional 12 sizes will be introduced to the market in September 2012 to offer complete coverage in the ultra-high performance category.

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“The current BFGoodrich g-Force Sport tread design was reviewed, analyzed and proven to be the optimal design for BFGoodrich Tires’ target consumer, target performances and new advanced ‘COMP-2’ compound,” says Andy Koury, brand category manager for ultra-high performance at BFGoodrich Tires. “While the tread design remains the same, we simplified the sidewall for a ‘racing’ look. It needs to look contemporary and sleek, but not be in the way. The new g-Force Sport COMP-2 provides a sleek look and, of course, upgraded performance.”

The BFGoodrich g-Force Sport COMP-2 compound and Performance Racing Core (PRC) — developed using many of BFGoodrich Tires’ racing technologies and compounds — resulted in 30% better wet grip and 8% better dry grip, offering precise control without sacrificing tread life, the company reports. It also offers optimum dry traction, short braking distance and cornering control in dry conditions.

“Advancements in compounding technologies have enabled us to achieve large improvements in traction in both wet and dry performances,” adds Koury. “We added a high horsepower compound and also upgraded the internal tire suspension to a new level with the Performance Racing Core to make sure all that power could make it to the ground. We strengthened, optimized and evolved the suspension system to increase steering response, rigidity and control to handle the new advanced compound.”

Michelin North America will support the launch with a $50 Mastercard gift card rebate promo that will run April 9 through May 7. ■

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Your turn

Greed is the reason tire prices are so high Editor’s note: After reading Editor Bob Ulrich’s November editorial on our website, www.moderntiredealer.com, many readers felt compelled to leave comments. Here is a sample. More Web reader comments will be presented in future issues of MTD. Dear Editor: Concerning your November 2011 edito-rial titled “Are tire prices too high? I say yes.”

I agree the price increases have to stop!

The manufacturers are killing the indepen-dent dealers like myself. (See a list of tiree price increases announced just this yearr on www.moderntiredealer.com).

The tire makers also have consistentlyy announced record sales and net profits.

CEO bonuses will probably reflect thosee profits at our and the consumer’s expense.

Profit is earned, not deserved. Somethingg is wrong with this picture.

By the way, I have been in the tire business for 39 years, since I was 14 years old. My father, Leroy, and I started our own retail operation June 1, 1987, almost 25 years ago. What a ride it’s been. I grew up in the business and it’s changed so much in the past few years.

It’s almost embarrassing to quote prices on some products these days. It’s a real shame that greed plays such a big part of all industry.

Todd Hamilton, Owner Double H Tire Mineral Wells, Texas

‘Customers are numb and get sticker shock’ Dear Editor: Concerning your November editorial — you said a mouthful, Bob. Customers are numb and get sticker shock when they are quoted current prices.

One of the screwy things about rebates, etc., is if an independent dealer sells multiple brands like most of us have to just to survive, it can be a nightmare keeping up with what is current at the time. If you are a four- or five-person shop and do not have an office person, it could be a challenge to keep it sorted out.

Ed Miller, President Ed’s Tire Factory Medford, Ore.

‘We can’t get water out of a rock’ Dear Editor: Dealers are facing customers coming in today that are given quotes for tires that consistently range from $850 to $1,200

per set. Most of the people replacing a set of tires haven’t had to do so in a number of years and can’t believe the increase.

We are viewed as the bad guy and that we are overcharging the guest. Customers usually revert to dropping to a lesser product, or only putting two tires on the vehicle, causing a safety issue.

We can’t get water out of a rock, customers can only afford what they can afford.

Another issue is how does the dealer afford to inventory these tires? As you have stated, prices have increased by almost 25% in the last few years, and that of course means that our inventory cost has paralleled those increases.

With margins getting tighter it really constricts cash flow. Dealers are starting to reduce premium brands and focus on private brands and lesser flag brands.

How do we fix this? It seems to me everyone in this industry agrees there are way too many sizes. If you talk to the tire manufacturers they state this is driven by the auto industry. Well, why can’t there be better communication between the two manufacturers to realize it’s gotten out of control and it would benefit both industries to reel it in? Is there that much difference between a 215/55R17 or a 225/50R17?

I think you get my meaning. The only way that I see it changing is when the dealer and the consumer shift purchasing habits and premium brands start losing share of accounts.

If the tire manufacturers can sell a truck tire for $275 each they will, next they will try for $280, and so on until the product doesn’t move. I think they have reached this point but have tried to ride out the recession with the big rebates.

It will be interesting to see where this goes.

Dennis Knapp, Owner Knapquist LLC Roseville, Minn.

Price hikes won’t stop ‘until greed is out of the picture’

Dear Editor: Yes, tire prices are too high! Gas is too high, so are prices for shoes, and food, and almost anything you would like to do for recreation is priced too high.

It’s not going to stop until greed is out of the picture. It’s not going to stop until we start doing more for ourselves in this country, which leads us back to that greed thing.

So what do you do? You suck it up and keep paying the higher prices for anything you need in life.

Ronnie Lloyd, Owner Colonial Tire and Automotive of Havelock Havelock, N.C.

Join Modern Tire Dealer’s National Advisory Council

Each month, Modern Tire Dealer is guided and influenced by a select group of readers — members of our National Advisory Council. These members’ opinions are the heart of the monthly Ludwig Report, compiled by well-known industry analyst Saul Ludwig. If you’d like to join this prestigious group, please let us know. We’d love to hear from you. Contact Editor Bob Ulrich at Bob.Ulrich@bobit.com or call (330) 899-2200, ext. 11.

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