AKRON-After nearly three years of difficult business conditions, most of North America's commercial tire dealers seem to be optimistic about 1994. Without exception, dealers contacted by phone expressed a belief that it will be a year when hard work and initiative pay off in improved profits.
The TIRE BUSINESS survey, which queried major commercial dealers in six regions of the U.S. and two regions of Canada, brought out the fact that, although economic conditions vary greatly from region to region, the dealers unanimously believe that business is improving.
Perhaps the most significant revelations of the survey were dealers' assessments of 1994's advantages and disadvantages vs. 1993.
Among the advantages are:
The year is getting off to a better start, except in the Northeastern U.S., where a frigid winter has lessened commercial activity;
Tire manufacturers generally have responded to dealer complaints about excessively low commissions on national account sales, an issue that soured dealer-supplier relations during 1993;
Past cost-cutting and belt-tightening by both dealers and their customers have paved the way for more sales and better profits;
Leaner, more efficient dealer organizations can enhance profits dramatically as sales increase;
Customers generally are stronger and more optimistic, making it more likely that dealers' sales efforts will bear fruit;
Low interest rates, availability of money and of acquisition possibilities encourage expansion of strong dealerships;
Housing starts are high and rising, providing impetus to trucking throughout the continent;
Trucking seems to be growing rapidly. Truck sales are high, more trucks are on the road, and more freight is moving by truck;
Most regions report improving local economies.
The advantages of 1994 were offered by the dealers without comment. But in listing disadvantages the year presents, the dealers tended to assess blame and suggest changes:
Price competition remains fierce. J.J. Seiter, president of Fort Smith, Ark.-based Treadco Inc., blamed both dealers and tire manufacturers for this problem.
``The dealers have trained the whole (trucking) industry to wait for a deal. And the tire companies have trained the dealers to wait for a deal....We've created our own monsters,'' he declared.
Recent tax increases may dampen sales and expansion when customers begin to see the impact on their bottom lines.
James Parkhouse, president of Bell Gardens, Calif.-based Parkhouse Tire, accused the government of shortsightedness in choosing to raise taxes without also reducing spending.
``Until they eliminate the waste, I think the whole effort (to reduce the federal deficit) is an exercise in futility,'' he said.
Archie F. Stroh, senior vice president and general manager of Vernon, British Columbia-based Kal Tire said the manufacturers' battle for market share continues to exert pressure on margins throughout North America.
Speaking of conditions in eastern and central Canada, Mr. Stroh said ``the manufacturers are making a pig sty of that market.''
Increasing national account sales with decreasing commissions continue to plague many Canadian dealers, Mr. Stroh reported.
Workers comp rates continue to ``go through the roof.'' This complaint, heard from both U.S. and Canadian dealers, was accompanied by accusations of ``poor management of the system'' and ``too much freeloading.''
Recent changes in the industrial structure of some areas will work a hardship on some dealers.