Independent tire dealers have a lot at stake in Ford Motor Co.'s current attempt at becoming ``America's newest tire store.'' Whether Ford can become a successful tire retailer remains to be seen. But it's clear the auto maker is serious about wanting to make this happen.
The company is pouring money into a national television, radio and print advertising campaign to establish Ford and Lincoln/Mercury dealerships as one-stop shops for tires, brakes, shocks, wheel alignments and batteries.
Ford wants to keep customers returning to its dealerships for tires rather than referring them to tire retailers and others for services it doesn't currently offer.
Traditionally, auto dealerships have had little success selling tires. Tires are cumbersome and costly to stock. They require knowledge and expertise to sell and to properly install and service. With their high overhead, auto dealerships will have to move a lot of tires to make any money on them.
Ford's goal is to sell 1 million tires in 1999 and 3 million in 2000. It will market 12 brands offered by its original equipment tire suppliers, providing 7,000 tire part numbers.
While 3 million tires may seem like a lot, it amounts to fewer than four sold per day at each of the 2,400 Ford and Lincoln/Mercury dealerships currently participating in the auto maker's tire program. Ford has a total of 5,000 dealerships in the U.S.
Even before its latest announcement, most Ford and L/M dealerships offered tires, although in far fewer numbers.
As it enters the retail tire arena, the auto company faces an uphill battle in convincing consumers that its dealerships can offer competitive tire prices. Car dealerships generally are regarded as the most expensive places to have auto repairs done.
Many of these outlets also require customers to set up appointments for service work. This inhibits walk-in business—one of the independent tire dealer's service advantages.
As it stands now, Ford and Lincoln/Mercury dealerships will get most of their tires through tire dealers and distributors. For tire dealers not working with auto dealerships already, such arrangements could mean additional business.
The move, however, has a potential downside for auto dealerships. Tire adjustments, which currently are handled through the tire retailer, would now end up on the auto dealers' service desks—a possible reason why many have shied away from offering tires in the past.
Ford, we suspect, will find competition in tires more daunting than it envisions. And the auto maker can expect a dogfight from independent tire dealers who have faced such threats before and risen to the challenge.
Still, the Ford experiment deserves tire dealers' full attention, as another huge competitor tries to grab part of the retail tire business.