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March 20, 1995 01:00 AM

`PEACE OF MIND': PA. DEALERSHIP JOINS GROWING NAPA AUTOCARE CENTER PROGRAM-AND LOVES IT

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    ALTOONA, Pa.-In the dog-eat-dog world of independent tire dealerships providing automotive service, you gotta have a ``hook.'' Absence of that clincher that offers customers a little something extra will turn you into kibble quicker than you can sing, ``My dog has fleas.''

    A tire is a tire is a tire in that sacrosanct world.

    And, as 41-year-old Tom McMullen knows too well, you don't usually get rich selling only tires. So he and his partner, Todd Hines, 36, decided they needed something more-call it sort of a strategic alliance-to hook those customers and keep 'em coming back.

    In blue-collar Altoona, clobbered for years by a slumping regional economy, that something special took the form of those big blue letters NAPA.

    That has spelled peace of mind-and savings-for motorists in an area where nearby coal mines in Johnstown, Pa., have been nearly played out and tired steel mills are shadows of their former vitality.

    Messrs. Hines' and McMullen's three-year-old H*&*M Tire Service Inc. may be one of the few tire dealerships around belonging to the nationwide NAPA AutoCare Center program, a membership agreement with the Atlanta-based National Automotive Parts Association (NAPA).

    But there is another ``Big Blue'' in the picture here: H*&*M Tire is also a Goodyear G-110 contract dealer.

    Thus far, no apparent conflicts have arisen, though Mr. McMullen admitted ``it's been kind of rocky with Goodyear the last few months. They maybe feel we're not moving as many of their products as we should be, that we're selling too much service, rather than tires.

    ``But we have to do whatever it takes for us to survive in this business, and `Mother Goodyear' is not going to be there to pay our bills if something should happen. We had to do something to generate higher gross margins. . . .''

    For H & M Tire-which has a 70-30 split between auto service and tire sales-the practical way to go was concentrating on auto service. That's where NAPA comes in.

    The former owners of the outlet, which for 15 years was also a Goodyear G-110 dealership, didn't do much auto service but exclusively used NAPA auto parts.

    Mr. Hines and Mr. McMullen acquired the store in what was basically a ``turnkey operation''-the other guys left Jan. 31, 1992, the next day H & M opened its doors for business.

    Eventually, they became concerned by escalating tire prices and costs. In response to Goodyear ``firing the (first) bullet,'' as Mr. McMullen put it, by beginning to sell to Sears, Roebuck and Co. a couple years ago, he followed the lead of many other dealerships: H*&*M added a second tier of products to its Goodyear stable, in this case the Lee brand made by Goodyear's Kelly- Springfield Tire Co. subsidiary.

    Then six months ago, Mr. McMullen said, ``we decided to do a full-out blitz in service, because that's where the money is.''

    So the partners signed on with NAPA AutoCare. The benefits, he said, are many.

    Under the program, NAPA offers a nationwide ``peace of mind'' warranty that unconditionally guarantees its auto parts for six months or 6,000 miles.

    The largest aftermarket parts supplier in the country also just added a new NAPA credit card to its arsenal.

    And if a customer uses the card to charge any repairs made with NAPA parts, the warranty coverage is doubled.

    NAPA also offers a number of other benefits for its AutoCare annual membership fee of $225 (see accompanying story), including co-op advertising, point-of-sale materials, training, merchandising, and exterior design programs.

    But the single biggest factor that sold Mr. McMullen on NAPA: ``I've always been one to favor nationwide warranties wherever I could get one. . . .'' With about 55,000 AutoCare Centers across the U.S. and Canada, NAPA's dealer network ``is so much larger than Goodyear's,'' he noted.

    ``So virtually whatever we do is guaranteed anywhere-which is a good thing to give to a customer.''

    H & M Tire is actually NAPA's largest dealer in the Altoona area, according to Mr. McMullen, buying upwards of $8,000 worth of parts monthly from the supplier-more than any other business except Conrail, the railroad.

    The dealership also has an in-storeNAPA computer with instant access toNAPA's warehouses and parts stores, so service technicians know immediately if a part is readily available.

    Both partners are more service oriented for the obvious reason, Mr. McMullen said: the percentage of markup is a lot better. H & M Tire averages between $25,000 and $30,000 monthly in service sales, and does practically everything: brakes, hoses, belts, shocks, struts, exhaust, tune-ups. All its technicians are certified for air conditioning work, and Mr. Hines is certified for the state's new emissions program.

    Included among the outlet's six bays is a Kendall Oil quick-lube operation that Mr. McMullen said has been very lucrative not to mention popular with Altoona's ``very price-conscious'' motorists. He claimed it does a brisker business than the local Jiffy Lube outlet.

    While the dealership will provide any tire a customer wants, it still sells mainly Goodyears and the Lee brand, which Mr. McMullen called his ``bread and butter'' line.

    But the winter has not been very kind. ``Last year we sold more than 600 snow tires in a couple months, but this year only about 200,'' he lamented. Meanwhile, the local tire competition-Sears, Sam's Club, Kmart, Firestone and at least 25 other big and small tire dealerships, at last count-hasn't taken a siesta, either.

    ``I don't even try to compete anymore with places like Sears,'' Mr. McMullen explained. ``They've run some ads that have thoroughly disgusted me-advertising tires at prices I can't even buy them at. We're just a little guy.

    ``I'd rather lose a sale on a tire then lose money on the tire, because then it didn't do me any good to sell that tire. Especially if I don't get any service work out of it.

    ``But tires are a good draw to get customers in the door.''

    He admitted he'd prefer doing a brake job and turning a couple rotors to selling some tires because, ``while I'll make 10 or 15 bucks on the tires I install, I can make $50 or even higher on a brake job.

    ``I like selling tires, but it's gotten so competitive.''

    When it comes to auto service, ``I really think I'm the competition to beat,'' Mr. McMullen boasted, noting that the area has a heavy concentration of some 50,000 motor vehicles.

    ``We're able to get customers in and out in a hurry. That's taken business away from new-car dealerships and other shops. We try to show people that their new car doesn't have to go back to the dealer in order to keep it in warranty.''

    Mr. McMullen said he planned to ``really jump on this NAPA credit card'' because it will make buying automotive service and repairs more easy and accessible for customers.

    ``I only have good things to say about NAPA,'' he continued, touting its reputation as ``the best'' supplier in the aftermarket parts business.

    Ignoring for a moment the many pluses he had just enumerated, Mr. McMullen conceded that, plain and simple, he and his partner just ``like working with NAPA.

    ``In three years, we've not only had a good business relationship with them, but we've also made good friends with people with whom we really like to associate.''

    There's a ``hook'' that's hard to ignore.

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