LAS VEGAS-An optimist would probably say the news was good: There is a future for the independent tire dealer up to the year 2000 and beyond. But anyone who thinks an independent's life will get any easier is sadly mistaken.
The industry's Darwinistic bent will continue: Survival of the fittest will mean fewer tire dealers, with big dealerships growing larger while smaller ones are forced to find their niche and offer unsurpassed customer service-or perish.
The message sounded bleak. But it was meant more as a challenge from two tire manufacturer executives who discussed the future of the industry for dealers, automotive product suppliers and others attending the recent Automotive Aftermarket Industry Week trade shows in Las Vegas.
Taking a page from David Letterman, John Gamauf, vice president of consumer tire sales for Bridgestone/Firestone Inc., offered a ``Top 10'' list of his own predictions.
``If (these changes) don't happen in your business in the next four years, you may have problems surviving,'' he warned dealers.
10. Multibrand suppliers and dealers will survive.
In today's retail marketplace, there are four types of customers: brand-conscious buyers; value-seekers; price-driven buyers; and store-reliant consumers.
Based on a BFS-commissioned survey of 2,000 retail tire buyers, he said price is becoming less important to customers, while store reliance has remained stable. And older consumers tend to patronize a store not for price, but rather for the services provided.
9. Dealers with a retail orientation will survive.
Duxler Tire in Chicago was a successful retail dealership in the 1960s that was almost out of business by the '80s, Mr. Gamauf said.
In 1991, the dealership underwent a complete cosmetic makeover and now features a modular layout resembling a customer-friendly clothing store in order to appeal to more upscale consumers.
8. Manufacturers who produce and distribute excessive original equipment tires downstream will not survive.
They ``can't do the tire dealers justice,'' he said. ``You need to align yourself with a manufacturer who has a merchandising plan.''
Dealers' arsenals should include a low-cost radial, a mass-market tire and a luxury touring tire-``the right products in order to make the right profit.''
7. Dealers whose performance product mix exceeds 33 percent will survive.
In 1993, performance tires accounted for 24.4 percent of tire sales; they currently account for 28.5 percent.
6. Dealers whose light truck mix exceeds 25 percent will survive.
To insure adequate profit in the next four years, Mr. Gamauf said ``some 60 percent of the products you need to sell in your stores are light truck and performance.''
5. More than half of a store's retail customers will be female.
Because more women now make tire-buying and auto service decisions, Mr. Gamauf suggested dealers cater to their needs, especially by regularly sponsoring events like women's car care clinics.
4. More than half of retail consumers will be 55 or older.
Dealers need to cultivate these customers, who are generally store-reliant, he said.
3. More than 35 percent of customers will be non-white.
In Miami, BFS dealerships run tire ads and print out receipts in Spanish, he said.
Dealers also need to consider all ethnic groups in their hiring practices, he added.
2. Vehicle manufacturers will enter the marketplace with dedicated auto repair centers.
Mr. Gamauf said tire dealers should expect increased competition from car makers-and their dealers. General Motors Corp.'s bumper-to-bumper warranties now include tires. And some Ford Motor Co. dealers have begun operating satellite auto repair shops.
1. Firestone will win the Indianapolis 500 race.
That prediction produced laughter from his audience, but Mr. Gamauf wasn't kidding.
He urged dealers to pick a supplier ``that best suits your needs'' and suggested they look for one that can serve as a single source for multiple tire brands, as well as parts and equipment, and also provides advertising, merchandising and educational support.
Dick Cahoon, senior vice president of Dunlop-brand sales for Dunlop Tire Corp., said that over the past five years, tire dealers' ranks have thinned by 5,000.
The emergence of warehouse clubs, mass merchandisers and ``category killers'' moving to branded products, and the increase in the number of large tire dealerships-those with 30 or more locations-``certainly has increased the competition for the replacement tire business.''
And as the competition has increased, so have tire sizes and speed ratings. Whereas in 1987 the top 10 passenger replacement tire sizes accounted for 61.7 percent of all tires sold, in 1993 that had shrunk to 43.7 percent.
``Dealers need to find a way to meet this size and ratio proliferation'' and ``turn inventory faster without sacrificing service to consumers,'' he said.
Large, multistore dealerships ``will continue to demand and get the lowest unit prices from suppliers because they have the economic clout, and are under the same profitability pressures.''
How can ``the little guys'' compete and, for that matter, survive?
By getting closer to their customers, determining a market niche large enough to sustain and grow their business and providing top-notch customer service while differentiating themselves from competitors, Mr. Cahoon said.
That will require pursuit of products, services and relationships ``that will allow you the opportunity to succeed.''
He called on dealers to align themselves with manufacturers and/or distributors who share common needs and philosophies.
A small dealership must get closer to its target customers, he said, because it cannot ``successfully compete with the big guys on price, convenience and speed in a single transaction of purchasing and fitting a new set of tires.''
It can, however, ``mimic the convenience of a Sears or Discount Tire or other large retailers by having a distribution partner that delivers non-traditional stocking items on a daily or hourly basis.''
Do not, he warned, attempt to be ``everything to everybody.''
Mr. Cahoon noted the ``phenomenal growth'' and success of catalog/mail-order sales operations like Land's End and Eddie Bauer, ``which offer competitively priced, high-quality items with exceptional customer service.''
He said that trend, as well as the increased accessibility to products via the computer will increasingly pull customers away from retail stores.
Dunlop realizes it ``can't be all things to all people,'' he said. ``We've put together a strategy that's market-driven and includes rapid new-product development. . .and customer intimacy-all tied to a philosophy of trust and integrity.
``No one has time for adversarial relationships at any level.''