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March 06, 1995 01:00 AM

DEVELOP A PRO-ACTIVE BUSINESS APPROACHEXEC TELLS DEALERS

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    NIAGARA FALLS, Ont.-Picture the tire dealership of the 21st century. Customers drive into a service bay and a TV monitor slides over to the car's window. Addressing an interactive screen, customers answer questions about their driving habits, the car's current tires and other information to guide the computer in what tires to offer.

    Lasers read the size and condition of the car's tires. The customer selects the tires and services desired, pays by using debit card and heads to the waiting room.

    Robots remove the tires and wheels and new tires are balanced and installed. The car is then aligned and deposited outside ready for the customer.

    Sound far fetched?

    ``All this is possible today, but the cost is prohibitive,'' said Peter Townsend, regional sales director of Dunlop Tires (Canada) Ltd. ``....(B)ut it will undoubtedly happen when the demand exists.''

    Mr. Townsend used this example of technological advancements tire dealerships might employ to illustrate the dramatic changes he sees taking place for Canadian dealers in the 21st century. Changes, he said, that will be impacted by five main factors-technology, overseas manufacturing, the U.S. and Canadian economies and the middle-class population.

    Speaking at the Ontario Tire Dealers Association convention Jan. 28 in Niagara Falls, Mr. Townsend said the biggest change dealers will face in the next century will be in philosophy. That is, dealers must develop a business philosophy that is pro-active to change rather than reactive.

    Today's independent tire dealer is a ``jack of all trades'' handling a myriad of tasks while running the dealership, he said. This results in the dealer having a lack of time to do most jobs thoroughly. ``The change in philosophy is to concentrate on those parts of the job that you do best and delegate the other tasks,'' Mr. Townsend said.

    But before moving to pro-active management, dealers need information and the ability to collect it.

    ``Making decisions without knowing all the facts can be dangerous,'' he said. ``Arm yourselves with technology, because technology provides information.''

    Ownership of equipment that allows access to the information highway, including electronic data interchange, will become mandatory for anyone dealing with a major tire company, he added.

    Mr. Townsend expects to see a continued supply of ``cheap tires'' to the North American market. This will be driven, in part, by tire makers' zeal to establish manufacturing plants in China. Production capacity in that country, where most people still ride bicycles for transportation, will reach 10 million tires annually by the year 2000-but without corresponding domestic demand, he said.

    ``It will take many years to turn China into a consumer society capable of purchasing its domestic products,'' he said. ``Until then, China's economy will be built on its exports, tires being one of them.''

    Mr. Townsend sees a continuing division in tire retailing, with mass merchandisers and discount clubs supplying the lower economic groups (owners of vehicles 6 to 10 years old) in Canada.

    Tire dealers, in turn, will supply the middle class, whose vehicles generally are 1 to 5 years old. Auto dealers will provide tires to the very affluent-customers who demand one-stop service.

    Car dealers are a growing retail tire force in Canada, Mr. Townsend said, citing a recent survey that showed the number of auto dealerships selling tires growing from 3 percent of the Ontario market in 1990 to 11 percent in 1994.

    ``Car dealerships, both domestic and import, have realized that to maintain business they also need to offer one-stop service to their customers,'' he said. ``And this, I feel, is where the independent tire dealer will be heading as the 20th century finally deflates.''

    The huge debt burdens of the U.S. and Canadian economies also are major factors in the future of the independent tire dealer in Canada, Mr. Townsend said.

    If the middle class shoulders the major cost of increased taxes to pay off the national debt, it will have a strong impact on their ability to purchase goods, he said.

    ``This does not mean there will be a reduction in your business, but it will be a change in the type of tires that you sell,'' he said. ``An educated consumer will prefer value over economy.''

    Dealers, he said, must send the message now to their customers that their dealership is the best choice for a value purchase.

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