Modern Tire Dealer - June 2023

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RETAIL TIRE PRICING AT MID-YEAR HOW TO MAKE $10 MILLION WITH ONE STORE COOLANT SYSTEM SERVICE BEST PRACTICES

Why the truck tire market is slowing down June 2023 | Vol. 104, No. 6 | $10 | www.moderntiredealer.com

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The Industry’s Leading Publication June 2023, Volume 104, Number 6

34 Multiple factors are putting the brakes on the medium truck tire market in 2023. Turn to page 36 to find out why.

Photo: Bridgestone Americas Inc.

DEPARTMENTS 4 Editorial

Unsung heroes Commercial tire dealers, techs keep America rolling

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

8 Industry News

Ralson brings new truck tire brands to U.S. Company looks to build dealer network

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

18 Your Marketplace Inflation and tax returns Monthly volume declines matched that of April 2020

54 Focus on Dealers

Marks leaves ITDG primed for more growth Group has grown to 167 members with 1,051 locations

56 Focus on Dealers

Ohio dealers fight catalytic converter theft State considers law that would remove incentive to sell converters

58 Business Insight

A guide to holding successful meetings Have an agenda, stay on-topic and look forward

60 Mergers and Acquisitions

The single store acquisition challenge It’s a lot harder than it looks

62 Dealer Development

How to work on your business — not in it Don’t get stuck in the ‘ask role’

63 EV Intelligence

F E AT U R E S 20 Tire pricing at mid-year

‘Leveling out’ is underway, says Fitment Group

24 Dealers take action on tire pricing Meanwhile, consumers continue to look for lower-tier tires

26 Going wide

Atturo Tire finds riches in new niches, while staying true to its roots

30 $10 million out of one store How Hank’s Tire generates big numbers

32 Coolant system best practices When it comes to antifreeze, dealer says one type doesn’t fit all

Commercial Tire Dealer™

34 Big downshift

Truck tire shipments declined during first half of the year

36 Hitting the brakes

The truck tire market is slowing down. Here’s why

46 Andrews Tire Service wins with speedy service Quickness, customer loyalty are dealership’s secrets to success

50 AG Tire Talk:

How low can you go?

Why farmers are hesitant to run ag tires at single-digit psi

All-in or part-time?

Don’t miss your window of opportunity to service EVs

64 TPMS Mitsubishi Mirage – 2022

66 Ad index

Modern Tire Dealer is a proud member of:

On the cover: 220037406 © Vitpho | Dreamstime.com

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Editorial

Unsung heroes

COMMERCIAL TIRE DEALERS, TECHS KEEP AMERICA ROLLING By

Mike Manges

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his is MTD’s annual commercial truck tire issue — an ideal opportunity to recognize commercial truck tire dealers and technicians and the important role they play in keeping our economy and way of life moving.

Where would we be without truck tires, the vehicles that roll on them and the people who sell and install them?

Check out these numbers from the American Trucking Associations (ATA), a trade group that represents for-hire motor carriers, private trucking fleets and other companies: • Commercial trucks move 72.2% of all freight in the U.S., traveling 300 billion-plus miles annually; • Trucking generated $875.5 billion in gross freight revenue in the U.S., according to the latest figures; • Commercial trucks make up 14.1% of all registered vehicles; • Nearly $48.5 billion in federal and state highway user taxes are paid though the operation of commercial trucks; • Trucks transported 66% of the value of all surface trade between the U.S. and Canada during 2021 and nearly 83% of the value of surface trade between the U.S. and Mexico; • Nearly eight million people, including more than three million drivers, are employed in trucking-related jobs.

According to the U.S. Department of Transportation, there are around 1.1 million for-hire carriers and more than 718,00 private carriers. (Trucking companies that self-identify as both total around 37,500.)

These numbers underscore just how important truck tires — and the people who sell them — are. (By the way, 2022 was a red-hot year for medium truck tire sales. Replacement shipments in the U.S. grew by more than 20% versus prior-year levels, according to MTD data. Turn to page 36 of this issue of MTD to find out if that momentum carried over into 2023.)

Commercial truck tire dealers make all of the above happen.

But I also would be remiss if I forgot to mention the highly skilled, dedicated professionals who install commercial truck tires — never an easy task.

These individuals understand better than most that there’s much more to installing a medium truck tire than just tightening a few lug nuts. Under federal law, the maximum allowed weight for a tractor-trailer is 80,000 pounds. Truck tire technicians are entrusted with an awesome amount of responsibility. And they make it look easy!

Let’s also hear it for those technicians who walk truck lots and terminals, carefully examining tires for irregular wear patterns, cuts, chips and other conditions that warrant removal from service.

Despite increasingly sophisticated tools and methods that

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Where would we be without the commercial truck tire dealers and technicians who keep America rolling?

Photo: MTD

make capturing this data easier, yard checks remain perhaps the most unheralded job in the world of truck tire service.

And we should all tip our hats to roadside service technicians, who help get hobbled trucks up and running, regardless of weather, time of day (or night) and other conditions.

The famous postal carriers’ motto, “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds,” just as easily applies to these brave, hardworking “knights of the road,” who spring into action whenever the phone rings.

Truck tire dealers and everyone who works with commercial truck tires should take a bow. You’ve earned it! ■ If you have any questions or comments, please email me at mmanges@endeavorb2b.com.

MTD June 2023 6/6/23 10:52 AM

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ModernTireDealer.com DIGITAL RESOURCES FOR THE INDEPENDENT TIRE DEALER

Stay tuned to MTD’s podcast!

The Modern Tire Dealer Show is available on Stitcher, Spotify, Apple Podcasts, Google Podcasts, iHeart Radio, Amazon Music, Audible and MTD’s website. Download it today!

3515 Massillon Rd., Suite 200 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 www.moderntiredealer.com

PUBLISHER Greg Smith gsmith@endeavorb2b.com (330) 598-0375

EDITORIAL

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

Editor: Mike Manges, (330) 598-0368, mmanges@endeavorb2b.com Managing Editor: Joy Kopcha, (330) 598-0338, jkopcha@endeavorb2b.com Associate Editor: Madison Gehring, (330) 598-0308, mgehring@endeavorb2b.com

PRODUCTION Art Director: Erica Paquette Production Manager: Karen Runion, (330) 736-1291, krunion@endeavorb2b.com

ACCOUNT EXECUTIVES

In one of the largest retail shakeups in many years, TBC Corp. has sold its Tire Kingdom and NTB Tire & Service Centers chains to Mavis Tire Express Services Corp.

Photo: TBC Corp.

Bob Marinez rmarinez@endeavorb2b.com (330) 736-1229 Marianne Dyal mdyal@endeavorb2b.com (706) 344-1388 Dan Thornton dthornton@endeavorb2b.com (734) 676-9135 Sean Thornton sthornton@endeavorb2b.com (269) 499-0257 Kyle Shaw kshaw@endeavorb2b.com (651) 846-9490 Martha Severson mseverson@endeavorb2b.com (651) 846-9452 Chad Hjellming chjellming@endeavorb2b.com (651) 846-9463

MTD READER ADVISORY BOARD

Dealers look for insights Here’s a new idea when trying to recruit bright young minds to the tire industry.

If they worry that the industry is slow or stagnant or that there might not be new things for them to pursue down the road, tell them about the last 30 days.

One dealership bought nearly 600 stores in a single deal. A group of investors is calling for a massive transformation of a major tiremaker. And on the commercial front, tire dealers are expanding and finding new partners. There’s nothing boring to see here — just businesses adapting for their next frontier.

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TBC sells retail stores to Mavis Best-One of Indy employees save a coworker’s life Group calls for big changes at Goodyear Who are the biggest retreaders in the U.S.?

Southern Tire Mart continues to expand Burt Brothers founder Wendel Burt has died Photos: ITDG moves it forward at annual meeting Callaghan Tire joins Best-One network Photos: Flynn’s Tire films TV spot to promote new store Tupelo could cost Goodyear $130 million

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

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SOCIAL MEDIA Like us Facebook:

Follow us Twitter:

facebook.com/ ModernTireDealer

twitter.com/ MTDMagazine @MTDMagazine

Rick Benton, Black’s Tire Service Inc. Jessica Palanjian Rankin, Grand Prix Performance John McCarthy Jr., McCarthy Tire Service Co. Inc. Jamie Ward, Tire Discounters Inc.

CUSTOMER/SUBSCRIPTION SERVICE (800) 260-0562 moderntiredealer@omeda.com

ENDEAVOR BUSINESS MEDIA, LLC CEO: Chris Ferrell President: June Griffin CFO: Mark Zadell COO: Patrick Rains CRO: Reggie Lawrence Chief Digital Officer: Jacquie Niemiec Chief Administrative and Legal Officer: Tracy Kane EVP Transportation: Kylie Hirko VP Vehicle Repair: Chris Messer

Modern Tire Dealer (USPS Permit 369170), (ISSN 0026-8496 print) is published monthly by Endeavor Business Media, LLC.1233 Janesville Ave., Fort Atkinson, WI 53538. Periodical 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 600653257. 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 2023 Endeavor Business Media, LLC. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopies, recordings, or any information storage or retrieval system without permission from the publisher. Endeavor Business Media, LLC does not assume and hereby disclaims any liability to any person or company for any loss or damage caused by errors or omissions in the material herein, regardless of whether such errors result from negligence, accident, or any other cause whatsoever. The views and opinions in the articles herein are not to be taken as official expressions of the publishers, unless so stated. The publishers do not warrant either expressly or by implication, the factual accuracy of the articles herein, nor do they so warrant any views or opinions by the authors of said articles.

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Industry News

Ralson brings new truck tire brands to U.S. COMPANY LOOKS TO BUILD DEALER NETWORK

R

alson Tire North America Inc. is now shipping commercial truck tires to the U.S. as it builds its domestic distribution network.

The company, which made its U.S. debut at the 2022 Specialty Equipment Market Association (SEMA) Show, is making its Ralson and Accelus truck tire lines available to distributors and dealers.

Ralson Tire North America is already receiving positive feedback about the products’ quality and performance, says Brian Sheehey, the company’s senior vice president.

Ralson brand products — which are “more application-based,” according to Sheehey — are designed for full-service commercial tire dealerships that buy directly from the company.

The company plans to sell Accelus tires through wholesale-distributors that reach smaller dealerships.

The Accelus lineup includes “the bread-and-butter of what any commercial tire dealer of any size would sell — a core of maybe 40 SKUs in regional, pickup and delivery and steer/drive/trailer tires,” says Sheehey.

“With Ralson, we’ll produce anything the customer wants,” says Manjul Pahwa, managing director of Ralson Tire North America’s parent company, Ralson Tyres Ltd. The company’s brand segmentation is “very simple and rational, so (distributors and dealers) don’t have to worry about carrying too many sizes, since shelf space is at a premium,” says Sheeley.

“We (also) do not want our dealers and distributors to compete against each other with the same brand.”

All Ralson brand products come with a seven-year, three-retread warranty, while all Accelus brand tires have a six-year, two-retread warranty.

Both brands are manufactured at Ralson Tyre’s factory in India, which Sheehey says is “the newest truck tire plant in the world.”

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The facility, which spans slightly more than one million square feet and has the capacity to manufacture one million truck tires per year, started production in May 2022. (Located near several ports, the plant will be able to produce four million units annually, according to Pahwa.)

“Between May 2022 and the first quarter of this year, we tested product in-house and via field evaluations,” says Pahwa.

Ralson Tire North America’s original U.S. distribution plan was to sell only by container, “but we realized that in order to better service our customers, we needed local distributors and dealers.”

The first batch of Ralson and Accelus brand tires hit the U.S. in March 2023, says Jim Mayfield, president of Ralson Tire North America.

“That was a container of what we call ‘seed tires.’ We sent them to customers we had been talking to. Now we have multiple containers on the water.”

ESTABLISHING A POSITION

Ralson Tyres was founded in the 1950s as a bicycle parts manufacturer and graduated to producing bicycle tires in the 1960s, according to Pahwa.

As the company grew, “we entered other product categories,” he says. “Around 10 years ago, we started toying with the idea of building a new business and started developing (commercial truck tire) technology. From there, we began looking at multiple markets for the product. The U.S. market was prioritized as one of our entry markets.”

The next step was construction of Ralson’s plant, a process that started before COVID-19 and continued through the pandemic.

“Now is as good of a time as any” to establish a position in the U.S. market, says Pahwa.

“We’re not a factory operation. We’re trying to build long-term relationships with end users and our dealer partners.”

F

P

IN

“We’re having conversations with distributors and dealers across the country,” says Jim Mayfield, president of Ralson Tire North America Inc., whose tires are now available.

Photo: Ralson Tire North America Inc.

Mayfield says Ralson Tire North America is growing its sales team. “We brought Brian onboard in October 2022.

We’re recruiting other people. We have to have boots on the ground and people who can sit down with dealers and work with their people to sell the quality of our product. We’re a brand that’s fully committed to the U.S. market.

“We’re having conversations with distributors and dealers across the country,” he continues. “We also know that having excellent customer support and the infrastructure in place to service distributors and dealers will be very important.

“We’re starting that process and are putting a team together” at Ralson Tire North America’s base in Franklin, Tenn.

The company is using “third-party warehousing” at the moment, says Mayfield. “We have tires located within a couple of hours of the Nashville area, which is a good, central location to reach the majority of the eastern U.S. “We’re also investing in marketing.

We have a significant presence on social media and will continue to utilize that.

And we’ll be back at the SEMA Show this year.” — Mike Manges MTD June 2023 6/6/23 10:52 AM

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Industry News

Bites Goodyear plant still down Goodyear Tire & Rubber Co.’s Tupelo, Miss., consumer tire plant is still offline as the result of an April 1 tornado.

Goodyear expects to lose $110 million to $130 million due to the shutdown. Full production isn’t expected to resume until the third quarter of 2023.

Sam Kato named TBC CEO TBC Corp. has named Sam Kato its new president and CEO. He replaces Laurent Bourrut, who is retiring. A 30-plus year automotive industry veteran, Kato most recently served as TBC’s chief administrative officer for the last two years.

Endeavor buys IMR Endeavor Business Media, parent company of Modern Tire Dealer, has acquired IMR Inc., a full-service automotive market research firm. IMR is known throughout the automotive industry for curating thoughtful, compelling and actionable insights that companies can use to make informed decisions about various marketplaces, brands and products.

Bridgestone breaks ground Bridgestone Americas Inc. has broken ground on the $60 million expansion of its tread rubber manufacturing plant in Abilene, Texas. The 50,000 square-foot expansion is driven by the “rapid growth” of the company’s retread business.

Subaru picks Falken Subaru has picked the Falken Ziex ZE001A all-season as a tire of choice for its 2024 Subaru Crosstrek. Two trim lines, Sport and Limited, come with the tire in size 225/55R18 98V.

TireHub adds Mickey TireHub says it is now an authorized national distributor for Mickey Thompson Tires & Wheels. The company began selling Mickey Thompson brand tires on May 1.

Tire Discounters grows in GA Tire Discounters Inc. has added to its list of Georgia locations with the purchase of The Tire Barn in Gainesville. Two generations of the Roper family have owned The Tire Barn since it opened in 1971. The recent acquisition gives Tire Discounters 22 locations throughout Georgia.

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TBC sells retail stores to Mavis

BC Corp. has sold its company-owned retail stores — a network of 595 NTB Tire and Service Centers and Tire Kingdom Service Centers — to Mavis Tire Express Services Corp. The two companies have entered into an agreement where TBC will provide wholesale and distribution services for Mavis’ retail stores.

The deal includes 392 NTB outlets and 203 Tire Kingdom Service Centers, with locations in Florida, Texas and other states across the Mid-Atlantic, Midwest and South.

In a statement, TBC noted “all NTB and Tire Kingdom retail store and retail field management associates will have the opportunity to continue their careers with Mavis.”

TBC has sold nearly 600 TBC had earlier sold 112 NTB locations to Mavis company-owned retail stores to Mavis. in 2020.

The latest deal gives Mavis a retail footprint Photo: MTD of more than 2,000 locations, say Mavis officials.

“As we execute our growth plans and strategies, we continuously analyze the assets in our portfolio and periodically fine tune them to drive superior performance in our core focus areas,” says Sam Kato, president and CEO of TBC Corp.

“Divesting our company-owned retail business allows us to focus and strengthen our wholesale business, pursue growing our distribution and ‘supply chain as a service’ solutions, while bolstering our market-leading Midas and Big O Tires franchise businesses.

“We have never been in a stronger position to offer best-in-class solutions that address a full range of customer priorities, while driving innovation and long-term sustainable growth.”

Stephen Sorbaro, co-CEO of Mavis, says the deal “represents a significant milestone in the continued acceleration of Mavis’s growth strategy, enabling us to deepen our presence in existing markets and expand our Mavis brand into new markets throughout the Midwest, Mid-Atlantic and in Texas.

“We have a strong working relationship with TBC and a history of successfully integrating NTB locations into our platform and we look forward to partnering with them again to welcome the talented NTB and Tire Kingdom teams to the Mavis family.”

Nexen will build tires in the U.S.

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exen Tire Corp. plans to build a manufacturing plant in the southeastern United States that will start producing tires by 2029.

The plant will represent an investment of $1.3 billion. Investment will begin during the second half of 2023.

When up and running, the plant will have a daily production capacity of 30,000 units, according to Nexen officials.

“This marks Nexen’s first establishment of an overseas factory in nine years,” the company said, and its first manufacturing facility in the U.S. “By possessing production facilities in South Korea, China, Europe and the U.S. (and) through the establishment of the U.S. factory, Nexen will be able to strengthen its sales activities with global original equipment manufacturers and meet the demands for localization amid (the) changing global supply chain environment,” say Nexen officials.

As part of its medium-term strategy, Nexen also stated that it plans to achieve sales of $2.7 billion in 2027.

“Based on figures from 2022, this ambitious plan aims to achieve approximately 40% revenue growth” within five years.

The company also plans to boost its current production capacity, which stands at around 45 million units a year, to 52 million units by 2025. “This will involve expanding annual production capabilities by 5.5 million units in Europe and 1.5 million units in Korea.”

MTD June 2023 6/6/23 10:52 AM

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Industry News

Trimax CEO details U.S. growth plans

Bites Callaghan joins Best-One Callaghan Tire in Bradenton, Fla., has joined the Best-One Tire & Service network and has a new name, Callaghan’s Best-One. The dealership has 10 commercial truck tire centers, two Bandag retread plants, a full-service retail tire and auto service location and the fivelocation Callaghan Industrial Tire division.

Partners Don Mead, Todd Severson, Guy Virgilio and Jane Callaghan Trinci will continue to lead the business.

Flynn’s opens Ohio store Flynn’s Tire & Auto Service has opened its 27th retail tire location, a store located in the Akron, Ohio, suburb of Montrose.

The outlet opened on May 22 and is the dealership’s ninth store in Ohio.

New retail brand coming Another private equity group, Dallas, Texasbased The Sterling Group, is getting into the tire retail business with its own retail brand. It calls Premier Tire & Service “a new platform” that will provide “one-stop tire and auto solutions.” The company says it will acquire independent tire and service locations across the country.

Dawson Tire expands Dawson Tire & Wheel in Gothenburg, Neb., has acquired F&F Tire & Service, a single-store dealership in Wisner, Neb. The purchase gives Dawson Tire & Wheel — which specializes in tires and wheels for agricultural applications — its fourth Nebraska location. Dawson Tire’s owner says the companies’ cultures are similar.

Shell picks Bridgestone Bridgestone Americas Inc. will provide original equipment tires for the Shell Starship, a new, super fuel-efficient heavyduty concept truck. The Starship 3.0 will ride on Bridgestone R213 Ecopia steer tires and Bridgestone Greatec R197 drive and trailer tires.

Eastern Tire creates ESOP Eastern Tire & Auto Service Inc. in Rockland, Maine, is now 100% employeeowned through its newly created Employee Stock Ownership Plan. The 77-year-old tire dealership says the ownership transfer to employees “is a natural progression” of what the business has achieved throughout its history.

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T

rimax Tire is on the move. The company, which is owned by Maxion International, is rolling out two new products — its first all-weather offering, plus a dedicated winter tire — this year. The firm also continues to expand existing lines.

Trimax’s new distribution center in Qingdao, China, is shipping product.

And the company is adding to its U.S. dealer base.

“We need to have distribution in all 50 states,” says Trimax CEO Stanley Wang, who shares more about his company’s plans in this MTD exclusive.

MTD: What are your company’s longterm and short-term plans for the U.S. market?

Wang: We have successfully secured Chinese brands that needed representation in the U.S. To do this, we established Trimax Tire in the U.S., which is the importer of record, handling all the logistic needs, plus (Trimax) pays all duties, federal excise tax, tariffs and other taxes.

In turn, Chris Tolbert, our director of sales, has hired an experienced team with feet on the ground, expanding distribution.

We are still a small, young company that has many opportunities to grow with current distribution and many areas of open distribution.

MTD: Trimax continues to expand its product offerings across all of its brands, including Farroad, Haida, Saferich, MileKing and Kapsen. Why is it important to maintain a steady cadence of new tire introductions?

Wang: The U.S. is an important market for replacement tires. We currently do not intend to add any more tire brands.

Our goal is to grow the quality tire brands that we represent.

With the Haida brand, we partnered and invested in some of the newer pattern molds — the Haida MT HD869 and Haida UHP HD937. We are also involved with the development of new patterns and sizes.

“We will continue to invest in molds for new products this year,” says Stanley Wang, CEO of Trimax Tire.

Photo: MTD

MTD: What is Trimax’s brand strategy in the U.S.? How do you position each of your brands?

Wang: Our market niche is quality opening price point, sold (and) delivered-duty-paid, in a timely manner — less than 90 days. Haida is our flagship go-to, with Farroad, Kapsen, MileKing and Saferich closely behind.

MTD: During the 2022 SEMA Show, you mentioned that Trimax’s parent company was opening a 100,000-squarefoot mixing warehouse in Qingdao, China, that will give Trimax the ability to mix brands in single containers. How is the new distribution center coming along? Are you shipping out of it?

Wang: We are now working out of the new, 100,000-square-foot warehouse in Qingdao, China. This has helped us with staging product orders closer to the shipping port to manage much quicker lead time logistics. As time progresses this year, we will move further into mixing distribution needs with multiple product offerings.

MTD: Are you planning any investments in your manufacturing plants this year or next year? If so, are you able to provide details?

Wang: We will continue to invest in molds for new products this year (and) next year if there are tires the replacement market needs. Later this year, we will share products introduced at SEMA. MTD June 2023 6/6/23 10:52 AM

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Industry News

Burt Brothers Tire Co-Founder Wendel Burt dies

Bites J.D. Power posts results Consumers are less satisfied with their aftermarket service providers, according to the J.D. Power 2023 U.S. Aftermarket Service Index Study. Users gave tire replacement providers lower scores in six of seven measures. The survey included responses of 11,194 vehicle owners who had aftermarket service performed on their vehicle in the previous 12 months.

Dealership rebrands After 23 years in business, Jarid Lundeen has rebranded his four Tires Plus locations in North Dakota as Trusted Tire & Auto. He had planned to rebrand in 2020, but says the COVID-19 pandemic delayed the rollout of the new name.

Continental CEO to stay Nikolai Setzer will serve Continental AG as its CEO and chairman for the next five years. The company recently extended his appointment, which began three years ago.

RNR gifts a Jeep RNR Tire Express recently gave a new Jeep Renegade to customer Shayla Deppen, a U.S. Air Force veteran and mother of two who lives in Riverview, Fla., as part of its annual Mother’s Day Giveaway. RNR received 15,000 nominations for the giveaway.

TIA opposes emissions rules The Tire Industry Association opposes two recently proposed rules that would dramatically increase the number of zero-emission vehicles (ZEVs) on the road. One rule proposed by the U.S. Environmental Protection Agency could require two-out-of-three new vehicle sales in 2032 to be a ZEV.

Rick Pearson has died Richard Pearson, longtime owner of Fleet Equipment Corp., died on May 3 after a three-year battle with cancer. He was 89. In 1965, with $300, he started Fleet Equipment Corp. from the home he shared with his wife, Mary Ann, and later opened a manufacturing plant in Pennsylvania.

Chapel Hill Tire adds store Chapel Hill Tire has acquired a Durham Tire store in Durham, N.C. This location is Chapel Hill’s second in the Durham area.

It gives Chapel Hill Tire 11 total locations.

Durham Tire still owns and operates another store in its namesake city.

14 2306MTD_8-15_News.indd 14

W

endel Burt, one of the two brothers who founded Burt Brothers Tire & Service in Bountiful, Utah, in 1991, died unexpectedly in California on April 26. He was 68.

Wendel and his brother, Ron, started Burt Brothers with a simple goal, which he had shared with MTD in one of many interviews over the years: “Sell at least one tire every day. Fortunately, we met that goal with only a few misses.”

The Burts grew their single store in Bountiful into Wendel Burt had a flair an operation that serves all of Utah, but remains mostly for customer service, a concentrated around Salt Lake City and along the founding tenet of the Burt Brothers Tire brand.

Wasatch Front. The company has 19 locations and with Photo: Ben Borchert the second generation of Burts now leading the business, a 20th store is scheduled to open in September.

Wendel’s sons, Jake, Jeremy and Jason, took over as owners and general managers of the business in January 2019, alongside Ron’s sons, Cory and Brandon. Wendel and Ron remained on the company’s board of directors even after their retirement.

Ron told MTD that he and his brother actually started working together when they were still in elementary school — at a dairy farm. Then they joined a painting crew and it was Wendel who first joined the tire industry. He enticed his brother to join him working for David Early Tire in Salt Lake City and eventually the two decided to strike out on their own.

“Probably the greatest blessing that ever happened to us was that our dad taught us to work,” said Ron. “That proved to be our saving grace.”

They centered their business on providing customer service. Known as the gregarious one of the brother duo, Wendel was a natural with customers. And according to his obituary, that personality extended far beyond the business.

Ron said he and Wendel shared a vision for their business, but Wendel was better at seeing the bigger picture, while Ron’s practical, dollars-and-cents brain always wondered, “How are we going to afford this?”

“We know that we were blessed beyond our own ability,” said Ron.

Investment group demands big changes at Goodyear

A

n investment group that says it represents 10% of Goodyear Tire & Rubber Co.’s “economic interest” is calling for some major changes.

Elliott Investment Management LP sent a letter and presentation to Goodyear’s board of directors on May 11, with the goal of outlining “the right path forward to create value at Goodyear and realize its full potential,” according to a press release that Elliott Investment Management distributed on the same day.

The group is calling for the addition of “five new, highly qualified independent directors” to Goodyear’s board in order “to improve governance, bring about a cultural change and help restore confidence among investors;” monetizing “the trapped value of Goodyear’s retail platform,” which Elliott believes is “nearly worth Goodyear’s market capitalization;” and forming an operational review committee “to develop an operational and margin improvement plan.” ■

O

C

May 2023 Issue Correction In the Products section of the May 2023 issue of MTD, we incorrectly listed the Hankook Ventus S1 evo Z AS X as the Ventus SW1 evo Z AS X. MTD June 2023 6/6/23 10:52 AM

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NumbersThatCount

Relevant statistics from an industry in constant motion

13.1%

Portion of pickups among all new vehicle registrations in Texas in 2022 Source: Experian Automotive Photo: Ford Motor Co.

56,600

329

Daily capacity of U.S. tire plants to build medium truck tires

Number of new tires and tread designs that have earned SmartWay verification

Source: MTD Facts Issue

Source: U.S. Environmental Protection Agency

Photo: Continental Tire the Americas LLC

$73.26

Average ticket price for an oil and lube job

Photo: Continental Tire the Americas LLC

71%

Scrap tires consumed by other markets

Source: MTD 2022 Tire Dealer Automotive Service Study

Source: 2021 Scrap Tire Management Report by U.S. Tire Manufacturers Association

Photo: MTD

Photo: 39569256 © Jevtic | Dreamstime.com

16 2306MTD_16-17_Numbers.indd 16

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Yo u r M a r ket p l a ce

Inflation and tax returns

MONTHLY VOLUME DECLINES MATCHED THAT OF APRIL 2020 By

John Healy

R

etail sellout trends continue to show softness on a year-over-year basis, marking a fifth straight month of negative retail sellout. During April, tire dealers saw average unit declines of 4% year-over-year, the largest decline since April 2020, when COVID-19 lockdowns were still in place.

So what’s driving the lackluster performance? We believe the overall inflationary environment continues to weigh on the consumer. Given that volatility, we want to access the health of automobile travel demand, which correlates to tire usage and wear. In April, for the second month in a row, miles driven trends remained positive. It’s the first time since February and March of 2022 that we recorded back-to-back months of positive trends.

Our miles driven momentum index showed a 1.3% year-over-year increase in March, followed by a 3% year-overyear increase in April. And miles driven through the first week of May grew 2.7% year-over-year.

Given these recent improvements, we see the potential for sectors related to passenger tires and aftermarket auto parts to improve, as well.

Raw material costs continue to fall in year-over-year comparisons. Combined, the materials needed to build a basic replacement vehicle tire fell 11.2% year-over-year in April 2023, which follows a 8.2% yearover-year decline in the first quarter.

And with year-over-year drops in the prices of carbon black, crude oil, natural rubber and reinforcement items needed to build a tire, it is becoming abundantly clear that rising raw material costs may be behind us.

There is a growing viewpoint that with this decline in raw material costs, manufacturers may be inclined to reduce price in order to jumpstart sellout trends.

THE SLOWDOWN PERSISTS

Eight out of 10 of our independent dealer contacts reported negative demand for replacement tires during the month of April, which is slightly worse than the 71% of dealers who saw declining demand in March. And for the second straight month, no independent operators saw a year-over-year increase in demand — a phenomenon we have not seen in the 10-plus-year history of our surveys.

While there are always a number of factors that can unexpectedly push and pull tire demand during a month (weather, calendar shifts, etc.), it appears the broader theme of the shaky macro environment has taken hold and created a trend in the tire retailing category.

Outside of these larger macro factors, we note declining year-over-year tax refunds, prior price increases from manufacturers and consumer deferment in automotive service are working against tire sellout trends. While inflation is cool-

Snapshot of Dealer’s PLT Tire Volumes (Year-Over-Year Change) Feb22

Mar22

Apr22

Feb23

Mar23

Apr23

Average

Increase

57%

60%

16%

40%

0%

0%

40%

Flat

0%

10%

17%

20%

29%

17%

27%

Decline

43%

30%

67%

40%

71%

83%

33%

Total

100%

100%

100%

100%

100%

100%

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

18 2306MTD_18-19_Marketplace.indd 2

ing in some sectors of the economy and consumer spending is still elevated in certain premium segments, it appears tire retailing has not seen any signs of positive momentum. Simply put, our latest survey indicates there are a number of headwinds facing the industry, with few tailwinds in sight.

Given fears of a recession during the back half of 2023, we feel it is likely that trends will continue to show softness.

TOP TIER DEMAND DROPS

For the second straight month, tier-three tires topped the demand charts among dealers in our survey. Tier-two tires moved into second place in April, flipping spots with tier-one tires from the previous month’s survey.

Given that dealers indicated tire demand was at its weakest point in years during April, we are not surprised to see those consumers who did choose to purchase tires traded down to tier-three brands. With inflation hurting the wallets of the low-end consumer the most, we see it as logical and rational that tire buyers would prefer the most inexpensive brands.

Looking forward, we note consumers seem to change their preference for certain tires given the current economic situation and that has played out in the swings in our rankings over the last few months.

Over the long run, we continue to believe consumers will opt for tier-two tires, since they strike a balance between performance and value.

Until then, we think it is likely that consumers will choose the most inexpensive brands, given the fact they are experiencing rising prices in every facet of their lives. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland. Healy covers a variety of subsectors of the automotive industry. If you would like to participate in the monthly dealer discussions, contact him at john.healy@northcoastresearch.com.

MTD June 2023 6/6/23 2:46 PM

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6/6/23 2:47 PM 4/14/23 9:55 AM

Tire pricing

“If tire prices are going up slightly, that’s not cause for alarm — as long as they are not going up significantly and/or tracking outside the standard rate of inflation,” says JP Brooks, director of business development for Fitment Group.

Photo: Butler Tires and Wheels

Tire pricing at mid-year

‘LEVELING OUT’ IS UNDERWAY, SAYS FITMENT GROUP By

Mike Manges

T

ire pricing finally appears to be stabilizing. But long-term normalization of tire prices — at both sell-in and sellout — remains dependent on a wide range of factors, according to JP Brooks, director of business development for Duluth, Minn.-based Fitment Group, which analyzes millions of passenger and light truck tire prices weekly.

“We continue to see prices increase slightly on most consumer goods, as well as tires, but the trajectory has slowed significantly,” says Brooks, who provides Fitment Group’s take on consumer tire pricing at mid-year in this MTD exclusive.

MTD: Earlier this year, you mentioned inflation levels were moderating and could work in favor of tire dealers. Has that occurred? What impact has this had on dealers?

BROOKS: Before we dive into retail tire pricing, I think it’s important to first look at the state of overall inflation in the U.S. On May 10, the U.S. Bureau of Labor Statistics released its latest inflation data through April. A lot of data was dumped upon us, but in short, consumer prices are still rising. However, the rate of increase has slowed substantially. The Consumer Price Index (CPI) rose 4.9% in April from a year

20 2306MTD_20-23_MidYearPricing.indd 20

AVERAGE ADVERTISED PASSENGER TIRE PRICES (JANUARY 2023 VERSUS JUNE 2023) SIZE

MAJOR BRAND (JANUARY 2023)

MAJOR BRAND (JUNE 2023)

LOW-COST (JANUARY 2023)

LOW-COST (JUNE 2023)

225/65R17

$186.06

$196.18

$113.48

$115.80

205/55R16

$152.23

$162.22

$87.22

$86.78

215/55R17

$181.05

$191.96

$99.62

$102.28

215/60R16

$143.50

$151.92

$89.31

$86.75

195/65R15

$129.76

$142.43

$75.05

$74.52

P

J

Q

SOURCE: FITMENT GROUP

earlier. At its peak, the CPI was just above 9% last summer, so the good news is that inflation seems to be taming and what the Fed is doing as far as raising interest rates seems to be working.

What effect has that had on tire retailers? With the significant price increases we saw in 2022, many tire retailers reported the trend of consumers trading down a tier or two as the prices of tier-one tires were hard to absorb for a lot of consumers, (especially) with the other consumer goods price increases they were experiencing.

Over the last five months, we’ve seen retail sellout data decline by single digits, with inflation pressure being a key com-

ponent. Consumers are slowing down on some of their spending. I anticipate we will likely see a continued flight to value, where consumers are trading down a tier or two, and a soft sellout market while the overall market starts to stabilize.

C C C C C

MTD: Will we see a moderation in inflation during the second half of the year?

BROOKS: We’ve seen tire prices follow relatively the same trend line that’s following inf lation, so as long as we continue to see those inflation numbers stabilize and slightly increase, I believe we are going to see the same thing with retail tire prices.

MTD June 2023 6/6/23 10:52 AM

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Tire pricing MTD: Near the end of 2022, advertised pricing on major brand tires seemed to decline. Will that trend continue?

BROOKS: I would say ‘decline’ wouldn’t be the best word. It’s been more of a stabilization. We continue to see prices increase slightly on most consumer goods, as well as tires, but the trajectory has slowed significantly. There are some outliers, but when we look at advertised tire pricing today, it closely tracks with the CPI and core inflation. The Fed targets a 2% inflation rate, which is an increase, so prices are going to go up. But the target rate of 2% overall is considered low enough for consumers to absorb. We’re not quite there yet with tire prices.

Inflation is trending down, but we’re not at the Fed target of 2%, so we’re not considered stabilized. But we could be on our way to stabilization. It’s really kind of how you view it. If consumer prices go up 2% year to year, the Fed is OK with that because that’s a comfortable increase for consumers to absorb. If tire prices are going up slightly, that’s not cause for alarm — as long as they are not going up significantly and/or tracking outside the standard rate of inflation. If the CPI is at 4.9% and tires are at an 8% increase, then something is out of whack. Now we have an outlier.

MTD: We’ve seen drastically fewer price hikes announced by tiremakers this year versus the past two years. Why is that

AVERAGE ADVERTISED LIGHT TRUCK TIRE PRICES (JANUARY 2023 VERSUS JUNE 2023) SIZE

MAJOR BRAND (JANUARY 2023)

MAJOR BRAND (JUNE 2023)

LOW-COST (JANUARY 2023)

LOW-COST (JUNE 2023)

LT265/70R17

$269.46

$283.25

$191.00

$185.86

LT245/75R16

$237.02

$245.65

$149.83

$142.41

LT275/70R18

$296.88

$305.68

$214.43

$212.16

LT225/75R16

$225.65

$231.20

$141.63

$142.41

LT245/75R17

$265.23

$272.70

$176.54

$245.94

SOURCE: FITMENT GROUP

and has the window for tire manufacturer price increases closed?

interest rate hikes on the horizon. However, we look to be moving in the right direction with inflation. And on top of that, the average age of cars and light trucks in the U.S. has risen again this year, so now the average age of vehicles in the U.S. is 12.5 years. That means more people are keeping their vehicles and repairing them.

I feel that as we continue to see a leveling out of tire prices, we will continue to see a continued flight to value during 2023. As inflation continues to moderate and tire prices moderate along with inflation, we might see an uptick in tier-one tire (sales) at the end of the year as consumers feel not quite as burdened by higher consumer prices. With fewer people buying new vehicles, they may feel less burdened financially and will want to make an investment in new tires. We’ll have to wait and see what the data looks like in six months. ■

BROOKS: We still have a lot of economic uncertainty, but I don’t believe we’ll see anything close to the increases we saw in 2022. Raw material costs are moderating, the supply chain has moderated and consumers, at the end of the day, can’t really absorb more increases across all consumer goods — not just tires. With sellout decreasing, as well, it’s a pretty bad time to raise prices again.

MTD: What can MTD readers expect to see regarding tire pricing during the rest of 2023 and why?

BROOKS: There’s still a lot of economic uncertainty to wade through. We still have a war in Eastern Europe. We have tensions with China. And we still might have more

PRICING BY U.S. REGION AND TIER FOR SIZE LT265/70R17 (JANUARY 2023 VERSUS JUNE 2023) REGION

OPENING

VALUE

BETTER

BEST

JAN. 2023

JUNE 2023

JAN. 2023

JUNE 2023

JAN. 2023

JUNE 2023

JAN. 2023

JUNE 2023

EAST NORTH CENTRAL

$199.50

$201.46

$243.91

$242.97

$268.60

$275.95

$285.67

$292.39

EAST SOUTH CENTRAL

$203.23

$207.21

$242.69

$240.62

$267.36

$272.58

$282.62

$290.49

MIDDLE ATLANTIC

$170.97

$180.24

$242.17

$242.55

$265.60

$277.90

$284.36

$296.74

MOUNTAIN

$205.41

$209.68

$263.44

$253.63

$273.69

$278.61

$283.42

$291.94

NEW ENGLAND

$173.55

$189.07

$248.97

$256.05

$277.95

$288.37

$309.31

$311.98

PACIFIC

$202.18

$209.04

$254.31

$246.78

$268.64

$274.49

$279.97

$288.61

SOUTH ATLANTIC

$191.96

$192.60

$240.04

$239.37

$268.47

$274.98

$283.28

$293.83

WEST NORTH CENTRAL

$202.33

$203.95

$239.46

$241.33

$266.12

$274.50

$280.62

$291.41

WEST SOUTH CENTRAL

$200.98

$204.92

$242.74

$239.71

$265.05

$271.57

$279.51

$289.08

SOURCE: FITMENT GROUP

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Tire pricing

Dealers take action on tire pricing MEANWHILE, CONSUMERS LOOK TO LOWER-TIER TIRES By

Joy Kopcha

N

avigating the ups and downs of tire pricing has prompted at least one tire dealership to do something it’s never done in its first 43 years in business.

Nick Fox, president of Fox’s Point S, a four-store Point S Tire & Auto Service operation in Montana, says the company placed its first container order. The shipment of 700 passenger and light truck Blackhawk tires from Sailun Tire Americas is scheduled to arrive this month.

Fox, the second generation to lead his family’s tire business, called the current state of pricing “bizarre. You’ve got your tier-one and higher tier-twos doing price increases and then the rest of tier-two is leveling out and staying the same. Then tier-three and four are going down in pricing. We had to pivot.”

The first move was to monitor selling prices of his lower-tiered tires more closely. Fox says his company had been selling based on the most recent cost to acquire those tires, but in some cases, that meant they weren’t covering all of their expenses.

He also has streamlined purchasing multiple lower-tiered brands and plans to focus on the Blackhawk line.

“We’ve sold some previously, but it’s never been a major part of our lineup.

We’re putting full force behind it. It was a strategic move because they (cost) less money than other brands we were buying.”

Consumers are shocked by the prices they’re facing to replace a set of tires, he says.

About 20% of Fox’s customers are deferring service repairs and tire replacement.

He says customers seem more comfortable delaying a purchase than trading down to a lower-priced alternative. “(The month of) May picked up, but we’re seeing customers holding off on making tire purchases because prices have increased substantially. They’re coming in expecting to spend $800 on a set of tires and now they’re a $1,000 purchase instead.

“And in Montana, we’ve got a lot of outdoor enthusiasts who are looking for more of a premium tire line and those have been subject to even larger

24 2306MTD_24-25_DealerPricing.indd 24

“I think people are more price conscious right now,” says Spencer. “It’s not as bad as it was in 2008 and 2009. I think they’re value shopping a little bit more.”

BALANCING TIRES WITH SERVICE

In Montana, Fox’s Point S has increased its marketing budget in 2023 to reach more customers.

Photo: Fox’s Point S

Small independent tire dealers aren’t the only ones making pricing adjustments.

Mike Broderick, the president and CEO of Monro Inc., told investors in May that consumers had been trading down to lowerpriced tires for three straight quarters.

increases,” says Fox. “It’s gotten to the point where promotions that manufacturers run to save $80 or $100 on a set of tires aren’t all that attractive.”

SHOPPING FOR VALUE

In the Atlanta, Ga., market, Michael Spencer says tire sales are down so far in 2023. In some of the seven TireSouth stores he and his wife Jessica own and operate, volumes are down by anywhere from 7% to 9%.

And while tire demand “is off a little bit,” his cost to replenish inventory is much lower than it was just six months ago.

“The floodgates have opened, so there’s a lot of inventory out there, which is causing pricing to come down,” he says. “Our replacement cost is significantly lower than it was at the end of 2022. Everybody’s calling you with a new deal every other day.”

There’s a downward push on premium brands, but Spencer says, “our entry-level (products) are outselling our premium (products) right now.”

TireSouth markets both levels of tires, as well as a full menu of automotive services. Spencer says “the service side is still humming along.”

He attributes that to drivers holding onto their vehicles longer than normal, which creates the need for regular maintenance.

“People who were used to getting a new car every two or three years are now getting services they’re not used to having to perform. We’re in that sweet spot when it comes to service.

TireSouth opened its newest store in Peachtree Corners, Ga., in January.

Owner Michael Spencer says consumers have grown more price conscious in recent months.

Photo: TireSouth

And in the first three months of 2023, “as our customers continued to look for more choice and greater value, tire sales of our opening price point tires were a larger proportion of our overall tire sales.”

The growing popularity of those lowerpriced tires “was a drag on our overall gross margin” in the quarter. So Monro raised prices on its opening price point tires and Broderick said the company recorded improvement as the period progressed — and maintained market share.

Broderick said he’s focused on Monro balancing its role as both a tire seller and an auto service provider.

“I do not want to be a tire-only provider.

I believe Monro’s greatest strength is that we are a full-service provider.” And Broderick said those pricing moves are a step to maintaining that balanced approach. ■ MTD June 2023 6/6/23 10:52 AM

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Atturo Tire

“There are synergies between different product categories that we can capitalize on,” says Michael Mathis, president of Atturo Tire Corp., pictured at the 2022 Specialty Equipment Market Association Show.

Going wide

Photo: MTD

ATTURO TIRE FINDS RICHES IN NEW NICHES, WHILE STAYING TRUE TO ITS ROOTS By

Mike Manges

T

he light truck tire segment, which has been Atturo Tire Corp.’s “home base” for most of the company’s existence, is now serving as a launching pad into other product segments, according to Michael Mathis, Atturo’s president.

Atturo is broadening its product portfolio with the goal of “growing our brand and our business,” he says.

As an example, Atturo entered the muscle car market in late-2021 with the launch of its AZ850 Muscle tire.

One year later, the company entered the powersports segment with the Trail Blade X/T SxS and the Trail Blade Boss SxS — both designed for all-terrain, sideby-side vehicles.

Atturo also continues to expand its specialty trailer tire and light truck tire offerings.

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The idea is to capitalize on natural “crossovers” between product lines and customers, says Mathis.

NATURAL SYNERGIES

“As we’ve penetrated the light truck tire market, we’ve run into instances of synergies between that market and other markets,” says Mathis.

“One of the best examples is the crossover between pickup truck owners and muscle car owners.”

Atturo’s research shows that around 50% of muscle car owners also own a light truck, he says.

“Here’s a customer base that already knows Atturo from light truck ownership and is open to the brand for its muscle cars.

This is an area where we have found a match between our core product and the other vehicle the customer has in his garage.”

Atturo identified the same connection between pickup truck owners and specialty trailer owners.

“If you have a trailer, you have a vehicle to tow it that we’re providing tires for,” notes Mathis.

“We did the same thing when we went into the powersports market. If you own a side-by-side, you also own a trailer and light truck to tow that unit around.

“There are synergies between different product categories that we can capitalize on and that leads down the path of addressing more markets.

“That also leads to yet other opportunities for broadening the Atturo product range, broadening our customer base and adding more of what I would call strategic, aftermarket SKUs.” At the same time, Atturo is expanding its menu of “everyday, complementary MTD June 2023 6/6/23 10:52 AM

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Atturo Tire replacement tires.” An example of this, according to Mathis, “would be to take a popular original equipment (OE) tire and build a different tread pattern into it” for aftermarket consumption.

“One of the fastest-growing OE sizes is 275/50R22. The traditional fitments on that are 22-inch options for the Chevy Silverado, Cadillac Escalade and Chevy Suburban. I think Dodge also uses that fitment.

“Last year, we took that size and instead of building it in a highway tread, we built that with an all-terrain tread. It’s been one of our most successful SKUs. “This has created greater profit potential for our dealers and a more unique offering that stands out among the myriad of highway tread tires that are available in that size.”

SIMPLICITY WINS

Other factors are driving Atturo’s product expansion strategy, says Mathis.

“The most obvious one is simply the opportunity to do more business by having more products in more categories to address a larger dealer and consumer base. One of the fastest ways to do that is to build out our product catalog.

“At the same time, we want to stay true to our brand. We’re not trying to be a commodity product.

“The other part is that as we continue to expand our distributor base — in order to get that shelf space and make sure our distributors have a wide enough variety of Atturo tires to justify inventory — we need to offer” more traditional, products and SKUs, he explains.

“There are a lot of brands that only have that aftermarket-type product and don’t have that OE fitment tire. Every day, dealers are changing 265/70R17s. We want to make sure dealers have an Atturo (tire) they can sell every day.”

Mathis says that while general tire supply “has been a rollercoaster for the last few years,” Atturo’s inventory is in what he calls “a healthy place.”

However, closely monitoring inventory fluctuations has never been more critical for the company.

“As we’ve seen an uptick in business over the last several months, we’re seeing some SKUs go out of stock again. But that’s a reflection of the improved business environment.”

Atturo brand tires are manufactured in four facilities in Asia.

“We’re building tires in Thailand and Taiwan and a limited number in China,” says Mathis, who adds that the factories “are nimble and can support us when we want to build a SKU that has relatively modest or even infrequent demand.

“We’ve been able to source the capacity and we’ve been able to work with partners that will produce these specialty, targeted tires for us.”

One niche that Atturo will continue to aggressively pursue is last-mile delivery van tires.

“A handful of these SKUs have been among our best-sellers.

It’s a segment that continues to grow.”

The segment also offers plenty of profit opportunity for dealers who know to service last-mile fleets, says Mathis.

“A lot of these fleets are not your traditional TBR-type fleets that have sophisticated tire management programs. They’re subcontractors to Amazon or they’re your local plumber who’s converted from an old van to a Ford Transit.”

Atturo has purposely shunned creating an associate dealer network for its customers.

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“We’ve put a big effort into raising brand awareness on a scale that’s really bigger than Atturo’s market position,” says Mathis. The company launched two new tires for the powersports market last year.

Photo: MTD

‘We’re in a deflationary period’ Price drops will benefit dealers and consumers, says Mathis Michael Mathis, president of Atturo Tire Corp., believes the tire industry has entered a “deflationary period.” And that’s a good thing, he says.

“What we’re hearing and seeing is that there is demand for replacement tires and that’s across the spectrum.

The overhang of high-priced inventory from the first half of 2022 has been a challenge for the industry to work through, but we are working through it.

“As that inventory starts to get replaced with lowercost products, retail prices will start to come down.

Consumers, quite simply, need the benefit of lower-cost tires. They need to see prices come down.”

As the industry right-sizes, Mathis says “getting back to 2019 volume levels” would be ideal.

“I don’t know if we’re ever going to see 2020 and 2021 volumes again, because I think those were so artificial in so many ways.

“The industry needs a realistic goal of where we should be headed and then looking at where that pent-up demand is for replacement tires.”

Many consumers were “priced out” of the market last year, says Mathis. “But in my view, inflation in the tire industry is dead. That just needs to flow through to the consumer, so they can get the benefit of that. And then the business will carry forward from there.”

MTD June 2023 6/6/23 10:52 AM

“As we’ve penetrated the light truck tire market, we’ve run into instances of synergies between that market and other markets.”

Michael Mathis, president, Atturo Tire Corp.

“Atturo doesn’t have a national associated dealer program, but what we can do is support a distributor that has a local program for its dealers,” says Mathis.

“We have a handful of distributors that have their own house programs. This allows Atturo to partner with the distributor in support of their relationship with that local dealer.

“This is part of our commitment to the independent distributor and dealer channel.”

The decision to not offer its own program under the Atturo umbrella “was born out of our start, when we had a limited catalog and were more of a niche brand than we are today,” he says.

“Our goal is to deliver a tire that will enable the distributor and dealer to make a great margin and allow the consumer to walk away with a tire that outperforms its price point.

“Rather than trying to force distributors and dealers to hit periodic volume targets or a particular product mix or forcing them into inventory situations they didn’t have demand for, we wanted to give them a tire they could make money on.

“There are a lot of distributors and dealers who are so conditioned on those programs and that back-end money.”

But, Mathis says, just as many dealers are looking for simplicity.

“If a dealer has to make his month-end number and every customer who comes in through the door is going to be pushed to buy a certain product, it does a disservice to the dealership, as well as the consumer,” he explains.

“My belief is that consistency in margin is what leads to volume.

“We have unique SKUs and our marketing has elevated the Atturo brand from a small-volume private brand into something that’s more nationally recognized.

“We’re focused on those local, independent distributors and dealers and giving them a product that’s not available to every dealer or outlet.

“That’s what keeps everybody coming back.

“The marketing we do (also) is a differentiator for us,” says Mathis. “We’ve taken the approach from the start of presenting our product directly to the consumer, so they go into their local dealer and ask for it.

“Events are a huge part of what we do. On average, we’re at 20-plus consumer events a year with a crew, display vehicles and tires.

“We also do a handful of dealer-focused events. We do a full mix of print, digital and outdoor advertising. And we’ve run a series of TV commercials on cable.

“We’ve put a big effort into raising brand awareness on a scale that’s really bigger than Atturo’s market position. Customers aren’t just coming in and asking for Atturo. They’re insisting on Atturo.”

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H a n k ’s T i r e

$10 million out of one store HOW HANK’S TIRE GENERATES BIG NUMBERS By

Madison Gehring

S

teve Goldberg, owner of Hank’s Tire, a single-location dealership in Woodland Hills, Calif., says it’s not unusual for up to 10 cars to line up at his store — before it even opens.

The dealership, which was founded 70 years ago by Steve’s father, Hank Goldberg, is busier — and more successful — than ever, turning $10 million in sales last year alone, despite facing some tough competition.

Steve says the majority of independent tire dealerships around his store have been bought out by big chains, making Hank’s Tire one of the last truly independents in the Woodland Hills area.

“I want to stay independent,” he says.

“I don’t want to sell out — not only for my dad, but I’m (also) proud of what we do and who our customers are.”

HUMBLE START

Hank’s Tire was started in 1953. Hank Goldberg had returned home from the Marine Corps and was looking for work.

His brother-in-law worked in the tire industry and brought him into it.

“My dad just had a little shack he rented and he was open seven days a week,” says Steve.

“He only had one employee and they only did tires. He had his jack and his tire machine and back then, they did all these things by hand.”

Steve says he remembers his father telling him he ran deals selling four tires for $100.

After two years at his original location, Hank moved to a bigger location in Tarzana, Calif.

He hired a second employee and started doing more mechanical work, like brakes, plus more tire-related services.

“I graduated high school in 1974,” says Steve. “We moved to our current location in Woodland Hills in 1973.”

The store is on the corner of a busy boulevard. (The facility was a gas station before Hank bought it.)

He remodeled the store and then a couple years later, built a building in the back to accommodate more auto service work.

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Hank’s Tire, a single-location dealership, achieved $10 million in sales last year — all while competing against bigger operations, says Steve Goldberg, its owner.

Photo: Hank’s Tire

“We are split, (with) our tire department in the front and our service department in the back,” says Goldberg.

Hank’s Tire has nine bays and is so busy that the company’s biggest problem is finding parking for all its customers, according to Steve.

He adds that Hank’s Tire tries to offer as much as it can.

“We are an AAA-approved repair shop, so we do all mechanical work.

“We do inspections, oil changes, brakes and air conditioning.

“We try to keep it simple and moving because it does get hectic and in the past couple of years, people have gotten more impatient.”

A POSITIVE ENVIRONMENT

Steve says he and his employees try to create a happy shop environment because they want to give people another reason to come — and return to — Hank’s Tire.

“They can go anywhere to buy tires or have their vehicles worked on.

“Why should they come here? Because we make them feel comfortable, they can feel the positive atmosphere and everybody

is wearing a smile. It really is the little things that make a difference.”

Steve says that he compares finding a good tire dealer to finding an electrician or plumber.

“If you have somebody you can trust and comes to your house and just does the job — it makes it so much easier.”

That’s the level of trust Steve has achieved with his customers. He says a lot of them don’t ask about price.

“They’ve been coming here for years, so they just trust us and that’s a really good feeling.”

Steve says his positive attitude starts at home.

His wife, Cheryl, puts a sign next to his car keys that says, “Choose Happy.”

She does that to remind Steve of his “options,” he says.

“She says, ‘You can go into work grouchy and be like everyone else or you can go in there with a good attitude and make everyone’s day better.’

“She’s right. I’m blessed, I’m healthy, my kids are healthy, the business is doing good and that’s really what we try to pass on to our customers.

MTD June 2023 6/6/23 10:52 AM

H a n k ’s T i r e “When a customer comes in all upset over a flat tire, I tell them it’s a repairable item and not the end of the world. We can fix it!”

Hank’s Tire employs three full-time service writers, nine technicians, six tire salesmen and seven tire installers.

In the early days of the business, Hank’s Tire made the majority of its revenue through tire sales. Steve says it’s now a 50/50 split between tire sales and service.

“We are very proud and I know my dad would be proud, too,” he says.

wears out faster on electric cars — especially the tires because of the weight of the battery. Plus, there is no spare tire in these cars, which a lot of people forget.

So when they have a flat tire, they must be towed, which just makes it harder.”

The price of tires also has “skyrocketed” in recent years.

Goldberg says he sold his most

expensive set of tires a few months ago for a Lamborghini. The price tag totaled $5,000.

“I learned a long time ago, you make money when you buy and we inventory close to 4,000 tires and sell 80 to 100 a day,” he explains.

“When there’s a deal on tires, we buy them and stock up on them.” ■

CHANGING TRENDS

Steve says that his business is the busiest it’s ever been. He credits that, in part, to the fact people aren’t buying new cars as much as they used to and are opting to have them repaired.

Steve says he has been approached by buyers, but doesn’t want to sell because he sees how some other independent tire dealerships that have been bought have lost their personalized service.

“My family probably wouldn’t let me sell it anyways. If I stay home with my wife all day, we might kill each other!”

“When our sales rep, Kevin, assured us of the FAM211’s uniformity, we were initially skeptical. Wide base steer tires are śşƳƽƉƬşıĔŷŷǤɻķşȁıǃŷƽɻƽƉɻİĔŷĔſıľ ɻ©ƉɻıƉſȃƬžɻĔııǃƬĔıǤʁɻǞľɻƽľƳƽľķɻ ƽśľɻȏȍȐʎȑȐ ȍȍ ȐɻǞşƽśɻĔɻıƉſƳƽƬǃıƽşƉſ œƉıǃƳľķɻıƉžžľƬışĔŷɻȄľľƽɻ ıǃƳƽƉžľƬ ɻ©śľşƬɻİĔŷĔſıľƬɻıƉſȃƬžľķɻşƽƳɻƩƬľışƳşƉſɻşſƳƽĔſƽŷǤ ɻÊľɻ quickly integrated the FAM211 into their program without any issues.

The FAM211’s performance is excellent, and it has an attractive appearance. Working with Fortune’s team has been positive, with top-notch follow-up. We look forward to growing our commercial business with Fortune Tires.”

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“I learned a long time ago, you make money when you buy and we inventory close to 4,000 tires and sell 80 to 100 a day.”

Steve Goldberg, owner, Hank’s Tire

Steve also says it is nice having customers come in and ask about his family.

He services second- and third-generation customers.

Like many dealerships, COVID-19 was the biggest challenge Hank’s Tire ever faced. Steve kept everyone employed through the pandemic, but had to make scheduling adjustments, like having employees come in every other week.

“You just have to roll with the punches,” he says.

Technology has become a bigger challenge at Hank’s Tire in recent years.

“I’m in California, so it seems like everyone has a Tesla or some type of electric car,” he explains. “Everything

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Auto service

Coolant system best practices

WHEN IT COMES TO ANTIFREEZE, DEALER SAYS ONE TYPE DOESN’T FIT ALL By

Madison Gehring

T

o keep up with ever-changing vehicles, tire dealers may notice they are stocking up on more types and brands of antifreeze than ever before.

Mark Cammy, founder and owner of Camco Tire & Auto LLC, which is headquartered in Milton, Del., is one of those dealers. He says stocking many different types of antifreeze is better than using a universal antifreeze.

“Different manufacturers use different components in their antifreeze, so they are pretty much all specific,” says Cammy.

He says as an example, General Motors uses what it calls a DEX-cool product, which is an orange antifreeze. Ford uses its own gold and orange color. BMW uses its green color antifreeze.

Camco Tire & Auto keeps around eight different brands of antifreeze in stock at all times and carries manufacturerspecific antifreeze.

“It’s a better service when you use the manufacturer-specific antifreeze,” he says.

“We like to put in the vehicles what came out of them.”

RIGHT RECOMMENDATIONS

Camco Tire & Auto has been doing business at its current location in Delaware for seven years.

Before that, Cammy had two Camco Tire & Auto locations in New Jersey.

Having added a third service bay to his store, Cammy says his dealership derives 20% of its revenue from tire sales and 80% from automotive service.

Cammy, who has been in the tire industry for 40 years, sees a difference in today’s coolant system products.

“Nowadays, manufacturers say it’s a long-life antifreeze,” explains Cammy.

“So you can basically go 100,000 miles based on some manufacturers’ recommendations. Personally, that’s a little too long for me.”

Cammy instead advises his three full-time employees and one-part time employee to service coolant systems whenever they work on a customer’s thermostat, water pump or radiator.

“Antifreeze is much better than it used

32 2306MTD_32-33_Coolant.indd 32

Educating customers about the benefits of cooling system service is important, according to Mark Cammy, founder and owner of Camco Tire & Auto LLC in Milton, Del. He keeps a wide range of coolant products at his store.

Photo: Camco Tire & Auto LLC

to be and it’s more specific to aluminum engines,” he says.

EDUCATING CUSTOMERS

Educating customers about the benefits of cooling system service is important, according to Cammy. He says customers should know that these services help ensure “optimal health” for their vehicles’ engines.

“It allows for optimal cooling, optimal heating and less damage to the engine due to the wrong antifreeze,” he says.

Sometimes, he adds, customers take a “do-it-yourself” approach when it comes to coolant system service.

Cammy calls them “YouTube-certified” or “Google-certified” customers who think they can learn how to perform coolant services from an article or video.

When these customers bring their vehicles back to Camco Tire & Auto, he educates them on the necessity of professional service.

“Everybody is trying to save money these days, which I can appreciate, but I always say, ‘Cheap work is not good work and good work is not cheap.’

“A lot of these guys say, ‘I watched a three-minute video on how to do this,’” laughs Cammy. “And I have to tell them that they watched a condensed video of an hour-long service.”

READY FOR SUMMER

Coolant system service begins to ramp up for Camco Tire & Auto in the summer months. Cammy credits this to warm weather and more customer travel.

“We are a resort community, so we get a lot of what we call weekend warriors coming in from different states,” he says. “These people drive a few hours and don’t do proper maintenance on their cars beforehand, so they have to come to see us.”

Cammy doesn’t actively market coolant system service, but rather keeps up with vehicle maintenance by doing routine checks when customers come in.

He also makes sure to give customers an estimate on how many more miles they can go before they will need coolant work.

“Coolant (system) failures market themselves,” he says. ■ MTD June 2023 6/6/23 10:52 AM

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Commerci al T ire De aler™

BIG DOWNSHIFT

TRUCK TIRE SHIPMENTS DECLINED DURING FIRST HALF OF THE YEAR By

Mike Manges

T

iremakers and dealers agree that the United States replacement commercial tire market is down year-over-year as the industry moves into the second half of 2023.

MTD estimates that shipments in January 2023 were down roughly 100,000 units versus prior-year levels. February and March 2023 followed suit for a fullquarter, total estimate of around five million units shipped in the U.S., all in the replacement channel.

While month-by-month declines during the first quarter were significant, they were somewhat camouflaged by the fact that dealers and distributors were still processing tires that had been delivered before the end of 2022. (One executive at a truck tire manufacturer told MTD that the fourth quarter of 2022 “was unbelievably strong — one of the strongest quarters I’ve ever seen.”)

Distributors and dealers are now working to draw down high inventory levels, which has curtailed large-scale purchasing of additional units, in some cases.

Shipments continued to decline through April and May. MTD estimates that around 8.8 million medium truck tire units will have been shipped in the U.S. replacement channel through the beginning of June.

U.S. replacement truck tire brand market share at mid-year Commercial tire dealers are working to draw down their inventories.

Brand

Share

Photo: MTD

Michelin

13.5%

Bridgestone

13.0%

Goodyear

9.0%

Yokohama

8.5%

Continental

8.0%

Firestone

7.5%

Double Coin

5.5%

Hankook

3.5%

Toyo

3.5%

Falken

3.0%

Sailun

2.5%

General

2.0%

Roadmaster

2.0%

Sumitomo

1.5%

Among manufacturers and according to MTD estimates, Bridgestone Americas Inc. has the most cumulative share of market (20.5%), when its Bridgestone and Firestone brands are added together, followed by Michelin North America at 14.5%, which represents the Michelin brand combined with the BFGoodrich brand; Goodyear Tire & Rubber Co. at 11%, a total that includes the Goodyear and Roadmaster brands; and Continental Tire the Americas LLC at 10%, when the Continental brand’s share is combined with the General brand’s share. ■

MARKET SHARE

Among those brands that ship enough units to qualify for MTD’s medium truck tire brand market share list, individual shares of market remained flat.

U.S. replacement medium truck tire shipments (2018 through 2022) Year

Shipments (in millions)

Also in CTD

2022

28.0

Westlake

1.5%

Truck tire market overview ............36

2021

22.7

Zenna

1.5%

Andrews Tire Service reveals the secrets of its success ..............46

2020

18.5

BFGoodrich

1.0%

2019

18.9

Gladiator

1.0%

2018

21.0

Others

12.0%

AG Tire Talk looks at why farmers are reluctant to run tires at low single-digit psi levels......................50

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*Source: MTD 2023 Facts Issue

Based on an estimated 8.8 million units (as of June 1)

MTD June 2023 6/6/23 10:52 AM

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Truck t ires

HITTING THE BRAKES

THE TRUCK TIRE MARKET IS SLOWING DOWN. HERE’S WHY By

Mike Manges

A

fter an incredibly robust 2022, high inventory levels and softening demand are conspiring to put the brakes on domestic medium truck tire market sales, according to several truck tire manufacturers and suppliers.

They discuss the challenges facing the market — and their own businesses — in this MTD exclusive. Looking beyond the present, they also share their thoughts on the “next big thing” in commercial truck tires.

MTD: 2022 was a remarkable year for medium truck tire demand, with replacement shipments in the U.S. growing by more than 20%, according to MTD research. Has that momentum carried over into the first half of 2023?

BRAD PERSONS, national sales head, commercial tires, Apollo Tyres Ltd: 2022 was an amazing year and served as a highwater mark for both original equipment (OE) and replacement tire volumes. If we go back to 2010, the commercial tire industry replacement tire volume has had a compound annual growth rate of 4.8% over the last 12 years. We expect the medium truck tire market demand to remain near all-time highs.

The American Trucking Associations recently stated that freight tonnage indexes will likely stay strong and consistent throughout 2023. We expect the consumption of medium truck tires to continue to be at a similar rate from last year. However, many dealers stocked up on tires when there were shortages and are sitting on stocks they will need to deplete.

We do see many opportunities and expect 2023 to be a great year for tire sales.

CHRIS TAVARES, executive director, commercial marketing, Bridgestone Americas Inc.: Industry and economic headwinds have cooled the full momentum of 2022 as we continue into 2023.

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“Under the current economic situation, demand for long-haul transport tires has declined, but demand for regional distribution truck tires has risen steadily,” says Joaquin Gonzalez Jr., president, Tire Group International LLC. Photo: Tire Group International LLC

However, we remain cautiously optimistic for the second half of the year thanks in part to new Bridgestone and Firestone products we have launched or size offerings we have expanded.

While market demand for premium tires has slowed from the records of the past two years, Bridgestone has continued to drive industry growth in the retreading space through our Bandag business.

The retread market at large is up yearover-year and Bandag has likewise seen an increase in sales year-over-year, as fleets continue to see the value of retreading in their operations.

Bridgestone is encouraged on the long-term outlook of the TBR space as we continue to make investments for the future. In 2022, we announced a $550 million investment in our Warren County, Tenn., plant, as well as an additional $60 million investment in our Abilene, Texas, Bandag facility to support continuous growth in the U.S. and Canada.

AARON MURPHY, senior vice president, CMA LLC/Double Coin: With the slowdown in the economy, as well as increased inventory levels at manufacturers and dealers, the momentum has shifted backwards to a declining sales trend.

We are seeing segments of the market, including OE, stay consistent with 2022 demand levels.

SHAUN UYS, head of Continental replacement truck tire, U.S., Continental Tire the Americas LLC: The market environment still remains difficult due to rising costs for materials, wages and salaries (and) energy and logistics, as well as the ongoing transformation of the automotive industry. Continental has been able to counter inflation-related rise swith price adjustments, optimized supply chains cost discipline and enhanced cyber security.

In truck tires, we continue to maintain a strong network of sales personnel to support our tire dealers, and our sales MTD June 2023 6/6/23 10:52 AM

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Truck t ires team takes a very active role in helping them grow their business. We want to show tire dealers how we can be their total solutions partner ARMAND ALLAIRE, executive vice president, commercial sales USA, Giti Tire (USA) Ltd.: Sufficient data for the first quarter indicates a softening of the national market versus 2022. We can readily observe that an overambitious interpretation of demand caused oversupply when buying habits changed rapidly.

The market will have to consume excess supply until demand normalizes.

The key for market analysis is to define demand adjustments by dealer, by client and by market. Think nationally, but act locally. For dealers, observe your local market and adjust with focused logic. Avoid the pessimism of negative national messaging and deal with your client’s input. Ask what your clients want/need and intensify your role as a transportation adviser for them — assisting on fuel saving practices and reducing total lifetime cost with retreading.

out to be a freight recession. This caused them to reduce their orders in 2023, even though our truck tire prices have fallen from last year because of the reduction in freight costs.

BRIAN SHEEHEY, senior vice president, Ralson Tire North America: While fleet tire demand did increase, we saw two related events drive a significant portion of that demand. First, there was a tremendous release of backlogged goods transported by ocean freight that cleared port logistics in a significantly faster timeframe than had happened over the previous 18 months. A large portion of these goods were ordered prior to — or just at the beginning of — the surge in inflation. Many companies placed larger orders to ensure their inventories matched demand as best they

As a result of these two events, tire shipments reached historic levels. However, dealers scrambled to find additional space, delayed shipments until space became available or canceled orders in their entirety. This also forced many manufacturers to store inventory that had not been planned or budgeted for.

While dealer sellout was very good in the first quarter, manufacturer sell-in has been challenging as dealers and fleets work down their existing inventory and adjust for the temporary cost fluctuations and the effect it has on their bottom line.

AL EAGLESON, segment manager, TBR North America, Sailun Tire Americas: At the end of 2022, inventory levels rose at wholesale and at retail levels. A lot of backorders were filled by manufacturers.

TOM LIPPELLO, senior director, commercial marketing, North America, Goodyear Tire & Rubber Co.: Goodyear found lots of opportunity meeting and exceeding our customers’ needs over the first half of 2023.

Supply chain and other market issues provided disruption, but almost across the board, the momentum we’ve seen recently has us very excited about our industry moving forward. We’ve seen growth in many of our key segments and our commitment is to lean into that growth and continue to deliver against the trust that our customers have in us.

KJ KIM, TBR marketing and sales director, Hankook Tire North America: Due to increased market inventories now, we expect replacement shipments to decrease in the first half of 2023 compared to last year. Though there has been a market decrease in 2023 compared to 2022, we expect a rebound, according to the U.S. Tire Manufacturers Association, for next year.

PETE SALVAN, vice president of sales, Prinx Chengshan Tire North America Inc.: We have seen our TBR sales slow down in the first half of 2023 due to our dealers having TBR inventory arrive at the end of 2022/early-2023 and then having to work through it in what has turned

38 2306MTD_36-43_CTD_TruckTireMarket.indd 38

“It’s likely that we’ll see some discomfort around pricing as dealers try to find a balance between aggressively pricing inventory to sell and trying to hang onto margins,” says Demetric Mass, national product manager, truck tires, Yokohama Off-Highway Tires America Inc. Photo: Yokohama Off-Highway Tires America Inc.

could by keeping their supply pipeline robust — a mitigating strategy to the delays and congestion of 2020 and 2021.

The second event we experienced in early-2022 was a significant slowdown in European demand, as well as other regions’ demand diminishing. This slowdown had manufacturers recalibrating their production and supply to focus on the backorder demand in North America.

Dealers and wholesalers are still sitting on a lot of those tires. Plus, we’re seeing a downturn in the demand for trucking, which will obviously filter down to commercial truck tire sales. It was a slower first quarter of 2023 versus 2022, with signs of recovery throughout the balance of 2023.

NICK GUTIERREZ, sales director, GroundSpeed Tires, Sentury Tire MTD June 2023 6/6/23 10:52 AM

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Truck t ires USA: Yes, there was definitely continued momentum in GroundSpeed TBR’s segment in the first two quarters of the year. While there are several factors that have contributed to this, we suspect the increase in demand for goods and services/e-commerce has had a big impact, leading to more shipments and increased wear and tear on U.S. commercial trucks and tires.

Due to recent U.S. legislation passing to improve transportation infrastructure, there has also been a rise in demand for medium and heavy-duty trucks, which will drive the truck segment’s momentum forward in 2023.

Along with these factors, there has been a shift towards more sustainable transportation options, which has also increased the demand for fuel-efficient, low rolling resistance tires. All of these are notable TBR growth drivers.

JOAQUIN GONZALEZ JR., president, Tire Group International LLC (TGI): Due to inflation, the demand for logistics service has declined. Most distributors are focused on moving existing inventory and their sell-in has lagged on TBR for the back half of 2022 and into the first quarter of 2023.

DAVE JOHNSTON, senior manager, commercial product and business development, Toyo Tire U.S.A. Corp.: 2022 was a terrific year for medium truck tires across the country. Replacement trucks were hard to find and the national fleet aged, driving up replacement tire market demand. This was great for commercial servicing dealers and Toyo Tires, resulting in a record sales year.

The first quarter of 2023 ebbed from the steep climb of 2022, as the market appears to be stabilizing from an increased supply of tires across the industry.

DEMETRIC MASS, national product manager, truck tires, Yokohama OffHighway Tires America Inc.: Demand remains high for replacement truck tires in 2023. Some fleets and owner-operators are awaiting new rigs, some have chosen to keep operating their existing equipment and we’ve even seen renewed interest in refurbishing pre-tier-four equipment. Whatever the motivation, keeping existing trucks on the road is good news for replacement truck tires and an opportunity to help truck owners improve the performance of those rigs with the latest tire technology.

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DAN FUNKHOUSER, vice president of commercial sales, Yokohama Tire Corp.: 2022 was absolutely a banner year for the industry, but unfortunately, we’ve seen a bit of a slowdown through the first quarter of 2023. Dealer inventories are flush. At the same time, we’ve seen the movement of total freight falter.

On the bright side, we continue to see positive replacement demand for our products and dealers have been effective at selling through their Yokohama inventory to end users. We’ve also seen an uptick in OE demand, so we’ll continue to balance our supply to meet the needs of our customers in all channels.

tive standpoint. Hankook continues to provide a competitive price, top quality and excellent service to customers.

MTD: As a truck tire supplier, what’s your biggest challenge at the moment and how are you working through it?

SHEEHEY (Ralson): As a new entrant into the market (and) establishing our customer base and supply chain, there is a hesitancy from the market to commit to significant factory orders until their domestic inventory levels are corrected. In order to address this, Ralson Tire North America is working to establish a network of domestic, just-in-time supply locations.

PERSONS (Apollo): Our biggest challenge right now is finding additional people as our business rapidly expands.

It is a great challenge to have and we are working through it.

TAVARES (Bridgestone): Perhaps the biggest opportunity we see is in helping our customers understand and embrace the value in a comprehensive tire management program like Bridgestone Fleet Solutions. Bridgestone Commercial is making incredible headway with a number of large and medium-sized fleets and those customers are readily seeing how the use of data, customized reporting and Bandag retreads is driving significant bottom-line results.

MURPHY (CMA/Double Coin): Higherpriced inventory. Like many in the industry, our dealers received large quantities of higher-priced product in late-2022, just as market prices dropped due to logistical costs plummeting. Helping customers work through this issue is a focus. The decrease in demand has created price concessions across the board.

SALVAN (Prinx): Since entering the U.S. and Canadian market in 2019, our brands are still relatively new to the market, so getting the word out about them is one of our challenges. Feedback from dealers that have been selling the tires and from fleets that have been running them has been extremely positive. Considering the higher costs due to inflation and lower freight volumes, we believe Fortune and Prinx truck tire lines are a great value priced alternative in the market.

EAGLESON (Sailun): Trucking fleets are facing challenges on all fronts. Labor resources, such as drivers and technicians, are in short supply. Fuel and insurance still remain high, on top of increased maintenance costs. All of these add to an eroding profit margin for many fleets.

Trucking companies are continuously on the lookout for products that deliver them a lower total cost of ownership.

GONZALEZ (TGI): The biggest challenge is to quickly replace the inventory purchased during the high freight cost period with current, relatively cheaper products. There are specific sizes that have maintained good sellout volume, but some of the more traditional sizes have seen a big decline in movement.

LIPELLO (Goodyear): We’re working diligently to grow our premier fleet service network and bring more connected services and an innovative tire management solution platform to our customers.

JOHNSTON (Toyo): While the overall balance of supply and demand in the market has improved moving into 2023, the mix of products must be routinely monitored to ensure we maximize fill rates. This mix is closely observed and adjusted to keep our customers stocked and ready for sales.

KIM (Hankook): Very large quantities of budget brand products coming into the U.S. market, along with lower prices, make it difficult from a competi-

MASS (Yokohama Off-Highway): Many tire distributors and dealers are wellstocked with tires, so the big issues this year are likely to revolve around tapping into MTD June 2023 6/6/23 10:52 AM

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Truck t ires demand to reduce inventory. It’s likely that we’ll see some discomfort around pricing as dealers try to find a balance between aggressively pricing inventory to sell and trying to hang onto margins.

FUNKHOUSER (Yokohama Tire Corp.): Our biggest challenge is the abovementioned swollen inventory levels in the market and uncertainty around the future of the economy. Regardless, we are optimistic for the remainder of the year. Again, all indicators point to strong demand for our brand and we continue to focus on driving that demand at the end user level to assist our replacement channel partners. So we feel well-positioned to take advantage of any upside in the market.

MTD: What’s the next big thing in commercial truck tires and why?

PERSONS (Apollo): We see an uptick in the number of discussions that are going on related to electric vehicles (EVs). As electric vehicle adoption increases, the demand for tires that can handle enhanced torque values and longevity will be key. Fleets will also look for EV tires that can offer low rolling resistance to offer the best economy per kilowatt hour. The weight of commercial vehicles will also increase due to the weight of the batteries. Fleets will look to tire manufacturers to offer enhanced solutions to meet these new applications.

TAVARES (Bridgestone): Mobility has completely transformed because of technology and we believe it will continue to evolve as fleets become more in tune with their operation through data. By equipping truck tires with sensors, commercial fleets are receiving insights that are changing how fleets make business decisions.

We also see this technology expanding to the routes where fleets operate — and not just at the beginning and end of their journeys. For example, Bridgestone and Pilot Flying J partnered last year to install IntelliTire, Bridgestone’s automated tire monitoring system, into the canopies of more than 300 Pilot Flying J locations. Fleets that make pitstops at these locations can gather additional sensor readings, spot leaks and take care of problems that may otherwise have resulted in roadside emergencies and unplanned downtime.

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MURPHY (CMA/Double Coin): Tires to address the EV truck market are one focus that we see taking a priority in the future. These vehicles have performance characteristics that are different than conventional trucks.

UYS (Continental): At Continental, we believe that in the B2B (business-to-business) space, we are shifting to a digitalization model where connected products and services are the key to fleet efficiency and profitability. Our digital tire monitoring solutions are the future of tire management and allow us to partner with the fleet and the tire dealer to adapt to specific customer needs and not an off-the-shelf product. This is exactly what fleets are seeking today.

ALLAIRE (Giti): One trend that will certainly continue in 2023 is the development of tires with greater efficiency and longer lifespan. We, as tire manufacturers, must constantly focus on reducing our environmental impact while working to match the evolution in commercial vehicles — whether diesel- or EV-powered units.

Commercial truck tires will continue to feature improved tread designs and more durable materials, allowing them to withstand more wear and tear without compromising on safety or performance.

Advances in tire technology, such as smart tires and tire pressure monitoring systems, are likely to continue to gain traction as human resources remain constrained.

These technologies can improve safety, reduce downtime due to tire-related issues and help fleet managers optimize their operations.

LIPELLO (Goodyear): The EV market and last-mile-delivery have been growing quickly and we’re leveraging current offerings and developing new products and services to meet our customers’ needs.

KIM (Hankook): Driver education on both daily inspections and driving habits is being more widely adopted. Driving habits affect fuel efficiency greatly. Driving habits that include frequent braking and engine idling could shorten the lifespan and mileage of a tire and waste fuel. Routine checks on tire pressure and improving driving habits can reduce fuel consumption and help tires last longer.

SALVAN (Prinx): We are paying attention to the electrification of fleets and

growth of the medium duty truck market.

There will be a lot of tire development for this sector of the market, with newer, more modern tread designs, higher load capacities and lower rolling resistance.

SHEEHEY (Ralson): Product technology as it relates to improvements in product quality and the evolution of battery-powered vehicles and machinery are a key focus of development over the next few years. As we see the lack of investment in internal transportation infrastructure (example: rail and pipelines), there will be significant dependence on trucking

Dan Funkhouser, vice president of commercial sales, Yokohama Tire Corp., says “2022 was absolutely a banner year for the industry, but unfortunately, we’ve seen a bit of a slowdown through the first quarter of 2023. Dealer inventories are flush.”

Photo: Yokohama Tire Corp.

to move products from point to point.

There will also be a focus on renewable or alternative energy power supply for trucks and other vital machinery.

Equipment manufacturers are investing heavily in these new technologies, so suppliers to these manufacturers need to invest significantly as well.

GUTIERREZ (Sentury): Managing supply chain disruptions and keeping up with changing customer demands in a highly competitive market should be top of mind for the industry as a whole. To overcome these challenges, companies may need to invest in technology, improve their MTD June 2023 6/6/23 10:52 AM

Truck t ires logistics (and) inventory management and develop innovative products that meet the evolving needs of customers.

And let’s not forget about the rising artificial intelligence conversation and debate. Technologies such as autonomous vehicles, electric powertrains and advanced sensors for real-time monitoring of tire performance are exploding.

These technologies will bring significant benefits in terms of increased efficiency, reduced downtime and improved safety, so how TBR brands meet these pivotal investments and changes to traditional business models will determine the strongest players in the years to come.

GONZALEZ (TGI): Under the current economic situation, demand for longhaul transport tires has declined, but demand for regional distribution truck tires has risen steadily. I think we have seen most tier-one manufacturers blend the benefits of long-haul and regional tires into what most call a super-regional tire.

This is something we feel will continue

and makes it easier for resellers to stock a one-application-fits-all option.

JOHNSTON (Toyo): High-quality, innovative technology and design remain the cornerstones of commercial truck tires. As increased supply brings market stabilization, important performance attributes like low rolling resistance, traction and durability will come to the forefront as fleets look for the best return on their investment.

Alternate fuel vehicles and their potential, unique tire requirements are an emerging market and a large part of our research and development moving forward.

MASS (Yokohama Off-Highway): I think there are a few next big things and most of them revolve around sustainability. Tread pattern design, compound development and sidewall engineering remain major focus points for us, as we and other tire manufacturers continue improving the fuel efficiency of our tires.

Reducing rolling resistance, minimizing heat buildup and extending tire

life contribute dramatically to performance, sustainability, and ultimately, to return on investment. This is an outstanding opportunity for full-service tire dealers to strengthen relationships with their customers.

FU NKHOUSER (Yokohama Tire Corp.): Take your pick — more regulation, increased last-mile operations, the proliferation of ultra-wide base treads and applications, EVs and autonomous trucks.

The list goes on and on. While we have an eye on all of that and remain engaged in what the future of our industry will look like, we have to also remain focused on the here and now. We have to exceed the unmet needs of our channel partners today.

I can say with a high level of confidence that most of our partners aren’t currently focused on any of those things. Instead, they’re focused on their business, their people, managing inventory, safety, making payroll and doing all the things that will allow their businesses to survive and thrive in an uncertain market. ■

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Truck t ires

ANDREWS TIRE SERVICE WINS WITH SPEEDY SERVICE

QUICKNESS, CUSTOMER LOYALTY ARE DEALERSHIP’S SECRETS TO SUCCESS By

Joy Kopcha

W

hen brothers Victor Bustamante and Nate Bustamante Jr. opened the doors of Andrews Tire Service Inc. in April 2000, they were just 25 and 19 years old, respectively. Victor had spent the previous eight years selling and servicing tires at another local shop when he and Nate decided to give their own business a try.

But it wasn’t easy.

“We went to the bank and asked for a loan and they denied us because we were too young,” says Nate.

They didn’t give up. Instead, “we brought in the big guns,” Nate says now with a laugh. With their dad’s credit backing, the bank took another look.

Ultimately, the two brothers were awarded a $25,000 start-up loan from the Small Business Administration.

That money helped them rent a small shop in Andrews, Texas, and the brothers got to work. Victor’s customers who had encouraged him to go out on his own did as they had promised and started ordering tires from the brothers and calling them for tire service.

But after a couple of months, the Bustamantes only had enough money in the bank for two more paychecks.

“After that, if we didn’t get any more money that people owed us, we were going to have to shut down and go work somewhere else,” says Nate That Friday, as if right on cue, the first customer payments arrived.

Since then, Andrews Tire has grown from that scrappy, two-person business into a company with customers scattered across the plains of west Texas and eastern New Mexico. The busy dealership’s service territory stretches 100 miles beyond its hometown of Andrews.

The business is made up of a team of 12 employees. The Bustamantes operate two service trucks and regularly service a list

46 2306MTD_46-49_CTD_Andrews.indd 46

Andrews Tire Service Inc. serves customers in West Texas and prides itself on providing quick, reliable service — no matter the time of day.

Photo: Liliana Flores

of 100-plus commercial customers. And they’re expanding their retail business.

But commercial tires have been an important part of Andrews Tire since day one and the Bustamante brothers insist that will continue.

OUTLASTING THE COMPETITION

A year after Andrews Tire opened its doors, the company welcomed its third employee — Nate Bustamante Sr. The “big gun” who helped his sons get started left his job in the oilfields of west Texas to work full-time in their dealership. (He’s since retired, but remains an equal owner.)

Those early years were rough, but over time the brothers established Andrews Tire as a reliable, fast and fair business.

“In the beginning, it was just me and my brother and we did everything,” says Nate. “We were answering phones, going out on service calls, changing oil and changing tires.”

Victor remembers when another longtime tire dealer cautioned him that Andrews Tire likely wouldn’t survive.

There were four other tire dealerships in Andrews at that time and the other dealer was blunt: “There’s not enough work out here.”

But the Bustamante brothers persisted.

And as it turned out, the tire dealer who issued the warning to them eventually closed his own doors. Within 10 years, all four local competitors went out of business.

By 2018, Andrews Tire had outgrown its original location. That year, the company moved to an 8,000 square-foot space on the outskirts of Andrews, a city of about 18,000 people and the lone incorporated city in Andrews County.

Located on a truck route, the fivebay service center is easier for trucks to maneuver in and out of as they crisscross the plains south of the Texas Panhandle.

MTD June 2023 6/6/23 10:52 AM

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Truck t ires OIL LEADS THE WAY

Andrews is in rural west Texas and sits atop the Permian Basin, the epicenter of Texas’ crude oil production. “We live and die by the oilfields,” says Nate.

Andrews County produced more than 35 million barrels of crude oil in 2022, making it the state’s eighth-largest county for oil production. (As a point of reference, that means Andrews County produced more oil in 2022 than the entire state of Louisiana produced in 2021. And Louisiana ranks No. 10 on the list of top U.S. oil-producing states, according to the U.S. Energy Information Administration.)

Nine of the state’s top 10 producing counties are near Andrews, according to oil production statistics maintained by the Railroad Commission of Texas.

All of that oil adds up to a lot of service calls. “When the oilfields are down, we try to hold on and make ends meet,” says Nate. “When it’s good, it’s real good.”

going to be there,” says Nate. “Some of these guys (at other tire dealerships) will get dispatched out and it will be two hours until their truck shows up at a location. We’re pretty good that if we say we’re going to be there in a certain time, we’re there.”

the business has found steady demand for well-priced medium truck tires. “One of our biggest brands is Roadmaster,” says Nate. “It’s a good tire. The price is right and we stay pretty competitive with other name brands in that area.”

SETTING EXPECTATIONS

With such a bounty of oilfield customers, there’s stiff competition to sell tires to oil company fleets. But Andrews Tire has made its mark by offering both sales and speedy service.

Nate says that Andrews Tire “can get stuff done a lot quicker than (the competition.) There have been times we have gone on location and someone else has called (another dealer.) The customer asks how long will it take to do six tires or eight tires.

The other guy will say, ‘Two or three hours.’

“We’ll beat them on that time and say we can get them done in an hour and (the customer) will let that other truck go home.

“We’ve got good people who know what they’re doing.

“We make sure that the guy in the field is pretty knowledgeable in what he’s doing. It is possible to do that work” in the span of an hour.

Nate admits it’s not the norm for two competing tire dealers to arrive on the same job site, but sometimes customers are so desperate to find someone they’ll call in back-ups.

“When it’s busy, you can call for a service truck and they’ll never show up.

So companies will call a couple guys to see who gets there first.”

The Bustamantes say they’ve learned it’s absolutely critical to offer reasonable response times and to show up and do the work, as promised. “If we say we’re going to be there in an hour or 45 minutes, we’re

48 2306MTD_46-49_CTD_Andrews.indd 48

Andrews Tire Service was founded by Victor Bustamante, left, his brother Nate Bustamante Jr., right, and their father, Nate Bustamante Sr., center.

Photo: Liliana Flores

Here’s the unwritten rule: “We don’t lie to the customer.”

“If I’m backed up, I’m going to let him know that ‘I’ve got two jobs ahead of you, but I’ve got you down and we’ll be there,’” says Nate.

In those instances, a customer might say he has another option who can get to him quicker. But Andrews Tire’s best customers say, “I’ll wait for you.”

Victor says that loyalty has been built over the years.

“We’ve been here 20 years and we’ve got some loyal customers who have moved up the ranks in their companies. They’ve stayed faithful to us and we’ve stayed loyal to them. That’s how we beat the competition.”

DOOR OPENS FOR RETAIL GROWTH

The oil industry also attracts plenty of other commercial customers, says Nate.

“We have a lot of over-the-road trucks that are (bringing) supplies to these oil fields. We do a lot of over-the-road trucks going through town.”

And while Andrews Tire hasn’t ventured into servicing national accounts,

While the commercial tire segment remains the dealership’s focus and represents 60% of its total sales, commercial tire sales have also led to growth on the retail side.

“We do a lot of commercial fleets,” says Victor. Over time, those customers have started bringing their personal vehicles to Andrews Tire. Nate says customers who live in Midland or Odessa will drive from those larger cities to have a new set of tires installed on their personal vehicle.

“They’ll run through here on their day off to put tires on because they don’t want to sit for three hours” in a tire shop closer to where they live.

A customer recently called from Odessa and asked if the tires he needed were in stock. He made an appointment for Friday morning and was out the door and on his way home again less than an hour later.

“That’s the kind of deal that we do quite often,” says Nate.

A HEALTHY WORKPLACE

On both the retail and commercial side, Andrews Tire is making a name for itself MTD June 2023 6/6/23 10:52 AM

Truck t ires as a speedy service provider. But the Bustamante brothers acknowledge it can be tough for employees to remain motivated and hustle for every single customer. One of their secrets is to “have plenty of guys in the shop,” says Nate.

“Growing up, when we worked at tire shops, there were two shop guys and two service truck drivers. It was tough to stay motivated because you were doing all the work and didn’t have help.

“We have more people, so it’s not as hard to get the job done.”

The Andrews Tire team also has two other secret weapons — owners who aren’t afraid to get their hands dirty.

“They see us out there (in the shop) with them,” says Nate. “We’re not sitting in an office, watching them work. We see that the bays are full and we work with them.”

Employees have told them they’ve never had a boss bust a tire or lend a hand when work piles up before.

“When there’s work, we get down and go to work with them,” explains Nate.

“The guys see we’re all a team. We’re not going to point fingers and say, ‘You’re not done yet?’”

DREAMING FOR THE FUTURE

The Bustamante brothers are proud of what they’ve accomplished, but they still see room to do more in the future.

“Hopefully, we’ll open up another store down the road,” says Victor. “We’d like to open in another town and branch out and make this shop our main warehouse.”

It’s not just a matter of dreaming about getting bigger. The brothers see expansion as a way to secure the business they’ve already established and better protect their employees from the ups and downs of the oil patch.

Victor says, “When oil shuts down, it shuts down completely. That’s why we’re trying to service more of the public” and increase the business’ share of the local retail market.

Opening in another community could also open the door to serving farmers.

As it stands now, Andrews Tire is “very

light” in agriculture tires, says Nate. But if it had a store even 25 miles to the north and closer to Lubbock, the dealership’s customer mix would be much more heavily tilted toward agriculture.

No matter what the future brings, the dealership’s commercial tire customers depend on the Bustamante brothers and their team. And that dependency doesn’t end at 5 p.m.

“They don’t care what time of day it is,” says Nate. “If they call at 5:30 and you’re closing down, they expect you to do the job and do it right now.

“If there’s a $300,000 piece of equipment on the side of the road, they need it moved right now. It doesn’t matter what time of the day it is.

“I think that’s part of the reason we’ve been successful. Out here, they expect you to do that. It’s not, ‘Let’s see when we can get you in.’ It’s ‘We need it now.’”

And over the years, Nate says those demanding customers have spread the word that Andrews Tire will “take care of it, no matter what time it is.’” ■

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AG T ire Talk

HOW LOW CAN YOU GO?

WHY FARMERS ARE HESITANT TO RUN AG TIRES AT SINGLE-DIGIT PSI LEVELS Modern Tire Dealer has partnered with AG Tire Talk to provide answers to insightful questions that farm tire dealers have about farm tire technology. This is the next installment in our ongoing series, which is designed to help farm tire dealers better connect with their customers. A trending question, followed by answers, will appear in our Commercial Tire Dealer section every other month. For complete answers, click on www.agtiretalk.com.

Photo: Yokohama Off-Highway Tires America Inc.

QUESTION: Why are farmers hesitant to run tires at recommended single-digit psi levels? What is required to do so?

What precautions must be taken and how are traction and flotation improved?

DAVE PAULK, manager, field technical services, BKT USA Inc.: Today’s ag radials are made to run at higher deflections and lower air pressures. Lower air pressures reduce ground bearing pressure and soil compaction.

With lower air pressures, the tire has a wider and a longer footprint to spread out the weight of the tractor over a larger contact area. The ability to run lower air pressures in the field is a definite advantage to taking care of the ground and increasing traction and flotation. The wider and flatter the footprint of the tire, the better the traction and stability.

Modern tire construction has been improved to allow low pressures with the

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production of increased flexion (IF) and very high-flexion (VF) technologies. An IF-rated tire can carry 20% more weight at the same air pressure as a standard tire or conversely can run about 20% less air pressure and carry the same weight as a standard tire. A VF-rated tire can carry 40% more weight at the same air pressure as a standard tire and the same weight as a standard at about 40% less air pressure.

A tire must have the correct amount of air pressure to carry the weight of the tractor and implement. It is always best to prepare for the worst-case scenario.

A tractor tire running at single-digit air pressures at a field speed of five to 10 mph may be able to carry that weight, but as speed increases, the weight carrying capacity of a tire decreases. Nine psi in the field at five to 10 mph does not equal nine psi on the road at 30 mph. Once out of the field and on the road, air pressures must be increased to handle the weight at

road speed. On the road, higher air pressures are needed for higher speeds and lower rolling resistance for fuel savings.

In the field, lower air pressures can be used for lower speeds and wider footprints for more traction and less compaction.

Air pressures that are too low will cause an overload condition and destroy the sidewalls of the tire.

The size of the implements and the application can also determine how much air pressure should be used. Lower air pressures can generally be used in the field when the implement is hooked to the drawbar. The full weight of the implement (seeder, cultivator, etc.) is not on the tractor.

In some areas, 16-row planters are used on the three-point hitch. While the planters are on the ground, air pressures can be low. When the planters are picked up at the end of the row, all the weight is on the back of the tractor and air pressures need to be higher.

MTD June 2023 6/6/23 10:52 AM

AG T ire Talk This is an example where the worstcase scenario option needs to be used.

Air pressures should be set to handle the planter when they are in the air. a Farming on hillsides and slopes requires higher air pressures, even though they may not be needed to carry the weight of the tractor and implement. Running lower air pressures on hillsides can buckle the sidewall of the tires because weight shifts from one side to the other. Hillsides and slopes are not the application to run single-digit air pressures.

AUSTIN FISCHER, ag field engineer, Firestone Ag:-I think there are two key reasons producers are hesitant to run ag tires at single-digit psi levels. First, singledigit psi levels require growers to be more diligent about checking pressures, given the reduced margin for error. For example, if a farmer runs six psi and loses one psi, that equates to a loss of 17% of the inflation pressure. But if they run 35 psi and lose one, the percentage lost is much smaller.

The second reason some producers may be hesitant to run ag tires at single-digit psi levels is that it becomes even more critical that they know the actual maximum axle loads that the tires will be subjected to.

As discussed above, the margin for error is reduced significantly at singledigit inflation pressures, so one needs to be sure the tire can handle the load(s) it will see in service at that low of an inflation pressure. Growers must consequently be really dialed in on how much their base machines weigh, as well as the weight added by implements, weight packages, aftermarket attachments, etc.

To run farm tires at the recommended single-digit psi level, growers must know their maximum axle loads and the inflation pressures that their tires require to carry those loads. It’s also critical to diligently monitor tire pressure when running ag tires on single-digit psi levels, as they can’t just be set and left alone.

Firestone Ag recommends checking tires at least once per day, perhaps in the morning, while allowing the machine to warm up. We also suggest using an accurate, high-quality air pressure gauge that has been calibrated and is no more than 15 years old. Other tools that can help growers include a tire pressure monitoring system, which automatically alerts operators when pressure drops below recommended levels, and a central tire inflation system to help keep tires in the appropriate pressure range.

Finally, dealers need to make sure their customers’ tires and wheels are in good shape. If tires are weather-checked or worn down to 20% or less, they should be replaced. If wheels are rusty or damaged, consider replacing them before trying to run tires at single-digit psi levels.

Another precaution is to be cognizant of the terrain on which the tires will be

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operating. If the tires will be operating in very hilly terrain, then we would recommend running four to six psi over the minimum pressure required to carry the load to increase lateral stability. This is especially important if the tires in question are IF- or VF-designated, due to the increased deflection inherent with those designs of tires. Lastly, we recommend

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AG T ire Talk that dealers ensure their customers’ tires are fully seated on the wheels. This can be done by visually confirming that the tire beads are fully against the vertical portion of the wheel flange and concentric with the wheel. If not, beads could potentially unseat during operation.

required to carry the intended axle load.

Radial tire casing construction carries 20% of the axle load, while the pressurized air in the chamber carries the remaining 80%. Bias tire casing construction carries 40% of the axle load, while the pressurized air in the chamber carries the remaining 60% As technology continues to evolve with radial tires, especially with VF tires, the ability to operate continuously at a working air pressure of nine psi has become a commercial reality.

Fundamentally, VF technology allows farmers to significantly lower air pressure without compromising the carrying capacity of the tire. This results in a much longer tire footprint or gross flat plate that spreads the weight of axle over a larger area, which significantly reduces the ground pressure effect and lowers soil compaction, improving the producer’s crop yield.

Advantages of VF tire solutions that can operate at low air inflation pressures include sturdier tire construction that is designed to be very flexible, without compromising casing endurance or tire life; greater load carrying capacity, by adjusting air pressure as needed; reduced soil compaction and improved crop yields due to the larger footprint and increased flotation; higher heat resistance; a long footprint for increased contact patch, traction and reduced slip; improved ride; and more.

GREG GILLAND, vice president, global agriculture, Maxam Tire North America Inc.: Agricultural tires — in comparison to construction, commercial truck and passenger or light truck tires — operate best at the lowest air pressure possible.

The primary reason agricultural tires can operate at such low pressures is the combination of the size of the air chamber in an ag tire and the number of tires mounted on a vehicle, allowing lower air pressures to be able to carry the weight.

The secondary reason ag tires need to operate at the lowest air pressure possible is to reduce the effect of the machine’s weight on the soil by decreasing ground pressure and soil compaction.

Agricultural tires operating at the best possible pressure have a direct impact on crop production and can improve farmers’ and growers’ yields.

On average, agricultural tires tend to operate between 12 to 20 psi on tractors working in the field. The advent of IF and VF technology is allowing tire air pressures to achieve much lower pressure, down to nine psi. The structural capability of tires impacts how much air pressure is

With all the above technological reasons that should convince or drive producers to convert to IF or VF tires, here are the primary reasons producers hesitate to operate at these pressures: the perception that the tires operating at low pressure are too low or look flat; concern when having to transport (road) the machinery that lower air pressures will slow the equipment or consume more fuel; the perception that low air pressure could lead to a tire flat in a remote area; historically perceived comfort for operating at 16 to 18 psi as the lowest threshold of air inflation in the field; concern that they must continuously adjust air pressures up or down, which is time-consuming when changing equipment based on expected axle loads; and discomfort with operating at one set inflation pressure that addresses all their equipment or load variables.

DAVID GRADEN, operational market manager, agriculture, Michelin North America Inc.: In my experience, almost nine times out of 10, producers are very reluctant to reduce their ag tire pressures to recommended single-digit, operational pressures. In most cases, I believe this is due to their historic experience running higher pressures or even the maximum pressure stamped on the sidewall of the tire.

When we recommend single-digit pressures to producers, we always have to begin with the “why” behind our recommendation. I could easily spend an hour on this topic.

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MTD June 2023

6/6/23 10:52 AM

AG T ire Talk However, the key points are improved traction due to a larger footprint and more lugs on the ground, which significantly improves floatation; reduced soil compaction, better crop yield and improved fuel economy; and finally, an overall improvement in efficiency and added money to the customer’s bottom line.

Unfortunately, it isn’t as easy as simply reducing your tire pressure until you see three lugs on the ground, either.

How do we reach that single-digit recommendation? Well, to begin, the producer’s tires must fit the application.

Is the machine strictly confined to field use? Does it travel over the road and how much? Are the tires under significant torque? Is the machine’s weight properly distributed to transfer the necessary torque for the application?

CHRIS NEIDERT, marketing, training and development manager, ag, Trelleborg Wheel Systems: Let’s go over some basic instructions when trying to determine air pressure. The tractor must

be first ballasted correctly, meaning the total weight of the tractor necessary to transfer the tractor engine output torque with high efficiency to the ground.

The weight distribution must then be determined, meaning how much weight should be over the front axle and how much weight should be over the rear axle.

When the above conditions have been met, dealers can then consult the tire manufacturer’s load table.

Find the load table for that particular tire size. If you’re using tire brand A, you must use the load table from tire manufacturer A to determine the air pressure.

It is not recommended to use a load table from a different tire manufacturer as nominal conditions and load capacities could vary between manufacturers.

much movement famers will experience in the sidewalls, how the bead performs, how much heat will be generated by the movement of the tire and the shape of the footprint, among other factors.

Below-spec inflation pressure can create excess heat, apply stress to parts of the sidewall and under-tread that it is not built to handle and cause other problems.

Tires also rely on inflation pressure to maintain the bead’s lock on the wheel.

Too little pressure could allow the tire to fall off the wheel, especially if it is being operated on a sidehill.

Load carrying capacity and top speed should always be within the bounds of the load and inflation table, noting special applications like steep slope air pressure increase adjustments. ■

BLAINE COX, national product manager — agriculture, golf and turf, Yokohama Off-Highway Tires America Inc.: Remember that manufacturers design every aspect of a tire to perform within the bounds you see on the load and inflation table — how

Note from AG Tire Talk: All information is provided solely to provoke thought. All deductions made from information must be confirmed by certified ag tire dealers and tire manufacturers before use. AG Tire Talk does not recommend anyone conduct tire service work, with the exception of certified ag tire dealer professionals.

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Focus on Dealers

Marks leaves ITDG primed for more growth GROUP HAS GROWN TO 167 MEMBERS WITH 1,051 LOCATIONS By

MTD Staff

“M

y job was to keep moving it forward,” an emotional Dave Marks, retiring president and CEO of the Independent Tire Dealers Group LLC (ITDG), said as he addressed the group’s membership one last time at ITDG’s annual meeting and trade show, which recently took place in San Antonio, Texas.

Just under 300 members and vendors attended the event.

Marks, who joined ITDG in August 2017, said the group has grown from 106 shareholders in 2016 to 122 shareholders in 2022, despite losing 20 shareholders due to acquisitions over the past three years.

Youngblood Automotive & Tire of Austin, Texas, won ITDG Dealer of the Year honors. (Pictured, left, Michael Youngblood, the dealership’s owner, with Chis Barry, ITDG’s vice president of sales.)

Photo: MTD

During the event, Marks received high praise from members and vendors alike for leading ITDG through the COVID19 pandemic and intense tire dealership merger and acquisition activity.

ITDG Vice Chairman Clay Miller of Mainstreet Tire in Colorado Springs, Colo., said that “Dave came on at the right time (and) the right place and made us all look good.”

MTD Publisher Greg Smith, while presenting an overview of the domestic tire industry during the event’s general session, praised Marks and said his leadership style reminded him of a quote from John Quincy

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Adams: “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

Marks believes ITDG is in good standing today.

“Although we lost eight shareholders in 2022 due to M&A activity, we added eight new shareholders the same year to replace them,” he said.

Total membership in ITDG has grown from 143 members with 607 total locations in 2016 to 167 members with 1,051 locations. Currently, there are ITDG members in 45 states.

Marks pointed to his “3-C’s” philosophy as a reason for ITDG’s success and for the group’s sustainability moving forward.

“I always wanted to make sure we were competitive, consistent and compelling.”

He said if a potential vendor was competitive, but not consistent, he would pass on doing business with it.

“If something happens with one brand, we must pivot to another brand and be able to give our members what is needed.”

Since 2016, ITDG has seen its average eligible purchase per shareholder grow from $1.8 million to $2.7 million per year and the group’s gross purchases have grown from $211 million to almost $342.5 million, Marks noted.

All of this enabled ITDG to give volume bonus and dividend payouts of more than $13 million to its shareholders in 2022.

At the same time, Marks said ITDG reduced the number of partners/vendors it has from 92 to 70. This way, each vendor has been rewarded with increased volume.

Currently, nearly 74% of ITDG’s purchases are tires, with auto parts standing at 18%.

Marks said that the group’s tire volume was down due to supply issues in 2022, but auto parts has been the fastest-growing segment for ITDG. (Due to the economic times, wheels and accessories have shrunk to under 4% of ITDG purchases.)

ITDG Vice Chairman Clay Miller of Mainstreet Tire in Colorado Springs, Colo., (right) said that retiring ITDG President and CEO Dave Marks (left) “came on at the right time (and) in the right place and made us all look good.”

Photo: MTD

ROOK NOW IN POSITION

During the event, incoming ITDG President and CEO Jason Rook, who replaces Marks, shared his thoughts about the group with MTD. When asked what he wants ITDG members and vendors to know about him, Rook said, “I want members to know that I care about the group, I care about our mission and the idea of what we do is very important to me.

“I want them to know that I always have their best interest in mind and I will increase shareholder value with every move we make. I want them to know that I will explore every opportunity to move the group forward.

“I want our vendor partners to know that they should expect more from ITDG and that ITDG will expect more from them. I will continue with our more-toless philosophy, which is pushing more volume to fewer vendors every year and letting them increase their piece of the pie.”

Since being tapped for his new assignment, Rook has traveled to visit many ITDG members. MTD asked what he found during those visits.

“In previous positions, I would talk to customers who had issues with employee retention, work quality and things of that MTD June 2023 6/6/23 10:52 AM

Focus on Dealers “One year from now, we’ll measure success by expanding the group, while keeping territories respecting our current footprint. We’ll expand while keeping our standards and ethics in place. We’ll increase our shareholder value, but we will never abandon the priority of ITDG, which is promoting the independent tire dealer.”

A NIGHT OF AWARDS

During the ITDG event’s farewell reception, several presentations were made to dealers. Of note: Enjoying a moment during the opening reception were, from left to right, Samuel Huebert, Kathy Huebert and Robert Huebert of Lee’s Service in Ridley, Calif.; Cheryl Bluman of ITDG; and Sarah Aurin and Taylor Castro of Country Tire & Wheel, which is located in Bakersfield, Calif.

Photo: MTD

nature. I don’t hear these complaints from ITDG members. I am learning from them and I am shocked by the level of commitment by all members.

“I have been terribly impressed by the innovation of their programs, by their community involvement and honestly,

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by their loyalty to the group. The things they do inside the group and the things they do for the group that don’t contribute directly to their bottom line, but build community, are very admirable.”

How will Rook measure success one year from now?

• Each year, ITDG presents its Dealer of the Year Award to one of its members.

For 2022, the award was presented to Youngblood Automotive & Tire of Austin, Texas.

• The Chairman’s Award was presented to Clay Miller of Mainstreet Tire.

ITDG’s next meeting and trade show is scheduled for April 24-27, 2024, at the Secrets Akumal, Riviera Maya, in Cancun, Mexico.

2/22/23 10:27 AM

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Focus on Dealers

Ohio dealers fight catalytic converter theft STATE CONSIDERS LAW THAT WOULD REMOVE INCENTIVE TO SELL CONVERTERS By

Mike Manges

O

hio tire dealers continue to fight to remove the financial incentive to sell catalytic converters without proof of ownership.

In conjunction with the Ohio Tire & Automotive Association (OTAA), representatives from two of the state’s largest tire dealerships recently sent letters to legislators in support of Ohio House Bill 110.

Jamie Ward, CEO and president of Cincinnati-based Tire Discounters Inc., wrote that the impact of catalytic converter theft “hurts several aspects of the customer service experience, not to mention the adverse financial impact it places on our organization.

“When a catalytic converter is stolen off a vehicle, that customer now must wait for us to order, receive and replace the part, which in some instances can take weeks. Supply chain issues have only added to this problem and (have) increased the overall cost of replacement.

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Jamie Ward, CEO and president of Cincinnati, Ohio-based Tire Discounters Inc., wrote that the impact of catalytic converter theft “hurts several aspects of the customer service experience, not to mention the adverse financial impact it places on our organization.”

Photo: Tire Discounters Inc.

“There is also the financial impact to our organization for replacing stolen catalytic converters,” wrote Ward. “The average cost of parts and labor is between $1,500 to $3,000 to replace a catalytic converter. We have spent anywhere from $18,000 to $36,000 over the past four years on these types of claims.

“In addition, several years ago we had the catalytic converters stolen from all our delivery vehicles, which delayed businessessential tire deliveries to our stores.

“Overall, there is a perverse, detrimental impact on both customers and businesses while these thefts continue to grow.

“We believe removing the financial incentive of selling used converters without proof of ownership to scrap metal dealers … would dramatically cut down on the theft of catalytic converters.”

John Marshall, corporate secretary at Grismer Tire Co., a 24-location dealership based in Dayton, Ohio, wrote that “over the past few years, we have personally observed a dramatic rise in (converter) thefts, including 44 documented incidents impacting just our company alone.

“We have also documented over a hundred thefts impacting our customers,” wrote Marshall. “According to the National Insurance Crime Bureau, the number of catalytic converter thefts reported in claims to insurance companies jumped from 3,389 in 2019 to 14,433 in 2020.

“These thefts impact both our customers and our own fleet vehicles. The cost of replacing a catalytic converter is approximately $3,000. When businesses are targeted, not only do companies have to incur the cost of fixing their own fleet vehicles, but they must also bear rising insurance premiums, as well.”

Marshall wrote that criminals “have targeted catalytic converters as a valuable commodity they can turn into quick cash.”

Legislation “would require scrap metal dealers to stipulate proof of ownership when individuals are seeking to sell a catalytic converter.”

House Bill 110 is currently being heard in the Ohio House Criminal Justice Committee.

MTD June 2023

5/25/23 10:36 AM 6/6/23 10:52 AM

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Business Insight

A guide to holding successful meetings

HAVE AN AGENDA, STAY ON-TOPIC AND LOOK FORWARD By

Dennis McCarron

W

hen was the last time your team held a meeting? If it’s been a while and you often find yourself prioritizing other things, there may be a good reason — your meetings are boring.

Don’t worry. You’re not the only one who thinks that. Your team probably thinks it, too. Here are a few guidelines to make meetings more interesting and more important to the success of your business.

For starters, meetings have to be planned. That means having an agenda. It doesn’t have to be elaborate, but the main topics of the meeting must be put down on paper and distributed to the team well in advance. This gives your team a chance to review the topics and let their subconscious play around with ideas for a few days. Having an agenda also allows for control of the meeting. If your team starts getting off-topic during the meeting, you can redirect and keep the meeting on-topic and on time.

Just as importantly, meetings are about solving problems. As a leader, your job is to identify problems. Your team is supposed to solve them — not the other way around. This can be a difficult concept for owners as they are used to solving problems and see themselves as best suited to do so. But for any solution to stick long-term, the best way is for your team to adopt a solution and take full ownership of it. That’s why it needs to be their idea — not yours.

‘Meetings should be about looking forward, not backwards.’

Someone also needs to take notes. If a meeting takes place and there is no action afterward on what was discussed, the meeting was a waste of time. The note taker, which is a job that should rotate each meeting, doesn’t have to write everything down — just the key takeaways, like who is responsible for follow-up on a task, what the group agreed to do moving forward, etc. Those notes should be distributed the following morning.

The person who leads the meeting should also rotate. This doesn’t necessarily mean that agenda setting is that person’s responsibility.

Remember, the leader identifies the problems. But the person in charge of the meeting simply calls the meeting to order and always on time. A meeting should never wait for a person who is late.

The person in charge of the meeting also makes sure that the group stays on-topic. If a subject comes up that is important and urgent — in other words, it isn’t something that should wait to be discussed — it should be tabled until the most important topic on the agenda is dealt with appropriately. Minor topics

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When meetings are about accomplishing something and not just reviewing things, they take on a whole new life.

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Photo: kali9 | 856721894 | Gettyimages.com

can be pushed off to the next meeting, if absolutely needed.

Being in charge of a meeting is also a small step in leadership skill-building. Everyone in your shop should be expected to hold the reins every once in a while. If your shop has 12 people in it, that means one meeting a year is on their shoulders. That’s not an impossible commitment.

Meetings must have start times and end times. These are to be honored. Not all meetings will produce a solution in its final form. It’s OK to leave a meeting with a work-in-progress.

It will be a bonus that you have most of the agenda already laid out for the next meeting!

Your first few meetings may take an hour, but shouldn’t go over that time limit. As your team gets comfortable with the idea that meetings are for solving problems, you will likely start to see most meetings in the 30- to 45-minute range. The agenda maker should adjust as the group learns the norms of holding meetings.

When meetings are about accomplishing something and not just reviewing things, they take on a whole new life. If something can be covered in an email, then it should be. No one wants to stay late at work more than necessary just to hear last month’s financial review.

If a topic on a meeting agenda includes a specific metric — for example, how to address declining alignments — then that’s fair game. Meetings should be about looking forward, not backwards. Your personal vehicle’s windshield is bigger than your rearview mirror for a reason. Keep this idea in mind as you plan and hold meetings. ■ Dennis McCarron is a partner at Cardinal Brokers Inc., one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com.) To contact McCarron, email him at dennis@cardinalbrokers.com.

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Mergers and Acquisitions

The single store acquisition challenge IT’S A LOT HARDER THAN IT LOOKS By

Michael McGregor

B

rad Templin, who works in the three-store family business, Scott’s U-Save Tires & Auto Repair, in the south Chicagoland area, asks a good question about how to acquire single store tire dealers.

Brad has tried to acquire a fourth store, but notes that sometimes after years of discussions, he’s reached an impasse on valuation — only to find out later the seller sold to someone else.

Brad is targeting the right type of tire dealer. The average age of the person selling is about 62 years old. The seller has been disengaged for three or four years and is no longer investing in the business.

Stagnation sometimes shows in the business’ customer count, low average repair orders and weak inspections. But the store usually has a solid base, a good team and is wellregarded in its area.

‘I always recommend having a valuation discussion in the first meeting.’

When the discussion finally turns to valuation, Brad says he and the seller end up far apart. In every case, the owner had no prior real market input into his businesses’ value and Brad bore the brunt of telling the owner what he thought the value really was. In several cases, the seller was offended and walked and then sold to the next guy who came along with a slightly better offer.

Here are a few ideas I gave to Brad when we discussed this over a video call.

One of the first suggestions I always give expansion-minded tire dealers is to have a pipeline of potential deals going. I recommend developing a target list of all the single-store locations in the markets they like and ranking them. Then reach out personally and start having conversations about your desire to grow through acquisition. The idea is to get multiple conversations going so you don’t get fixated on any one business if you need to walk away at some point.

I always recommend having a valuation discussion in the first meeting. This sets the owner’s expectations and perhaps educates them a little bit so they can ponder things. This also saves everyone a lot of time. Sincerely show that you’re not out to take advantage of them. My approach is to throw in the kitchen sink of “add-backs” to profit in there. Is there a condo in Costa Rica leased through the business? Throw it

60 2306MTD_60-61_McGregor.indd 60

in. Are non-essential family members on the payroll? Throw them in. Can you prove personal expenses “mistakenly” get passed through the business? No problem. Start with the last 12 months and then work backwards as you need to.

Next, identify the ‘contra-add-backs.’ If the owner works in the business, what’s the fully loaded cost to replace him? Is rent set at fair market value or does the owner need a bump to bring the property to market value? Are there delayed investments like equipment, broken bay doors or a sales floor that need to be refreshed? You want to itemize this stuff and show the owner how they lower the value of the business to you and everyone else.

Then analyze the business to see what it would look like under your ownership. First, look at the profit margins. Small businesses typically underprice, so that’s potentially some upside for you. Perhaps you have more buying power? Compare their sales and vehicle inspection process to yours. Are you better? Is your incentive program more effective?

Why is this analysis important? Let’s say, for example, that you offer 4X on a business with $250,000 in EBITDA for a price of $1,000,000. If, with your tweaks, you think you can get it to $330,000 EBITDA, you can see how this might be a 3X deal in hindsight. Maybe you take that chance and go with a slightly higher offer to get the deal done?

There is no one right way to present the discussion of valuation, but try using logic. Talk about the differences between Monro, with $1.3 billion in revenue and 14X EBITDA valuation, and a single, independent tire store. They are at polar ends of the valuation spectrum.

If you reach an impasse, ask the owner to take his cash flow and balance sheet for the business (not the real estate), go to a bank and find out how much he can borrow without signing a personal guarantee. If it’s not as much as he thinks, point out that he gets to keep the cash or excess working capital in the business when he sells. Sometimes that’s a lot.

Part of the challenge with a single-store operator being offered a 3X EBITDA valuation is they might say, “You know what? I’ll just work it another two years. I’m feeling healthy.”

Two years goes by and the guy figures, “Well, I’ll just work it for another year.”

At some point, a mostly cash-at-closing offer should resonate.

Beyond that, you might have to get creative with employment agreements and earn-outs. At the end of the day, what’s it worth to you and what can you really do with it? ■ Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael.mcgregor@focusbankers.com.

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6/6/23 10:51 AM 5/26/23 8:42 AM

Dealer Development

How to work on your business — not in it DON’T GET STUCK IN THE ‘ASK ROLE’ By

Randy O’Connor

A

s crazy and unpredictable as the tire industry can be, there’s a long series of predictabilities that can be directly traced to the growth and profitability of most dealerships.

If you have participated or are participating in 20 Groups, you’ve likely heard and seen the timelines we use to describe what’s happening in your shop and what needs to happen in order to move beyond your current level of performance.

Getting a profitable operation up and running in the first few years can be tough. Advancing beyond the industry average net performance can be even tougher — maybe even impossible — if you don’t have the influences around you to keep you from continuing to operate like you’re a new owner/operator.

At a recent D2D Development Group meeting, one of the biggest barriers to continued growth and success was highlighted. (Hang on until the end of this column and it will all come together.)

‘Take yourself out of the ask role and start operating your business like you’ve learned to.’

Newer dealership owners and/or those not making money can have trouble with cash flow, find that payroll is perilously close to not happening and feel immense stress on a daily basis. These owners often wonder why they don’t just hang it up and get out of the tire industry.

While there are a million things on the table to help move into a taste of profitability — like car count, expense reduction and a revamp of payroll — operational efficiencies should be in hyper-focus.

Let’s say you did those things and are ready to move forward.

Cash flow is getting better, payroll seems less perilous and stress is still high, but you’re earning a few wins here and there. Let’s say you’re now in the 1% to 3% net profit range. You’ve earned a decent car count and it’s time to start focusing on experiences — both customer and your team members’ experience.

At this stage, improving your operational efficiencies with a defined vehicle inspection process and memorable customer experience should jump to the front of the priority line. Handle those, raise your labor rate again, get better margins on your parts, refine your payable and receivable processes and target a demographic missing in your customer database and you’ll

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likely take a few steps forward toward doubling down on your current net.

Fast forward and your cash flow is much better. Payroll is not only not perilous, but you likely have room to start taking your “fair share” as an owner. Operating at 4% to 7% net, you’ve joined the masses and are at the industry average. Here you finally feel a reduction in stress and can start working a bit more on the business, rather than in it. Your community, via word of mouth, has finally started to positively impact your car count and you begin focusing on your sales process, hiring standards and job standards. These actions will help greatly, but this is where things get a bit sticky and many owners get stuck. Remember the predictabilities I mentioned earlier?

Well, here we go.

The road to 4% to 7% has likely been the result of your heavy influence in every single aspect of your business. Customers and team members know they can ask you for help or a solution and you’ll handle it. You’ve effectively mastered the art of the “ask role.” You alone are the chief operating and executive officer of your own finely crafted position, aimed at keeping you right where you are.

The good news is work is fun again and your efforts in working a bit more on your business are paying off. For the next step, you start fine tuning. You start having some fun with processes and making small incremental changes that make for year-long improvements. You also give someone on your customer service team an elevated role with more responsibility. That way you can do what you know you need to do by working on your business and deciding how you’re going to reinvest your profits.

However, the only problem is that you’re still CEO of the masterful “ask role” you have created. Customers still ask for you by name and you help them. A technician has an issue and glances straight beyond your service manager and directly to you. This role is now, with fantastic predictability, the single greatest barrier — among many — standing between you and advancing into industry-leading profitability.

How do you fix it? Simple. You take yourself out of the “ask role” and start operating your business like you’ve learned to.

Furthermore, replace the “ask role” with team-centric systems that allow your business to thrive without you there.

Don’t forget that if you are stuck in the “ask role,” our industry is full of awesome fellow tire dealership owners who can help you via a peer-to-peer group. ■ 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.

MTD June 2023 6/6/23 10:51 AM

EV Intelligence

All-in or part-time?

DON’T MISS YOUR WINDOW OF OPPORTUNITY TO SERVICE EVS By

Craig Van Batenburg

T

here are now three levels of high-voltage technician certifications with regard to electric vehicle service safety.

ASE has classified a level-one tech as being aware that high-voltage systems are dangerous. (By the way, once you know that a hybrid, plug-in hybrid, pure electric and even a fuel cell vehicle is in your bay — my company, Automotive Career Development Center, calls all of those an EMV — stay away from the orange-colored parts!)

Level two means you have all training, personal protective equipment and other equipment to service the entire EMV, except high-voltage battery repair. (Swapping the old HV battery with a new one is allowed, but remember to keep the lid on the battery packs.)

sent some jobs to other good shops, but where can you send an EV? Most likely, back to the local dealer, where it was purchased by your customer.

In some cases, your options will be limited. Are there highquality, independent EV service facilities near you? Or is it time to offer EV service at your business and grow into it?

Your customers may switch to an EV this year. Waiting to see when the market is ready means you may have missed the sweet spot when a competitor takes those customers away from you. ■ 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.

‘Your customers may switch to an EV this year.’

Level three includes all of level two, plus the training to get inside the HV pack and make repairs.

With little to no regulations and EVs selling faster than most people thought they would, where do you lead your team?

First, it’s time for an assessment of your shop, the people who work there and the cost of — and return on — your investment. I wrote a previous MTD EV Intelligence column about the cost of getting into EV service. This article is about when you should get in.

Anyone following the sales of new EVs in the U.S. would see a trend that EVs are more popular year-over-year than any other classification of light-duty vehicles. In other words, in just a few years, EVs — that means vehicles with no internal combustion engine at all — will make up more than 15% to 25% of total sales.

Should you go all-in on EVs? Let’s look at what happens when you say no. This means you will keep things the way they are now. For the short-term, you will most likely be more than OK. What about doing some work on EVs? With that decision, at some point you must tell your customer, “Take it back to the EV dealership.” As a shop owner for more than 25 years during a lot of technology changes, that was not an option I felt was in my company’s best interest.

We invested in new air conditioning machines, scan tools, alignment racks, scopes and many other pieces of equipment.

We invested in training for our technicians and managers. We made improvements in our building, as well as office equipment.

This was expensive and stressful. But what choice did I have?

It was either stay current with the times or fall behind.

Play to your strengths. I assume tires and related work are your strength. At my old business, Van Batenburg’s Garage, we w w w . M o d e r n T i r e D e a l e r. c o m 2306MTD_63_VanBatenburg.indd 63

63 6/6/23 4:33 PM

TPMS

Mitsubishi Mirage - 2022 OPERATION

The signals from the TPMS transmitter are received by the ETACS-ECU (vehicles without Keyless Operation System) or KOS & OSS-ECU (vehicles with Keyless Operation System).

ETACS-ECU or KOS & OSS-ECU vehicles process input signals from each TPMS transmitter as well as vehicle speed signals from the ASC-ECU. It receives the atmospheric pressure signal from ECM, and when the atmospheric pressure is low (such as at high altitude), it calibrates the tire pressure received from TPMS transmitter and makes a judgment of warning. When the road tire pressure is low, a warning signal is sent, causing the TPMS warning light to be illuminated. When there are TPMS problems, the ETACS-ECU or KOS & OSS-ECU sends a warning signal causing the TPMS warning light to flash. The light changes to continuous illumination after flashing for approximately one minute.

For three seconds after the ignition switch is turned to the “ON” position, the ETACS-ECU or KOS & OSS-ECU illuminates the TPMS warning light to check any breaks in the TPMS warning light circuit.

By connecting the scan tool to the data link connector, data stored in ETACSECU or KOS & OSS-ECU (such as tire pressure and tire pressure sensor ID, the alarm status and warning history, etc.) can be displayed and the tire pressure sensor ID can be registered.

NOTE: If the TPMS transmitter is replaced, register the ID codes of all the TPMS transmitters again, including the replaced transmitter, using the scan tool.

TROUBLESHOOTING

Use these steps to plan your diagnostic strategy. If you follow them thoroughly, you will be sure that you have exhausted most of the possible ways to find a TPMS fault.

1. Gather information about the problem from the customer.

2. Verify that the condition described by the customer exists.

3. Check the vehicle for any TPMS DTC. 4. If you cannot verify the condition and there are no TPMS DTCs, the malfunction is intermittent.

64 2306MTD_64-65_TPMS.indd 64

Fig. 1

Fig. 2

Fig. 3

Fig. 4

When disengaging the bead, place the tire on the tire changing machine as shown in Fig. 1, and rotate it as pictured in Fig. 2. To re-engage the bead, ensure correct placement of the valve, as seen in Fig. 3, using proper rotation as noted in Fig. 4.

Photos: Mitchell 1

5. If there is a TPMS DTC, record the number of the DTC, then perform the DTC procedures.

MEMORIZING THE SENSOR ID

1. Select “4tires ID Reg. (Change tire PRS.)” and start the tire pressure sensor ID registration.

NOTE: If the ID code registration is not finished within 20 minutes, all the ID codes registered in the TPMS transmitter before will be erased. For this reason, the ID codes need to be registered again.

2. “4 SNSR ID Registration Do you want to start? Note Finish ID Registration within 20 minutes.” is displayed. Then, press “OK.” NOTE: • You can start the operations from any TPMS transmitter. The tire pressure sensor ID registration has no order.

• On completion of the tire pressure sensor ID code registration, the tire pressure sensor ID code is displayed on the scan tool screen. (Mitsubishi’s latest tool is the M.U.T.-III.) • The scan tool cannot identify which registered TPMS transmitter is used for each wheel. For this reason, write down the tire number for each wheel when the tire number and ID code is displayed on the scan tool during ID code registration.

• It may take one minute for the ID code to be displayed on the scan tool screen after the tire pressure is reduced.

• If the ID code is not displayed, reduce the tire pressure another 20 kPa (2.9 psi) or more. If the ID code is not dis-

played yet, rotate the tire to displace the TPMS transmitter, and reduce the tire pressure 20 kPa (2.9 psi) or more again.

• If the ID code cannot be registered for all four wheels, the ETACS-ECU or KOS & OSS-ECU may be faulty and require replacement.

• If the ID code can be registered for one wheel or more, the TPMS transmitter in which the code cannot be registered may be faulty. Replace that TPMS transmitter.

3. Decrease the tire pressure to 189 kPa (27.4 psi) or less by changing 20 kPa (2.9 psi) or more and register the tire pressure sensor ID code of each wheel to the ETACS-ECU or KOS & OSS-ECU. NOTE: The TPMS indicator illuminates for tire pressure alarm.

4. “4 SNSR ID Registration Completed.” is displayed. Then, select “OK.” 5. After one minute or more has passed, correct the tire pressure for all wheels with ignition switch “ON.” 6. Check the data list “Registered ID reception, Tire 1, 2, 3, 4” if “YES” is displayed for each tire. When “NO” is displayed, drive the vehicle for approximately five minutes, check the display again. If “NO” is still displayed, register the ID code again.

TORQUE SPECIFICATIONS Component

Lb.-in.

(N.m)

Valve stem-to-TPMS sensor screw

12.4±0.8 1.4±0.1

MTD June 2023 6/6/23 10:51 AM

TPMS SENSOR REMOVAL AND INSTALLATION Removal and Installation

WARNING: Certain components of this vehicle, such as TPMS sensors, may contain perchlorate materials. Before deployment and/or disposal, review and comply with all applicable regulations.

• Ensure valve cap is always in place except when adjusting tire pressure.

• If the valve core and valve cap are replaced, use a genuine replacement part. The valve core is similar to a conventional one but uses nickel plating to avoid corrosion.

• Replace the valve with a new one every five years or when the tire is replaced.

• Do not drop the TPMS transmitter from a height greater than 3.3 feet.

• Do not expose the TPMS transmitter to extraneous magnetic fields.

• TPMS transmitter should not be stored at temperatures above 176 F or exposed to temperatures above 212 F. • If the TPMS transmitter is replaced, execute “Tire Pressure Sensor ID Reg-

istration” on the scan tool under the “Special Function”.

• Be careful not to damage the TPMS transmitter.

SERVICE POINTS

Tire Bead Disengaging

Be careful not to damage the TPMS transmitter with the tire level or tire bead.

1. Fix the tire on a tire changing machine.

Then apply a bead breaking shoe to disengage the tire bead from the wheel.

Repeat procedure for the opposite side.

2. Fix the tire on a tire changing machine so that the TPMS transmitter is positioned as shown in Fig. 1.

3. Use a tire lever to disengage the upper bead. Rotate the tire to disengage the tire bead from the wheel.

4. Fix the tire on a tire changing machine.

5. Use a tire lever to disengage the lower bead. Rotate the tire as shown in Fig. 2 to disengage the bead from the wheel.

Tire Bead Engaging

1. Prepare the tire and fix the wheel as usual.

2. Put the tire on the wheel so that the

Howdy.

cross point of the bead with the wheel is approximately 7.9 inches (A) away from the valve, as shown in Fig. 3.

3. Engage the shoe and make sure that 7.9 inches (A) is maintained between the cross point and the valve. The arrow in Fig. 4 shows the direction of rotation of the wheel.

4. Turn the wheel in order to engage all the first side of the tire.

NOTE: The standard shoes can pass over the sensor without damaging it.

5. Put the second side of the tire in position so that the cross point of the bead with the wheel is approximately 7.9 inches away from the valve.

6. Turn the wheel to engage all of the second side of the tire.

NOTE: The standard shoes can pass over the sensor without damaging it.

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

PAGE

WEBSITE

ACDC

63

www.fixhybrid.com

Aftermarket Auto Parts Alliance Inc.

59

www.perfectstopsummerpromo.com

Alligator

65

www.alligator-tpms.com/mtd

American Omni Trading

19

www.american-omni.com/transmax

Ascenso Tires North America

53

www.ascensotiresna.com

Aston Technologies

29

www.astontechnologies.com

Atturo Tires

5

www.atturo.com

Autel

9

www.autel.com

BKT USA Inc.

11

www.bkt-tires.com

Continental Tire

21

www.continentaltire.com/promotion

Cosmo Tires

35

www.cosmotires.com

Ford Motor Company

27

www.motorcraft.com

GT Radial

41

www.gtradial.com

Hunter Engineering Company

49

www.hunter.com/tire-changers/heavy-duty

IMI Products

43

www.imiproducts.com

K&M Tire Inc.

57

www.kmtire.com/mrtire

Ken-Tool

52

www.kentool.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Linglong Americas Inc.

7

www.linglongtire.com

Maxxis Tires

33

www.maxxis.com

Mr. Tire/Big 3 Tire

47

www.mrtirebig3tirectd.com

Nitto Tire U.S.A. Inc.

OBC

www.nittoenthusiastcircuit.com/apply

PPG Industries Inc.

39

www.ppgversolon.com

Pre-Q Galgo Corporation

51

www.pre-q.com

Prinx Chengshan Tire North America Inc.

31

www.fortunetireusa.com

RoadX Tire

13

www.roadxtires.com

Sailun Tire Americas

44-45

www.gosailun.com

Sentury Tire USA

17

www.groundspeedtbr.com

Tireco Inc.

23

www.milestartires.com

Transamerica Tire Company Ltd.

IFC

www.predatortires.com

Western Tires Inc.

55

www.jk-usa.com

WheelerShip LLC

56

www.wheelership.com

Wrenchers LLC

61

www.wrenchers.com

Yokohama Off-Highway Tires America Inc.

15

www.yokohama-oht.com

Yokohama Tire

25

www.yokohamatruck.com

ZC Rubber America Inc.

37

www.arisuntires.com

66 2306MTD_66-68_AdIndex.indd 66

B

J P

L a

MTD June 2023 6/6/23 10:51 AM

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6/6/23 10:51 AM 3/22/23 1:27 PM