AKRON-In the face of increased competition, commercial dealerships are growing-expanding both inside and outside their current marketing areas. It's a trend many of them are likely to continue in the coming years, as well.
``Consolidation of (commercial) dealers will continue,'' proclaimed Jerry Fletcher, CEO of Fletcher's Cobre Tire in Phoenix.
Since January 1995, Fletcher's has acquired five major commercial dealerships to service the nation's largest earthmoving and truck tire customers.
The additional outlets added $55 million to Fletcher's sales, making the company the second largest commercial tire dealership in the nation, according to TIRE BUSINESS' annual survey.
Fletcher's was not alone. Of the dealerships surveyed, 80 percent said they had expanded their outlets or added equipment during the past year.
More than half of the expansions that took place last year put existing dealerships into new markets, suggesting the trends in increased competition and consolidation will continue in the near future.
Eighty percent of the dealers surveyed said competition, in general, had increased.
Almost 65 percent noted price competition was up-compared with 43 percent last year-while 32 percent of those responding said it remained on par with the past year.
Competition is unlikely to ease anytime soon, with 70 percent of the respondents noting they expect to expand their outlets or upgrade equipment this year.
Snider Tire, for instance, opened a combination commercial tire center and Bandag retread shop in Bluffton, Ind., in January and plans to open a commercial/retread facility in Commerce, Ga., Aug. 1, to service an existing market in that region, said President John K. Snider.
The commercial tire dealership experienced a 15-percent growth in sales during 1995, which Mr. Snider attributed to strong economic conditions. He believes the economy this year will continue to be upbeat, but not as robust as 1995. Nevertheless, Snider Tire is on target to increase 1996 sales by about 11 percent to $50 million, according to Mr. Snider.
More dealers this year reported they had ``no'' difficulties with accounts receivable, a nagging problem for commercial dealersships in the recent past. More than 80 percent of those surveyed said accounts receivable were not a problem. Only 14 percent said they were. Those numbers compared to 68 and 31 percent respectively last year.
The main concerns dealers have for the future remain much the same as past years, however. When asked ``What industry or market trends particularly challenge your company this year?'' dealers most often said price competition, declining margins and national account programs.