GLENDALE, Ariz.—Three tire dealers in this Phoenix suburb aren't too concerned about auto dealerships like Sunland Lincoln-Mercury getting into the tire business. They told Tire Business that auto dealers have tried to compete for replacement tire customers before with mixed results.
``The auto dealers have never had any effect on our retail business,'' said Ron Britton, co-owner with his father, Doug, of three Big O Tires stores—including one in Glendale. They welcome the competition.
Mr. Britton said one of their locations is near a major shopping mall and has ``eight to 10'' other tire and auto service stores nearby, including Sears and Montgomery Ward auto centers.
He noted that an auto dealership—even if it sells tires—brings more traffic into the area. He added his Big O dealership will still do well because of customer service and because auto dealers who sell tires are ``out of the ballpark price-wise.''
``My guess is that it'll last one to three years,'' said Charlie Stevenson, owner of Tucker Tire in Glendale. He said a number of large auto dealers in the Phoenix area have tried the same thing and most have failed.
Over the years, in addition to his stand-alone tire dealership in Glendale, Mr. Stevenson has operated as many as five tire departments within auto dealerships.
He said most auto dealers end up with too much tire inventory because they don't know the business. ``You've got to know where to buy and how to deal with so many different brands,'' he said.
Also, many auto dealers don't keep track of their tire inventory adequately and employee theft becomes a problem. ``It seems like (stolen) tires are harder to track and bring bigger money than a spark plug,'' Mr. Stevenson said.
He said the auto dealers who've made it work have hired a skilled manager for tire sales and not delegated it to``an $8- to $10-an-hour guy.''
Bob Snelling, owner of Jones Tire and Auto Services in Glendale, said Sunland Lincoln-Mercury will have ``no effect on my retail business at all.'' He said large discounters like Scottsdale, Ariz.-based Discount Tire Co. are his toughest competitors.
Mr. Snelling worked at a Ford dealerhip's service department for 10 years before opening his own tire store. At one time, he said more than half his business was providing tire sales and service to auto dealers. Now, tire sales are only about 15 percent of his $1 million annual sales.
``If tires went away, I wouldn't worry about it,'' he said. But Mr. Snelling said he's joining the Tire Factory Groupe—which in turn is part of the Tire Alliance Groupe—and that will enable his prices to be more competitive.
He agreed that inventory control and management are crucial to any auto dealer's success in the tire business. ``If they get the right guy, they're going to do great,'' he added.