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Photo: All-Star Tire Co. Inc.
Mike Manges By
HHere to stay MORE PRIVATE EQUITY FIRMS WILL INVEST IN TIRE DEALERSHIPS
opefully, you’ve had an opportunity to peruse the 2024 MTD 100, our list of the largest tire dealerships in the United States, published in last month’s edition of MTD.
I’ve looked at it many times!
When examining the MTD 100, patterns, trends and takeaways always become visible. My biggest takeaway from this year’s MTD 100 is the growing number of large tire dealerships that are either owned or backed by private equity groups.
At the top of this year’s MTD 100 with 2,115 stores is Millwood, N.Y.-based Mavis Tire Express Services Corp., which in 2021 was acquired by a group of investors led by BayPine LP.
With nearly 500 company-owned locations, Les Schwab Tire Centers Inc. is still owned by Meritage Group LP, which acquired the Bend, Ore.-based dealership in 2020.
Los Angeles, Calif.-based private equity rm Leonard Green & Partners remains a majority investor in Sun Auto Tire & Service Inc. as it has since 2021. (Sun Auto Tire has grown to include more than 470 locations across 30-plus brand names.)
San Francisco, Calif.-based Percheron Capital owns Big Brand Tire & Service, which has expanded to nearly 210 locations.
Moving down the list, Northern Rock Auto, which does business as Main Street Auto and has 58 locations, also is backed by private equity.
Bloom eld Hills, Mich.-based O2 Investment Partners owns Straightaway Tire & Auto, which has 54 stores.
Audax Private Equity, with o ces in San Francisco and Boston, Mass., bought into High Ridge, Mo.-based Dobbs Tire & Auto Centers Inc., which has 42 locations, last year.
Garnett Station Partners, based in New York, N.Y., has a stake in Goodturn Tire & Auto, which does business under nearly 10 di erent brand names with a total of 27 stores.
Bestige Holdings, headquartered in Park City, Utah, gained majority ownership of North Salt Lake, Utah-based Burt Brothers Tire & Service, which now has 26 locations, in 2023.
Who knows how many other MTD 100 dealerships have private equity backers? ( at’s why they call it “private!”)
One thing is for sure: private equity ownership in independent tire dealerships is here to stay — and not just among the “big guys.”
Smaller tire dealerships will continue to be attractive targets for private equity investment and ownership, according to MTD columnist Michael McGregor, a partner at Focus Investment Banking LLC.
McGregor advises multi-location tire dealerships on mergers and acquisitions and has worked with many private equity rms. Private equity groups “are in every segment,” he says, and some “are looking for one, two or three locations.”
e amount of available capital — or “dry powder” — within reach of private equity rms is high.
According to S&P Global, the value of private equity dry powder reached $2.59 trillion at the end of 2023, a year-over-year increase of nearly 10%.
“If you look at the chart of how dry powder has grown, it’s almost a straight line up,” says McGregor.
What will further accelerate private equity investment in tire dealerships? Interest rates.
“When interest rates are high, you’re either going to be very selective with the acquisitions you make or you’ll put more equity in now,” says McGregor.
“Private equity gets more interested in acquiring tire dealerships and can get more competitive with valuations when rates are lower.”
In his July report to Congress, Federal Reserve Chairman Jerome Powell said that the Federal Reserve Committee does not believe “it will be appropriate to reduce the target range” — the target interest rate set by the Federal Reserve — “until we have gained greater con dence that in ation is moving sustainably toward 2%,” which is the Feds’ stated objective.
During the same session, however, he noted that recent “monthly readings have shown modest further progress” toward the 2% target.
Regardless of what happens with interest rates this year or the next, it’s a good bet we’ll see more private equity investment in tire dealerships.
is will continue to change the face of not only the MTD 100, but the tire industry in general. Get ready for it. ■
If you have any questions or comments, please email me at mmanges@endeavorb2b.com.
Big Brand Tire & Service, which has more than 200 locations, is one of several dealerships on the 2024 MTD 100 that has private equity backing.
Photo: Big Brand Tire & Service
ModernTireDealer.com
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Flurry of activity
Business unit divestitures, tire dealer and distributor events, grand openings, tire dealership expansions and more were among the most widely read stories of the past month on MTD’s website.
1. What OTR tire sale means for Goodyear
2. ‘The Chick- l-A of the tire business’
3. MTD 100 lists largest tire dealerships
4. Photos: Steve Shannon Tire sponsors 4-Wheel Jamboree
5. Burt Brothers wants 75 to 100 Stores
6. Goodyear to sell OTR business to Yokohama
7. Photos: A look at ATD’s newest distribution center
8. Discount Tire expands mobile service
9. Expansion is name of the game for MTD 100 dealers
10. Photos: Inside Grismer Tire’s newest store
DIGITAL EDITION
Check out MTD ’s digital edition at the top of our website’s homepage.
Chad Hjellming chjellming@endeavorb2b.com (651) 846-9463
MTD READER ADVISORY BOARD
Rick Benton, Black’s Tire Service Inc.
Jessica Palanjian Rankin, Grand Prix Performance
John McCarthy Jr., McCarthy Tire Service Co. Inc.
Jamie Ward, Tire Discounters Inc.
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Modern Tire Dealer (USPS Permit 369170), (ISSN 0026-8496 print) is published monthly by Endeavor Business Media, LLC. 201 N Main St 5th Floor, Fort Atkinson, WI 53538. Periodicals postage paid at Fort Atkinson, WI, and additional mailing offices. POSTMASTER: Send address changes to Modern Tire Dealer, PO Box 3257, Northbrook, IL 60065-3257. SUBSCRIPTIONS: Publisher reserves the right to reject non-qualified subscriptions. Subscription prices: U.S. ($81.25 per year). All subscriptions are payable in U.S. funds. Send subscription inquiries to Modern Tire Dealer, PO Box 3257, Northbrook, IL 60065-3257. Customer service can be reached toll-free at 877-382-9187 or at moderntiredealer@omeda.com for magazine subscription assistance or questions. Printed in the USA. Copyright 2024 Endeavor Business Media, LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopies, recordings, or any information storage or retrieval system without permission from the publisher. Endeavor Business Media, LLC does not assume and hereby disclaims any liability to any person or company for any loss or damage caused by errors or omissions in the material herein, regardless of whether such errors result from negligence, accident, or any other cause whatsoever. The views and opinions in the articles herein are not to be taken as official expressions of the publishers, unless so stated. The publishers do not warrant either expressly or by implication, the factual accuracy of the articles herein, nor do they so warrant any views or opinions by the authors of said articles.
Discount Tire continues to bring its mobile tire service to new markets.
Photo: Discount Tire
Industry News
Burt Brothers wants 75 to 100 stores
PRIVATE EQUITY OWNER TO EXPAND DEALERSHIP’S REACH
Fueled by private equity group and majority owner Bestige Holdings, Burt Brothers Tire & Service Inc. has aggressive growth plans.
e 26-store, North Salt Lake, Utah-based dealership wants to add 40 locations within the next three years and is targeting a total footprint of 75 to 100 outlets within the next half-decade, Brian Maciak, the CEO of Burt Brothers Tire & Service, recently told MTD.
Bestige Holdings, which is based in Park City, Utah, gained majority ownership of Burt Brothers Tire & Service in early-2023, a er acquiring a stake in the dealership in September 2022.
NEW LEADERSHIP
Maciak, former president and CEO of TBC Corp.’s Big O Tires program, became chief executive of Burt Brothers Tire & Service in March 2024.
e second generation of Burt Brothers Tire & Service ownership — Brandon, Cory, Jason, Jeremy and Jake Burt — are no longer employed by the dealership, having le the company via “a transition of several leadership roles,” Maciak told MTD. However, they retain minority ownership in their namesake rm, added Maciak, who did not discuss speci cs. (Burt Brothers Tire & Service was founded by brothers Ron and Wendel Burt in 1991. Wendel Burt died in April 2023.)
‘MONUMENTAL SCALE’
Burt Brothers Tire & Service added ve locations to its footprint during the rst half of 2024.
“We have a brand new store in Tooele, Utah,” Maciak told MTD. “We acquired JP Midland Tire Pros in Roy, Utah,” which added another location to Burt Brothers Tire & Service’s network.
On June 1, Burt Brothers Tire & Service picked up three more locations via the acquisition of e Tire Company, an independent tire dealership in Cedar City, Utah.
“Our pipeline is pretty full,” said Maciak. “We’re de nitely going to continue to grow and grow on a monumental scale.” e dealership’s growth “won’t be limited to Utah,” which is Burt Brothers Tire & Service’s traditional market.
“We’ll be growing in the Mountain region, so in a short time, you’ll see us in other states. It will be aggressive growth, but we have the funding, the timeline and the team to carry it out. Bestige wants us to grow.
“We’re going to grow in terms of roo ops and that will be fueled by green eld (stores), as well as acquisitions.
“We’re also going to grow the pro tability of each location. And we can’t hit our goals without having a best-in-class team, so we’re investing in their training and career paths.
“As a corollary to that, we’re (also) planning to invest in the customer experience,” said Maciak.
“We believe the customer experience will look di erent in ve to seven years than it does today. And we’re also taking a look at community involvement,” which he noted has always been a Burt Brothers Tire & Service priority.
“Burt Brothers has always given back to the community. We have various community sponsorships and partnerships. We’re going to continue to give back.
“We have a wonderful (business) that so far has been contained to the state of Utah and we’re going to take it to other states and make this more of a regional player.”
BESTIGE’S BACKGROUND
Burt Brothers Tire & Service is the only retail tire operation within Bestige Holdings’ portfolio, which encompasses 29 “platform investments” across 17 industries, according to the rm’s website.
Bestige Holdings’ other automotive industry properties include Johnny’s Auto Parts, an auto parts distribution company based in Miami, Fla.; National Auto Parts Warehouse, another auto parts distributor that’s headquartered in Miami; AutoPlus Auto Parts, a distributor with several locations throughout the Paci c Northwest; and Engine & Performance Warehouse, a specialized engine parts distributor that’s based in Denver, Colo.
As it pertains to Burt Brothers Tire & Service, “the plan all along was that Bestige would be injecting equity to fuel (the dealership’s) growth plans” a er buying into the business “and then take on more stock until they became majority owner,” Maciak told MTD.
— Mike Manges
“We’ll be growing in the Mountain region, so in a short time, you’ll see us in other states,” says Brian Maciak, CEO of North Salt Lake, Utah-based Burt Brothers Tire & Service Inc.
Photo: Burt Brothers Tire & Service
Bites Yokohama to buy Goodyear’s OTR business
Telle Tire adds store
Webster Groves, Mo.-based Telle Tire & Auto Centers has acquired a two-location dealership, Riechers Tire & Auto, which is based in Washington. A fourth-generation family business, Riechers Tire, will continue to operate under its traditional name, according to Telle Tire officials. The acquisition closed July 1.
Wilks buys Doyle Hayes
Albertville, Ala.-based Wilks Tire & Battery Service has acquired Doyle Hayes Tire Service in Dalton, Ga. The deal included a combination retail/commercial tire outlet and a Bandag retread plant, giving Wilks Tire 12 total locations and the dealership’s first location in the state of Georgia.
Sun is now SAFE
Sun Auto Tire & Service Inc. has launched its new Sun Auto Fleet Enterprises (SAFE) Fleet Program, “a comprehensive suite of services aimed at helping fleets of all sizes maximize productivity by reducing costly downtime,” according to Sun Auto Tire officials. Sun Auto Tire has more than 470 locations.
Discount expands service
Discount Tire is bringing its mobile tire installation service to the country’s third largest city. Starting this month, Discount Tire plans to roll out its mobile service in Chicago, Ill. “Discount Tire currently offers mobile tire installation across 11 states,” says Tom Williams, the dealership’s chief experience officer.
New top tech named Chapel Hill Tire’s director of training, Mike Storey, recently achieved World Class Technician status through the National Institute for Automotive Service Excellence. Storey is responsible for training new Chapel Hill Tire employees and fostering an environment of continuous learning and professional development.
Goodyear Tire & Rubber Co. will sell its OTR tire business to Yokohama Rubber Co. Ltd. for $905 million in cash.
The sale came eight months after Goodyear announced it would seek buyers of three pieces of its business, including its OTR tire operations.
“The sale of the OTR business marks an important milestone as we continue to execute against our Goodyear Forward transformation plan,” says Mark Stewart, CEO and president of Goodyear.
Rubber Co. Ltd. plans to acquire Goodyear Tire & Rubber Co.’s OTR tire business for $905 million in cash.
“We are grateful to our OTR colleagues who have driven the success of the business and are committed to working closely with Yokohama to ensure a smooth transition for customers and associates.”
In November, Goodyear said its OTR tire business produced annual revenue of approximately $700 million. In its announcement of the sale, Yokohama said the Goodyear OTR tire business unit, which makes tires for the mining and construction industries, generated total sales of $678 million in fiscal 2023 and has about 500 employees.
Goodyear says it will continue providing OTR tires for U.S. military and defense applications. As part of a product supply agreement with Yokohama, Goodyear also will manufacture certain OTR tires for Yokohama at some of its manufacturing locations for up to five years after finalizing the transaction.
The deal is subject to regulatory approvals and is expected to close by early-2025.
Yokohama says its acquisition of Goodyear’s OTR business will contribute to the ongoing expansion of the Tokyo, Japan-based firm’s off-highway tire business.
Yokohama says the global OTR tire market is expected to grow around 6% per year — “considerably higher than the projected 2% annual growth for the consumer tire market.”
Yokohama says it is already “well-positioned” in that global market for agriculture and forestry tires, which it estimates accounts for about 40% of the total off-highway tire market.
“The acquisition will serve to complement Yokohama Rubber’s OHT product range in non-agricultural applications by bringing in the strong brand power of Goodyear’s OTR business into the group,” said Yokohama.
As part of the acquisition, Yokohama will acquire all shares of Nippon Giant Tire Co. Ltd., which operates Goodyear’s OTR tire plant in Japan; Goodyear Earthmover Pty. Ltd. in Australia; and “certain OTR assets at the other plants and facilities around the world.”
Though neither company specifically mentioned it in their respective statements, in the U.S. Goodyear produces OTR tires at its plant in Topeka, Kan.
MTD asked Goodyear to clarify plans for the Topeka factory. A spokesman noted the plant also produces commercial medium truck tires and that “the Topeka plant will supply tires to Yokohama for an initial period of up to five years post-closing.”
When Goodyear first announced its intention to sell off its OTR tire operations, Chief Financial Officer Christina Zamarro said the business unit was more severable than other assets within the Akron, Ohio-based tiremaker’s portfolio.
Then-Chairman, CEO and President Rich Kramer also noted that Goodyear’s OTR competitors were much larger and to ramp up to compete at their scale would require “significant” investment, which Zamarro said wouldn’t be achievable in the near future.
Goodyear officials say they plan to use transaction proceeds to “reduce leverage” and “fund initiatives” in connection with its Goodyear Forward plan, elements of which were revealed in November 2023.
Yokohama
Photo: Goodyear Tire & Rubber Co.
A LONG WAY TOGETHER
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Bites ATD opens regional distribution center
Cosmo stickers are here
Tire Group International LLC (TGI) has launched redesigned tire labels for its Cosmo brand. All Cosmo tires will feature the new label design, which reflects Cosmo’s brand identity, according to TGI officials. TGI also is introducing a series of collectible stickers that will be rotated every few months.
Turbo signs deal
Turbo Wholesale Tires LLC has announced a brand partnership with Ultimate Fighting Championship’s Arman Tsarukyan. He will be the first ambassador of Turbo’s Rolling Big Power brand.
VIP Tires holds event
Auburn, Maine-based VIP Tires & Service recently held a customer appreciation event at its newly acquired Joe’s Tire Shop location in Waterbury, Conn. VIP Tires has invested about $200,000 in remodeling and improving the 6,000-square-foot facility.
Ascenso adds Dube
Ascenso Tires North America has expanded its original equipment sales team with the recent addition of Sylvain Dube.
Conti, Samsara team
Continental Tire the Americas LLC has announced a partnership with Samsara, a telematics provider, to create a data-driven fleet management solution for trailers.
Love’s opens location
Love’s Travel Stops has opened a new Love’s Truck Care location in Salinas, Calif., and has upgraded five existing Love’s Truck Care and Speedco locations.
New Schwab warranty
Les Schwab Tire Centers Inc.’s new “America’s Best Tire Warranty” is free to consumers and is a default part “of every tire purchase at no extra charge,” say Les Schwab officials.
American Tire Distributors Inc. (ATD) recently celebrated the grand opening of its first regional distribution center in McDonough, Ga.
The facility will serve as a central hub to support 22 ATD distribution centers across Georgia, Florida, Alabama, Louisiana, Mississippi and Tennessee.
ATD invested $10.5 million in the nearly 760,000-square-foot facility, which has the goal of employing 180 associates and holding 15,000 different SKUs.
American Tire Distributors Inc.’s (ATD) new distribution center will support ATD warehouses across Georgia, Florida, Alabama, Louisiana, Mississippi and Tennessee.
“Opening our inaugural regional distribution center in McDonough marks a pivotal moment for American Tire Distributors and our supply chain capabilities,” says Stuart Schuette, president and CEO of ATD.
“This facility not only exemplifies our commitment to improving the customer experience with faster delivery, but also highlights our dedication to bolstering the local economy.”
ATD officials say the new distribution center will be replenished daily and offer improved inventory availability.
ATD has had a presence in Georgia for nearly 25 years with facilities in Augusta, Kennesaw and Tucker.
New Grismer Tire store is ‘exceeding expectations’
Sales at Grismer Tire Co.’s newest store in Lewis Center, Ohio, are surpassing expectations.
The outlet, which opened five months ago, is located just north of Columbus, Ohio’s rapidly growing capital.
It spans 6,800 square feet and has 12 service bays, including one specifically designed to service electric vehicles.
The store also is outfitted with Hunter Engineering Co. alignment and tire changing equipment and features a large, well-appointed employee breakroom.
Grismer Tire’s newest store has 12 service bays, including one designed to service electric vehicles.
“There’s a large influx of people moving into the Columbus area,” Bob Kemper, the store’s supervisor, recently told MTD.
“We’re very excited about the new store. We opened in the middle of March and out of the gate, sales have exceeded expectations. We have the right location” in a high-visibility area.
John Marshall, Grismer Tire’s executive vice president (retail), also credits the store’s success to “the great talent of the people we have in the location.”
Marshall was MTD’s Tire Dealer of the Year Award recipient in 2003.
Grismer Tire, which is based in Dayton, Ohio, and also does business as Detroit Tire and Dayton Tire Sales, currently has 28 total locations. Twenty-seven of those are retail stores. One is a commercial tire location, which also houses the dealership’s retread plant.
The dealership, which was founded in 1932, plans to open another retail store in Mason, Ohio, some 20 miles north of Cincinnati, “in the coming months,” according to Marshall.
The Lewis Center outlet is Grismer Tire’s northernmost store.
Photo: American Tire Distributors Inc.
Photo: Grismer Tire
Bites
Michelin posts results
Michelin Group posted sales of more than $14.6 billion during the first half of 2024, down from $15.2 billion during the same period last year. However, the company boosted its year-over-year segment operating income from $1.84 billion during the first six months of 2023 to $1.93 billion during the same period in 2024.
Chapel Hill plans store
Chapel Hill, N.C.-based Chapel Hill Tire has broken ground on a new location in Durham, N.C. The store will span 7,000 square feet and is expected to open in November 2024, according to Marc Pons, president of Chapel Hill Tire. The outlet will be the dealership’s third location in the Durham area.
Tire Discounters expands
Tire Discounters Inc. has opened a new store in its hometown of Cincinnati, Ohio, which takes the place of an older Tire Discounters outlet nearby. With more than 210 stores, Tire Discounters is the seventh largest tire dealership in the U.S., according to MTD’s recently published 2024 MTD 100 list.
LWG opens location
Greenwood Village, Colo.-based Leeds West Groups (LWG) has opened its first greenfield store — a location in Taos, N.M. The store is LWG’s seventh location in the New Mexico market.
Maxam promotes two
Maxam Tire North America has promoted Lester Crook to the role of zone sales director, north, and Brian Dowling to the position of zone sales director, south.
Goodyear names CMO
Former Stellantis North America executive Will Roland has been named Goodyear Tire & Rubber Co.’s chief marketing officer. He also will serve as one of the company’s vice presidents. Roland will report to Goodyear CEO and President Mark Stewart, who also came to Goodyear from Stellantis.
Yokohama TWS boosts plant capacity
The Yokohama TWS ag tire manufacturing plant in Spartanburg, S.C., has achieved a 20% increase in production capacity. e plant builds Trelleborg brand tires. (Yokohama Rubber Co. Ltd. acquired Trelleborg Wheel Systems last year.)
“We are now more confident than ever in serving our North American customers, who can easily stock up on Trelleborg tires, knowing they are locally manufactured in the United States,” says Marco D’Angelo, vice president of manufacturing, Yokohama TWS.
Yokohama TWS officials say that by “focusing on local production and sourcing,” the company can “minimize transportation costs and logistical complexities.”
Purcell Tire to add D/C, fleet facility
Purcell Tire & Rubber Co. is investing $5.3 million in a new, 44,000-square-foot distribution center and eet repair shop in its hometown of Potosi, Mo. Purcell Tire’s new facility will streamline its distribution processes and enhance its vehicle maintenance services, reinforcing the dealership’s “commitment to providing top-notch service,” according to Purcell Tire o cials.
e distribution center will be Purcell Tire’s sixth warehouse, according to MTD research.
TIA accepts nominations for award
The Tire Industry Association (TIA) is accepting nominations for the Marvin Bozarth ETS Technician of the Year Award.
e award recognizes OTR tire technicians “who exemplify excellence, dedication and leadership in their eld,” according to TIA officials, and “honors the legacy of Marvin Bozarth, a tire industry icon known for his commitment to training and education.”
TIA’s new award honors Marvin Bozarth, a member of the Tire Industry Hall of Fame.
“This is something that shines a light on earthmover tire service and celebrates techs,” TIA President Keith Jarman recently told MTD.
To qualify for the award, candidates must be an employee of a TIA member in good standing; must have completed a minimum of basic TIA Commercial Tire Service and Basic Earthmover Tire Service (ETS) programs; must have at least three years of experience as an OTR technician; and must be able to attend the 2025 TIA OTR Tire Conference, where the award recipient will be named.
TIA is accepting nominations through the end of this month at its site, www.tireindustry.org.
The Yokohama TWS plant in Spartanburg, S.C., manufactures Trelleborg brand ag tires.
Photo: Yokohama TWS
Photo: MTD
Numbers ThatCount
Relevant statistics from an industry in constant motion
$52.35 BILLION
Amount consumers spent to modify and accessorize their vehicles in 2023
Source: 2024 SEMA Market Report
MTD
6,647
Source: MTD
Photo: MTD
Total number of locations represented by the top 10 on the 2024 MTD 100
50 MILLION
Combined global miles driven by all Volvo electric trucks since their inception in 2019
36.9%
Independent repair facility owners who believe the growth of EVs and hybrids won’t a ect their business within two years
Source: IMR Inc.
Kumho Tire USA
298,680
Number of radial rear replacement ag tires shipped in the U.S. last year.
Source: MTD estimates
MTD
Photo:
Photo:
Source: Volvo Trucks North America
Photo: AB Volvo
Photo:
John Healy By
FSummer slump continues
RAW MATERIAL PRICES CONTINUE TO INCREASE
or a second straight month, our checks with tire dealers indicate retail sellout trends were down low single digits in June — about 1.4% for the month, compared to a 1.3% drop in May and trends that were slightly down during the first quarter.
Regionally, the Midwest, Northeast and Southeast all saw negative volumes, while the Southwest reported the strongest growth — up a healthy 3.1%, year-overyear. From our view, it appears that the onset of summer drove slight declines in consumer tire replacement as tax dollars dried up and weather became milder and created less of a volume tailwind.
While the first quarter was affected by another mild winter across much of the U.S., it seems the second quarter saw moderate improvement, with only slight declines and May and June and April’s burst of positivity, a 5.1% volume increase.
Tough comparables are ahead for both July and August. Given that, we would not be surprised to see similar depressed sellout trends in the coming months.
So given those volume and sellout trends, what’s happening on the road? Looking at miles driven, trends were down low single digits during June, following a flat-to-slightly-positive first quarter. Our Miles Driven Momentum Index registered a 1.2% decline in June, a replica of the results in May.
Both months were up against tough yearago comparisons. In 2023, miles driven grew by 3.5% in May and 3.2% in June, respec-
tively. So we’ll repeat the refrain that we think this year’s June figures are largely a result of difficult comparisons. The numbers are still above pre-pandemic trends.
THE CLIMB CONTINUES
Raw material costs continue to increase. In June, the basket of raw materials to build a basic replacement tire grew 11.7% — a slight decline of 0.1% from May numbers. This follows a 3.1% year-over-year increase during the first quarter of 2024. So far, it adds up to a 9.3% year-over-year increase in the cost to build a tire and a sequential increase of 2.8% from the first quarter.
Natural rubber costs grew by 47% in June and again, that’s due to continued supply pressures in Southeast Asia. But other input costs are rising,too. Oil prices are up 11.8% in June, synthetic rubber costs rose 8.2% and carbon black prices are up 3.1% year-over-year for the month. Tire fabric and cordage price is down 4%.
Using a wider lens, we note our tire raw material index fell 9.7% in 2023 from 2022 levels. In 2024, that index is up 6.3% on a year-over-year basis. We’re not that surprised to see raw material costs moderate and increase slightly on a year-overyear basis. We view this as stability and a positive for the tire industry, given all the volatility experienced since 2020.
A month ago, commentary from tire dealers led us to believe multiple manufacturers had pushed price decreases through to dealers. We had long pondered if this
was a possibility given the declines in raw materials in 2023. We’ll continue to monitor the pricing and promotion environment.
SUMMER SLOWDOWN
Dealers suggest consumer demand for passenger and light truck replacement tires was down in June, compared to a year ago. Of our contacts, 42% reported negative demand trends for the month, down sequentially from a net neutral demand in May.
Consumer deferment remains the theme and the onset of summer and mild weather with little precipitation has allowed consumers to further postpone their tire replacement.
We do note that healthy demand for tier-two and tier-three tire brands during the month, but dealers indicated soft sales of premium-tire products.
For the second straight month, tier-three tire brands were the most in-demand from consumers, with tier-two tires in second place and tier-one brands once again in the basement of our rankings. The recent consistency of tier-one brands at the bottom of the rankings reminds us of what we saw for five straight months in the latter half of 2023. From September to January 2024, tier-one brands were the least in demand.
We believe these results to be an indication of the type of tire buyer in the marketplace. Consumers have deferred necessary auto maintenance and they’re entering the market with fewer tax refund dollars in their pockets, so they opt for more value-oriented tires.
While these tier rankings can be volatile from month to month, we continue to expect tier-two tires to perform well as they strike a balance between cost and performance. ■
NORTHCOAST
John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland, Ohio. Healy covers a variety of subsectors of the automotive industry. If you would like to participate in the monthly dealer discussions, contact him at john.healy@northcoastresearch.com.
SAILUN TIRE USA ROLLS OUT ITS BRAND-NEW TRAINING CENTER
Sailun Tire USA (STU) is thrilled to announce the launch of its brand-new STU Training Center this September in beautiful Chattanooga, Tennessee. With a desire to offer loyal customers and their employees the opportunity to not only enhance their tire knowledge but also amplify their overall selling skills, STU has created a learning space in its state-of-the-art research and development facility to help propel all who attend to the forefront of this highly competitive market.
The STU Training Center is a prime destination for comprehensive and experiential professional enhancement. Its program has been carefully designed to meet the ever-evolving needs of individuals and businesses alike, offering a wide range of effective training programs specifically tailored to promote tire proficiency and empower overall growth.
“Our goal is to ensure that participants leave the training well-equipped with knowledge about our products. At Sailun Tire USA, we recognize the challenges of learning about the various tire sizes, applications and warranties offered by different tire brands. We believe that this training program will establish a solid foundation for future courses provided by Sailun or other manufacturers.”
— Ronald Dolan, president of Sailun Tire Americas
The friendly, experienced instructors at the STU Training Center pride themselves on delivering high-quality education. Sailun engineers are also onsite to answer any participants’ questions.
“I started in the tire business a little over 30 years ago and there were several people working at major tire manufacturers who took me under their wing and taught me about tires. I wanted to learn and I really appreciated all that I got. It helped me along in my career to a point where I was able to provide mentoring for new company hires and training to OEM automotive dealerships, independent retailers and large major retail chains, for example. Now, I have an opportunity to share this with new hires at independent retailers who want to learn and want to succeed — and I’m paying it forward. The kicker is, I really do enjoy doing this.”
— Greg Lender, trainer
A hands-on approach.
Whether tire dealerships are looking to introduce their new employees to the industry, improve their current employees’ basic tire knowledge or equip their whole team with the latest tools and selling expertise, STU Training Center has a first-rate program designed to fit their needs.
This thoughtfully developed, two-day training program is jam-packed with beneficial information and fosters a sense of camaraderie by offering a chance to learn alongside like-minded people who share the same passion.
Tire Basics 101 is the perfect introduction or refresher when it comes to learning about tires. It focuses on tire terminology and the importance of air pressure and provides an abundance of crucial information related to tire replacement recommendations. Then it wraps up with a review of the specific product line each participant represents.
Tire Conditions is an invaluable course that includes a comprehensive hands-on visual inspection of various tire damage and discussions on warrantable or non-warrantable situations.
How to Sell is an extremely worthwhile course that ensures participants are perfectly positioned to promote Sailun products’ fantastic features and substantial benefits, while expertly identifying diverse consumers’ unique needs and desires. Groups are encouraged to role-play real-world scenarios to build confidence and prepare for similar situations in the field.
Photos: Sailun Tire USA (STU)
Product Knowledge is an excellent investment for any individual or business owner who wants his or her team to excel at building their business’ brand and masterfully increasing profitability. This course concludes with an in-depth exploration of STU brands, describing what they have done and continue to do to offer such exceptional value.
Choosing the STU Training Center just makes sense when it comes to providing employers and employees with clear, concise and unparalleled tire training from expert instructors with extensive industry knowledge — not to mention doing so in an unintimidating, extremely comfortable environment where participants are happily immersed in engaging educational activities created for Tire People by Tire People.
“Overall, I think the course was really informative. I think it’s a really good start for anyone that’s in the tire industry and is passionate about tires and having a career in tires. I would recommend the course.”
— Recent participant
The STU Training Center is dedicated to making it as easy as possible for everyone to take advantage of this unparalleled learning opportunity. That’s why Sailun offers convenient monthly scheduling options to accommodate busy professionals, customizable training solutions for larger groups and unbeatable introductory offers.
Sailun Tire USA looks forward to celebrating its brand-new STU Training Center with the people who have made it all possible — eager to continue their journey together, working in tandem to achieve personal and professional excellence.
“We’re very excited about this project, but it’s just the beginning when it comes to our overall goal to find as many ways as possible to integrate with our customers at a deeper level.”
— Ronald Dolan, president of Sailun Tire Americas
For more information contact the team at STUtiretraining@sailuntires.com. ■
Working as a team.
Identifying tire conditions.
A comfortable learning environment.
The proud participants with smiles and certificates.
CUV/SUV tires
Hot trends in CUV/SUV tires
DEMAND, SIZE PROLIFERATION AND INNOVATION DRIVE SEGMENT GROWTH
Madison Gehring By
The CUV/SUV market has grown exponentially in the last few years, forcing tire manufacturers to create new tires to keep up with this demand.
In this MTD exclusive, tiremakers and marketers discuss challenges and opportunities they see in the CUV/SUV tire segment.
MTD : What do you see as the biggest challenges and opportunities in the CUV/ SUV tire market over the next ve years?
STEVEN LIU, vice president of product development for Hercules Tire, American Tire Distributors Inc.: e demand for CUV and SUV tire tments has grown tremendously and will continue to grow, aligned with the trend in new vehicle sales.
Year-to-date, cross utility sales through May increased by 9.6%, while all other segments remained flat or declined. We anticipate that the CUV/ SUV segment will continue to outperform the overall market in terms of growth, driven by ongoing diversi cation in these vehicle o erings.
New vehicles are increasingly segmented within the CUV/SUV category, spanning from economy to luxury, and available in various sizes.
With CUV/SUV sales surpassing those of passenger sedans and e ectively dominating the market, there is a signi cant opportunity in replacement tire sales due to shorter adoption periods for a ermarket tires, compared to original equipment (OE) tires.
Over the past ve years, there has been a noticeable trend toward trading down in brand/tier choice when consumers shop for their second or third set of replacement tires.
KARL JIN, divisional head of product and pricing for PCLT tires, Apollo Tyres Ltd.: e landscape of the CUV/SUV market
is undergoing rapid evolution, posing formidable challenges for tire manufacturers. Since 2010, the number of OE tire sizes has nearly doubled, soaring from 70 to 130 by 2023. is surge is fueled by the introduction of new vehicle models and a myriad of size options across di erent trims.
Meeting the diverse demands of this segment necessitates substantial investment, requiring the development of distinct tires that meet increasingly sophisticated performance standards. e introduction of electric vehicles (EVs) further complicates this dynamic market.
Not only are the SUV and CUV tire segments growing, but Steven Liu, vice president of product development for Hercules at American Tire Distributors Inc., says he is noticing an uptick in all-weather CUV/SUV tires.
Photo: American Tire Distributors Inc.
Alongside the varied applications of touring, all-weather and all-terrain tires, a signi cant 30% of CUV/SUV sizes for 2024 models are designated for EVs.
IRIS OCASIO, senior product planner, Bridgestone Americas Inc.: Over the next ve years, we expect the CUV/SUV market to continue to grow rapidly as consumers increasingly prefer larger vehicles over sedans.
With this shi , the primary challenge is size proliferation. As demand for CUVs/ SUVs increases, the segment has seen a surge of more OE tments in a wider range of tire sizes. is diversity makes it di cult to accommodate all new sizes, requiring manufacturers to be strategic in prioritizing where to expand their tments.
The growth of the CUV and SUV segments gives companies the option of creating tailored tire solutions, like the Vredestein Pinza AT All-Terrain tire, which caters specifi cally to off-road enthusiasts, says Karl Jin, divisional head of product and pricing for PCLT tires, Apollo Tyres Ltd.
Apollo Tyres Ltd.
The CUV/SUV segment is not only expanding in size, but also diversifying in the types of tire tments. For example, some vehicles are designed with ultra-high performance (UHP) OE tments, while others in the same category are equipped with all-terrain (A/T) tires. Historically, SUVs predominantly used highway tires and the current market has demanded a broader range of options, including UHP, all-season, all-terrain (A/T) and mud-terrain (M/T) tires.
“The CUV/SUV segment is not only expanding in size, but also diversifying in the types of tire fi tments,” says Iris Ocasio, senior product planner, Bridgestone Americas Inc.
Photo: Bridgestone Americas Inc.
NICK DAVIS, senior category product manager, North America, Goodyear Tire & Rubber Co.: We anticipate that there will be more CUVs and SUVs on the road than traditional passenger sedans and coupes in the next ve years.
Photo:
GO ANYWHERE
ALL-NEW THE
Introducing the all-new Yokohama GEOLANDAR A/T4™ with an extensive 15” - 22” size-range and limited treadwear warranty up to 65,000 miles. Engineered for outstanding off-road resilience and dependable all-weather traction, your adventure-loving customers can go anywhere with confidence.
CUV/SUV tires
“Goodyear has introduced traditional CUV/SUV sizes in the new Cooper Discoverer Road + Trail AT, expanding the size line-up of its predecessor,” says Nick Davis, senior category product manager for Goodyear North America, Goodyear Tire & Rubber Co.
Photo: Goodyear Tire & Rubber Co.
vehicles are primarily used for city driving. e preference for tires that o er excellent traction in various driving conditions, as well as the rising number of consumers who prefer the aggressive design of these tires, is growing.
is creates an opportunity for tire dealers to focus on the top CUV/SUV sizes as they grow in popularity and include them in their stocking strategies. Additionally, vehicles in this category are featuring larger rim sizes, driven by OEMs. Growth in this segment is anticipated to be driven by 19-inch rim sizes and above.
“The launch of our Dynapro HPX tire in late-2023 expanded our product line to fi ve dedicated tires for light trucks and SUVs that meet every driving scenario,” says Moonki Cho, product manager for Hankook Tire America Corp.
Photo: Hankook Tire America Corp.
MOONKI CHO , product manager, Hankook Tire America Corp.: CUV/SUV tires include a variety of options, including touring, all-terrain and all-weather. ese types of tires are then categorized based on the behavior, high load and use of vehicles, all of which are different from that of a passenger car.
It is important that manufacturers understand the type of vehicle consumers are driving and the environment in which they are driving, so that continued innovation and development meets these needs.
In the past, SUVs were primarily considered vehicles for outdoor activities or driving on speci c terrains.
Recently, there has been an increase in consumers looking for both the convenience of city driving and o -road performance. We have seen an increase of consumers choosing all-terrain tires, even when their
ERIC SCHMEDDING , product category manager, Michelin North America Inc.: e CUV/SUV tire market continues to grow signi cantly, both from the increasing number of sizes needed, as well as the tire performances required.
“As CUV/SUV models have diversified from compact crossovers to full-size SUVs, there’s a growing demand for specialized performance, such as off-road capabilities, allseason versatility and enhanced fuel efficiency,” says Eric Schmedding, product category manager, Michelin North America Inc.
“As vehicles become more technologically advanced, such as with the growth of EVs, tire technology needs to continue to evolve to meet the unique needs of these vehicles,” says Shawn Denlein, president of sales and marketing, Kumho Tire USA.
Photo: Kumho Tire USA
Photo: Michelin North America Inc.
As CUV/SUV models have diversi ed from compact crossovers to full-size SUVs, there’s a growing demand for specialized performance, such as o -road capabilities, all-season versatility and enhanced fuel e ciency.
SHAWN DENLEIN, president, sales and marketing, Kumho Tire USA: e popularity of SUVs and CUVs continues to grow globally, growing at just over 16% last year, according to vehicle count data, driving increased demand for specialized tires.
In fact, according to the U.S. Tire Manufacturers Association (USTMA), the CUV/SUV segment of the tire market is expected to fuel most of the growth in tire sales over the next several years and that trend is continuing as more carmakers are releasing more models in this category, including EVs.
is growth is also consistent with the larger rim diameter growth (18-inch and higher) that is projected by the USTMA to be at least 58% of the overall tire market by 2029, with the CUV/SUV volume speci cally projected to be about 75% of the market. As vehicles become more technologically advanced, such as
with the growth of EVs, tire technology needs to continue to evolve to meet the unique needs of these vehicles, including increased range e ciency though reduced rolling resistance, improved treadwear to handle the high torque and heavier vehicle weight due to the EV batteries — and the ability to reduce road noise due to quieter cabins in EVs.
JAY LEE , product director, Nexen Tire Americas Inc.: e CUV/SUV tire market is highly competitive, with numerous brands and products vying for consumer attention, which puts pressure on pricing and pro t margins.
Keeping pace with technological advancements — such as smart tire sensors and advancements in tire materials, improved durability (and) reduced rolling resistance — can be costly and complex. SUVs and CUVs are increasingly popular worldwide, driving a growing demand for tires tailored to these vehicles. Opportunities exist for tire manufacturers to di erentiate themselves through innovative technologies, such as all-weather performance and improved tread life.
“Success in this dynamic market will depend on the ability of manufacturers to adapt quickly to changing consumer preferences and technological developments,” says Jay Lee, product director at Nexen Tire
Americas Inc.
Photo: Nexen Tire Americas Inc.
ANDRE OOSTHUIZEN, chief marketing o cer, Pirelli Tire North America: Four out of ve cars sold today (are) SUVs. Consumers are favoring the versatility, higher seating position and comfort that SUVs o er. As the SUV market evolves, it’s driving an increased demand for high-performance tires that cater to both traditional combustion and electric vehicles.
“Consumers are favoring the versatility, higher seating position and comfort that SUVs offer, ” says Andre Oosthuizen, chief marketing officer, Pirelli Tire North America. “That’s why Pirelli has dedicated the Scorpion product line to specifically cater to CUVs and SUVs.”
ese emerging market trends are considered as we strategically re ne our product o erings and ensure we meet market demands e ectively.
KEN COLTRANE , vice president of marketing and product development, Prinx Chengshan Tire North America Inc.: With the CUV/SUV now being the predominant segment in the market, one of the challenges is keeping up with SKU count in ation.
“With CUV/SUV now being the predominant segment in the market, one of the challenges is keeping up with SKU count infl ation,” says Ken Coltrane, vice president of marketing and product development, Prinx Chengshan Tire North America Inc.
Prinx Chengshan Tire North America Inc.
As electric vehicles continue to grow, this also presents a challenge. Do we introduce an EV-speci c tire or just make sure we have the appropriate EV sizes and load capacities in our existing lines?
Each of these challenges, of course, represents an opportunity for us to continue to grow our presence in North America.
TSUYOSHI JOHNSON, director of product planning , Falken Tires, Sumitomo Rubber North America Inc.: e biggest challenge in the CUV/SUV tire market stems from the vast segmentation of the CUV/SUV landscape over the past few years. Originally, the SUV segment was created for their utilitarian use. Now, like cars, they’ve created di erent subsegments to meet the wants and demands of consumers.
is includes everything from commuter CUVs and SUVs to luxury SUVs (and) high-power sporty CUVs, to name a few.
We’re also seeing OEMs catering to the adventure crowd, with tments featuring all-terrain tires from the factory.
So many subsegments presents a lot of potential confusion (around) which product lines to carry and which ones will resonate with customers.
all-new, all-weather HiSeason 4S
Photo: Pirelli Tire North America
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CUV/SUV tires
“For Falken, this trend has encouraged us to develop several products to support the growth of the CUV/SUV market, including the all-weather Aklimate, UHP all-season Azenis FK460 A/S, all-terrain Wildpeak A/T Trail and touring all-season Ziex CT60 A/S,” says Tsuyoshi Johnson, director of product planning, Falken Tires, SRNA.
Photo: Sumitomo Rubber North America Inc.
Another challenge is understanding the state of the hybrid and electric CUV/ SUV market.
It seems we’re currently in a transitional phase, where people aren’t fully ready to convert to EVs, which has made it di cult to gure out if CUV/SUV electric vehicles are the future or not.
It’s a fact that a number of electric CUV/ SUVmodels have launched over the past few years, but sales forecasts are not as aggressive as they once were. e greatest opportunity exists in knowing which subsegments are popular in your speci c area, preparing you to o er the correct tires for those vehicles and your customers.
In response to market demand for CUV/SUV tires, Sentury Tire USA has released the Delinte Bandit X_T (DX20) tire. Photo: Sentury Tire USA
NICK GUTIERREZ , territory sales and marketing director, Sentury Tire USA: With the ever-expanding CUV/SUV market and new vehicles being manufactured each year, our challenge is to keep up with the demand for new tire sizes and to ensure Sentury Tire o ers a wide selection of options to accommodate the OEMs.
JOAQUIN GONZALEZ JR., president, Tire Group International LLC: e CUV/ SUV tire market is highly competitive and
with the growing popularity of SUVs and CUVs, more tire manufacturers are entering the market.
This has led to increased competition and the need for tire manufacturers to di erentiate their products. At the same time, consumer preferences are constantly evolving, forcing manufacturers to keep up with these changes.
Factors such as fuel e ciency, durability and noise reduction are becoming increasingly important to consumers and tire manufacturers need to adapt their products to meet these demands.
Also with the advancement of technology, there are opportunities for manufacturers to develop innovative solutions — forcing them to continually invest in research and development.
“Moving forward, the CUV/SUV tire market will continue to adapt, adjust and change with consumer wants and needs,” says Chris Tolbert, director of sales, Trimax Tire.
Photo: Trimax Tire
CHRIS TOLBERT, director of sales, Trimax Tire: Let’s think about this with a little bit of tire history. e SUV is a spino from a truck and minivan. en we super-sized them. Recently we downsized them to a CUV. We implemented H/T, A/T and M/T and then evolved with R/T and X/T. Fi een inches moved to 16 inches and 17 inches. Plus-size a ermarket tire and wheel packages exploded. Now, OEM has 18-, 19-, 20- and 21-inch tires. Internal combustion engine vehicles are evolving to hybrid and EV. e electronics, cameras and censors of newer vehicles continue to get better and better. Consumers want a comfortable, smooth ride performance. ey also want the look, but not the noise
“Specifi c to Cosmo Tires, this year we are launching a line specifi cally designed to cover the growing CUV/ SUV market in the Cosmo Kurrent, with the added benefi t of the tire being EV-ready,” says Joaquin Gonzalez Jr., president, Tire Group International LLC.
Photo: Tire Group International LLC
or rough ride. Tire sidewall appearance has become just as important as the tread area. Moving forward, the CUV/SUV tire market will continue to adapt, adjust and change with consumer wants and needs.
PAUL SEPETJIAN , head of private brands, Turbo Wholesale Tires LLC: e biggest opportunity I see in this segment is the pace at which it is growing.
e CUV/SUV tire market is one of the fastest growing segments in the entire industry and it’s going to be cool to see how companies navigate around the competition of it and distinguish their brands through innovation and creativity.
The biggest challenges I see in this segment are that some of the tier-one and two tires have done a good job capturing the market, as well as the fact that it is not an extensive segment where there will be multitudes of sizes.
is is where innovation can grow the market and segment, but for now, it will be hard for new brands to come into this eld and change buyers’ habits and perceptions.
“The biggest challenges I see in this segment is that some of the tierone and two tires have done a good job capturing the market, as well as the fact that it is not an extensive segment where there will be multitudes of sizes,” says Paul Sepetjian, head of private brands, Turbo Wholesale Tires LLC.
Photo: Turbo Wholesale Tires LLC
e fact that it is growing at such a high pace, it’s worth the risk of investment. But those are the few things that will make it hard for brands in di erent tiers or brands that haven’t dabbled in this segment yet to make a swi entry.
CUV/SUV tires
“Yokohama has developed several products to meet all the needs of the CUV/SUV tire market with our Geolandar CV all-season touring tire, Geolandar CV 4S all-weather tire, Geolandar X-CV all-season performance tire, Geolandar A/ T4 all-terrain tire and Advan Sport EV A/S EV-specific tire,” says Kevin Nguyen, manager of product planning, Yokohama Tire Corp..
Photo: Yokohama Tire Corp.
KEVIN
NGUYEN, manager of product planning, Yokohama Tire Corp.: The biggest opportunity in the CUV/SUV tire market is the large volume of these vehicles on the road today and the steady growth over the next five years as CUV/ SUV vehicle sales are projected
to be 60% of all new vehicle sales by 2028. The biggest challenges will be developing new technologies to continually improve the tire’s performance and treadwear to match the evolving CUV/SUV market. CUVs/ SUVs come equipped with many different tire sizes and performance characteristics. In today’s market, there are compact CUVs that use passenger vehicle-sized tires, mid-size CUVs that use crossover-specific sized tires and larger CUV/SUVs that use highway terrain light truck-sized tires. Just as important as having the right tire size is having the right product that matches the SUV/CUV characteristics, whether that be an all-season tire, high-performance tire, off-road capable tire or EV-specific tire.
““In the next five years, the demand for SUV and CUV tires will rise significantly, driven by the increasing market share of these vehicles. We anticipate that largesized CUVs will be the primary growth segment,” say ZC Rubber officials.
Zhongce Rubber Group Co.
Zhongce Rubber Group Co. Ltd (ZC Rubber): In the next five years, the demand for SUV and CUV tires will rise significantly, driven by the increasing market share of these vehicles.
We anticipate that large-sized CUVs will be the primary growth segment. This presents a substantial opportunity for tire manufacturers, but also brings challenges. To meet the demands of SUVs and CUVs, tires must offer superior handling performance and safety. These vehicles require robust tires to support their larger bodies and higher ground clearance. Manufacturers must develop tires that are more durable, safer and provide better grip. Additionally, the rise of electric SUVs and CUVs introduces new requirements. Tire manufacturers need to create tires specifically for electric vehicles, focusing on low noise, low rolling resistance and ensuring adequate mileage.
To capitalize on these opportunities, tire manufacturers must continually innovate and upgrade their technologies to meet the growing market demand and deliver higher-performance, more environmentally friendly products. ■
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CUV/SUV tire dealers adapt to economy, customer habits
FINDING THE RIGHT PRICE
REMAINS A CHALLENGE
Circle Tire owner Scott
says drivers are holding onto their CUVs and SUVs longer, which is good news for his company. They’re also opting for lowertier tires when shopping for their second or third replacement set.
Madison Gehring By
Economic trends continue to impact tire dealers, including those who specialize in selling tires for CUVs and SUVs.
Ishmael Salandy, owner of Dominion Tires of Arlington, a single-store dealership in Arlington, Va., says “the economy and rising in ation (have) impacted SUV/CUV pricing a lot.
“ e last two years, we have seen such an increase in prices across the board on all brands.”
Salandy, whose dealership only sells tires and provides tire-related services like alignments, felt compelled to adjust his labor rates in response.
Perfect
Rady
Photo: Perfect Circle Tire
CUV/SUV tires
“It’s challenging to price (tires) accurately if we’re paying more than the customer is spending,” says Tara Postovit, owner of M&C Tire, which is based in Kalispell, Mont.
“We used to charge about $40 per tire for installation,” which was in line with what his competitors charged.
“Then I would say about five months ago or so, they lowered their costs to $25 per tire installation, so we had to do the same.”
This price jump on CUV and SUV tires — primarily at the premium level — has caused an increase in sales of tier-three and tier-four tires, says Salandy.
Seeing this trend, Salandy started stocking more-tier three and tier-four CUV/SUV tire brands.
He attributes his dealership’s ability to stay afloat to the sale of those tires.
Tough times also have forced Salandy to look at alternative sources of supply.
During the last year, he teamed up with K&W Tire Co., a Lancaster, Pa.based tire distributor, and started buying “about 95% of our inventory from them.
“We would buy all of their Cooper-brand tires, which isn’t a premium brand, but I would say is a more expensive tier-two tire.”
Continued economic pressure forced Salandy to investigate other brands.
His dealership recently picked up Sentury Tire USA’s Delinte line, which he says he can sell at an even more attractive price point.
“Right now, our inventory is about 75% tier-three and tier-four tires,” he notes.
PRICING CHALLENGES
Another dealership that has felt the weight of tire pricing and inflation is single-location, Kalispell, Mont.-based M&C Tire.
“We are now seeing prices start to level out, but for the past couple of years — especially pre- and post-COVID-19 times — there was a big fluctuation in pricing,” says Tara Postovit, the dealership’s owner.
“It’s challenging to price (tires) accurately if we’re paying more than the customer is spending.”
Postovit describes M&C Tire, which was founded in 1979, as being “old-school. We don’t charge up for the warranty afterward and the installation and all that comes with that.”
When inflation and tire prices skyrocketed, customers would come into M&C Tire, saying they can get the same set of tires down the road for less money.
“Then we would have to explain to them that the price (other dealerships were) giving them is not the final price they would be paying,” she says.
M&C Tire faced a decision: revamp its pricing model or stick with its traditional method, which the dealership’s customers prefer.
M&C Tire chose the latter.
Postovit says managing inventory has also been a challenge in recent years.
“The tire industry is really interesting because you really have to pay attention
to the (overall) economic market so you know what to stock.
Like other dealerships in its area have done, “we will probably have to increase our inventory to more entry-level and lower-tier tires just to give people a chance to recover financially.”
She says M&C Tire uses a “good, better, best” model when suggesting tires to consumers.
That will continue, but Postovit says the “good, better and best” discussion now starts at the lower tiers.
SERVING CUSTOMERS
“Inflation has affected CUV/SUV tire prices,” says Scott Rady, owner of Perfect Circle Tire, which is headquartered in Waldo, Wis.
Customers who have the money to buy “fancy SUVs” will continue to buy tier-one replacement tires, he notes.
“But then we have what I like to call the middle class — the people with older CUVs and SUVs who are maybe on their second or third set of replacement tires.
“These guys are going for the cheapest things that they can get because the economy has affected their ability to purchase mid-to-premium-tier tires.”
Rady adds that many CUV and SUV owners in his area are holding onto their vehicles longer, which he says has been good for his dealership. ■
Photo: M&C Tire
Perfect Circle Tire’s Rady says economic pressures are influencing the tire brands that consumers are choosing. (His dealership also sells and services ag tires.)
Photo: Perfect Circle Tire
Mike Manges By
TOP OF MIND
TIRE COMPANY EXECUTIVES TALK STRATEGY WITH MTD
“What’s on the minds of some of the tire industry’s most prominent decision-makers?” at was the question that spurred the creation of MTD’s Mid-Year Q&A series, a succession of interviews with top-level tire company executives that appeared on www.moderntiredealer during the months of June and July.
From the state of tire demand to supply, manufacturing, new products, relations with tire dealers and more, executives addressed a wide range of issues impacting not just their own companies, but also their customers – while articulating their strategy and plans for the rest of 2024. (Most photos in this story were provided by tire manufacturers and companies that the executive interviewees represent.)
Paolo Ferrari, executive chairman of Bridgestone Americas Inc. and president and CEO of Bridgestone West, told MTD that “you will see us doubling down on our premium strategy — focusing on technology, tire performance, tier-one and tier-two (and) premium distribution, which is a way to drive pro t, but also to support our vision of a sustainable solutions company.”
Jochen Etzel, CEO of Continental Tire the Americas LLC, said that his company “is focused on the customer-centric alignment of the organization and all its business activities. e North American market is a growth driver for the Continental global tire business and our strategy is to continue developing partnerships with independent dealers — understanding that with ongoing consolidation, there will be opportunities, as well as challenges.”
Claudio Zanardo, CEO of Pirelli Tire North America, told MTD that Pirelli has “multiple priorities. Our direction is a direction of growth and serving the market in the best way. We have huge demand. Customers and consumers are asking more and more for Pirelli products. Our biggest priority will be to serve this demand in the most e cient way.”
Rob Williams, president of Hankook Tire North America, said the division he runs represents “about 25% of Hankook’s global sales ... but talking about the $1.6 billion” investment that Hankook is making at its Clarksville, Tenn., plant, “the fact we’re more than doubling (PLT tire) capacity” at the factory “and the fact we’re adding medium truck tire (production)” at the plant, “I think it’s very clear that our ambitions are as strong or stronger than probably any other manufacturer.”
Stan Chandgie, Yokohama Tire Corp.’s chief operating o cer, addressed a variety of industry trends, including consumer trade-down to less-expensive tires. “I think we’ve bene ted in some ways as consumers have looked for more value in their tires,”he told MTD. “Ultimately, we’ve outpaced the market post-COVID-19, which signals the strength of our consumer relationships and the ongoing demand for our brand.”
Toyo Tire U.S.A. Corp. continues to reap the bene ts of its manufacturing investments and exibility, Michael Graber, the company’s president and CEO, told MTD. “ e ability to move tires around and build them in the most e cient way possible has given us the opportunity to build more of what North America needs at our Georgia plant.”
Among numerous topics, Arvind Poddar, chairman and managing director of BKT, explained why his company has maintained a steady cadence of new tire introductions and how this bene ts the rm’s dealers and distributors. “ e industry is dynamic and constantly evolving. By regularly launch new products and enhancing current ones, we ensure that we are meeting the latest demands of the market and addressing the changing needs of customers.”
Aaron Murphy, senior vice president of CMA/ Double Coin, discussed “new and market-focused product developments” from his company that “will continue in the TBR and radial OTR segments. Long-term, we may expand or move into new sectors of the tire industry with the same attributes that a dealer would expect from CMA and Double Coin.”
Ferrari
Etzel
Zanardo
Graber
Williams
Poddar
Chandgie
Murphy
Ron Dolan, president of Sailun Tire Americas, discussed the $240 million investment that Sailun is making in its new plant in Mexico, which will start building tires next year. “ e focus of this plant will be to cater to the United States market, with the majority of the production intended for sale in the U.S. By expanding operations in Mexico, Sailun aims to enhance consistency, security and predictability in the production of its tires,” thus ensuring “a stable supply chain for North American customers.”
Tommi Heinonen, vice president of sales for Nokian Tyres North America, said Nokian’s major focus in the second half of 2024 is leveraging “the big investment we’ve made” at the rm’s Dayton, Tenn., plant. “We are focusing on improving our availability. We have a stable supply from our U.S. factory.”
Looking to the rest of 2024 and into next year, Kenda Rubber Industrial Co. Ltd. “will be making additional new product announcements and following the planned launches of current products, I have asked that our Kenda Americas team continue to work with our customers to grow our brand with tremendous products and good programs,” Jimmy Yang, Kenda’s chairman, told MTD.
Samuel Felberbaum, president of Prinx Chengshan Tire North America , discussed his company’s e orts to grow its distribution network. “I’d like to continue to grow the business that we have and look for new distribution, where it ts. We’re always looking for new business. We’d like to explore opportunities for original equipment business for both TBR and PLT. And I’d like to look at adding a U.S.-based warehouse.”
Chris Brackin, president of American Omni Trading Co., discussed how ongoing product development will power his company’s growth during the second half of 2024. “We already have an extremely robust assortment of products, from passenger to medium truck to specialty. However, there are some key segments that we are targeting for new products as they have grown in demand and also represent strong pro t opportunities for our customers.”
Michael Mathis, president of Atturo Tire Corp., elaborated on Atturo’s e orts to move into new product segments, adding that “there are still additional market segments where I think there’s tremendous opportunity for our brand to build upon the success we’ve had in some our di erent categories. We’re building the Atturo brand out to be a more complete product o ering to our distributors.”
G.S. Sareen, CEO and president of Omni United (S) Pte. Ltd. , discussed his company’s “premium accessibility” concept. “What we are doing very aggressively now is (manufacturing) products that can perform at premium levels and still be (sold) at a very competitive price. If we can keep our prices competitive, then we can provide access to a much bigger cross-section of consumers.”
Ralson Tire North America Inc. is making big investments in product manufacturing and distribution, Brian Sheehey, the company’s senior vice president, told MTD. “Our domestic plans are to increase our U.S.-based warehouses from one to three in the near future to better serve our dealers and eets by providing a much more stable supply chain system and increased inventory levels for them.”
Randy Tsai, senior vice president of Greenball Corp., discussed investments his company is making in its plants and production capacity. “We’ve always strived to be on the leading edge of development,” he told MTD. “We’re always trying to make di erentiated products. O en times, that requires additional hardware or production capabilities at the factories that we source from. We’re constantly in development.”
“When we were in the Trelleborg Group, we were one of the di erent businesses within that group,” Paolo Pompei, CEO of Yokohama TWS, told MTD. “Today we’ve joined a family that’s dealing with tires and speaks our language. For us, this was an attractive development — to be part of a strong global player and one of the main (suppliers) in the o -road segment.”
Full-length interviews are available at www. moderntiredealer.com. ■
Dolan
Brackin
Pompei
Heinonen
Mathis
Sheehey
Yang
Sareen
Tsai
Felberbaum
Best practices
“If you invest in somebody, in their
in their advancement and
Dealers share operational best practices
EMPLOYEE, VENDOR RELATIONSHIPS CAN GIVE YOU AN EDGE
Madison Gehring By
Some operational best practices are obvious. Others, including the nuances of employee relations, aren’t as apparent.
“When we say ‘best practices,’ I think there’s two things that affect any business,” says Brad Templin: analytics and what he calls “the human element.”
Templin is the chief operating officer at Scott’s U-Save Tires & Auto Repair, a four-location dealership based in the Chicago, Ill., area.
“It doesn’t matter if we’re selling tires and repair services or selling vacuum (cleaners), all businesses need to understand their numbers and how they affect overall performance of the business on the ownership and management level.”
Templin says he learned that businesses are always judged on their deviation from forecasts. Being down is looked at in a negative light and always comes with ques-
tions, but being up is “equally as important from a management and owner standpoint to understand.
“If we are up 50%, 40% or even 20%, we have to ask ourselves, ‘Is this sustainable? Will we need to hire more people? Are we marketing to the right people? How is our inventory keeping up?’
“These are things business owners need to think about when their businesses are up. People focus on the down, but the up is just as important.”
Templin’s second point?“You have to balance the cold and dryness (of the numbers) with the human element.”
Templin says it’s important to remember that employees are people, not numbers.
“Everybody who is on your team should be looked at as a team (member) — not within a hierarchy of power,” he explains.
“It’s obviously summertime” and various parts of the country, including
the Great Lakes region, where Templin’s company is located, “have had some crazy heat. For those weeks of extreme heat, we were down a little bit. We looked at why we were down. Was it car count? Productivity?
“Then we looked to see that it was 96 degrees outside, making it 110 degrees inside the shop.
“Now it (was) more understandable as to why we were a little slow for those weeks!
“There’s 16 different factors that go into a good work week and there’s 16 different factors that go into a bad work week.”
Templin credits good employee relations at his dealership to the example set by his parents.
In 1981, Templin’s father opened the first Scott’s U-Save Tires & Auto Repair location as a full-service gas station with two service bays.
In 1993, the company moved to a new facility, having outgrown its original.
career,
future, does it not come back to you?” asks Brad Templin (left), chief operating officer at Scott’s U-Save Tires & Auto Repair, which is based in the Chicago, Ill., area.
Photo: Scott’s U-Save Tires & Auto Repair
In 1996, the dealership added onto its new facility and began selling tires and doing tire repairs.
“I believe the reason why we are so successful is because my dad was charismatic, friendly and kind,” says Templin. “He became our brand. He treated all his employees equally. It didn’t matter if you were the guy pumping gas or his best salesman.”
Twenty-seven years ago, Templin’s father passed away, leaving Templin’s mother in charge of Scott’s U-Save Tires & Auto Repair.
Being outside the industry, Templin says his mother didn’t have a lot of knowledge about tires and service, but knew she had to surround herself with “great people.
“She has done that through her time in the industry and I think when you surround yourself with (good) people ... and show them respect, it will come back” to you.
“I’ve rarely seen someone who was shown respect and (did) not give it back.
“If you invest in somebody, in their
career, in their advancement and future, does it not come back to you?”
This virtuous circle “is also the only way we can stand out from big box competitors,” he explains.
“We can’t tell customers that our Michelin tires are better than Costco’s Michelin tires. They’re both Michelin tires. The only reason customers come to us is (because of) our people.”
PARTNERING UP
“Aside from ... finding the right people and this and that, I think it all comes down to finding the right vendor or a partner that you can grow with,” says Steve Kruse, co-owner at Mitchem Tire Co., a four-location dealership based in Springfield, Mo.
“We’ve been fortunate to have really good relationships with companies like Community Wholesale Tire,” which is based in Hazelwood, Mo., “and we recently joined a container program at Point S USA.”
This allows Kruse’s dealership to com-
pete with big box stores by not having to cut margins.
Choosing a vendor shouldn’t be taken lightly, he explains.
“You really want to find a vendor that wants to be your partner rather than just a supplier,” citing his dealership’s longstanding relationship with Community Wholesale Tire as an example.
And Point S has been a “great program” for Mitchem Tire.
“They offer us the opportunity to purchase direct container loads and use their existing warehouses for fill in products.”
Kruse says there are plenty of options where independent tire dealers can find support.
“You create a relationship with a sales representative, who then talks to the manufacturers and you can express your concerns, wants and needs and see if you can meet in the middle and come up with a program that benefits not only yourself, but the customer, as well,” says Kruse.
“It really all comes down to fostering those relationships.” ■
Auto service
How to market and sell ADAS service
IT ALL STARTS WITH EDUCATING THE CUSTOMER
Kim Klimas By
Advanced driver assistance systems (ADAS) that include everything from adaptive cruise control to backup cameras, lane departure warnings and more are on the rise — and not just in luxury vehicles.
“As we are in 2024, over 40% of all cars on the road have some version of ADAS,” says Stewart Peregrine, senior executive of ADAS sales at Autel. “And those on-road numbers are expected to continue to climb, presenting a prime avenue for tire dealers to expand service offerings to include repair and recalibration of ADAS in their service lines.”
MULTIPLE BENEFITS
According to Duane Watson, technical trainer at Bosch Mobility Aftermarket, the benefits of adding ADAS service to a tire dealership’s offerings can be two-fold.
“By implementing ADAS service, shop owners and technicians can simultaneously eliminate reliance on outside partnerships and grow their business,” he says.
Ryan Gerber, ADAS product specialist at Hunter Engineering Co., echoes Watson’s sentiment.
“What it really comes down to is value for the customer and value for your business,” he says.
“You’re servicing their vehicle correctly, as required, and helping to keep them safe. You’re also servicing your business by opening up a new revenue stream and increasing your profitability.”
EDUCATION IS KEY
Once ADAS equipment has been purchased, marketing ADAS service may seem like a daunting task. It doesn’t have to be, says Gerber. He suggests starting with the basics.
“First and foremost, if you haven’t
Ryan Gerber, ADAS product specialist at Hunter Engineering Co., says that by offering ADAS calibration, “you’re servicing (the customer’s) vehicle correctly, as required, and helping to keep them safe. You’re also servicing your business by opening up a new revenue stream and increasing your profitability.”
Photo: Hunter Engineering Co.
already, learn about ADAS. This may seem obvious, but you need to know which cars have which systems and what needs to happen when any of the components are disturbed.
“Do your research. Use look-up guides and become familiar with the information.
“After that, the best advice would be to begin conversation with the customer now,” before their vehicles require calibration.
“Ask them about the systems on their vehicles, point out their locations, explain what they provide and how they work and when and why systems will need calibration.”
Gerber emphasizes that there’s no “right time” to start the discussion. “You can start these conversations when they’re in for any reason, such as an oil change or wiper blade replacement.
“Educating the customer will alert them to the value and safety (of) ADAS, which really can’t be overestimated.
“When the time does come for calibrations, the acceptance rate will be much greater than if they’d never heard of ADAS, which could well be the case otherwise.”
Education should be at the core of any ADAS-related conversation, says Peregrine, especially since many customers are not yet familiar with ADAS or are operating under a limited understanding of the technology’s capabilities.
“My advice to market and sell ADAS service is first to educate the local customer base on what ADAS is.
“These safety features found on vehicles today need to be aimed and calibrated to do their intended job on the road.
“Changes in ride height (and) tire size and common services like alignments and suspension work require ADAS calibrations.
“A campaign around bundled services would be a good way to sell” ADAS calibrations, according to Peregrine.
Vehicle owners aren’t the only customers to target once you have your ADAS equipment set up, says Bosch’s Watson. He suggests allocating a segment of your marketing to other tire dealers who are looking to outsource ADAS service.
“Depending on the repair job, these shops often outsource services to other shops or dealerships or turn down the business altogether.”
Targeted marketing to other tire dealerships can mean securing a consistent stream of incremental ADAS work.
“One critical piece of advice I’d share is to understand your target audience and how they receive their information,” says Watson. “Once you understand who the audience is, you must determine which communication channels to best reach them.”
Then use clear, concise messaging to reach out, he advises.
“Shop owners are most easily reached via trade magazines, social media networks, online forums and small business events.”
Parminder Singh, tech support at Texa USA, stresses the need to emphasize the value-add of ADAS service to customers.
“To effectively market and sell ADAS service as a tire dealer, it’s crucial to understand the unique value these systems bring to your customers and how to communicate the value of your business.
“Having in-house brochures to demonstrate your trusted calibration ability to customers — as well as mailer promotions to local businesses reminding them of your proximity versus higher-cost (auto) dealership calibration services — will help you expand your local repeat business.”
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Auto service
TIPS TO PITCH ADAS
“The best way to sell ADAS services to customers is to inform them on the front end of the service,” says Autel’s Peregrine. “This should occur at the same time that other services from the same sale are being discussed.”
Peregrine says Autel has “a wheel alignment filter on our website that will help shops understand what is required ... following (an) alignment. This makes the process a lot easier and prompts the start of a sales conversation that might go something like this: ‘I see that you are scheduling an alignment today. Based on your car make and model, a steering angle relearn and ADAS calibration is required after the alignment. Can we go ahead and schedule this work to get you back on the road?’”
Singh from Texa USA agrees that alignments are the easiest and most common opportunity to bring up ADAS services organically.
“I would highlight the connection between wheels and driver assist system accuracy,” he says. “When a wheel alignment has been performed, the vehicle manufacturer specifications require ADAS calibration because the sensor field of visibility has been altered. The same principle applies when wheel size has been changed or the ride height has been changed, causing a sensor field of visibility adjustment.
“When wheel or suspension work has been completed, it is the installer’s responsibility to inform their customer of the required ADAS calibration to confirm their vehicle is safe to drive, as per the vehicle manufacturer’s specifications.”
Hunter’s Gerber notes that minor tweaks to a vehicle can impact the ADAS enough to require calibration. In fact, he says that “anything that affects the angle of the cameras or radar even slightly triggers a calibration.
“One component of ADAS that’s often overlooked is resetting steering systems. A vast majority of vehicles have steering sensors that need calibrated after wheel alignment. These sensors feed input data to the ADAS systems for proper operation. This service is a great segue into having larger conversations regarding ADAS.”
Watson from Bosch suggests offering complimentary scans to check the status of a vehicle’s ADAS systems, with or without issues present. He also recommends that tire dealers “train staff in how to communicate the importance of recalibrations after a tire change, wheel alignment or other service.
“To effectively market and sell ADAS service as a tire dealer, it’s crucial to understand the unique value these systems bring to your customers and how to communicate the value of your business,” says Parminder Singh, tech support at Texa USA.
Photo: Texa USA
“By implementing ADAS service, shop owners and technicians can simultaneously eliminate reliance on outside partnerships and grow their business, eliminating the need to outsource these services and attracting new customers,” says Duane Watson, technical trainer at Bosch Mobility Aftermarket.
Photo: Bosch Mobility Aftermarket
“The best way to sell ADAS service to customers is to inform them on the front end of the service,” says Stewart Peregrine, senior executive of ADAS sales at Autel, “This should occur at the same time that other services from the same sale are being discussed.”
Photo: Autel
“The best way to educate your customers about how (the) ADAS in their vehicle works is by pointing out the technologies they use every day and breaking down their most basic functions,” he says. “It’s helpful to let them know how these systems can be compromised through debris from the road, damage to the exterior of the car or even general wear and tear.”
He also advises that dealers “offer clear pricing to increase transparency and trust between technicians and customers.”
MARKETING TO OTHER DEALERS
When marketing ADAS service capabilities to fellow tire dealerships, Watson suggests using online testimonials to help build initial credibility.
He also suggests “utilizing previous relationships with other shop owners” to establish new relationships, adding that this can be accomplished through in-person demonstrations, in-person meetings and networking events.
He also recommends that tire dealerships “leverage (their) social media to share their shop’s ADAS capabilities to target audiences.
A post in a local Facebook group of repair shop owners or gearheads is a great way to introduce your shop’s capabilities to an engaged audience.”
“Most customers have only a passing knowledge of ADAS, if that,” says Gerber, “which is why it’s so important to begin planting the seeds now and getting them acquainted with what’s coming down the road.
“Most calibrations that a tire shop will see will be fairly simple, but a few can be fairly expensive. The more time customers have to get used to this idea, the better.”
And it isn’t just customers who need education, according to Singh. “It’s best to first and foremost train your staff and have them educate each customer. Training service employees on how to discuss your trusted ADAS calibration ability with customers or local repairers in a way that is informative or educational will be key for multiple levels of return business.
“When they believe your business is growing in responsible, new directions, they will feel more confident to return for service in and out of the wheel well,” he says. ■
Commercial Tire Dealer ™
Selling forklift tires — and forklifts
ALL-STAR TIRE’S UNIQUE MODEL SUPERCHARGES GROWTH
Mike Manges By
Houston, Texas-based All-Star Tire Co. Inc. is unique. The dealership doesn’t just sell forklift tires. It also sells forklifts. But it took a while to get to that point.
Robert Morin, the owner of All-Star Tire, founded the company in 2000 after working for a commercial truck tire dealership that had a retread plant. (Prior to that, he worked as a farmhand, changing ag tires on big tractors.)
He went from working in the dealership’s retread shop to handling emergency road service calls, interspersed with some sales functions.
Morin enjoyed the job, but with a young family to raise, he wanted a more predictable schedule. He began eyeing other opportunities, including going into business for himself.
After considering several options, Morin concluded that selling forklift tires would allow him to raise his children on “a more eight-to-five schedule.”
He put up his own shingle. Soon, at the suggestion of a friend who was working for Morin as a technician, the newly established All-Star Tire began fixing forklifts.
“In the early days, it was just two of us running like crazy,” says Morin. “I was fortunate that clients kept referring us to other clients and we grew.”
Hustle was the name of the game, he notes — just as it is now.
“We landed a big stevedore company, Cooper T. Smith, by just working on
“A business axiom I love is, ‘It isn’t the biggest that eats the small. It’s the fast that eats the slow,’” says Robert Morin, owner of Houston, Texas-based All-Star Tire Co. Inc. (pictured center, with his employees.) “Customers want to know, “Can you do it now and how fast?’”
All-Star Tire Co. Inc.
Thanksgiving when others didn’t answer the phone. They turned into the largest customer for us” in All-Star Tire’s early days, generating up to $300,000 in annual revenue.
“They paid every Friday. That was such a blessing.”
Morin began signing other customers as additional opportunities emerged. AllStar Tire continued to grow.
The dealership’s next turning point came when Morin, a big believer in continuous learning, enrolled in a Goldman Sachs-sponsored program for small businesses.
“Typically, the people who are there are some type of what you would call a ‘C-suite person’ — the CEO, the CFO or the COO of a company.”
During the program, “I sat at a roundtable with these people and someone said, ‘Robert, you already sell tires. You repair forklifts. Who don’t you sell forklifts?’
“In my mind, I was still ‘a tire guy’ and I said, ‘I don’t know.’ But I bounced the idea around and thought, ‘Why shouldn’t I be a forklift dealer? Other people can do it. Why can’t I do it?’ I brought the idea to my team and they said, ‘Yeah.’
“So the question became: how do I become a forklift dealer? I began talking with
Forklift sales make up 10% to 15% of All-Star Tire’s revenue. Morin believes that percentage will increase. “If you sell a set of tires for a forklift, you’re talking $1,000. If you sell a forklift, you’re talking $30,000 to $40,000. It’s a bigger-ticket item.”
Photo: All-Star Tire Co. Inc.
forklift dealers,” who recommended that Morin attend a material handling industry trade show to meet with potential suppliers.
“I went to the show and began talking with all of the forklift manufacturers.”
He discovered that most were content with their established distribution.
“Then on the last day we were there, I stumbled onto Tailift,” a forklift manufac-
Photo:
Commercial Tire Dealer ™
turer that “was looking for representation in Houston,” says Morin.
“They had some requirements,” which All-Star Tire met. “We started selling forklifts.”
Today, most of All-Star Tire’s industrial tire competitors sell tires to forklift dealers, but that’s where the connection usually ends, according to Morin.
“Our client base (is comprised of) the
same companies that started out buying our tires,” he says. “Forklift tires bring us customers.
“Our name is All-Star Tire, but when I send you a quote, it also says that we sell forklifts and we lease forklifts.”
The latter service is a more recent addition to the dealership’s business.
New forklift sales make up 10% to 15% of the company’s revenue.
Morin believes that percentage will increase.
“If you sell a set of tires for a forklift, you’re talking $1,000. If you sell a forklift, you’re talking $30,000 to $40,000. It’s a bigger-ticket item.”
Morin is fond of calling All-Star Tire “the NASCAR of forklift tires” because of the dealership’s speed and accuracy.
“A business axiom I love is, ‘It isn’t the biggest that eats the small. It’s the fast that eats the slow.’ Customers want to know, ‘Can you do it now and how fast?’
“We started a mounted wheel program that allows us to install four to six tires on a forklift in 30 minutes, as opposed to three hours,” he says.
MANUFACTURING HIGH-QUALITY PRECURED TREADS AND RETREADING MATERIALS SINCE 1952
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“We have a client that has 60 forklifts. Eighty-five percent of his fleet is the same make and model. They all have the same size tire on the drive position and they all have the same size tire on the steer.”
The customer uses All-Star Tire’s mounted rim program, “which cuts down on the amount of time their machines are out of production. And that bleeds down into smaller customers.
“The guy who has 10 forklifts” typically follows the same model as customers who run larger fleets, says Morin.
“So now I can speak to that customer and I can show him our data. ‘This tire will last this long in this application in these types of conditions.’”
After-sale service is important, he says. “The tires we sell are rigorously tracked for hours of usable life. We have a large customer that’s getting over 5,000 hours” on a set of forklift tires — an increase of around 1,500 hours delivered by the original set of tires on the unit.
Morin offers another example of the impact of after-sale service.
Years ago, a water bottling company in his market “was changing tires out often due to its 24-hour operation.”
Several tire vendors tried to provide a solution, but failed. “I conducted a preventive fleet survey and changed to a non-marking tire compound and their replacement rate was cut by 50%.”
With a winning formula in place, Morin is investing in the next evolution of his business: by-the-job forklift rental.
“We probably have 20 of them on rental and I’m looking to expand that. At some point, we’ll have a tire company, a forklift dealership and a separate equipment rental company.” ■
12/15/23 10:33 AM
Industrial tires
What’s new in forklift tires?
TIREMAKERS SHARE THE LATEST IN TECHNOLOGY, TRENDS
Mike Manges By
Breakthroughs in bigger tires o en receive more coverage, but forkli tires are bene ting from signi cant advancements, as well. Forkli tire manufacturers discuss what’s new in this specialized — and essential — segment.
Nick Phillippi, director, product management and operations, North America, Ascenso Tires North America: With forkli and other material handling equipment, end users are constantly trying to improve utilization of the machines. In some cases, that means working in tight aisle space — implying tires require better wear resistance compounds to meet life expectations, while also being built to withstand the dynamic stresses of being steered while the vehicle is in a stationary position or having to manage longer cycle runs.
uous, heavy loads. is explains why the research and development of new materials will focus even more on the capacity to withstand the typical harsh conditions of industrial environments, reducing the frequency of replacements and maintenance — thus improving the overall reliability of material handling operations and with positive e ects in terms of cost e ciency.
In the future, we will also assist to enhance tread patterns and (develop) speci c designs to meet the typical needs of this sector, contributing to safe material handling and streamlined processes. Tires will be speci cally designed to ensure low rolling resistance.
At the same time, the development of innovative tread patterns will bring bene ts in terms of greater traction and stability on various surfaces, including wet, oily and uneven terrains. is (will) result in higher safety and comfort for workers operating in industrial environments, thanks to the tires’ capacity to (provide) better shock absorption and cushioning to reduce vibrations and operator fatigue.
Another area we see end users starting to pay more attention to is the quality of the ride. Most material handling machines have no suspension system, meaning they are reliant on the tires to provide the cushioning e ect to the machine and reduce equipment damage through impact.
Alan Eskow, vice president, BKT USA Inc.: Among the most relevant trends is the use of advanced rubber compounds and synthetic materials will be widespread to o er improved durability and wear resistance.
Also heat resistance plays a key role to ensure better performances in high-temperature environments and under contin-
BKT USA Inc.’s Maglift “has been particularly designed for forklifts in industrial and logistic operations,” according to BKT offi cials. “This solid tire features high load capacity and outstanding comfort. Maglift shows excellent cut and chip resistance, resulting in a long tire life.”
Photo: BKT USA Inc.
Load capacity is a likewise crucial factor, as overload can actually lead to premature wear and potential safety hazards. is explains the tendency to enhance the tire’s design and to leverage solid and robust tread patterns to support higher load capacities, without compromising operator ride safety and comfort. is will accommodate the growing need of larger and heavier loads in material handling operations.
“The Double Coin REM-6, an all-steel radial forklift tire, is designed for more demanding applications, especially in the larger 10.00R20 and 12.00R20 sizes,” says Tony Cresta, director of product management, CMA/ Double Coin.
Photo: CMA/Double Coin
Finally, the rise of electric and autonomous forkli s is paving the way for the development of tires speci cally made for autonomous handling systems and vehicles.
Tires will be designed to work along with regenerative braking systems to optimize energy recovery during operations.
Tony Cresta, director of product management, CMA/Double Coin: To increase tire life in material handing applications, some fleets of container handlers, for example, have tire pressure monitoring systems (TPMS) installed. Some of these newer set-ups allow an operator or eet manager to easily check their tire pressure via app and Bluetooth without removing equipment from service and sticking the tire with an air pressure gauge. TPMS adoption will continue to help eet managers extend their tire life and increase eet e ciencies.
The Ascenso FLB 681 has a specially designed tread that ensures optimal load distribution with a wide footprint, plus a strong casing for enhanced impact resistance, a special tread compound and other features.
Photo: Ascenso Tires North America
Made with 93.5% sustainable and biosourced materials, the Ultimate Green XT from GRI offers low rolling resistance, high abrasion resistance, enhanced traction for greater driver control and other features.
Ydo Doornbos, director, North America, Global Rubber Industries Pvt. Ltd. (GRI): e material handling industry is undergoing a signi cant transformation, driven by the adoption of cleaner and more e cient technologies. Electric forkli s are leading this charge, o ering environmental bene ts and lower operating costs. However, these advancements require innovative tire solutions to address their unique demands.
Industrial tires
our sustainability e orts with our products. A sustainable tire is a tire that is eco-designed using the life cycle analysis method. is approach is the perfect complement to Michelin’s philosophy, which focuses on long-term performance to combat programmed obsolescence and reduce fossil fuel consumption.
Cli Davis, executive vice president, Sun-TWS North America: Solid tires are being designed to improve fuel e ciency, which is becoming increasingly important as fuel prices rise and environmental concerns grow. ere is a growing demand for tires with low rolling resistance to enhance vehicle e ciency and reduce energy consumption. e rise of EVs is driving demand for solid tires that can handle the unique requirements of these vehicles, such as higher torque and di erent weight distributions.
Among other features, the MS600 highperformance press-on tire from Maxam Tire North America sports a full-size tread profi le for enhanced traction, stability and extended tread life.
Photo: Maxam Tire North America
Robbie Gilliss, material handling segment manager, Maxam Tire North America: In the material handling industry, advancements in rubber compounding technology are leading to more durable and eco-friendly forkli tires. Innovations around extending tire life are helping businesses reduce replacement costs and environmental impact. Having a forkli tire solution that the eet can count on to deliver long tire life (and) durability and safely support carrying heavy loads, all while sipping on the energy source, is a necessity.
Darren Stratton, brand director, material handling, Michelin North America Inc.: In recent years, Michelin has begun seeing a push from both original equipment manufacturers and eet owners to demonstrate
There is a strong push toward using sustainable and eco-friendly materials in tire production, including recycled materials and bio-based components. Innovations — such as self-healing polymers, puncture-resistant materials and smart tires that can monitor their own conditions — are becoming more prevalent.
Chan Phothisane, OTR national sales director, Zhongce Rubber Group Co. Ltd (ZC Rubber): ZC Rubber’s passenger and light truck EV tires have grown signi cantly (over) the last six years. Our company plays a signi cant role in supplying the OE market with our EV passenger tires. Our engineers have great knowledge and in-depth understanding of EV vehicles.
EV forkli vehicles are much
ZC Rubber America Inc.’s Westlake SR60 is a solid industrial tire that offers a high-capacity solution for lifting and loading heavy weights. “The SR60 is an excellent rolling resistance tire and offers great traction when braking,” say ZC Rubber officials.
Photo: ZC Rubber America Inc.
The Michelin X Stacker 3 HD can sustain heavy-duty applications and can cover extended transport distances at a speed of 15 mph.
heavier due to battery weight. e tires also wear faster due to the capability of accelerating faster. However, forkli EVs offer a smoother ride, increased uptime, less scheduled maintenance and the ability to carry heavy loads. Canada and the United States continue to move toward lower emissions. e demands for EV forkli tires will continue to grow in North America.
Bhavesh Sondagar, product manager — earthmoving, construction and industrial tires, Yokohama O -Highway Tires America Inc.: Innovation in forkli and material handling tires is being driven by maximizing three important factors: tire life and stability, which are always a priority in any industrial setting, and improving the productivity of operators and machines.
The new Galaxy MFS 101 Severe Duty Solid (SDS) NM from Yokohama Off-Highway Tires America Inc. features a non-marking compound, three-stage construction, shoulder lugs for traction optimization and more.
Photo: Yokohama Off-Highway Tires America Inc.
Key to that productivity is recognizing the importance of reducing vibration through tire technology.
Study after study illustrates the e ects of vibration on operator fatigue, productivity and health. We are seeing increased interest from equipment owners in minimizing vibration to help keep operators healthy, alert and e ective.
We believe the combination of tire performance and worker performance is a synergy that tires can create and the forkli market is an ideal place to put that technology to work.
Photo: Global Rubber Industries Pvt.Ltd.
Photo: Michelin North America Inc.
Marc Margossian, business development director, Yokohama TWS: When visiting customers, the most common question is, “What’s new?” and within the material handling segment, the answers can always vary. Despite the industry being over 100 years old, there are ongoing introductions to the marketplace.
Original equipment manufacturers go through extensive testing to qualify products. Attributes which can be considered a benefit through the entire value chain can be:
• Extended tire life. All customers want a product that lasts longer and keeps up with their varied applications.
• Low rolling resistance. Whether you are utilizing an electric motor or an internal combustion engine, tires with low rolling resistance can provide longer productivity between battery charges or consume less fuel.
• Comfort. Tires provide much of the comfort on a forklift and you want to protect the operator, the load and the equipment.
• Profile. Design profiles of a tire can vary greatly and offer different performances.
• Stability. Tires need to provide excellent stability, which is often tested on a tilt table to ensure proper handling while carrying a load and taking corners while maneuvering.
• Sustainability. Protecting the envi-
ronment is very important and many manufacturers are working hard to reduce their carbon footprint and are building tires with less environmental impact.
• Wear indicators. Providing indicators on the tire indicating when to change out the tire can be a real benefit and enhance safety.
• Compounds. Having the right compound for applications can dramatically improve tire life and therefore reduce the cost of ownership by keeping (an) operation up and running. Examples of what different compounding can offer include a clean environment; lower heat build-up; low rolling resistance; (the ability to) carry heavier loads; and electrically conducting and non-marking (tires.)
In addition, we are in an age of digitalization. Companies are looking for new ways to interact with each other that provide easier access to pricing, inventory visibility (and) documentation flow. Being able to interact in a more expedient manner is a nice improvement. ■
The PS1000 (press-on) and XP1000 (resilient) from Trelleborg Tires are “maximum intensity tire designs” that enhance overall tire performance, minimize change-outs, provide effective planning for downtime, improve safety and reduce waste.
Photo: Trelleborg Tires
Growth mode
ZC RUBBER CONTINUES TO INVEST IN TIANLI, OTHER EFFORTS
MTD staff By
The OTR, industrial and ag tire segments are always evolving — not just in the U.S., but worldwide. This evolution has captured the attention of many tire manufacturers as they continue to adjust to the changing environment.
While Goodyear Tire & Rubber Co. recently announced the sale of its OTR
tire division to Yokohama Rubber Co. Ltd., others are seizing the opportunity to grow.
Zhongce Rubber Group Co. Ltd. (ZC Rubber), already one of the world’s largest OTR tire producers, is in a growth mode right now with its Tianli line of OTR, industrial and ag tires.
Earlier this month, ZC Rubber held
Wheeling and dealing
If you’ve been around the OTR tire business long enough , you’ve probably met or have done business with Sean Wheeler, general manager for Colony Tire Corp.’s Norfolk, Va., operations.
As Wheeler told MTD during a recent trip to China with ZC Rubber, “I do a lot of buyouts. For instance, many times somebody will call me and say, ‘I have 500 of these tires and I don’t know what to do with them. Can you help me?’”
Wheeler started out working for Tire Centers LLC and spent 14 years there before moving to Colony Tire, where he’s been for the past 16 years. During that time, he’s traveled around the globe buying and selling tires.
His venture into the OTR tire end of the business came around 2006 or 2007. During that time frame, there was a severe shortage of OTR tires, so “I went to outside sales and knew I had to think outside-the-box.”
He started traveling around the country and the globe in search of both tires and customers.
Wheeler says he is grateful to the leadership at Colony Tire for “putting so much trust in me and allowing me the freedom to succeed.
“I do military-surplus, OTR-surplus, TBR-surplus and ag-surplus. And I’ve been fortunate to make a lot of connections.”
This networking has allowed Wheeler to be notified to bid on surplus tires from the government. He also receives calls from companies when they have bought more tires than they need for their new equipment.
As Wheeler jokes, “companies will tell me, ‘Hey, we bought enough tires for 50 of these machines, but we ended up only building 10 machines. Are you interested in purchasing the leftover tires?’”
The ability to buy so many tires of all shapes and sizes at attractive prices puts Wheeler in a position to sell to small- to mid-sized dealers at prices that allow them to be competitive in the market.
Right now, Wheeler oversees two warehouses and has 52 people who work for him.
In fact, he has two people who specialize in bidding on military contracts for tires. He says his company is the second largest in buying military surplus tires.
“It’s a niche business. If you’re looking for a tire that no one else has, I’ll probably have it. That’s what I like doing.”
a ground-breaking ceremony in Saltillo, Mexico, for a new, 6.5-million-square-foot plant and on-site warehouse to serve the North American market.
During a presentation at ZC Rubber’s Tianjin, China, plant earlier this year, executives told MTD and representatives from Colony Tire Corp. about the company’s future growth plans.
In 2022, ZC Rubber acquired the maker of Tianli tires, Tianjin United Tire & Rubber International Co. Ltd. (Tutric).
The company created a wholly owned subsidiary, Zhongce Rubber (Tianjin) Co. Ltd. to oversee day-to-day operations of the Tutric factory, located in the port city of Tianjin, China.
Tutric was originally United Tire in the 1980s and had been selling a variety of tire lines in the U.S. since the 1990s.
According to Benjamin Lou, global OTR director of ZC Rubber, Tutric was China’s largest OTR tire exporter to the United States during the period prior to U.S. tariffs being placed on Chinese-produced OTR tires.
That acquisition allowed the company to produce tires from six inches to 63 inches, with more than 2,000 SKUs.
Sean Wheeler turns surplus into gold
Benjamin Lou, global OTR director for ZC Rubber, explains the company’s plans for its Tianli business.
Photo: MTD
Rubber recently hosted guests from Edenton, N.C.-based Colony Tire Corp. (From left to right, Benjamin Lou, global OTR director, ZC Rubber; Sean Wheeler, general manager for Colony Tire’s Norfolk, Va., operation; Nate Potts, wholesale account manager for Colony Tire; and Chan Phothisane, OTR national sales director, ZC Rubber America Inc.)
Lou says the company is still in the test stage with its own 63-inch OTR tire, but is supplying up to 63-inch tires to the top 50 global construction machinery companies in China as of the first quarter of this year.
The Tianjin plant currently is producing 120,000 metric tons of products yearly or 500,000 pieces, including tires, with some track products.
Lou says Tianjin is currently exporting 70% of its tires and noted that by the end of 2024, the company plans to have its Tianjin factory “carbon neutral.”
OTR tire sales represent 30% of all ZC Rubber’s total sales. Of that amount, about 8% is currently sold in the U.S.
To ensure quality, the company is spending 3% to 4% of its revenue on R&D.
Heading up ZC Rubber’s sales operation in the U.S. for the past five years is Chan Phothisane, OTR national sales director.
Based in Houston, Texas, Phothisane says the company is currently selling by container-load directly to large distributors.
Phothisane adds that ZC Rubber currently does not have a ware-
house in the U.S. (The company’s two largest customers currently are Dunlap & Kyle Co. Inc. and Colony Tire.)
“Our ideal customers are large wholesale tire companies or large commercial tire chains with large inventory space,” he says. “We will tailor our business approach according to how much business is in that region.”
ZC Rubber continues to improve its tires’ quality and performance and is currently experiencing adjustment rates of well below 1%, according to Phothisane.
Being in growth mode, Phothisane is also looking to expand the company’s salesforce.
“In order to grow and become the fifth largest tire manufacturer in the world, we need manpower to cover the U.S. region.
“We believe that quality service is the key to keeping the customers happy. It is important to be in front of our dealers, while also having inside sales support.
“Customer service response time is crucial. We are looking to hire outside sales positions for the aftermarket division.”
Currently, ZC Rubber is selling the Tianli brand for agriculture, construction, material handling, forestry and mining applications, as well as its Westlake brand in agriculture, construction, material handling, forestry and mining operations, according to Phothisane. ■
ZC
Photo: MTD
Various tires and a miniature scale model decorate the lobby of ZC Rubber’s Tianjin, China, factory.
Photo: MTD
OTR tires
What OTR tire sale means for Goodyear
YOKOHAMA WILL PICK UP OTR TIRE RETREAD PLANT AS PART OF THE DEAL
Mike Manges By
The recently announced sale of Goodyear Tire & Rubber Co.’s OTR tire business to Yokohama Rubber Co. Ltd., detailed in the News section of this edition of MTD, is the latest step in the Akron, Ohio-based tiremaker’s Goodyear Forward plan.
The $905 million cash transaction, announced on July 22 and scheduled to close by early-2025, shows that the Goodyear Forward plan is “progressing,” according to John Healy, managing director and analyst at Cleveland, Ohio-based Northcoast Research Holdings LLC and MTD’s monthly Your Marketplace columnist.
In November 2023, Goodyear announced “portfolio optimization” plans to sell its OTR tire business, chemical business and Dunlop brand to generate “gross proceeds in excess of $2 billion.”
Goodyear has OTR tire facilities in Topeka, Kan., plus Japan, Kuala Lumpur, Indonesia, South Africa, Brazil and Columbia, according to Goodyear’s corporate website.
A Goodyear spokesperson told MTD that the Topeka plant, which opened in 1945, “will supply tires to Yokohama for an initial period of up to five years, post-closing.”
Also as part of the transaction, Yokohama will take ownership of Goodyear’s OTR tire retreading plant in North Bay, Ontario, which is the last-known OTR tire retreading facility within Goodyear’s portfolio.
Goodyear sold its Wingfoot OTR tire retreading operation, which included two plants, to Potosi, Mo,-based Purcell Tire & Rubber Co. in 2009.
The dealership switched from Goodyear’s retread system to Michelin’s retread system several years ago.
GOODYEAR MOVES FORWARD
Goodyear plans to use proceeds from the OTR tire business unit sale to “reduce leverage” and “fund initiatives” in connection with Goodyear Forward.
“They’re going to focus on businesses that they can earn an adequate return on and look at businesses that require more capital and they might not be in a position to fund,” Healy told MTD.
“I think it’s a sign that .... they’re progressing with the Goodyear Forward strategy.”
Healy also believes Goodyear is “on-pace” with the timeline associated with the OTR tire unit spin-off.
“They laid out early in the year that they had hoped to update the investment community on the sale of at least one of the (three) assets by summer or the middle of the year sometime.
“Additionally, they said they were going to try to get $2 billion for the sale” of the company’s OTR tire and chemical business units and Dunlop brand.
“I think some (within) the investment community were a bit skeptical, but I think the fact they were able to get the first business out and almost get halfway there is a positive.
“To me, they got a good dollar” for the OTR tire business, which Healy believes was probably more difficult to “decouple
and move out of the Goodyear organization” than the Dunlop and chemical businesses.
He also noted that the effort to divest all three business units is a separate initiative than Goodyear’s “cost reduction plan” of $1 billion, which also was announced in late-2023.
Via a presentation posted in November 2023, the Akron, Ohio-based tiremaker said that 40% of the targeted $1 billion savings total will come from “footprint actions and plant optimization.”
This will include increased product standardization “and fewer changeovers,” as well as “enhanced predictive maintenance, labor productivity and ongoing footprint actions,” plus SKU rationalization “to reduce complexity and enable increased plant efficiency.”
Thirty-five percent of savings are expected to come from “reduction in raw materials costs via ‘clean-sheet’ approach to identify and negotiate best-in-class prices; vendor (and) spend consolidation; rigorous, data-driven negotiations; and material substitution and consolidation.”
An additional 20% will come from “growth in low-cost/off-shore shared service centers; lean/best-in-class organizational structure for lower cost and increased efficiency; increased automation of transactions via IT/AI; and refined marketing.”
The remaining 5% will be driven by “digital inventory and logistics planning, virtual R&D prototyping and increased efficiency,” as well as the optimization of logistics “to reduce less-than-truckload shipments” and the establishment of “offshore product development centers.”
On July 22, a Goodyear spokesperson told MTD that the company is “relocating 175 roles supporting our Americas business and corporate functions to a new Goodyear location in Costa Rica, effective in early-2025.”
Goodyear plans to use proceeds from its OTR tire business unit sale to “reduce leverage” and “fund initiatives” in connection with Goodyear Forward. Photo: Goodyear Tire & Rubber Co.
Will You Take Home The Mr. Tire/Big 3 Tire Commercial Tire Dealer Of The Year Award This Year?
The Mr. Tire/Big 3 Tire Commercial Tire Dealer of the Year Award is designed to recognize the tire dealership that is quite simply “The Best” among independent commercial tire shops. K&M Tire has partnered again with Modern Tire Dealer to bring you the 8th annual Commercial Tire Dealer of the Year Award. The winner will be announced this January at the 2025 K&M Tire Dealer Conference in Columbus, Ohio.
Winner Receives:
$2,000 in cash.
$1,000 towards the charity of their choice.
$1,000 towards a physical improvement project at their dealership.
Trophy along with the distinction of being the Mr. Tire/Big 3 Commercial Tire Dealer of the Year.
A feature story on the winning Commercial Dealer in a custom publication distributed at the K&M Tire Dealer Conference.
Nominations* will open July 1st, 2024 and will be accepted through September 30th, 2024. Please register by visiting the online registration site www.mrtirebig3tirectd.com and nominate your dealership today!
*This contest is for all eligible Mr. Tire and Big 3 Tire dealers only. Winner will be announced during the 2025 K&M Tire Dealer Conference in Columbus, Ohio!
2024 Winner Weaver’s Tire Service of Northumberland, Pennsylvania
Commercially Viable
Toyo introduces M156 all-position tire
Toyo Tire U.S.A. Corp. has introduced the M156, an all-position urban and regional medium truck tire. Building upon the success of its predecessor, the Toyo M154, the Toyo M156 features a four-rib pattern and a new, patented, buttress sidewall design that ensures even pressure distribution. A SmartWay-pending tire, it also has a high-elongation top belt, a wider belt package and a new carcass profi le to minimize the growth of its tread profi le and reduce strain at the bead and belt edges. Other features include a center groove design with angled groove walls and stone ejectors to reduce irregular wear and tearing and minimize stone retention, respectively.
TOYO TIRE U.S.A. CORP. www.toyotires.com
ATD expands Hercules ag tire range
American Tire Distributors Inc. (ATD) has introduced its Hercules AG-Trac F-2 ag tire. The tire is offered in two 16-inch sizes for 2WD front tractor wheel positions, providing the fl otation, durability and steering response needed for agricultural settings, according to ATD officials. The tire is built to withstand the demands of farm work, with durable construction for long-lasting performance. It also features enhanced steering response for precise control and maneuverability. Other features of the tire include a strong nylon cord casing designed to resist damage; a four-rib design for enhanced fl otation and self-cleaning; 10- and 12-ply offerings for higher load-carrying capacity; and more.
AMERICAN TIRE DISTRIBUTORS INC. www.herculestirescommercial.com
GRI expands ag, construction tire portfolio
Global Rubber Industries Pvt. Ltd. (GRI) has expanded its ag and construction tire portfolios with the addition of 11 new SKUs. These newly introduced SKUs encompass DOT sizes that comply with United States requirements. GRI officials say the company’s expanded product portfolio includes tires designed for implementation and fl otation machinery in agriculture applications and skid steers in the construction category. The expanded portfolio includes the Green XLR F77, the Green EX I100, the XPT SS and others.
Bridgestone unveils Bandag retread
Bridgestone Americas Inc. has introduced the new BDR-AS3 retread, Bandag’s solution for package-and-delivery and last-mile delivery applications. The BDR-AS3 features a non-directional tread pattern, 3D siping for enhanced all-season traction, 3 Peak Mountain Snowflake certification and other elements. The new product joins Bridgestone’s full portfolio of Bandag retreads and helps deliver improvements in cost-per-mile.
BRIDGESTONE AMERICAS INC. www.bandag.com
Continental adds size to Conti Hybrid HT3
Continental Tire the Americas LLC’s Conti Hybrid HT3 commercial truck tire is now available in size 255/70R22.5, Load Range H. The tire is intended for car haulers, van trailers, long-haul and regional light construction trucks. The Conti Hybrid HT3 255/70R22.5 was made to carry the extra load of heavy vehicles and withstand rough terrain and applications, according to Continental officials. The tire features a robust compound to withstand high scrub situations. Its tread pattern is designed to withstand abrasions and features a fuel-efficient compound, allowing for lower rolling resistance and other benefi ts. The size extension also comes with a matching winged retread.
CONTINENTAL TIRE THE AMERICAS LLC www.continental-tires.com
CMA/Double Coin launches S/T radials
GLOBAL RUBBER INDUSTRIES PVT. LTD. www.gritires.com
CMA LLC/Double Coin has introduced two new, all-steel S/T radial tires to the Double Coin lineup. The additions expand on the success of the company’s RT500 model tire and are in response to the requests of customers, according to CMA/ Double Coin officials. Additions include the high-demand sizes of ST235/80R16 and ST235/85R16, which have been designed explicitly for high-speed trailer use. Features of the new tires include a large steel casing for greater carrying capacity, optimized tread depth for reduced heat build-up and wide shoulders for stability. The tires are designed for RV trailers, 5thwheel trailers, horse trailers, utility trailers and boat trailers.
CMA LLC/DOUBLE COIN www.doublecointires.com
By
Dennis McCarron
Labor law changes WHAT YOU NEED TO KNOW TO STAY COMPLIANT
Once again, the Department of Labor has changed the rules surrounding employees who are considered “exempt.” The word “exempt,” in common explanation, means “does not have to clock in” or “salaried.” In other words, the employees’ hours are not strictly recorded.
The new changes won’t have as big of an impact as the last set of labor law changes, but they are something that every small business owner needs to be aware of when it comes to the impact on their operations.
And let me get this one out of the way: California is currently exempt from the ruling simply because its standards are already higher than federal.
Let’s go over the basics of the rule of exemption before we talk about the recent changes.
In order to be exempt, the “duties test” and the “pay test” both have to be met. If an employee only qualifies by one standard and not the other, the business will be held to whatever penalties the government deems appropriate.
The “duties test” is largely about independent decision making. Can the employee hire and fire people at their sole discretion? Can they spend budgeted money on long-term planning like marketing and promotions? How many people report to them?
In general, small businesses in the tire and automotive aftermarket can sometimes have one person who is salaried working in a store and making decisions. In a situation like this, if the owner works in the store on a regular basis, then the store manager cannot be salaried — nor can anyone else. If the owner’s hours are irregular and are largely hands-off to daily decision-making, then the store would be permitted to have a salaried employee, but the employee still must be able to pass the duties part of the rule.
The ”pay test” is fairly straightforward. An exempt employee must be paid in a way where their pay doesn’t fluctuate weekly due to performance or hours worked and they must meet a threshold set forth by the government on minimum pay. That is the part that changed this year, effective July 1, and will be subject to automatic changes next year and periodically in the future.
The exemption status begins with classification of one of the following: executive, administrative, professional, computer, highly compensated and outside sales. You can toss out outside sales, computer and highly compensated since outside sales requires a majority of travel; computer, since it’s a specialty; and highly compensated salaries start at $107,432 base — and changing to $151,164 by 2025 — and California doesn’t apply here.
The other three designations will require a minimum weekly pay of $844/week or $43,888 annually. Clearly, this amount is typically lower than any store manager would make as a base, but remember that the salary test is dependent on the duties test.
If your employee doesn’t clear the duties test, then their hours worked will be subject to overtime rules. And if you didn’t record their hours worked, the government will take the employees’ word for it. If they say they usually work 60 hours a week, then that’s enough for the government.
‘If you are currently in violation of this new change to an old law, make the adjustments.’
In the beginning of January 2025, this salary threshold will increase to $1,128/week ($58,656 annually) and starting in July 2027, will be automatically increased and set on a three-year increase schedule based on earnings data.
What does this mean for you, the independent tire dealer? Well, that depends.
The likelihood of you being targeted by the Department of Labor for your one employee is astronomically low. That number dramatically ticks up, though, if a large corporation in your state or local area and in your same industry gets audited and loses.
Your chances also dramatically increase if any current or former employee complains about the violation to the Department of Labor’s Wage and Hour Division. It doesn’t matter if they are an angry employee seeking revenge. Either there’s a violation or there’s not. And retaliatory penalties are much harsher. So if an employee has a complaint and they talk to you first, focus on what’s the law.
The bottom line? If you are currently in violation of this new change to an old law, make the adjustments. Work the math backwards from what employees earn now as a salary to what they earn working the same hours, including the portion of overtime. When their hours go over, pay more. Just make a correction the following week to keep it consistent. Remember, this is only a big deal if you’re in violation.
One final note: please remember that hourly employees’ bonuses are subject to overtime rules, as well. If you have a bonus plan of sell x and get set $x in return and the employee had to endure overtime to achieve that, there is a premium established by the government that adds on a little more than your said pay-out. ■
Dennis McCarron is a partner at Cardinal Brokers Inc., one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com.) To contact McCarron, email him at dennis@cardinalbrokers.com.
Mergers and Acquisitions
The benefits of a two-step sales process
WHY WE MOVE FROM INTEREST TO A LETTER OF INTENT
Michael McGregor By
Imight have mentioned before that we nd automotive aftermarket industry transactions take a bit more time to get done than IT or health care industry transactions. I believe one reason for this is that many auto-related business owners whom we represent never started their business for the sole purpose of eventually selling it.
Tire dealers and others in automotive also tend to be more contemplative of their exit timing. ey’re in no great hurry to get out. Matching the contemplative nature of sellers, buyers of automotive a ermarket businesses are also thoughtful and discriminating in the types of companies that they acquire.
So to match the pace of automotive deals and because we nd it more e ective, we employ a two-stage sale process. A two-stage sale process involves rst getting indications of interest (IOIs) from as many buyers as we can and then narrowing down that buyer pool by inviting the more serious ones to submit formal letters of intent (LOIs).
the prospective buyer by a certain date. Here’s exactly what we have in our IOI request:
a. Purchase price range and form of consideration. Your indication of interest should specify a preliminary, non-binding purchase price range to acquire the assets owned and operated by our client. You should assume that the company is free of cash and third-party debt.
b. Financing. Your letter should provide a description of the sources and levels of nancing contemplated, if applicable, as well as the timing involved and the steps required to secure the necessary funds for the transaction.
c. Due diligence and timing. Your letter should provide a summary of due diligence topics or additional information you will require to complete your investigation of the company and submit a binding o er. Also indicate the period of time that you believe will be necessary to satisfy your due diligence requirements, along with an anticipated closing date.
d. Real estate. Description of your intent to purchase the real estate and valuation or method of valuation thereof.
‘Many auto-related business owners whom we represent never started their business for the sole purpose of eventually selling it.’
When we’re ready with all the materials we need to go to market, we assemble what we call a target list of strategic buyers that make sense for the business.
We maintain our own database of buyers that we have done deals with or shown deals to in the past and have their personal cell phone numbers and email addresses in our own phones.
Last, we have a dedicated research department that we employ to dig into the industry and ll out the list of buyers in case we missed anything. We prefer to leave no stone unturned when it comes to developing the target list. is list is then divided up by the investment bankers working the deal. We reach out via email and phone by sending a blind teaser which describes the business in general terms without identifying the name or exact location. e teaser is a two-page document that is intended to get a buyer to want to learn more, which they can do a er signing a con dentiality agreement.
When the buyer is a new entity that we are not familiar with, we always have a phone discussion to make sure the interest level is real and that they have the resources to get a deal done.
A er having multiple conversations about the opportunity, sending out con dential info memorandums and sending an instructional process letter, the next step is getting an IOI from
e. Conditions and approvals. Describe all conditions required to consummate a transaction, including any corporate, shareholder or regulatory approvals which will be necessary for you to receive in order to complete an acquisition of the company.
f. Other considerations. Please provide any other terms, considerations or assumptions that may be material to the company in determining which prospective buyers it will select.
Upon reviewing the IOIs, the client decides who we want to take the next steps with. is might involve supplying more nancial and other information, like tire unit sales mix, having a Zoom meeting between the parties and visiting the client’s business con dentially a er hours.
All of this is intended to provide the buyer with the information that they need to generate a more comprehensive LOI to purchase the business. We then let the buyer know the due date for formal LOIs. ese LOIs include more detail of the above IOI items, along with discussions of employment agreements, non-compete clauses, exclusivity, timing, etc.
Upon gathering the LOIs, with our guidance, the client decides which buyers we are going to negotiate with to nd the ultimate buyer with the most acceptable LOI. e next step is to sign the re-negotiated LOI, take the business o the market and enter due diligence for 90 to 120 days until closing. ■
Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael.mcgregor@focusbankers.com.
Dealer Development
Randy O’Connor By
RProclaiming your value BEST PRACTICES TO HELP YOUR DEALERSHIP STAND OUT
ewind a few years and I’m willing to bet that you looked at your best practices a bit differently than today. It’s one of the many essentials COVID-19 brought forward — at least in part.
The workforce was different then. So were hiring practices. Pay scales were different, as were budgets. Training looked different and for many, not in a positive way. Market share was different, too, and so probably was your level of comfort.
Justin Trudeau, the prime minister of Canada, said, “The pace of change has never been this fast, yet it will never be this slow again.”
Put your dealership in a decade-long time warp and several best operational practices have — or at least should have — changed. And there are fundamental shifts still happening that will profoundly impact your business.
We can’t have this discussion without the word “value.” As one of my previous columns noted, the definition of value varies dramatically. But your customers’ definition is much more consistent. What customers want and need isn’t a secret.
Customers want and need a locally owned tire dealership that is top of its market. There’s nothing better than a super well-run, locally owned service provider — one that will listen to and understand customers, while being super-convenient and fairly priced for the value being delivered. Those tire dealers who get this right reap the benefits. It’s a major competitive advantage.
Now is the perfect time for you as an independent tire dealer to flex your strength and value.
So operationally, what are some best practices being used out there today that are working? Here are a few that I have picked up based on conversations within Dealer to Dealer Development, the 20 group that I run:
Communication. When dealing with customers, it’s all about expectations. While we assume, erroneously, that customers know about things like caster and camber, they assume we know things they haven’t explained to us, either. Often these are their expectations. Unless the customer’s expectations are stated by way of effective communication, we don’t stand a chance at meeting or exceeding those expectations. It’s simple, really. Ask relevant questions and listen to the response until you’re 100% satisfied you can deliver. Day, time, price, value package, warranty, wait or leave — there’s a finite group of questions that shorten the curve. Are your questions dialed in?
Sales strategy. Everyone who answers your phone should know that what’s about to happen on that line is emotional. Sure, some folks are all about price and getting something for nothing. Sure, some folks think they are the experts — trying to steer you, your service and the price. Sure, some folks trust you and will simply throw you their keys. (We love those customers!) But what about
the customers you don’t have? By and large, those customers are shopping for tires everywhere. They should be your customers. Your dealership must differentiate itself by getting consumers to buy what they’re looking for. It’s emotional!
Convenience. The appointment process is crucial, from both the consumer and operator standpoint. It should work for both parties. Is your customer service team tuned into your service schedule and able to intelligently squeeze in an appointment here or there? Can you take walk-in, non-diagnostic work multiple times daily? What’s your current level of productivity? If you don’t know, your customers certainly do.
Community involvement. Many dealers’ marketing budgets have been minimal over the last few years. Those marketing efforts that work are community-based. You must have your operation dialed in to invest heavily in your local community. That’s where your value gains share.
Technology. You should aim to send a digital vehicle inspection text and/or email to the customer with pictures and even video within 20 minutes of their vehicle entering the shop. Any questions?
Pricing. The services and products you and your team provide are extremely valuable. If you’re a true top performer, you can set market price, within reason. If you’re among the majority of the market, you’re probably relying on the average market price. If you’re cutting prices, something is going to give.
Notice how price is last on my list. Large competitors who devalue our skills and expertise by giving away service or playing the price game only reinforce the misguided notion that independents have a ledger line they can’t touch. Are you proclaiming your value, loud and proud? ■
Tire and auto industry veteran Randy O’Connor is the Owner/Principal of D2D Development Group (Dealer to Dealer Development Group.) He can be reached at randy@d2ddevelopmentgroup.com. For more information, please visit www.d2ddevelopmentgroup.com.
Unless the customer’s expectations are stated by way of effective communication, we don’t stand a chance at meeting or exceeding those expectations.
Photo: MTD
Adding full EV service IS IT FOR YOU?
Craig Van Batenburg By
Electric vehicle (EV) sales are still growing. The power grid keeps getting greener all the time. Tire manufacturers are working on new compounds to help make EV tires last longer. The materials used to build these tires are being looked at with an ecological eye.
Overall, the downside of electric vehicles is less now than it was five years ago.
I visited a tire and full-service shop on Cape Cod in Massachusetts last week.
My reason for stopping in was to inform the owner that a new Massachusetts technician training program may pay for two weeks of EV training at my company, Automotive Career Development Center (ACDC).
The shop’s owner was off that day, so I talked with Steve, the store’s manager. He was polite and to the point. He said, “My boss hates EVs, but he is a realist, so I will let him know.”
This shop works on a lot of high-end European cars.
‘Is this the time to offer EV service or have you waited so long that your competitors are already there?’
Many owners of Mercedes and BMW vehicles made the switch to the Tesla Model S over 10 years ago and the shop started losing good customers.
It is now undeniable that EVs are not going away.
You may think whatever you want about EV owners, the cars, Elon Musk or any objection you personally feel. I have my own biases, too.
My company is going on 48 years old. In that time frame, we have all seen a lot of changes. (If you are under 30 years old, find an old-timer and we can fill you in.)
Today, your customers are looking at their total cost of ownership and some will come to the conclusion that an EV will cost less to own.
That may not be your view. If so, that will be a customer lost — unless you can service their vehicle.
Recently, a light duty fleet operator told his technicians that the company’s owner and board of directors had decided to order 40 new electric trucks.
He hired ACDC to prepare his shop for the GM Silverado EV, Rivian R1T, Ford Lightning and Ford E-Transit.
Over the last month, ACDC’s technician, Chris Bray, and I have been studying, scanning and preparing to add these four
vehicle types to our list. Were we surprised at this? No. Are you? In some applications, electric vehicles will save fleets money in the long term.
Do you have fleet customers? If not, why? When action at your shop is slow, fleets can fill in those days.
When I was in school, we had field trips. That was a while ago and they still exist.
Maybe you have allowed local high school students to visit your business on a field trip?
The field trip I want you to go on starts with you adding the app PlugShare to your phone and learning how to use it.
If you have trouble figuring it out, ask a 14-year-old.
Then find the nearest location that’s listed in the app. Stop by as many times as you can and talk to EV owners while their vehicles are plugged in.
This “market research” will be up close and personal. I do this often, especially when I am traveling beyond the range of the ACDC electric car or motorcycle I am driving that day. Here are a few questions to ask, in no particular order:
• “Are you renting this EV?”
• “Do you like it?”
• “Have you had any problems with it?”
• “How long does it take to charge your EV?”
• “How long have you owned this EV?”
• “Did you own a hybrid before this vehicle?”
• “When the EV needs service, do you use a dealer or Tesla service center?”
You may not want to identify yourself as a shop owner. That is up to you.
An honest opening statement may be that you are interested in buying an EV.
This type of research is very helpful in educating yourself and you may learn what you can offer to these owners.
Is getting into EV service for you? I can tell you that the business exists.
And there clearly is a lack of well-trained technicians who are capable of the service and repair of hybrid, plug-in hybrid, and electric cars and trucks.
Is this the time to offer EV service or have you waited so long that your competitors are already there? ■
Craig Van Batenburg is the CEO of Van Batenburg’s Garage Inc., dba Automotive Career Development Center (ACDC), which is based in Worcester, Mass. A 50-year automotive service industry veteran, Van Batenburg provides training for facilities that service — or want to service — electric and hybrid vehicles. For more information, see www.fixhybrid.com or email him at craig@fixhybrid.com.
YO U R B E S T M OV E
Focus on Dealers
An event with something for everyone
STEVE SHANNON TIRE TURNS FAIRGROUNDS INTO TIRE JAMBOREE
Mike Manges By
Over 1,000 wholesale customers — and more than a few enthusiastic retail customers — attended the recent Steve Shannon Tire Summer 4-Wheel Jamboree event.
The jamboree, which took place July 12-14 in Bloomsburg, Pa., Steve Shannon Tire’s hometown, was the dealership’s first big customer event since 2016.
“The tire business is a relationship business,” Jesse Shannon, one of Steve Shannon Tire’s owners, told MTD before the event started.
His brothers, Herb and Steven, also have ownership in the 43-location dealership, which they acquired from their father, Steve Shannon, several years ago.
Steve Shannon Tire has 36 retail stores, most of them in Pennsylvania, plus seven commercial tire outlets.
The dealership also has nine distribution centers, including a large warehouse in Bloomsburg, that together operate on a “hub-and-spoke” system to serve customers across its network.
Steve Shannon Tire is the 29th largest independent tire dealership in the United States, according to the recently published 2024 MTD 100.
NON-STOP ACTIVITY
More than 20 tire and service equipment exhibitors visited with customers of Shannon Tire Wholesale, Steve Shannon Tire’s wholesale distribution division, during the trade show portion of the event, held indoors.
Outside, on the Bloomsburg Fairgrounds midway, Steve Shannon Tire employees, operating out of a large tent, sold tires to jamboree attendees.
A small army of technicians performed tire switchovers on a wide range of light trucks, from conventional, showroom-quality models to exotically customized, lifted rigs.
Anticipating a high level of interest from attendees, Steve Shannon Tire brought 600 tires to the event. Delivery
On the Bloomsburg Fairgrounds midway, Steve Shannon Tire employees, operating out of a large tent, sold tires to attendees throughout the weekend. The dealership brought 600 units to the event. Delivery trucks ensured a steady supply.
Photo: MTD
Braving the heat, Steve Shannon Tire technicians mounted a non-stop wave of light truck tires purchased during the three-day jamboree.
Photo: MTD
trucks moving to and from the dealership’s Bloomsburg distribution center ensured a steady supply.
TAKING CARE OF CUSTOMERS
The Steve Shannon Tire Summer 4-Wheel Jamboree served a number of purposes beyond selling tires.
“It’s good to get the whole (Steve Shannon) team together,” Steven Shannon told MTD. “They get to meet customers in a little different environment. It’s a good morale-builder.”
The event also connected Shannon Tire Wholesale customers, many of whom are small tire retailers, with vendors for one-on-one conversations, plus product education and demonstrations.
The retail tire market in the northeastern U.S. “is very competitive,” said Jesse. “A lot of big guys are here. But there are still a lot of family-owned (tire) dealerships, which is good.”
“You need to take care of the customer to succeed in this business,” said Herb. “We just try to get better every day.” ■
Inside the trade show hall, where more than 20 vendors set up exhibits, Steve Shannon Tire representatives, including Steven Shannon, one of the dealership’s owners, (pictured on the right, behind counter), processed orders placed by customers of the company’s Shannon Tire Wholesale division.
Photo: MTD
‘The Chick-fil-A of the tire business’
CUSTOMER EXPERIENCE TRUMPS EVERYTHING
Gray’s Tire & Service Center Inc. recently opened its seventh store, a 9,000-square-foot facility in Clanton, Ala. “We want to be the Chick-fil-A of the tire business,” says owner David Gray.
Photo: Gray’s Tire & Service Center Inc.
By
Mike Manges
Whether selling tires or chicken sandwiches, David Gray says only one thing matters: the customer experience.
“We want to be the Chick-fil-A of the tire business,” says Gray, who recently celebrated the opening of his seventh Gray’s Tire & Service Center Inc. store, a 9,000-squarefoot facility in Clanton, Ala.
“Our business model is in and out. We’re quick, we’re good, we’re friendly and we do what we say we’re going to do.
“My thing is efficiency,” says Gray, who founded his namesake company in 1998 at the age of 22.
“How many steps does it take to get from here to there? Getting the car from the parking spot into the service bay — how long does it take to do that?”
It all starts with the initial interaction between the customer and salesperson, according to Gray.
“When someone drives up, we smile and say, ‘Thank you for
coming in.’ We answer the phone with a smile. The customer doesn’t care what kind of equipment you use. This is a relationship business. That’s what sets us apart.
“We have four (competitors) circling us,” he continues. “And we all sell the same thing. A tire is a commodity. I tell our salespeople, ‘Ask for the customer’s name. Ask for their number.’
“If someone is going to work the front counter, they have to have that welcoming personality,” he explains.
“When I hire (employees), I say, ‘When you go and get fast food at a McDonald’s, how’s the experience? How do they treat you?’ Then walk into a Chick-fil-A. What do they say? Thank you. What do they say after you place your order? My pleasure.’ It’s simple. You don’t have to reinvent the wheel. People want to be treated nicely.”
KEEPING THINGS SIMPLE
Gray opened his first location, a four-bay store, after working for another tire dealership.
“I always knew what I wanted to do. I worked on motorcycles and lawnmowers as a kid and I had a dream of owning my own business someday.”
He added a second store in 2008 as The Great Recession started — “the worst time in history” to open a new location, he says with a laugh.
“It was a corner gas station. We converted it and added eight bays to it. A year later, we added a store in Montgomery, Ala.”
Four years later, Gray acquired another tire dealership in Auburn, Ala. Business continued to flourish and he expanded further.
Operationally, Gray says he tries to keep things simple. He avoids stretching his resources and employees too thin. “You can’t be everything to everybody.”
He keeps a close eye on inventory, which he calls “our biggest expense.”
Pricing also is meticulously tracked and adjusted, when needed. “Just like Chick-fil-A, I don’t want to be the cheapest person in town and I don’t want to be the most expensive.
“There are people who are always going to want (expensive tires), but you have to be able to adjust quickly” when customers want to buy alternate brands.
“We’ll do whatever it takes to capture the customer, but you have to be smart,” he says.
Showrooms and waiting areas at Gray’s Tire & Service Center stores are open, modern and inviting.
“A lot of our clients are women,” who expect a premium retail experience, he says.
“When they walk in, we want them to say, ‘Wow! This store’s clean. It looks good. It smells good. The waiting room is huge.’ Image is everything.”
When dealing with today’s customer, “You better be on your ‘A game.’ It’s your people and your culture. If you don’t have that, you’re flying by the seat of your pants.” ■
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Cadillac Escalade ■ 2023
DESCRIPTION & OPERATION
The tire pressure monitor system warns the driver when a significant loss of tire pressure occurs in any of the equipped tires. When the vehicle is stationary, the sensor’s internal shock sensor is inactive. As vehicle speed increases, the shock sensor pulses every wheel rotation, which puts the sensor into rolling mode. The remote-control door lock receiver receives and then sends the tire pressure and temperature data to the body control module (BCM). The BCM translates the data contained in the tire pressure sensor radio frequency (RF) transmissions into sensor presence, sensor mode and tire pressure. Once vehicle speed is greater than 25 mph, the sensors begin to transmit once a minute keeping the pressure data up to date. Each sensor has its own identification (ID) code which it transmits with each RF message and must be learned into the BCM memory. Once all four IDs have been learned and vehicle speed is greater than 25 mph, the BCM continuously compares IDs and pressure data in the received transmissions to the learned IDs and pressures to determine if all sensors are present and if any tires are low. If the BCM detects a low tire pressure condition, or a malfunction, it will send a message to the instrument cluster.
The sensors continuously compare their last pressure sample to their current pressure sample and will transmit in Alert mode if a 1.2 psi change in tire pressure has been detected. When the tire pressure system detects a significant loss, or gain of tire pressure, the TPMS indicator icon illuminates on the instrument cluster and if equipped, a check tire pressure type message is displayed on the driver information center. Both can be cleared by adjusting the tire pressures to the recommended level. If power is disconnected from the BCM or if the vehicle battery is disconnected, each tire pressure sensor ID is retained but all of the tire pressure information is lost. Cars equipped with the driver information center will display dashes and the scan tool will indicate a default tire pressure value of 32 psi for each tire.
To reactivate the sensors, the vehicle must be driven above 25 mph for at least two minutes.
TPMS SENSOR LEARN
Learn with EL-52545 (Preferred)
The EL-52545 allows the tire pressure sensors to be learned without transmitting RF data between the tire pressure sensors and the vehicle. Each tire pressure sensor ID is learned to the EL-52545 and stored internally. The EL-52545 is then connected to the vehicle data link connector (DLC) using the OBD2 Interface Module, which is part of the EL-52545 kit. The stored tire pressure sensor information will then be loaded into the K9 BCM. Using the EL-52545 will prevent the vehicle from learning an errant nearby tire pressure sensor from another vehicle, especially if the tire pressure sensor batteries are low. This is the GM recommended method.
1. Select RDR from the on-screen display.
2. If available, scan the QR code on the vehicle’s tire placard or certification label. If QR is not available, select MMY from the on-screen display and manually input the vehicle information Make sure the TPMS tool battery is sufficient to complete the learn process. Do not place the tool directly on the valve stem. The tool should be placed against the tire sidewall near the valve stem. The TPMS sensor learn activation procedure may have to be repeated up to three times before determining if a sensor is malfunctioning.
3. Approach the vehicle starting with the left front tire and read each tire pressure sensor information by pressing the green trigger button with the EL-52545 located near the tire valve stem. Read each tire pressure sensor in the order identified on the EL-52545 .
4. If any tire pressure sensors do not respond, replace the tire pressure sensor only after several attempts have
been made to identify all sensors. An undetected sensor will be identified with “No Sensor Detected” displayed in the table. After sensor replacement rerun RDR procedure.
If any sensors display “Sensor Not Compatible” on the EL-52545 screen, you will need to first make sure compatible sensors are installed on the vehicle.
5. Verify the BAT value for each tire pressure sensor in the table on the EL-52545 is OK. If not, replace the tire pressure sensor and rerun RDR procedure.
6. Verify the pressure and temperature values are reasonable based on the ambient conditions and actual tire pressure. If either value is inaccurate, replace the tire pressure sensor and rerun RDR procedure.
7. Ignition On/Vehicle in Service Mode.
8. Connect the EL-52545 OBD2 Interface Module to the EL-52545 .
9. Verify the OBDII icon is displayed on the EL-52545 and the green LED is flashing on the Interface Module.
10. Connect the other end of the OBD2 Interface Module to the vehicle DLC.
11. Select OK on the EL-52545 and follow the on-screen instructions.
Learn with EL-50448 (Alternative)
When the EL-50448 TPMS Activation Tool is used in activate mode, it produces a low frequency transmission that activates the sensor. The sensor responds by transmitting in Learn Mode-Remotely Triggered. When the BCM receives a learn mode transmission while in Learn mode, it will assign that sensor’s ID to the location on the vehicle relative to the order in which it was learned.
In the event a particular sensor is activated and the horn does not chirp, it may be necessary to rotate the wheel so that the valve stem is in a different position due to the sensor signal being blocked by another component. Make sure the TPMS tool battery is sufficient to complete the learn process. Do not place the tool directly on the valve stem. It should be placed against the tire sidewall near the valve stem. The sensor learn activation procedure may have to be repeated up to three times to determine if a sensor is malfunctioning. TORQUE SPECIFICATIONS
1. Ignition On/Vehicle in Service Mode, using vehicle information section in the center stack console, initiate the Tire Pressure Sensors Learn mode by navigating to Tire Pressure (psi) and tap it. Next, press and hold the image of the top vehicle view with four tires for 10 seconds and release. A double horn chirp will sound indicating the Learn mode has been enabled. The left front turn signal will also be illuminated.
2. Starting with the left front tire, activate the sensor by holding the antenna of the activation tool aimed upward against the tire sidewall close to the wheel at the valve stem. Press and release the activate button. The tool will indicate the sensor activation signal is being transmitted. Wait for a horn chirp. If the horn does not chirp, repeat the sensor activation sequence with the tool. Once the horn chirp has sounded, the sensor information is learned and the turn signal in the next location to be learned will illuminate.
3. After the horn chirp has sounded and the right front turn signal is illuminated, repeat the prior step for the remaining
three sensors in the following order: right front / right rear / left rear.
4. When the left rear sensor has been learned and a double horn chirp has sounded, the learn process is complete.
REMOVAL AND INSTALLATION
Sensor Replacement (Clamp-in
style)
Before the tire is removed from the wheel note the following items:
• When using the tire machine to separate the tire bead from the wheel, position the bead breaking fixture 90 degrees from the valve stem.
• When removing the tire from the wheel, ensure a tolerance is maintained between the tire machine fixture, or irons, tire bead and the sensor.
Removal Procedure
1. Remove the tire and wheel assembly.
2. Remove and discard the Tire Pressure Sensor cap.
3. Remove and discard the Tire Valve Front and Rear Stem.
4. Demount the tire from the wheel.
5. If a tire sealant product was used/found within the tire/wheel, use a mild dish soap, clean water and shop cloths to remove the sealant residue.
6. Remove and discard the Tire Pressure Indicator Sensor Nut.
7. Remove the Tire Pressure Indicator Sensor.
8. Remove and discard both the metal and rubber indicator sensor washers.
Installation Procedure
1. Ensure that the sealing surfaces of the sensor and wheel are clean.
2. Install a new rubber tire pressure indicator sensor washer, followed by a new metal sensor washer.
3. Install the Tire Pressure Indicator Sensor. (The air passage of the tire pressure indicator sensor must face away from the wheel.)
4. Install a new Tire Pressure Indicator Sensor Nut and hand tighten. (Apply light pressure when installing the tire pressure indicator sensor nut to ensure it’s positioned correctly.)
TPMS
5. Ensure the tire pressure indicator sensor is properly oriented and flush with the wheel surface.
6. Mount the tire to the wheel.
7. Install a new Tire Valve Front and Rear Stem.
8. Inflate the tire to the proper pressure as indicated on the tire placard.
9. Install new Tire Pressure Indicator Sensor Cap.
10. Install the tire and wheel assembly.
11. Perform the tire pressure indicator sensor learn procedure.
Sensor Replacement (Snap-in style)
Removal Procedure
1. Remove the tire and wheel assembly.
2. Demount the tire from the wheel.
3. If a tire sealant product was used/found within the tire/wheel, use a mild dish soap, clean water and shop cloths to remove the sealant residue.
4. Insert a suitable tool into the hole of the valve stem to prevent it from rotating.
5. Remove and discard the tire pressure indicator sensor bolt.
6. Remove the sensor by pulling it straight off the valve stem.
7. Remove and discard the valve stem by pulling it through the wheel.
Installation Procedure
Never install the tire pressure indicator sensor on an unapproved wheel. Whenever the Tire Pressure Indicator Sensor is removed from the rim, install a new valve stem and a new bolt. Do not reuse the old parts.
1. Before installation, verify the orientation of the valve stem for the correct position of the tire pressure indicator sensor.
2. Remove the new bolt from the new tire pressure indicator sensor and pull it straight off the new valve stem.
3. Apply lubricant to the new valve stem.
4. Using a tire valve stem installation tool, pull the valve stem through while parallel to the valve hole on the wheel. Ensure the flat of the valve lines up with the flats of the snap in the enclosure.
5. Assemble the tire pressure indicator sensor to the new valve stem.
6. Insert a suitable tool into the hole of the valve stem to prevent it from rotating.
7. Install and tighten the new tire pressure indicator sensor bolt.
8. Check that the valve stem is concentric and completely seated in the valve stem hole of the wheel.
9. Make sure there is a gap between the valve stem and the indicator sensor. The tire should not have contact with the sensor during installation to prevent damage to the sensor.
10. Mount the tire to the wheel.
11. Inflate the tire to the specified pressure as stated on the tire placard.
12. Install the new dust cap.
13. Install the tire and wheel assembly.
14. Perform the tire pressure indicator sensor learn procedure. ■
Information for this column comes from the tire pressure monitoring systems data in ProDemand, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com.
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