Modern Tire Dealer - June 2011

Be sure to route your new Auto Service Professional to your techs!

JUNE 2011 • VOL. 92, NO. 6 • TEN DOLLARS • A BOBIT PUBLICATION

MTD round table: Dealers say supply, pricing are big concerns

THE INDUSTRY’S LEADING PUBLICATION

Does cloud computing protect your software and data?

TM

Introducing the DISCOVERER A/T3

ON ROAD. OFF ROAD.

OUT THE DOOR.

The all-traction, all-terrain, all-the-time tire specially designed to move off the sales floor as well as it moves down any road.

■ Fuel effi ficiency the SmartWay FOR SUVs AND demand heavy-duty LT tires LIGHT TRUCKS. Cooper is with you on■ yourHeavy journey to build your business. for Go to coopertire.com or call 1.800.847.3777 to learn more.

■ 2011 market share Untitled-1 1

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Be sure to route your new Auto Service Professional to your techs!

JUNE 2011 • VOL. 92, NO. 6 • TEN DOLLARS • A BOBIT PUBLICATION

MTD round table: Dealers say supply, pricing are big concerns

THE INDUSTRY’S LEADING PUBLICATION

Does cloud computing protect your software and data?

TRUCK TIRES ■ Fuel efficiency the SmartWay ■ Heavy demand for heavy-duty LT tires ■ 2011 market share

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Feature 18 Oil changes keep customers in the pipeline

The Industry’s Leading Publication June 2011, Volume 92, Number 6

How a ‘humdrum’ service leads to other sales opportunities

Departments

Commercial Tire Dealer™

4 Editorial Don’t arbitrarily dismiss LinkedIn

6 Online Popularity contest

25 Heavy-duty LT tires The trend toward smaller, more fuelefficient vehicles in fleets and a rebound in construction have driven up demand for commercial light truck tires

32 Fuel-efficient truck tires

8 News/views Will 4 million more tires help? Continental announces expansion in Mount Vernon

16 Ludwig Report While business remains soft, a rebound is predicted for later this year

Manufacturers weigh in on SmartWay certification

42 Focus on industry

37 Commercially Viable

46 Focus on industry

38 Two new construction tires

Dealers speak out at MTD round table: ITDG members say supply, pricing are big concerns

Updating Sentaida’s tire production: Everything is on schedule in 2011, says Lin

50 Business insight

Continental improves fuel efficiency and mileage features

The latest in Web-based processing: Cloud computing protects your software and data

52 Business insight

40 Retreads vs. new truck tires MTD breaks down the numbers, with a little help from the Top 100

Remember that old business plan? (You did have a business plan, didn’t you?)

53 Counter intelligence It seems fast isn’t fast enough anymore: ‘Turbulent’ is now the new ‘calm’ for tire dealers

56 TPMS

On the cover: Photo by Neal Weingart

Get serious about BMW 6-Series — Special care is needed to avoid sensor damage

66 Your turn ‘We must continue to educate the non-believers’

58 Products 61 Quik-Link 63 Classified Modern Tire Dealer is a proud member of:

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TRIB

TIRE RETREAD & REPAIR INFORMATION BUREAU

Member An Industry Association

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Editorial

Don’t arbitrarily dismiss LinkedIn

G

ermano Julio Badi requested to add you as a connection on LinkedIn,” read the e-mail request. The name sounded familiar, and he wanted to add me to his professional network.

I viewed Badi’s invitation, and remembered he is the Tire Industry Association’s director of international affairs for South

By Bob Ulrich America (his business card leaves out his middle name). I accepted his invitation, which gives me 164 connections.

Is that good or bad? How valuable is LinkedIn to independent tire dealers, or any retailer, for that matter?

LinkedIn bills itself as the world’s largest professional network. It connects more than 100 million “professionals” in more than 200 countries, either directly or in a “six degrees of Kevin Bacon” way.

It works. I communicate with Antony Powath, vice president of marketing with “Rubber Asia” based in India, only through LinkedIn. How many of you are linked in to LinkedIn, but do little more than accept the invitations because they are sent to your e-mail? I was like that at first, but have since realized how valuable LinkedIn is.

Certainly, the networking aspects of it are great if you are trying to find a job. I’ve even written a reference for a former colleague.

And it works both ways: It’s also a great place to find qualified employees.

But LinkedIn’s greatest strength may be in its business networking.

For example, if you have a business question, you have millions of people at your disposal to help answer it. “Post those vexing questions on ‘LinkedIn Answers’ to tap into the knowledge of the world’s foremost business experts,” says the site.

Alan Renzi, owner of The Tire Spot LLC in Newark, N.Y., sees the need for LinkedIn — and he has just started connecting to people. It’s all about networking, he says.

“I can see the potential value in it, but I haven’t utilized it yet. One of the three people I have linked up with so far is my former NTDRA (National Tire Dealers and Retreaders Association) rep, and it was nice to know he was still around.

“He might be a potential source for information in the future for some of the resources NTDRA had. I am looking for the tire dealer survey book they put out in the ’80s.

It was a dealer operations manual and workbook. It had financial ratios in it that you could compare to your own, and help you troubleshoot the financial condition of your company.”

(Well? Can anyone help out Alan? He’s also on Facebook, by the way.)

There are a lot of other ways LinkedIn can help you and your business.

In his recent Web article, “Three Ways to Use LinkedIn for Social Sales,” Jacob Morgan, co-founder of Chess Media Group, writes that he finds information on prospects before meeting with or contacting them. I would think wholesale distributors and commercial tire dealers would find this extremely helpful.

I know I do. As a journalist, I have used LinkedIn to keep up with executive titles. And you don’t have to be connected to the executive to call up his or her profile.

LinkedIn is a social network for businesspeople, which differs from Facebook. The latter says it gives people “the power to share and make the world more open and connected.”

As it relates to retailers, however, Facebook is business-oriented, too, because it connects them directly to their customers.

Many of you have a Facebook page for your tire dealerships, where you can promote special offers and pile up “Likes.” I know a lot of you are nervous about giving customers a chance to post feedback on their vehicle repair experiences, but I’m sure the good comments outweigh the bad. It also gives you a chance to right any wrongs, either real or perceived.

Modern Tire Dealer has its own Facebook page, and 898 people “Like” us. (Next stop, 1,000!) We use it to post photos from the dealer meetings and product introductions we attend, and interact with our readership.

Sometimes we post news items. Sometimes we display links to fun videos, such as old tire advertising.

Although tire dealers are our customers, the MTD Facebook page is closer to a B2B site, whereas your pages are clearly B2C. Either way, as Alan Renzi says, it’s all about networking.

So when Germano Julio Badi or someone like him wants to connect with you on LinkedIn, or a tire-buying customer decides to become a fan of your Facebook page, embrace the opportunity, and accept social networking in 2011.

Just don’t let LinkedIn and Facebook erode your faceto-face social skills. ■ If you have any questions or comments, please e-mail me at bob.ulrich@bobit.com.

Just don’t let LinkedIn and Facebook erode your face-to-face social skills.

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Online

Popularity contest

O

ut of the hundreds of news items posted on Modern Tire Dealer’s Web site (www.moderntiredealer.com) each year, some of the most-read items cover, naturally, news that directly affects you — tire price hikes, new products and tire recalls.

Other news you were most interested in over the last year includes “MTD names John Snider Tire Dealer of the Year” (posted in September 2010), “Goodyear will drop Gemini name, format” (October 2010), “ATD targets New England for expansion in 2011” (October 2010), and Les Schwab’s Phil Wick dies at 66” (August 2010).

Another of our popular Web site features is MTD TV, where our Editor Bob Ulrich posts video blogs.

Recently, his most popular posts have been: “The racing effect” (July 2010), “Fill rates will get worse” (March 2011), and “Winter tires — two or four?”

(February 2010).

MTD editors also regularly post written blogs. Our most well-read have included Ulrich’s “An in-depth look at Goodyear’s board of directors (April 2010), “Tire labeling law will have wide-ranging effect, says King” ( January 2010), “The top 25 independent tire dealers prefer... Michelin” ( July 2010), and “TRIB vs. Retread Tire Association: Let the chips fall where they may” (October 2010).

Also well-read is a blog from Managing Editor Lori Mavrigian on “‘Rubber’ meets the road, and goes on a killing spree” ( January 2011).

Our Web site also archives articles from past and current issues of the magazine. Some of the most read articles in 2011/2010 included: “Analyzing the tire industry in 2009 and beyond” by Bob Ulrich ( January 2010), “‘Good, better, best’ is dead”

by Wayne Williams (December 2010), “Breaking down the theft triangle” by Norm Gaither (November 2010), and “Top 12 emerging technologies” by Mike Mavrigian (November 2010).

See it all and much more on www.moderntiredealer. com. And be sure to leave us a comment! ■

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, fax (760) 451-9292 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

Will 4 million more tires help?

Continental announces expansion in Mount Vernon

By Bob Ulrich

C

ontinental AG has 40 tire manufacturing plants worldwide. The largest is in Mount Vernon, Ill. And it’s about to get even larger.

The company, through its U.S.-based subsidiary, is investing $224 million to expand its 70-acre Mount Vernon facility.

The expansion will increase capacity at the plant by nearly four million passenger and light truck tires.

“Continental Tire the Americas is experiencing significant growth, and demand for its tires throughout the region,” said CEO Matthias Schoenberg during the news conference in Mount Vernon. “Adding production capacity to meet this demand was essential.”

To help defray some of the costs, the city passed a $22 million business incentives package. It’s not a handout, said Dan Seals, assistant director of the Illinois Department of Commerce and Economic Opportunity.

“These are performance-based incentives, and we’re getting a 10-to-1 return.”

Continental will add 444 “good-paying jobs with benefits,” added Schoenberg.

Passenger tire production — nothing smaller than 17-inch sizes — accounts for 70% of the Mount Vernon plant’s consumer tire capacity.

Consumer and truck tire capacity

Continental produces 10 tires per standard man hour at its Mount Vernon, Ill., plant.

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The Mount Vernon plant has the capacity to produce 27,700 consumer tires per day, according to Benny Harmse, the plant’s vice president of manufacturing. It is running 24/7 because of demand.

By October, he said daily production will reach 31,000 passenger and light truck tires.

The plant also produces 8,100 truck tire per day. By the end of the year, truck tire capacity will be increased close to 10%, to 8,900 tires a day.

Continental is expected to manufacture close to 2.9 million truck tires in Mount Vernon this year, up from 2.6 million in 2010. That includes production for Yokohama Tire Corp. (about 500,000 tires) and Toyo Tire Holdings of Americas Inc. as part of the GTY joint venture “plant,” which is housed under the same 70-acre roof as the rest of Continental’s production equipment.

Toyo is no longer part of the joint venture.

By the end of the year, Toyo’s production, which accounted for 280,000 tires, “will be converted to Yokohama and Continental production,” said Harmes.

Since 2007, Continental has invested $486 million in the Mount Vernon facility. ■

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News/views

In the early days, Ed Bobit did a little of everything as the head of Bobit Publishing. He even modeled (he’s on the left) on the cover of “Construction Contracting.”

50 years and counting Ed Bobit and ‘Automotive Fleet’ celebrate a golden anniversary It was a warm June day in Chicago, Ill. The year was 1961, the “Mad Men” era. Ed Bobit had an idea that he thought would be good enough to take to the boss. He’d done his research, outlined his idea and was ready to make a pitch.

“What if,” he said to his bosses at the publishing giant, McGraw-Hill Publishing Co. Inc., “we created a magazine for the men who manage the vehicle fleets at big companies?

The magazine will be devoted to the issues they need to know about running a cost-efficient fleet.”

The reply came back: “No, thank you.”

Bobit felt so strongly about his idea that he went back to the bosses with his resignation letter and decided to give it a go alone. And with that, he launched Bobit Publishing and its flagship publication, “Automotive Fleet.”

This month, Bobit Business Media Inc. celebrates its 50th anniversary. It offers a complete mix of media products — print and digital magazines, e-newsletters, events, Webinars and Web sites that deliver news, industry trends and insight to the entire spectrum of the fleet management market.

There are 19 diversified print magazines in all, including Modern Tire Dealer, which was purchased by Bobit in 2000.

Ed’s son, Ty, runs the company, based in Torrance, Calif., as CEO and president.

Fifty years after he went out on his own, however, Ed Bobit is still at his desk in the corner office every morning. We at Modern Tire Dealer wish “Automotive Fleet” and its “coach” a happy anniversary!

Vogue Tyre teams up with Vossen Wheels Vogue Tyre and Rubber Co. and Vossen Wheels have joined forces.

Vogue says its network of warehouses and 16 Custom Center locations now offer the complete line of Vossen wheels.

The new wheel offerings are available in modern silver, black and gray painted finishes. Each new wheel offering is also available pre-installed and balanced with Vogue’s line of luxury tires.

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News/views

bites

ASA offers new system ASA Tire Systems has teamed up with Royal 4 Systems to provide a warehouse management system for tire dealers. It will provide point of sale, sales analysis, accounts receivable, purchasing and mobile RF solutions for inventory receiving.

TIA issues guidelines The Tire Industry Association (TIA) has created an Environmental Best Practices on how to transition away from lead wheel weights.

The document is available to all TIA members at www.tireindustry. org. It describes procedures in transitioning away from lead wheel weights, and precautions for handling and recycling.

Hankook tire OE on Cooper S Hankook Tire Co. Ltd. has been selected as the new original equipment tire manufacturer for the BMW Group’s Mini. Initially, the new ultra-high performance tire Ventus Prime2 was tested by the car manufacturer and will now come factory-installed on Mini Cooper S models.

Yokohama builds in Philippines Yokohama Tire Philippines Inc. has broken ground for its new tire plant near Davao City, Philippines.

Yokohama Rubber plans to expand the annual production capacity of the YTPI plant by 2.4 times to 17 million tires from the current 7 million by 2017.

Curry’s Auto opens eighth store Curry’s Auto Service will open its first Maryland location Aug. 1, 2011, in Gaithersburg. The opening will represent the third store opening in eight months for the Sterling,Va.based Curry’s Auto, which opened stores in November and April.

Daimler chooses Yokohama The Yokohama Advan Sport V105 has been selected as original equipment for Mercedes-Benz SLK-class two-seater Roadster models produced by Daimler AG of Germany.

Yokohama Rubber Co. Ltd. will supply the Sport V105 in six sizes for the SLK, which has been sold around the world since its European debut in March 2011.

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Autopromotec successfully completes 24th show The 24th Autopromotec Show in Bologna, Italy, was held during the last week of May. The biennial international event devoted to automotive equipment and the aftermarket had 1,473 participating exhibitors, a record figure and an increase of 2% over the 2009 show.

The exhibition area was 150,000 square meters, including both indoor and outdoor exhibits. Thirty-seven percent of the exhibitors — 547 in total — came from outside Italy. This shows the markedly international character of Autopromotec, which has earned a reputation as an influential event in the automotive aftermarket worldwide.

The increase in foreign exhibitors over the years has been achieved by developing a series of relationships with local associations in a number of countries worldwide, and by collaboration with the Italian Agency for Foreign Trade. These partnerships have been of key importance in the international promotion and organization of groups of delegates at the trade fair.

Delegations of buyers from the United States, South Korea, Egypt, Japan, India, Iran, Lebanon, Morocco, Mexico and Russia attended the show.

There were nearly 17,000 foreign visitors out of 101,620 total visitors at the 2009 Autopromotec Show. This international trend continued in 2011, although final figures are not yet available.

Autopromotec is owned by the Italian Tyre Retreaders Association (AIRP) and the Italian Garage Equipment Manufacturers Association (AICA).

Etzel will take over for Schoenberg at Continental Jochen Etzel will take over as CEO of Continental Tire the Americas LLC (CTA) effective July 1, 2011. He will replace Matthias Schoenberg, who was previously named global head of ContiTech’s Fluid Technology business unit.

Etzel joined the company as a lawyer in Continental’s corporate law department nearly 20 years ago. A few years later, he took over the financial manager position of the International business unit, which was responsible for developing Continental’s tire business in regions outside of Europe and the NAFTA region.

Etzel will relocate from Continental AG’s Jochen Etzel takes over as CEO headquarters in Hanover, Germany, to CTA’s of Continental Tire the Ameriheadquarters in Fort Mill, S.C. cas LLC effective July 1, 2011.

Tire industry loses three veterans Bob Malerba, former independent tire dealer and president of the Tire Industry Association (TIA), died of cancer on May 30, 2011. He was 64.

Malerba served as president of TIA in 2005-2006. He also served on the TIA (formerly the National Tire Dealers and Retreaders Association and Tire Association of North America) board for many years.

At one time, Malerba owned Malerba’s Silver City Tire, a three-store commercial tire chain based in Meriden, Conn. He also ran a Bandag retread shop. In 2004, he sold the stores, which did business as Malerba’s Tyre Man, to Jim Berlin.

Edward M. Stocker Jr., a lifelong tire industry figure, died May 12, 2011. He was 75.

Following a career with the former Firestone Tire & Rubber Co. , in 1971 he fulfilled his lifetime goal of being in business for himself. He owned a chain of tire stores until 1982. After selling the retail stores he founded Silver State Tire Co. Inc. in Reno, Nev. Silver State Tire was a wholesale tire distribution company with nine warehouses in six western states. Silver State Tire was sold to ATD in 2006 when Stocker retired.

David Jones, senior vice president of sales for Tireco Inc., died in California on May 21, 2011. He was 58. Jones joined Tireco in 1982 as general manager. He helped the Compton, Calif.-based company grow to become one of the nation’s largest importers and private brand marketers of tires and tire-related products.

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News/views

bites

Hankook builds China plant Hankook Tire Co. Ltd. has broken ground for its third plant in China, and sixth plant total, in Chongqing Liangjiang. The plant will start operating by August 2012, and is designated to produce 4,500 truck and bus radial tires and 30,000 passenger car radial tires per day by the end of 2015.

Conti ships precure treads Continental Tire the Americas LLC has begun shipments of its flat precure treads from a new central manufacturing plant in Morelia, Mexico. The plant will fulfill the increasing demand for retreaded truck tires as Continental expands its ContiLifeCycle solution for trucking fleets.

AAIA releases digital factbooks The Automotive Aftermarket Industry Association has released its online publications, the Digital Aftermarket Factbook 2012 and the Digital Aftermarket Factbook & Lang Annual 2012. AAIA members receive a complimentary copy of the Digital Aftermarket Factbook 2012 as a member benefit. To order visit www.aftermarket.org.

Michelin raises ag tire prices Michelin North America Inc. will raise prices up to 6% on Michelin brand replacement agricultural tires in the U.S. and Canada effective July 1, 2011. Michelin previously announced it was raising its truck tire prices, also effective July 1.

Sumitomo adds joint venture Sumitomo Rubber Industries Ltd. will establish two joint venture companies with Thai Eastern Group Co. LTD. in Thailand. One will run a natural rubber plantation, the other a natural rubber processing plant.

Sumitomo owns 70% of the $6.7 million joint venture.

Andreoli integrates scheduler Andreoli & Associates Inc. has completed an integration project with www.MyAutoServiceAppointments. com to provide online appointment scheduling for tire and auto services. The cost to add the online scheduling module for a single location is less than $99 a month.

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Tornado destroys Cross-Midwest’s commercial service center A tornado destroyed Cross-Midwest Tire Co.’ss commercial tire service center in Joplin, Mo.,., on May 22, 2011.

According to President Greg Trum, no onee was hurt. However, one of the company’s shopp service managers lost his home.

Trum described the service center as “a tangledd mess.” A nearby Home Depot and Walmart alsoo were leveled.

As of June 6, Joplin, Mo., officials reported the tornado killed 141 people. Based in Kansas City, Mo., Cross-Midwest also has 12 other commercial tire service centers servicing the midwestern United States.

The Th front f t offi ffice area att the th h commercial tire service site in Joplin, Mo., was reduced to rubble by the May 22, 2011, tornado.

Major management changes at Yokohama Rubber Takao Oishi, CEO and president of Yokohama Tire Corp., is going back to the parent company in Japan.

Oishi, who also serves as a managing corporate officer for Yokohama Rubber Co. Ltd., officially will be promoted to director after the general meeting of shareholders June 29, 2011. He also will become general manager of the Industrial Products Business Group, and will remain a managing corporate officer.

Replacing Oishi as CEO and president of Yokohama Tire Corp. (YTC) in Fullerton, Calif., is Yasushi Tanaka, who also serves as a corporate officer.

Oishi was named CEO and president of YTC in April 2008.

Yokohama’s board of directors also has “informally decided” on major changes in its senior management team in 2011. The changes will be formally approved after the general meeting of shareholders.

Five executives received promotions.

1. Tadanobu Nagumo, president and representative director, will be promoted to chairman, CEO and representative director.

2. Hikomitsu Noji, director and senior managing corporate officer and president of the Yokohama Tire Group, will be promoted to president and representative director.

He will remain president of the Tire Group.

3. Tooru Kobayashi, director and senior managing corporate officer, will be promoted to director and vice president.

4. Kinya Kawakami, director and corporate officer, will be promoted to director and managing corporate officer.

5. Hirohiko Takaoka, corporate officer, becomes managing corporate officer.

Virginia group honors two of its own During its annual convention and trade show recently, the Virginia Automotive Association (VAA) recognized two of its own. Executive Director Steve Akridge honored Jim Matthews and Dave Kavanah for their support of and service to the VAA with two prestigious awards.

Matthews received the “Friend of the Industry Award.” He recently retired as region manager with American Tire Distributors Inc. (ATD).

Kavanah received the “Distinguished Member Award” for his 23 years of dedicated service to the VAA board of directors. He recently transferred to Baltimore, Md., where he is branch manager Jim Ji left, left receives rece re ceiv ives es DaveMatthews, K avanah, left of the ATD location there. a plaque from Steve Akridge.

“Dedicated and passionate certainly describe Dave’s commitment to VAA,” adds Akridge. ■

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Ludwig Report

While business remains soft, a rebound is predicted for later this year

L

ast month I commented that at $4 a gallon for gasoline, there would likely be some backoff in driving leading to softer tire sales. Based on contacts with dealers throughout the country, retail tire sales have been weak since April.

And as I write this comment in late May 2011, that condition still exists.

Oil prices — and gasoline — have retreated a bit from recent highs, and based on my experience, consumers By Saul Ludwig get accustomed to high gas prices and eventually return to former driving levels. So do not be discouraged if business remains soft for a few months; I predict it will come back. Be certain you’ve ordered enough winter tires if your stores are in snow areas. I expect tire prices to remain firm and one more round of price hikes from your suppliers may be required for them to fully offset raw material costs.

While natural rubber prices appeared to have stopped going up, synthetic rubber and carbon black continue to move much higher. These are indeed unusual times.

Monthly survey A number of independent tire dealers were surveyed concerning current business trends.

Except for tire prices and costs, the results of the April 2011 survey are compared with those of April 2010.

Passenger tire dealers’ six-month outlook is positive

of rising fuel prices. Some dealers we surveyed noted that lower income areas are particularly affected as the customers have little disposable income to spend on car care.

Selling prices for major and private brand tires continued to inch higher In comparing the month of April 2011 with March 2011, average costs for size 215/60R16 major brand tires were up 1% while selling prices were up 1%. Average costs for a 215/60R16 private brand tire were up 3% while selling prices were up roughly 2% for the month. Reflecting tire price increases, we expect data for May to show more significant increases.

Most dealers believed pricing was very firm In April 2011, approximately 80% of both the passenger tire and truck tire dealers suggested pricing was very firm, while the remaining dealers believed pricing was a bit aggressive.

Truck tire inventories remained too low The survey indicated that 78% of passenger tire dealers believed inventories were in line with current business levels, while the remainder viewed inventories as too low to meet

How dealers view their near-term business Dealers

DEC

JAN

FEB

MAR(R)

APR(P)

APR(10)

Passenger tire Will improve Will worsen Will stay level

17% 33% 50%

70% 0% 30%

43% 0% 57%

60% 0% 40%

56% 0% 44%

50% 14% 36%

75%

83%

80%

75%

80%

56%

Truck tire Will improve Will worsen Will stay level

25% 0% 0% 0% 0% 0% According to our dealer survey, dealers who 0% 17% 20% 25% 20% 44% sell passenger or truck tires sense that in the R-Revised P-Preliminary next six months business will improve. Roughly 56% of passenger tire dealers suspect business will improve, while the remaining 44% expect business to demand. The truck tire dealers we surveyed had mixed views, remain the same. As for truck tire dealers surveyed, 80% see as 40% believed inventories were in line with business levels business improving while only 20% see business staying level. while the other 60% felt inventories were too low.

Such confidence is a positive outlook for the industry. These outlook comments tend to be seasonally directed rather than Service revenues were up 6%, dealers reported year-to-year comparisons.

Dealers who provide automotive service reported that 40% of revenues, on average, were generated by service during April.

Tire sales were mixed in April Dealers indicated that service business was up 6% in April vs.

According to dealer reports, on average, retail sales of new April 2010. ■ replacement passenger tires were flat with individual responses varying greatly. Some were up as much as 10% in April vs. April Analyst Saul Ludwig is a managing director with Northcoast 2010, but most reported declines in the 5% range. On the other Research Holdings LLC based in Cleveland, Ohio. He concentrates hand, new truck and retreaded tire sales were up 4%. There is no on the tire and chemical industries. He has been writing for Modern doubt consumers are pulling back as they are feeling the effects Tire Dealer since April 1975.

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Oil changes

Oil changes keep customers in the pipeline How a ‘humdrum’ service leads ds to other sales opportunities

By Ann Neal

T

here’s always more business to be had. Getting it requires a stronger offensive in a sputtering economy. An offensive strategy that makes the most of the humdrum oil change keeps customers in the pipeline for sales and services down the road.

Teasing price-conscious customers into the shop for routine maintenance plays to a dealer’s strengths. Consumers know the tactic well: Discount the price of an essential service or product to attract customers, ideally laying the groundwork for future transactions while selling higher-margin items or services along with the discounted one. But when it comes to their vehicles, not all drivers are looking for bottom-feeder pricing.

Knowing the job is done correctly and with the right materials trumps price for motorists bringing their vehicles to the dealerships owned by the Slagle family of Phoenix, Ariz., and Ross Blankenship of Akron, Ohio.

“Some competitors offer low prices. Each of our stores is near a retirement community. Price is important to those retirees.

But reliability and performance is important, too.

“Our niche is doing a good job for them. If we do that, they come back for other services,” says Bob Slagle, founder and president of S&S Tire and Auto Service Center, which has three stores on the west side of Phoenix in Goodyear, Peoria and Surprise, Ariz.

Slagle’s customers drive past a shop offering oil changes for

Bob Slagle, founder of S&S Tire and Auto Service Center with three locations in Arizona, feels oil changes can be used as a traffic builder. “If we do a good job with oil changes, we hope to get other work.”

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Slagle and Service Manager Gary Gyder go over a customer’s paperwork in the service bays at S&S Tire’s Goodyear, Ariz., location.

just $9.98. “We don’t want that kind of business. He can’t make a profit, and I don’t want to compete with him.”

Not a humdrum decision Price is not the only market pressure. S&S Tire, like other independent tire dealerships, might charge less for an oil change than the local Walmart, quick-change oil places such as Jiff y Lube, and car dealerships. But, “It’s a different type of market,” says Slagle. “They don’t advertise price as much as they do convenience.”

Convenience is important to customers squeezing an oil change into their busy lives. But they are also looking for speed and high-quality service.

Once a customer brings in a vehicle for an oil change, S&S Tire technicians perform a safety inspection and point out any items needing attention. “They are primarily a traffic builder into our stores,” says Slagle.

The number of oil changes performed each day ranges from 12 at the Goodyear location, which has two dedicated bays, to six at the Peoria store. The S&S Tire stores in Peoria and Surprise each have one bay reserved for oil changes. Margins on oil changes are about the same at all three locations. S&S Tire uses and markets a semi-synthetic Kendall oil which costs a little more but is better for the engine and environment.

“Our society places so many demands on people’s time. If a customer has an appointment, you need to start on time. I feel as long as our price is competitive, if we do a good job and get it done on time, a customer will think of us when they need other services or tires,” says Slagle.

From alignments to engine diagnostics, about any type of vehicle repair can be performed by the 40 employees of the

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Oil changes three S&S Tire stores. Customers find an extensive range of tires for automobiles, light trucks, and SUVs as well as tires for farming equipment, mowers and golf carts, heavy-duty trucks, construction equipment, trailers and RVs. S&S Tire is also one of the region’s largest retailers of custom wheels. Slagle and his wife, Joanne, established S&S Tire in 1976. Their sons work in the business today. Rob is general manager and Dan manages the Goodyear store.

Coupons drive business To reach customers, S&S Tire encourages one-on-one contact through exhibits at car clubs and RV shows. “It’s inexpensive to do and easy to quantify returns,” says Slagle. Radio advertising consists mainly of spots on a local long-running Saturday morning talk show program. The company does little newspaper advertising. Instead, S&S Tire offers coupons for services and tires through its Web site. A customer with a coupon is charged $19.95 for an oil change. “We get a lot of coupon response. A customer needs to get an oil change more often than a brake job,” says Slagle.

Seventeen hundred miles away in Akron, Ohio, coupons and word-of-mouth advertising are the only marketing tools used by Ross Blankenship. He is the owner of State Street Tire, which operates out of two locations just a half-mile apart.

Blankenship credits over 100 new customers every month to coupons mailed direct to existing and potential customers and downloadable from his Web site. He relies solely on direct mail

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and the Web site for coupon distribution. He does not advertise through radio, television or other channels.

“If you spend $2,000 a month on advertisements, why not spend $1,500 on advertisements and take the leftover $500 and discount your oil changes to get the people in the door?”

Blankenship asks.

The discount formula is a winner for State Street Tire. “We send out coupons and our reputation for quality work keeps us busy.

We do 20 oil changes a day between the two stores. es.”

Keep it in the middle le His tip for dealers tryrying to increase their oil change business? Connsider charging $10 less ss in order to draw in 500 new customers. “But ut don’t go too cheap,” hee cautions. “Then youu get the coupon-only shoppers who won’t buy anything else. So you need to keep it State Street Tire In n Akron, Ohio, uses d direct irec ir ectt mail to advertise d deals l on oil il changes. h

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Oil changes in the middle. We charge $19.95 to $24.95 for an oil, lube and filter, 40-point safety inspection, and a free tire rotation.”

The free tire rotation creates opportunities to boost revenue.

“Customers frown when you take tires off when they came in just for an oil change. We solved that problem by offering the free rotation. We sell a lot of brakes off of that.”

Like Slagle at S&S Tire in Phoenix, Blankenship is sensitive to a customer’s time pressures. But it’s not an area where he competes head-to-head with quick-change oil providers: “An oil change place down the street called O’Neil Lube does a great job and runs a good business. They are twice the price on the same oil change we offer. Their benefits are doing the job faster and not needing an appointment.

“If we had a larger facility we would be able to compete on the convenience issues, but our six bays are usually full every hour we are open,” says Blankenship.

It’s the experience If extreme convenience is not bringing customers to State Street Tire, what is? For one, high-quality service delivered in pleasant surroundings.

“We have a 42-inch, high-definition TV, a very clean showroom and, most important, an arcade machine with some popular ’80s video games customers seem to love. Of course it’s on free play, and the gourmet coffee is always hot and fresh.” It’s a friendly environment that customers won’t find at Walmart, quick-change places, and other competitors.

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State Street Tire founder Ross Blankenship (left) speaks with long-time customer Vinnie Vansickle, who says he is dedicated to the dealership because of its expert service and convenience.

Outside the showroom, customers find a full-service operation. “We tell our customers we will cut your car in half and weld it back together if you want us to,” Blankenship says. The reputation of his shops is built on friendly service and doing the job right the first time.

Blankenship opened his second store in January 2008, which turned out to be the eve of the Great Recession. Even so, business levels generally trended upwards.

“It has been great since day one. We have good suppliers and great personnel. We took a hard hit and fell a little, but I am proud to say we bounced right back and are doing well. We have over

Quik-Link: 800-687-1557 ext. 17113

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Oil changes 12 employees at two locations. Our first store is a two-bay shop that pumps out a million plus every year. The second store is a half-mile away, and it has six bays that stay jam-packed all the time.”

on them all, nor do I even want to try, so there is enough business to go around for all to reap the rewards. Instead of working against one another, more shop owners need to work together. I really think we benefit each other,” he explains.

Two better than one Why are the two stores so close toFree can be good business gether? It’s a question everyone asks. “I First-time customers drawn in by a planned on shutting down the small store coupon discover a meaningful perk that once the big store was up and running. comes with every tire purchase: free flat But the numbers for the small store only State Street Tire has two locations repairs. “We offer free flat repairs when dropped around 20% in the beginning in Akron, Ohio. Overflow tire service others will not. If we can repair it to get and continue to grow every year. It’s nice work might be done outside to free them on the road and save them from having them so close; we share product up the bays for other services. buying a tire, we do it.” and employees if needed.”

The tactic works “unbelievably” well, The two stores generate some nice numbers, too, with around according to Blankenship. “We simply tell our customers no charge, $2 million in annual sales. About 50% of revenue comes from just remember me when you need tires.” Free flat repairs are tire sales, which total about 12,000 a year. Oil changes represent responsible for the sale of 20 sets of tires a month, he says.

When viewed as a strategy for introducing customers to the about 15% of revenue, and the rest is other services.

For Blankenship, sharing ideas, techniques and strategies blend of convenience, speed and high-quality service available for overcoming the day-to-day challenges of tire store opera- only from an independent tire dealer, oil changes are not so tions positions all independent owners to better compete in a humdrum after all. ■ crowded marketplace.

“Some people may ask why I would give away so much Ann Neal is a freelance writer with more than two decades of information. I have an easy answer,” he says. “Within five miles experience managing employee, financial and marketing communicaof my shops are 67,000 registered cars and trucks. I cannot work tions and Web content in the commercial trucking industry.

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MTD June 2011 6/8/11 11:41:22 AM

Commercial Tire Dealer™

Heavy-duty LT tires The trend toward smaller, more fuel-efficient vehicles in fleets and a rebound in construction have driven up demand for commercial light truck tires

By Bob Bissler

A

s the cost of raw materials continues to rise, so do tire prices. Companies and individuals who need trucks to conduct business need to save revenue every way possible. One of those ways is by utilizing light trucks in commercial applications.

In 2010, replacement light truck tire sales, which includes commercial LT tires, totaled $4.3 billion. Many manufacturers have dedicated commercial light truck product lines. Even those who don’t are aware of their importance.

“We have been receiving requests for more 10- ply or E load range tires in highway and varying degrees of all-terrain tread patterns,” says David Shelton, marketing director for GITI Tire (USA) Ltd. GITI does not have a dedicated commercial light truck tire line.

“This would lead one to speculate that many of these tires are being pressed into commercial light truck use. There appears to be a lift in the demand for, and utilization of, commercial light trucks as the economy grows.”

Just a few short years ago, a growing economy seemed a long way off. Replacement light truck tire unit sales dropped 16% from 2007 to 2008. At that time, MTD reported that two main factors — high gas prices and the construction market crash — were to blame.

Today, we still have high gas prices. But thanks to the turnaround in the economy, construction is slowly picking up. So is the demand for commercial light truck tires.

“Cooper Tire forecasts continued growth in commercial light truck tires,” says Bill Hoban, Cooper Tire & Rubber Co.’s national truck tire sales manager. “The driving force behind this growth is twofold. First, OE vehicle manufacturers’ sales are strong and their heavy-duty light truck vehicles are spec-ed with these tires.

“Secondly, fleets are moving toward smaller, more fuelefficient vehicles when they can. This enables them to hire non-commercial driver’s license (CDL) drivers, which lowers their payroll and makes it easier to find drivers.”

There is a shortage of CDL drivers. So the trend toward smaller vehicles in fleets is good news for non-CDL drivers. However, there are greater demands being placed on these drivers, and that is reflected in the way some of them drive.

“We see more and more drivers of commercial light

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trucks driving faster and faster, simply because of economic reasons and wanting to be as efficient as possible,” says Manon Dijkhuis, public relations and press manager at Apollo Vredestein B.V. “But what most of these drivers don’t realize is that speed, maximum load and tire pressure are directly related.

“Speeding with a heavy load puts more pressure on the tires, which affects the tire itself. The family of Comtrac tires of Vredestein is especially developed for this situation, to make sure that driving stays safe even in these extreme situations.”

In commercial light truck applications where speeding isn’t practical, such as on construction sites, there is a different market demand being created.

“One of the things we have noticed from our customers is that there is an increased demand for commercial light truck tires that have features designed for city and regional roads,” says Libor Heger, brand manager, Continental Tire the Americas LLC. “There are a number of ‘megafleets’ in the pick-up and delivery segment who own commercial light trucks, and these vehicles are not necessarily heavy-duty pickups on construction sites. Instead of an aggressive off-road pattern, they are asking for features designed for sidewall protection and better handling in city environments.”

While some manufacturers receive requests for a broader commercial light truck tire range, others don’t expect growth in this segment. And that’s a good thing.

“Nexen is trending in a positive direction, up 30% through April, a trend we feel will continue to move upward,” says John Aben, vice president of sales and marketing at Nexen Tire America Inc. “In my opinion, this segment is the easiest to forecast and manage the inventory, because of the number of SKUs. There hasn’t been huge growth from OEs adding new sizes; 90% of our sales come from 10 sizes.”

Fuel-efficient truck tires: Even though original Manufacturers weigh in on SmartWay equipment manufacturers certification . . . 32 haven’t been adding many Commercially Viable . . . 37 new sizes in this segment, Two new construction tires: the demands being placed on Continental improves fuel efficiency the performance of existing and mileage features . . . 38 commercial light truck tires Retreads vs. new truck tires: are increasing.

MTD breaks down the numbers, with help from the Top 100 . . . 40

ALSO IN CTD

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Low-rolling resistance

Fuel-efficient truck tires Manufacturers weigh in on SmartWay certification

L

ow-rolling resistant tires are mandated on new trucks in California. And tire manufacturers are trying to keep up.

The law went into effect in January 2010, and applies to all 2011 tractors and trailers. To help verify that truck tires meet the proper fuel efficiency standards, the United States Environmental Protection Agency (EPA) set up its SmartWay program.

(Michelin North America Inc. says Oregon has passed a similar piece of legislation to California’s, and is waiting on the regulations to be defined. “Many other states are considering similar regulations to reduce diesel emissions.”)

With SmartWay certification in the spotlight, we asked truck tire manufacturers the following question: “Does your company offer — and market as such — commercial tires featuring low-rolling resistance technology?” Here are their answers.

Bridgestone Commercial Solutions Group Bridgestone has three steer tires, three drive tires and four trailer tires that are marketed with the SmartWay green leaf label, including Graetec wide-based tires. (See page 36 sidebar for a complete list of all brands that are SmartWay-certified.)

Bridgestone says its Graetec wide-base tire uses less materials, while its Bandag retreading process reuses materials. The result is “to make our resources last longer.”

The new Firestone brand FD695 PLUS drive tire is among three truck tires on the SmartWay list. The company says the tire is built for fuel efficiency without sacrificing removal mileage.

Bridgestone says it is designed for optimum performance on tandem-axle drive tractors in long-haul and regional operations.

Its cap/base tread compounding design and deep 26/32-inch original tread depth help to increase wear life.

Continental Tire the Americas Inc. Continental, with its Continental and General brands, has more SmartWay-verified truck tires on the market than any other company, according to the U.S. EPA SmartWay Transport Partnership’s Web site.

“Continental continues to concentrate our research and development efforts in the area of lower rolling resistant truck tires and materials,” says Clif Armstrong, director of marketing for commercial vehicle tires.

“Fuel cost has a major impact on the success and profitability of everyone that operates trucks — whether it is one truck or hundreds of trucks. Fuel represents over 17% of a trucking fleet’s variable operating costs. Once diesel reached $3.29 a gallon, fuel became equal to salaries as the major operating expense.

“At average fleet operating conditions, rolling resistance accounts for about 35% of a truck’s fuel consumption. That’s a

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number you just can’t ignore when truck operators are trying to cut costs. So we try to educate our customers through events and information on our Web site how low-rolling resistance truck tires really do trump long mileage tires in the long run.”

Armstrong says Continental has proven that a tire with a deep lug tread pattern also can be fuel efficient. Its HDL 2DL Eco Plus drive tire has a full inch of tread depth, but meets the SmartWay standards.

“So it’s not just a matter of reducing tread depth. There are many other factors that can be adjusted to meet low-rolling resistance standards.

“In the future you’ll see Continental continue to make improvements to our tire tread cap and base, which accounts for 50% to 60% of a tire’s rolling resistance. Primarily, this is achieved via compounding.”

Continental’s ContiLifeCycle flat precure tread products utilize the same The S581 is one of fuel-efficient compounds as its new eight fuel-efficient tires, he says.

General truck tires.

“Future research will involve improvements in material volume, optimization of deformation, new carbon blacks and innovations in multi-component treads.”

Double Coin Holdings Ltd. Double Coin is one of two Chinese brands that market SmartWay-certified tires in the U.S. Its F-series covers all three axle positions. “(They) all feature special compounds and technology throughout the tires to reduce rolling resistance and increase fuel mileage,” says Aaron Murphy, vice president of Double Coin’s U.S. subsidiary, China Manufacturers Alliance LLC. One of the company’s goals is the reduction of raw material and component weights “in order to achieve lower rolling resistance on all Double Coin’s FT105 products by reducing finished trailer tire is SmartWaygood weight.” Others are in the certified and designed for long mileage. works, he adds.

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Low-rolling resistance Falken Tire Corp.

“Falken’s corporate engineers developed the EcoRun brand incorporating the eco-friendliness of performance and price into its products,” says Nick Fousekis, senior manager of consumer marketing. “EcoRun tires will help drivers save money and fuel as the tires work more resourcefully.”

EcoRun line premium steer (RI-109), drive (BI-887) and trailer (RI-119) tires were introduced at the Specialty Equipment Market Association (SEMA) Show.

Craige McFerrin, Falken’s TBR specialist and account manager, says each tire in the line is available in size 295/75R22.5. He expects size 11R22.5 to be added to the lineup in the second quarter of 2011.

Two other sizes — 11R24.5 and 285/75R24.5 — will be added by the fourth quarter.

GITI Tire (USA) Ltd. “In the segment of commercial tires, GITI is at the vanguard of manufacturers that comply with regulations created to reduce the emission of toxic greenhouse gases,” says the company.

“For example, the GT Radial GSL213 FS (for steer axles) and GT Radial GT669+ FS (for drive axles) truck tires have already received the SmartWay verification from the EPA under the latest Rolling Resistance Coefficient requirements. And the GT Radial GT979FS (for trailer axles) is in the process of verification.”

GITI says it expects SmartWay verification for additional commercial tires in 2011 and 2012.

Goodyear Tire & Rubber Co. On the commercial truck side, Goodyear offers a family of tires and retreads featuring its Fuel Max technology; seven of them are SmartWay-certified.

“Each Fuel Max tire incorporates cool-running compounds and constructions to help improve miles per gallon for fuel savings that can be applied straight to the bottom line,” says the company. “Along with promoting many miles per gallon, tires

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and retreads with Fuel Max technology offer great performance and long original tread life for a low cost per mile.”

Hankook Tire America Corp.

Hankook markets five medium truck tires in the U.S. that target rolling resistance: the AL11 and AL07+ steer and all-position tires; the DL11 and Z35A drive tires; and the TL01 trailer tire. The AL11, AL07+ and DL11 are designed using Hankook’s e3 (pronounced e-cubed) technology, which focuses on energy, economy and environment.

The company says e3 “is part of Hankook’s Kontrol Technology Hankook’s AL11 is a philosophy, which allows for the premium long haul design and production of tires that steer tire. provide a range of benefits across four areas that consumers identified as key when choosing quality tires: performance, safety, comfort and a tire’s impact on the environment.”

Kumho Tire U.S.A. Inc. Kumho has three SmartWay-certified tires: the eco-friendly KLS02e, KLD01e and the KLT02e.

“Kumho Tire is fully committed to expanding our line-up of EPA SmartWay-approved commercial medium truck tires,” says Rick Brennan, vice president of marketing.

“Kumho Tire is currently applying Low Rolling Resistance technology The Kumho KLD01e to our Regional Steer product to has a full 26/32-inch deep tread. achieve SmartWay certification.”

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Low-rolling resistance Michelin North America Inc.

“innovative compounding technology” to resist irregular wear Michelin has 15 Michelin brand truck tires (six steer, five and produce high miles per 32nd-inch of tread. drive and four trailer) and two BFGoodrich tires (one steer, one trailer). Five of the Michelin tires are X One wide-base lines.

Yokohama Tire Corp.

“The Michelin X One is a game-changing, fuel-saving solution Yokohama has nine SmartWay-certified tires, including for the trucking industry, born out of Michelin’s commitment the 703ZL drive tire. The “ultra-long” mileage tire is the first to bringing sustainable products to the marketplace,” says the produced with Yokohama’s Zenvironment technology, which company. “The X One reduces rolling resistance over duals uses cutting-edge technology to produce tires that are more by 12%.” fuel efficient and help protect the environment.

In 2009, the U.S. Department of Energy’s Oak Ridge Lab It features a deep one-inch tread with the lowest rolling published a study citing up to 10% fuel-savings advantage using resistance in its category, according to the company. It also has a wide single tires over duals. solid closed shoulder that provides even wear, which translates “The primary technology used in X One is Infini-Coil, a to more road miles. ■ quarter-mile of steel cable that allows the tire to keep its shape.”

Other benefits of X One tires include No matter how you break down the numbers, domestic replacement truck weight savings, lower emissions and regulation tire shipments are up 20% through the first quarter. Overall? Imports? Widecompliance. base? You name the replacement truck tire category and that segment is “X One tires can save more than 700 pounds booming. So is the original equipment market, for that matter. per truck, allowing for more cargo per load, which To get a feel for how the brands are faring, here is the year-to-date translates to fewer loads and lower emissions.” market share by company or country.

Tire shipments in 2011

Toyo Tire U.S.A. Corp.

Toyo has three SmartWay-certified tires: the M137 steer tire, the new M657 drive tire and the M157 trailer tire.

The company says the M137 is Toyo’s benchmark commercial product. It is designed “to optimize performance in high speed, line haul applications where irregular wear often cannibalizes a product prematurely.”

The M137 uses “optimum” tread depth and

SmartWay-certified 17 truck tire brands make the list The following low-rolling resistance tires are SmartWay verified when used on class 8, line-haul trucks. They are listed by brand name.

BF Goodrich: ST244 steer, TR144 trailer.

Bridgestone: R280, R287 and R287A steer; Greatec S800Z, M720, Greatec drive; Greatec R135, R195, R197 and S197 trailer.

Continental: HSL2, HSL2 ECO Plus, HSR, HSR1, HSR1 ECO Plus, HSR2, HSR2 ECO Plus and HSR2 SA steer; HDL ECO Plus, HDL2 ECO Plus, HDL2 DL ECO Plus, HDR, HDR1 ECO Plus, HSR, HSR1, HSR1 ECO Plus, HSR2, HSR2 ECO Plus and HSR2 SA drive; HTL ECO Plus and HTL1 trailer.

Double Coin: FR605 steer, FD405 drive, FT105 trailer.

Dunlop: SP384 FM steer, SP456 FM drive,

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2011 replacement truck tire market share Company

change Company

%

change

Bridgestone 25.0%

%

down

Yokohama

7.5%

up

Michelin

21.5%

same

CMA LLC

4.0%

same

Goodyear

21.0%

down

South Korea

4.0%

same

Continental

7.5%

same

Others

10.0%

down

Source: MTD estimates

SP193 FM trailer.

Falken: RI109 EcoRun steer, BI887 EcoRun drive, RI119 EcoRun trailer.

Firestone: FS507 steer, FD695 PLUS drive, FT455 PLUS trailer.

General: S371, S580 and S581 steer; D660, S371, S580 and S581 drive; ST250 trailer.

Goodyear: G399 Fuel Max and G662 Fuel Max steer; G305 Fuel Max AT, G305 LHD Fuel Max, G392 SSD and G572 Fuel Max drive; G316 LHT Fuel Max, G316 Fuel Max DuraSeal and G394SST trailer.

GT Radial: GSL213 FS steer, GT669+ FS drive.

Hankook: AL07+ and AL11 steer; DL11 and Z35A drive; TL01 trailer.

Kumho: KLS02e steer, KLD01e drive, KLT02e trailer.

Michelin: X Coach XZ, XZA3, XZA3+, XZA2, XZA1+ and XZA2 Energy steer; XDA Energy, XDA3, X-One XDA, X-One XDN2 and X-One XDA Energy drive; XTA Energy, XT1, X-One XTA and X-ONE XTE trailer.

Roadmaster: RM180 and RM185 steer; RM871 trailer.

Sailun: S605 steer.

Sumitomo: ST778SE steer, ST710SE trailer.

Toyo: M137 steer, M657 drive, M157 trailer.

Yokohama: RY617, 103ZR and 101ZL steer; 703ZL, TY517mc2 and TY577 drive; RY407, RY587 and RY587mc2 trailer.

Falken guarantees two retreads within five years from the D.O.T. date for its premium EcoRun line.

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Construction tires

Two new construction tires Continental improves fuel efficiency and mileage features

By Bob Bissler

T

he proof is at the proving grounds. Continental Tire the Americas LLC (CTA) launched two construction tires last month at its Proving Grounds in Uvalde, Texas. The new medium radial truck tires represent several years of testing at the 5,000-acre facility.

The Heavy Steer Construction 1 (HSC1) and the Heavy Drive Construction 1 (HDC1) tires were designed for optimal mileage and reduced stone retention.

At a special event for fleet customers and truck tire dealers, CTA personnel outlined the company’s commitment to grow and evolve with the fast-changing truck tire market.

“Who would have thought five years ago that the main driver for transportation goods would be the fuel efficiency of tires?” said Libor Heger of CTA’s brand management segment. “It’s not mileage anymore. Fleets more and more are putting the emphasis on fuel efficiency.”

To improve fuel efficiency, CTA engineers focused on enhancing the tread design of both tires. The HSC1’s new tread design has a three-groove pattern that provides strong performance on loose surfaces. The tire’s tread depth has been increased from that of its predecessor, the HSC, from 23/32-inch to 24/32-inch. Tread width also has been increased, from 220mm to 229mm.

The HDC1’s new tread pattern has an altered tread block

The HSC1’s tread pattern has a three-groove design for strong performance on loose surfaces.

flank angle that reduces trapped stone by 50% from the HDC it replaces. The tread depth also has been increased, from 30/32-inch to 32/32-inch.

Both tires are available in sizes 11R22.5 and 11R24.5 for load range H. TheHCS1 will be available in 12R sizes later this summer.

The tires were designed with steeper sidewalls to provide greater load-carrying capacity and improved retreadability.

The new sidewalls also offer more stability and greater resistance to deformation caused by radial forces.

The new tires are made with a compound that consists of long polymer chains to prevent deep tears compared to short polymer chains. The toughness of the new on-/off-road compound means increased resistance to cuts, chips and chunks. It also reduces the number and, more importantly, the depth of any cuts and tears. In addition, it improves protection of the casing by keeping damage superficial.

“The addition of the HSC1 and HDC1 has completed our portfolio of truck tires that are ideal for coal or waste hauling, logging, construction and other on/off highway service,” said Clif Armstrong, director of commercial truck tire marketing. “Last year, we introduced our new trailer tires for this segment, the HTC1 and HTL1. So with the steer and drive products launched this week at Uvalde, Continental now offers a new generation The HDC1 features technologies to reduce stone retention, resulting truck tire for every wheel position in construction and severe duty trucking.” in fewer casing penetrations.

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MTD June 2011 6/8/11 3:26:49 PM

In accordance with CTA’s new ContiLifeCycle approach launched in March, the tires were designed for optimum retreadability. A retread of the HTC1 will be available this summer, and one for the HDC1 will follow soon after. The tires also were designed to be compliant with the EPA’s SmartWay certification requirements.

“We do a lot of testing for SmartWay certification,” said Armstrong. “We started building a new testing plan in development for SmartWay certification for either tractor enhancements, or aerodynamic elements for trailers. We also do product development testing as per the modified J1321 required by SmartWay. “We run with about $250,000 worth of instrumentation in the test trucks, and we measure everything — if the driver has his headlights on, if he’s got his A/C going, if he’s turning the radio up too loud. We take every variable into the test that we possibly can.”

The company has come a long way since its inception 140 years ago. At that time,

Continental’s main product was horseshoes, which is why there is a horse in the company logo. Since then, CTA has evolved to keep up with changing transportation markets.

“In the future, we will add one more product group here, the hybrid segment,” said Heger. “This segment will consist of specially designed products for the long haul applications.

“In the construction business, we have three groups of products: regional, on-road/off-road products, and special off-road products, such as mining. We will continue to design products for different axles and for different applications.” ■

Stone retention problems?

No problem Continental engineers go to extremes to test tires Continental Tire the Americas LLC engineers in Uvalde, Texas, leave no stone unturned when it comes to improving the company’s global portfolio of construction tires.

Recently, one of the construction tires for the European market was experiencing stone retention problems. In order to perform accurate tests at its Uvalde Proving Grounds, engineers took extraordinary steps.

“We shipped several tons of European rock into southern Texas so we could recreate the surface that was causing the cutting and chipping,” says Curtis Decker, manager of product development.

“That seems extreme, and it did to the Drug Enforcement Administration. They broke down and searched all our containers of rock because they could not believe anybody would ship containers of rock across the ocean. At times, that’s what is required to address certain issues.”

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Retreading

Retreads vs. new truck tires MTD breaks down the numbers, with a little help from the Top 100

By Bob Ulrich

T

he relationship between new and retreaded truck tires is symbiotic. New truck tires are built to be retreaded; retreads help truck tire manufacturers meet demand.

Until 2003, more retreaded truck tires were produced annually than new truck tires. At that point, their trend lines crossed.

Since then, new truck tires have outnumbered retreads five of the last seven years. And with casings in short supply, that trend should continue into at least the immediate future.

Welcome to the new normal.

In 2010, 15.2 million new replacement truck tires, worth $5.1 billion, were shipped in the United States. Another 14.3 million retreaded truck tires, worth about $3 billion (including casing costs), were sold in the domestic market. So a new truck tire costs 58% more than its retreaded counterpart.

The retreaders on Modern Tire Dealer ’s “Top 100 Retreaders in the U.S.” list, which appeared in our April 2011 issue, represented nearly 89% of the total truck tire retreads produced last year. They also run 304 retreading plants, close to 45% of the domestic total.

The top 25 retreaders account for more than half (59.2%) of the industry’s output, and 29% of the total plants. They

Market share: truck tire retreads

retread an average of 167 truck tires a day, which is twice that of the average retread plant.

Wingfoot Commercial Tire Systems LLC, a Goodyear Tire & Rubber Co. subsidiary based in Fort Smith, Ark., retreads 6,180 truck tires a day.

Southern Tire Mart, based in Columbia, Miss., is second at 3,612. It is the largest independent truck tire retreader in the U.S. Bridgestone Commercial Solutions Group, which oversees Bandag retreading, is third at 3,482 a day. Snider Tire Inc., MTD’s 2010 Tire Dealer of the Year, is fourth at 2,050. ■

Retreader on the move Gem City Tire moves from 60 to 53 Gem City Tire Inc., based in Dayton, Ohio, moved up seven spots on Modern Tire Dealer’s “Top 100 Retreaders” list this year. The reason? It increased its daily output 12%, from 210 truck tire retreads to 235.

President Jeff Lecklider expects further growth in 2011. He replaced equipment at his Goodyear retread plant, including a computerized buffer, in December and January. A new computer software program also was installed.

“We are gearing up for at least a 10% to 15% increase in our existing capacity in our plant.”

(among the ‘Top 100 Retreaders’)

Process

Share

Bandag

46.0%

Goodyear

20.9%

Michelin

20.4%

Marangoni

3.9%

Oliver

3.2%

Acutread

1.0%

Other

4.6%

* Michelin owns the Oliver retread processes.

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Gem City Tire Inc. President Jeff Lecklider and Vice President Pat McMahon (third and fourth from left, respectively), talk with Matt Sharrett (left) and Jon Russell from TruckersB2B at the 2011 Goodyear Dealer Conference earlier this year.

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‘The more informed we are about a product, the less likely we are to lose a sale.’

Bob Slagle

Our consumer business is flat. Dollars are higher but not units.

Pires: We have had to adjust our budgets to offset these problems. Commercial salesmen are constantly reminded to drive less and purchase fuel at the least cost. It has also affected consumer and commercial tire purchases. Both don’t have the budget to purchase high-end products.

Huebert: Not only have our expenses increased — delivery, service, etc. — but our customers’ expenses have increased, too.

Howard: We’ve seen very little impact.

‘We’ve increased our inventory by 50% in order to have product to sell.’

Lionel Pires

levels and doing so far more frequently than normal. We’re not seeing one specific segment that is short; it’s just all over the board.

Howard: Supply has been tight with us in all segments. We have been forced to purchase based on size, not necessarily by manufacturer.

What are your other major concerns?

Slagle: It’s the possibility of inflation. We have added huge amounts of government debt over the past 10 years. Unless we ask the government to do less for us, taxes will be increased.

Health care costs are another concern. We pay a major portion of our employees’ medical care. The amount has risen drastically, and I don’t see anything on the horizon that will reduce it.

‘I see increasing government regulations taxing valuable time.’

Robert Huebert Pires: Pricing from high crude costs and the manipulation of rubber pricing have created price increases never seen in the last 30 years. This has created the desire from many dealers to sell cheap in order to help their cash flow by moving product in order to pay their bills.

Huebert: I see increasing government regulations taxing valuable time.

Tire costs are rising and our customers are looking at new ways to save.

Howard: The other dealers have already pretty well mentioned my other major concerns.

What impact are soaring gasoline/oil prices having on your business?

Slagle: In a random survey I saw this week, 62.5% of the respondents said they are changing their driving habits.

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How are you handling on-going price increases?

Slagle: Most consumers are aware of escalating tire prices.

We try hard to be competitive, and our competition has the same issues we do.

Pires: Consumers in both retail and commercial are doing more price checking because some of them really don’t believe the reasons behind the increases could cause such a large increase.

Huebert: Most consumers who haven’t purchased tires in a few years have sticker shock. We’re seeing much resistance to the increases. Inquiries about used tires are way up!

Howard: We find our salespeople need to spend the extra time to educate the consumer as to why the prices are up. Once explained, they normally understand.

What impact have large distributors had on your business?

Slagle: Whenever possible, we buy directly from tire manufacturers. With the proliferation of sizes, we cannot have every tire in stock that consumers want. Distributors help us with those situations.

‘We have been forced to purchase based on size, not necessarily by manufacturer.’

Richard Howard

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Focus on dealers Pires: As in the past, they operate on low (margins) and survive on year-end bonuses.

While some have gone out of business or sold, the big get bigger!

Huebert: Good, in that there is another source to go to for product, but bad, in that sometimes we perceive them as competition.

Howard: With the back order situation from our direct programs, we are fortunate to have a good relationship with the large distributors.

Representatives from Point S, the leading independent tire and car service dealer network in Europe, met with ITDG’s Mike Cox (right) to discuss mutual areas of interest. Point S sold 12 million tires in 2010 through its network of 1,150 dealers with 1,950 locations in 20 countries. Pictured, from left, are: Point S Development International Operation Director Fabien Bouquet and Juergen Benz, manager.

Growth spurt

ITDG represents 361 locations in 27 states The Independent Tire Dealers Group (ITDG) continues to expand outside its West Coast roots. It now has dealers in 27 states.

During its annual meeting in late April in Phoenix, Ariz., CEO and President Michael Cox said the group has 125 total dealers with 361 locations. ITDG has 67 shareholder members — eight members became shareholders in 2010.

As a group, Cox said ITDG had a “top line growth of 49% and a comp (same member) increase of 31%.”

The Phoenix meeting was attended by representatives from 75 member dealer companies and 45 vendors and suppliers.

Three action plans came out of the ITDG meetings.

First, the group is looking to bring new members together with existing members for more interaction and communication within the group. This could call for regional meetings.

Secondly, the group is aggressively looking for more synergies inside and outside the group. And lastly, the members agreed to act as one within the industry.

The ITDG’s captive insurance program has allowed the dealers to manage their own risk and has been very profitable, according to Cox. The group now has its own in-house counsel.

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Are your customers asking for low-rolling resistance tires?

Slagle: No. They have not been educated about rolling resistance.

Pires: There is very little demand for (consumer) tires that are low-rolling resistant. There is some demand for medium truck tires.

Huebert: No. Howard: Very few.

How important is online training to you?

Slagle: We have used online training for years. The more informed we are about a product, the less likely we are to lose a sale. MAST (Michelin Americas Small Tires) probably has the best online training that we have seen.

Pires: It will be a factor in the future. We currently do little online training. Most training comes from in-house training and the Tire Industry Association (TIA).

Huebert: We have used some online training and I can see even more in the future. We currently are receiving training from suppliers, vendors and associations in a wide variety of areas.

Howard: It is important. However, I prefer the old-fashioned way — face to face.

What are your top three reasons for being an ITDG member?

Slagle: Originally, we joined ITDG to lower our acquisition costs for tires so we could compete. Since then, we have become a stockholder, and each March we receive a nice volume bonus and dividend check.

Our top three reasons for being a member are: 1. ITDG lowers our buying costs; 2. we have many partners who I can exchange views with; and 3. we have a “captive” insurance company for workers’ compensation. Since joining, through their aggressive risk management, we have reduced our X Mod (experience mod) from 129 to 98. That has lowered our costs.

Pires: I belong to ITDG because: 1. most importantly, it gives us a good buying price by using the group’s potential buying price, which as a single dealer we would not get from the manufacturers. 2. The insurance group is a well-organized company and it has a great preventative safety program. It has been one of the reasons that my experience mod has gone down. Their periodic safety inspections are a great asset. More importantly is the manner that they are now closing injury cases within a very reasonable amount of time. This helps save the group money and as a dealer it helps keep our costs down.

This insurance group is second-to-none. 3. Being an investor in the group, the leasing company and the insurance group have shown to be good investments. Year-end dividends have been more than expected.

Huebert: We joined for product and pricing. ITDG provides: 1. consistent workers’ comp coverage; 2. a network of dealers to discuss issues; and 3. programs and products that have a positive effect on our bottom line.

Howard: ITDG is extremely important to our bottom line.

The top three reasons for being a member are: 1. captive insurance company; 2. being able to exchange ideas amongst peers; and 3. the ability to remain an independent tire dealer and still purchase from so many different suppliers competitively. ■

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6/8/11 11:50:35 AM

Focus on industry

Updating Sentaida’s tire production Everything is on schedule in 2011, says Lin

By Greg Smith

Lin also said the company wants to continue to be primarily an exporter of he plant expansion and growth by Sentires, with 80% of its tires being shipped taida Group Co. Ltd. is on-schedule. abroad. Last year, Sentaida had sales To help celebrate and discuss its fuof three million tires worldwide, and ture plans, Sentaida officials invited a handful plans to sell six million in 2011. of its key dealers and Modern Tire Dealer to its “We want to sell more tires in the plant in Qingdao, China.

U.S. It’s the most important market The company used the plant tour to showfor us,” said Lin. case its new equipment and commitment Maxwell Wee, director of sales for for quality. Lanny Lin, president of Sentaida Sentaida International Inc., based in Group Ltd. said, “Our plan is to have a brand Miami, Fla., said, “To do this, we know mix that will be viewed as mid- to high-end that we must build quality products in the marketplace.” and have better fill rates with more tires Known primarily for its Landsail and Delinte in the distribution channel.” consumer tires in the United States, Lin said Qin Long is chairman and Wee said the company is continuing Sentaida currently is running an even mix of CEO of the Sentaida Group. to look for distributors as the comprivate brand tires to its house brands. pany’s capacity expands to increase its He then laid out the company’s five-year plan, along with market penetration. This also means finding distributors who some short-term strategies. The three key plans are:

T

1. be a first-class tire brand known worldwide for quality.

2. be a highly profitable tire manufacturer.

3. have a business philosophy known for high quality products along with building a long-term stable relationship with customers through a professional sales team coupled with service and technical assistance.

Sentaida has its own chain of retail stores in China (for more store photos, visit Modern Tire Dealer ’s Facebook page).

Sentaida’s factory produced 13,000 pieces per day in April of this year, and the plan is to be doing 24,000 pieces per day by December. All of the tires being produced are PCR, UHP, LTR, SUV and CUV consumer tires.

Within five years, the factory is to be producing 20 million tires per year. Lin also said he wants to see a higher mix of house brand to private brand products by that time.

The company has started aircraft tire production at the facility, with a goal of 40,000 tires per year. This operation will include the startup of a retreading operation for the aircraft tires. Lin said the company wants to achieve a goal of being in the top 10 for quality before it begins to produce truck tires in the factory.

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Top-of-the-line from China Atlanta dealer has been on board since the beginning Horace Bennett of Western Distributors of Atlanta Inc. has been “selling Delinte tires from the beginning.” Bennett owns the company along with two partners.

“I am a firm believer that Delinte are top-of-the-line as far as Chinese-produced tires go. I’ve dealt with many other Chinese companies over the years, and these are as high quality as it gets.”

Western Distributors has been in business for 26 years with warehouses in Atlanta, Charlotte and New Orleans.

The company is well-known for its custom wheel and performance tire business. About 46% of the company’s business comes from tires.

It has around 5,000 total customers on the books.

The key to his company’s success, according to Bennett, “is we are known for our availability and service. We aren’t the “We have knowledgeable cheapest and don’t sales guys and that makes the difference,” says Bennett. want to be.”

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6/8/11 11:50:51 AM

Focus on industry

Standing outside the tire manufacturing factory in Qingdao are, from left: Horace Bennett, owner of Western Distributors of Atlanta; Eden Qin, Sentaida; Hilton Cordero, sales manager for Sentaida International; Maxwell Wee, director of sales for Sentaida International; Luis Pulido, president of Acero Tyre in Venezuela; and Mustafa Abubaker, owner of Tire Universe in Dallas.

are selling more mainstream sizes of tires. To date, Sentaida has specialized in the performance-sized product segment of the industry.

The company wanted to assure its current dealers that they understand the need to maintain profitability for all levels of distribution. Wee said the company has 29 distributors with 36 warehousing points in the U.S. He believes the company needs another two to three years to adequately service the entire country with distributors.

During a product presentation, Sentaida officials said they hope to soon be adding a 30-inch tire to their line-up. Currently, the company has tires from 13- to 28-inches in 80-series to 25-series sizes. The company is bringing three different Lansail lines to the U.S. — the LS288 touring tire; the LS988, a sports UHP tire; and the LSV88, a commercial light truck tire. It is scheduling production of 19-inch and 20-inch sizes of its Landsail CLV5 luxury UHP SUV tires beginning in July; a CUV tire and a sports CLV2 tire in July; and 15-, 16- and 17-inch sizes of its all-terrain off-road tire, the CLV3, in August.

Sentaida is also planning to add two series and 38 sizes to its Delinte line later this year. ■

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Across the Tire Universe Delinte is a delight to Texas dealer Tire Universe has been selling the Delinte brand from Sentaida International Inc. since September 2009, according to owner Mustafa Abubaker.

Abubaker says Delinte is his highest volume ultra-high performance brand, and it accounts for 25% of his company’s total sales. The company also sells 13 other tire brands and 13 wheel brands.

“Sentaida’s been a solid partner.

Their products are excellent in quality and their service is unparalleled.”

Tire Universe was founded in Texas by Abubaker in 2005. It has a 100,000-square-foot warehouse in Dallas and a 27,000-square-foot warehouse in Houston. Tire Universe has more than 1,000 active customers.

“We are best known for our UHP Tire Universe owner Mustafa products, even though we are getting Abubaker has 127,000 square into the metric and light truck tire feet of space in his two Texas tire and wheel warehouses. business,” says Abubaker.

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Business insight

The latest in Web-based processing Cloud computing protects your software and data

M

ost people don’t like cloudy days. When the sun isn’t shining, people tend to get cranky. A sunshiny day makes people happy and less stressful.

In the technology world, however, clouds are actually a good thing.

“Cloud computing” is the latest opportunity in computing, and you should be taking advantage of it. Perhaps you already are in some application By Wayne Croswell in your business.

According to Wikipedia, “cloud computing is Web-based processing, whereby shared resources, software and information are provided to computers and other devices (such as smartphones) on demand over the Internet.”

What does that mean to you and your business? It opens up lots of opportunities for you in so many ways. Take your basic business software, for example. You would no longer need to have that software and data sitting on a machine in your office just waiting for a disaster to happen. Your business data would be available to you anytime, anywhere as long as you have Internet access and a browser. And it would be safe and backed up.

Applications are all going the way of cloud computing. Sales force automation and Customer Resource Management (CRM) are both available via cloud computing. Your entire sales force, regardless of where they reside, can get at any and all data relating to customers via the Internet.

So when one rep makes a change to the customer data, it’s available immediately to everyone in your company that has access to the sales force and/or CRM applications.

Cloud computing is being used for video surveillance, as well.

Old technology required the use of video recording devices at the shops or warehouses. Someone had to manually change the tapes or CDs all the time.

With cloud computing, video surveillance is taken to new heights. You still need cameras, but they are connected to the Internet and the recording is done in the “cloud.” You can manage all your locations (even delivery trucks) from one place — and that place is wherever you are when you want to take a look.

You “connect” to the recorded videos or live feeds from any computer you log into with a browser and Internet connectivity. The “manual” intervention with tapes and CDs goes away.

Storage is all being done in the cloud.

Head in the clouds Let’s take a closer look at putting your business software in the cloud. First, let’s look at the alternative to cloud computing: hosting your application on computers at your business. This

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means the programs that run your business as well as all the data reside on computers in your stores. Here are a few of the cons to in-house solutions.

• You are responsible for the computers that operate your business. As they become obsolete, you must replace them. As they become slow or disk storage runs out, you must increase the power of the machine or add disk storage. Should you have hardware malfunctions, you need to address the problem. When it’s time to receive a software update to fi x bugs or get new features, you must take down the system. All of these result in downtime for your business software.

• You need to make sure you are backing up your data every day, including providing for a safe off-site storage plan.

More time, more money.

The alternative is to place your business software and data in the hands of a secure data center, typically provided by your software provider. This cloud computing concept eliminates your concern with hardware malfunctions, obsolete technology, software updates, disk storage and data backup. All this is taken care of for you “auto-magically.”

Another thing to consider when going the cloud route includes: Make sure you have ownership of your data and an easy method to retrieve your data should you decide to move it somewhere else. Reliability of your Internet connection also is paramount to a high up-time. Remember, you are relying on operating your business from the cloud, so high availability is a must.

The service provider will make sure they have computers and backups, uninterrupted power and Internet connections, but you have to make sure you can get to the Internet from your locations. In addition to installing reputable, high-availability Internet services, you can install redundant or backup systems in the event you have an Internet problem.

Cloud computing can take many of the technology headaches out of your workplace. If you want to understand more about cloud computing and how you can take advantage of it in so many ways in your business, give us a call. We can help you figure out the best ways for you to utilize this great technology in your world.

So the next time you look up at the clouds, look real hard, you might just see your business in there. ■ As CEO and president of WECnology LLC (www.wecnology.com), Wayne Croswell is a “complimentary technology advisor” for independent tire dealers. Croswell can be reached at wcroswell@wecnology. com or (603) 249-5530.

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Business insight

Remember that old business plan?

(You did have a business plan, didn’t you?)

S

elling tires takes money.

Unless you invested in your business out of personal savings or inherited the family business, there is a pretty good chance you developed and followed a business plan to get your tire business up and running.

Bankers want to see them. Sophisticated investors won’t even talk to you without one. And it is possible that even if you did not By Roger McManus need to raise capital to start your business, you were enlightened enough to prepare one just for yourself.

Assuming that you prepared a business plan at one time, odds are that it has not been updated since you wrote it.

There is a lot less guessing. And, your numbers will be a lot more realistic because you are working from experience instead of hope!

But, you may ask, why would I want to write a business plan, or even update an old one? The answer pertains less to planning than to thinking. Using the business plan as a framework simply focuses that thinking more easily. Besides, business plans have followed a pretty standard format for years. Ever wonder why?

A new look at an old plan If you look at a few common components of typical business plans, you can restructure them into points that focus on current challenges you may be facing. By reworking the key elements of your tire business in your head, you will come away with a clearer awareness of time management, specifically how to spend:

Feeling uncomfortable If that is the case, this article should make you a little uncomfortable — at least to start. Uncomfortable because you will remember all of the things you said you would do that you have not quite gotten around to. The numbers you boldly forecasted now make you wonder what you could have been thinking! You have a lot of company. Don’t sweat it. There is good news.

Your business plan represented your best hopes at a point in time. You now have something real against which to compare it. You know the types of tires your clients use and the precise cost of the labor and materials to perform the various auto repairs that come in.

You know what equipment you have and what you need when you have the opportunity to make new capital investments. You know your inventory levels for the different types of tires and related products you use and what it costs to buy them in today’s market.

You know what you didn’t know at the time. Undertaking the “rewriting” of a business plan is not nearly as daunting as starting one from scratch. If you have never written one, it is actually pretty easy once you are already in the business.

• less time actually running the business, and • more time focusing on growing it — and, having a life of your own.

Digging out that old business plan and looking at it with new eyes will clarify what you have learned since you started and the things with which you are living while keeping the business going today. By reframing the business with “entrepreneurial eyes,” you are very much likely to see your business as much larger than you ever have before.

“How to Write a Business Plan... Made Easy” is a downloadable book that goes into great detail about all of the elements you should consider, and includes sample plans, financial plan worksheets and a quick-start guide, all for under $30. To read about it go to: http://tiny.cc/businessplan. For guidance more specifically for the tire business (but, at $70, a bit more expensive), check out www.tiny.cc/ tire-business-plan. ■

Roger McManus is author of “Entrepreneurial Insanity in the Tire Industry,” a new book that challenges business owners to examine why they opened their businesses and explore whether they are achieving the personal freedom that business ownership was supposed to deliver.

“Entrepreneurial Insanity in the Tire Industry” is available through Amazon in print or When reviewing your old business plan or starting a new one, a good starting Kindle form. If you buy your copy from the point is to list the people on your payroll and the jobs they do. Make note of Tire Industry Association Web site (www. what percentage of their efforts require input from you. tireindustry.org), the publisher will make a As you review this section of your plan, think hard about those who require contribution to the Tire Industry Educational the most and the least hand-holding. What policies could you put in writing Foundation. You can contact McManus directly that would eliminate a high percentage of your involvement with the kinds of at roger@ensanitypress.com. questions you deal with daily?

A scorecard for the players

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MTD June 2011 6/8/11 4:23:12 PM

Counter intelligence

It seems fast isn’t fast enough anymore ‘Turbulent’ is now the new ‘calm’ for tire dealers

I

’ve always admired how a cartoonist can say so much with a few images and a couple of captions. I remember years ago reading the comic strip Garfield — you know him, he’s the chubby, orange cat that is always questioning why things don’t seem to work out well in his world. In this particular comic strip, Garfield sat with this puzzled look on his face, By Wayne Williams and it read, “Just when I finally figure out where it’s at, somebody moves it.”

Garfield hit the nail on the head; things are moving. It’s not easy to figure out where it’s going, and keeping up with change is ever more challenging.

It’s indisputable, change is accelerating. As I wrote in an article last year, even the speed of change is changing, not only faster and faster, but wider and wider. The magnitude of change and the consequences of change are significant. Wrong decisions have more severe consequences than ever.

Today, many decisions feel more urgent, more complicated, and require immediate attention.

Going digital or giving up?

Please don’t think I’m trying to create some hysteria.

Last week I visited an independent tire dealer in Southern California at the dealer’s request. He was seeking advice. He’s contemplating what he considers significant changes in his marketing direction. He is, by default, being forced to make some changes (usually not a good position).

He knows the basic direction he needs to pursue; he has to go digital. He has no Web site. He has no relevant digital presence. He openly admits he has not acted, and that decision alone has adversely affected his business. He pointed to competitors in the area that are gaining on him.

He is losing business.

In days gone by, in the “Yellow Pages days,” he could get away with not changing his ad for a few years as long as the phone number and address were correct. Today, he can’t wait. He has to act now. He’s got the best-looking ad where returns are diminishing and is completely invisible where the opportunities lay.

This is an oversimplification, but it’s not like the Internet was turned on last week. The consequences of not acting prudently or quickly are lasting. He may never recover the lost business.

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The hardest reality beyond the speed and pace of change is the unrelenting, unending march. There is no rest. Right behind turbulent change, more change rages. Change is unyielding, moving violently and with intensity. This can be either wearying or energizing, or both wearying and energizing.

If we are waiting for change to slow or yield, we are kidding ourselves. The changes over the last few decades have produced a hardened, battle-ready group of product and service providers; they are known as “independent tire dealers.”

The changes we face work in favor of the independent tire dealer when change is addressed prudently, aggressively, strategically and with purpose.

I have two pieces of advice this month: Go more digital, and become more professional.

Number one: Go BIG digital. Abandon old, large, Yellow Pages ads. Abandon old advertising that only returns marginal results. Invest in the future, and the future is digital.

Number two: Become more professional. Not just a little more professional. Think quantum leap. If customers in your area want faster service, give them faster service — fast.

If they want WiFi, give ’em WiFi. Get rid of the old coffee pot and step it up. Look around, shop the competition, step up your game!

Become more professional Listen to this opportunity. I read a lot of business magazines such as “Fast Company,” “Forbes” and “Wired,” and I read a wide variety of White Letters, primarily pertaining to customer service, digital advances and in-store experiences, and there is a shift taking place.

The consequences of not acting prudently or quickly are lasting.

Big box stores like Walmart, Best Buy and others are having trouble keeping up with all of the changes. (No kidding — why should they be exempt from the pain of change?)

Anyway, the shift, the buzz is that consumers want personal service, and they want it the way they want it.

They want to deal more and more with smaller local retailers who get it! Do you understand what I’m saying here? Small

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Counter intelligence local retailers who get it! The trend is toward local shops! How do consumers find local retailers who get it? Well, they don’t stay up all night watching infomercials, and they don’t look in the Yellow Pages. I mean, what could you possibly say in a static ad with black ink on a yellow page, or a color ad on tissue-thin, yellow paper, that indicates that you get it? The fact is, if you’re in the Yellow Pages, it screams you don’t get it.

Where do the consumers go? They go online. They want to get info. They want prices, of course, but most of all, they want to deal with a professional who gets it!

If you’re not digital and you’re not professional, forget it!

I was reading “Automobile” magazine this month, the June 2011 issue. Talk about change. It’s their “sneak preview” issue.

Check this out if you didn’t see it: 165 new vehicles are coming in the next 24 months! A new, smaller Cadillac and a new, larger Cadillac; smaller Audis and larger Audis; smaller crossovers and larger crossovers; 556 horsepower Camaros; the return of the Dodge Viper; a Fiat; a Veloster; a Jaguar crossover. Minis are getting bigger and Caddys are getting smaller. The VW minivan is on the way, it’s called the Bulli.

This is going to get very interesting. Do you think the big box guys, Mr. Big Mart or Mr. Big Club, are going to be able to keep up with these changes?

My experience and my research is saying that this is a gigantic opportunity for the local retailer who gets it. Are you that local retailer?

My company is producing a video to hammer home the

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Dealers like Charlie Hamad of Hamad Tire Inc. in Cuyahoga Falls, Ohio, can check customer contact/ sales statistics over a set time period to nail down effectiveness of various promotional media.

point. Keep tuned to this column for more information. The video will be entertaining and informative! ■ 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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TPMS

Get serious about BMW 6-Series Special care is needed to avoid sensor damage SUBJECT VEHICLE: 2004-06 BMW 6-Series.

SENSOR IN TIRE? Yes. RESET PROCEDURE? Yes. Directions follow.

SPECIAL TOOLS NEEDED? No.

The tire pressure monitoring system (TPMS) in 2004-06 BMW 6-Series vehicles keeps track of pressure levels in all four tires. If a significant drop in pressure is detected, the system will turn on a red tire pressure warning message on the control center, and also sound a warning signal. If there is a problem with the system itself, the warning light will be yellow.

When the low tire pressure warning light and message appears, immediately check air pressure of all the tires and adjust to the specified pressure. If the warning light still comes on after adjusting the tire pressure, repair the damaged tire.

NOTE: If a tire’s pressure has been adjusted, the TPMS must be re-initialized.

To remove an old sensor, follow these steps.

1. Raise the vehicle on a suitable support. Remove the tire/wheel assembly from the vehicle.

2. Demount the tire from the wheel following the tire changer manufacturer’s instructions. Pay special attention to the following to avoid damaging the tire pressure sensor:

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union nut. If one of the valve parts is loose, replace the entire valve. c. Keep the sensor free of tire mounting paste. d. Fit the lower tire bead so that no pressure forces are exerted on the sensor. e. Fit the upper tire bead so that no pressure forces are exerted on the sensor.

2. Install the tire/wheel assembly on the vehicle.

Now you are ready to re-initialize the TPMS. NOTE: If a wheel or tire has been replaced, or repairs have been made to the air spring suspension, the TPMS must be re-initialized.

Figure 1

Figure 2

a. To prevent the pressing-off horn from damaging the sensor, do not rest the pressing-off horn on both rim sides in the area of the valve. b. The valve should be about 15 cm to the right of the assembly head to prevent the tire iron from damaging the sensor. c. The tire bead must not press onto the sensor.

Don’t damage the sensor

1. Set the tire pressure of all wheels to specification.

2. Press “Menu” button.

3. Open the “I” menu of the control center.

4. Select “Vehicle Settings” and press the controller.

5. Select “FTM” and press the controller.

See Figure 1.

6. Start the engine; do not start driving.

7. Select “Set Tire Pressure” and press the controller. See Figure 2.

8. Select “Yes” and press the controller.

9. Drive the vehicle. The message “Initializing” will be displayed. Initialization is automatically completed during the drive. When initialization is complete, “Status: Active” message will be displayed.

NOTE: The initialization finishes during driving, which can be interrupted at any time. When driving resumes, the initialization is continued automatically. ■ 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.

To install a new sensor, follow these steps.

1. Mount the tire to the wheel following the tire changer manufacturer’s instructions while paying special attention to the following to avoid damaging the tire pressure sensor: a. When the sensor is installed, the rim must not be cleaned with high-pressure cleaning equipment. b. Visually inspect the sensor for the external damage and check for a tight fit. DO NOT retighten the screw and

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Your turn

‘We must continue to educate the non-believers’ Dear Editor: Bob Ulrich’s article, “A case for casings: If they can get them, our Top 100 retreaders will retread and sell them” in the April issue of MTD resonated very deeply with me.

In addition to being a well-written, great article, it reminded me of a statement I have made many times during the past 30 years.

I said my goal was to work myself out of a job, meaning that our promotion of the economic and environmental benefits of retreads would have such a positive impact on truckers that they would not hesitate to have their tires retreaded, and there would no longer be a need for promotion.

Clearly that is not entirely the case, but the acceptance of retreading by the trucking industry is firm and is here to stay. The credit, in some small way, may go to industry associations that spend a lot of time and money promoting retreading.

But the major accolades belong to the retreaders, who have done such an outstanding job in improving the quality of their products over the years.

The manufacturers of non-destructive tire testing machines and other top quality equipment also deserve a tip of the hat for bringing a continual line of improved machinery and equipment to the market, making it possible for retreaders to constantly improve their finished product.

The nice part is that the real winners are the end users, and that makes me happy, knowing that I have done my part to open the eyes of doubters in the trucking industry, who have now become our strongest proponents of having their tires retreaded.

As the fleet manager of one large trucking fleet once told me, “You couldn’t take retreads away from us today with a gun.”

But as healthy as the retread industry is these days — the casing problem excepted — there is still more to do.

As long as people see road alligators on our highways and believe they are totally caused by retreads, and as long as there are still a few fleets in both the private and public

sectors that don’t believe that retreads will work for them, we must continue our efforts to educate the non-believers.

Harvey Brodsky, Managing Director Retread Tire Association Pacific Grove, Calif.

Stock determines success of ‘good, better, best’ sales strategy Dear Editor: I am in total agreement with your reader Harry Anderson, who wrote a letter to the editor appearing in the April issue of MTD titled “Stop re-inventing the wheel! — ‘Relationship selling’ is still your key to survival.”

“Relationship selling” is the key to success for the independent tire dealer. This is the advantage that the independent dealer has over regional and national retailers. The reference to “good, better, best” being dead, which I wrote about in the December 2010 issue, has to do with inventory and SKU proliferation.

There was a day in the past when a dealer had the good, better and best tires in stock in the back room and could offer the tires to the customer at the counter. Today, however, with ever-increasing SKUs and vehicle types, it is impossible to stock a good, better, best offering on the premises.

With soaring SKUs, the independent can’t be sure his suppliers have them in stock, either, without some phone calls or Internet research. This changes the sales presentation, of course.

It’s fruitless to offer tires that are unavailable, and as a result, the way it was once done is dead.

As Harry stated, the “good, better, best” strategy defines the middle to the prospective buyer. This was true yesterday, is still true today and will be true into the future. It will never change.

The good, better, best sales approach is as valid today as ever, but the execution today compared to days gone by is different.

Wayne Williams, President ExSell Marketing Inc. La Habra, Calif.

“COGS (cost of goods sold) is way up, gross profit margins are down, gross profit dollars are up, expenses are up. The net result is that we’re OK, but not as good as last year so far...”

Nate Zolman, President Zolman Tire Mishawaka, Ind. “The price of gasoline and diesel fuel is impacting our sales.”

Bill Anders, President Burlington Tire Service Inc. Burlington, 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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