Facts section: distribution
Everywhere a warehouse And American Tire Distributors has room to grow
O
ne year ago, American Tire Distributors Inc (ATD), was the largest wholesale tire distributor in the United States. That hasn’t changed. However, it had serious gaps in its nationwide coverage. Weak spots included Seattle and Portland in the Northwest, and the Great Lakes region, which includes Illinois, Indiana, Michigan and Ohio. ATD has been working overtime to fill those holes. Late in 2010, it acquired two Northwest distributors: Lisac’s of Washington Inc. and Tire Wholesalers Inc., adding distriChart 10 bution centers in U.S. CONSUMER TIRE RETAIL Portland, Ore., and MARKET SHARE Spokane and Kent, (based on retail sales) Wash. The company Distribution channel 2010 2009 also announced plans to build a Independent tire 60.0% 60.0% 126,000-square-foot dealers distribution center Mass merchandisers 14.5% 14.5% in the Seattle, Wash., Warehouse clubs 9.5% 9.5% area in the first quarTire company-owned 7.0% 7.0% ter of 2011. stores A new distribution center in Auto dealerships 6.0% 5.5% McCook, Ill., will Service stations 1.5% 2.0% serve the greater Miscellaneous outlets 1.5% 1.5% Chicago area. And the New England area is being heavily targeted (the company says it is conducting site evaluations in eastern Pennsylvania, New Jersey, New York, Massachusetts, Connecticut and other New England states). “The growth of ATD was expected, as was the growth of other tire distributors such as Hercules, TCI and TBC (Carroll Tire Co.),” says tire industry analyst Saul Ludwig.
“It is a trend that has been going on the last few years. “Given the ever-growing plethora of brands, tire names, sizes and styles, it is impossible for the average tire dealer to stock everything any customer may need. Dealers are relying more on warehouse distributors to carry the right inventory, and this trend is likely to continue.” (According to a recent MTD survey, retail tire dealers average almost five wholesale tire suppliers each.) ATD is based in Huntersville, N.C. It has 86 distribution centers servicing 39 states. The warehouses inventory approximately 26 brands and 40,000 SKU’s. Dealer Tire LLC, the second largest independent domestic wholesale distributor with 20 distribution centers, wholesales solely to the automobile dealer channel. Not surprisingly, the Cleveland, Ohiobased distributor sells 11 original equipment brands: BFGoodrich, Continental, Dunlop, General, Goodyear, Hankook, Kumho, Michelin, Pirelli, Uniroyal and Yokohama. Dealer Tire sells tire programs to car dealerships. It is “exclusively dedicated to helping original equipment automobile manufacturers design, implement and manage profitable tire programs for their dealerships that, in turn, increase customer satisfaction, customer safety and customer retention,” according to its Web site. It has deals with 15 vehicle manufacturers, including Mercedes-Benz USA LLC, BMW of North America LLC, Toyota Motor Sales U.S.A. Inc., Chrysler Group LLC and Kia Motors America Inc. Based in Cleveland, Ohio, Dealer Tire services between 4,000 and 8,000 automobile dealerships nationwide. Nearly 52% of the 30,000 independent tire dealers in the U.S. also sell to car dealerships. ■
Chart 11 CONSUMER TIRE DISTRIBUTION CHANNEL MARKET SHARE Initial channel Independent tire dealers Tire company stores Miscellaneous*
2010
2008
2006
2004
76.0% 75.0% 74.0% 72.5% 8.0%
8.5%
16.0% 16.5%
8.5%
8.5%
17.5% 19.0%
* “Miscellaneous” includes mass merchandisers, warehouse clubs, auto parts chains and oil companies/service stations.
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MTD January 2011 4/26/11 11:05:15 AM
