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Published on January 3, 2000

Forecast for the new millennium

Thoughts as we enter a new century and a new millennium: Tire dealers will face a marketing onslaught from Internet competitors that could change the way a growing percentage of the public buys tires.

Tires still will be put on locally, and many customers will continue to have relationships with their local dealer, but a sizable population of customers will buy their tires via the Internet and then arrange to have them installed near home.

Dealers without an Internet presence could get left out.

Ford's efforts to turn its 5,000 auto dealerships into "America's newest tire stores" could work to the advantage of the independent tire dealer, in the long run.

Selling tires is complex, competitive and inventory-intensive, which the owners of Ford dealerships will soon find out.

Many likely will turn to local independent tire dealerships, with which they've had a relationship, to help them run this aspect of their business.

The biggest threat will come if Ford can buy tires at lower prices than what tire dealers must pay.

Tire fill rates should improve—in part, because they have no where to go but up. Makers will continue to simplify production by cutting marginal brands and sizes and adding capacity as needed.

Efforts to link major customers through intra-nets should speed up order entry and provide better data to forecast production demands.

Personnel issues will continue to plague tire dealers and retreaders. However, more groups will follow the example of the Arizona Tire and Service Dealers Association, which has established an apprenticeship program for automotive service technicians.

Besides providing training, such programs will enhance the public's perception of the tire and automotive service business and attract newcomers to the field.

Dealers will face a more limited choice of suppliers, as tire makers continue to link up for mutual benefit. But dealers will gain from the additional lines offered by these combined companies, such as Cooper Tire & Rubber Co. dealers now having access to the high-performance lines made by Pirelli S.p.A.

Tire makers will introduce more products designed to differentiate themselves from the competition, such as run-flats, puncture-sealing tires, colored tires and those that are more fuel-efficient.

Tire and wheel packages could become more prevalent at the original-equipment level, while Continental A.G.'s efforts to make the tire a key sensor component of the vehicle could take hold.

Retreaders will find their equipment options increasing but the cost of entry rising. Price competition will become more acute.

Change will continue at a fast and furious pace during the next century. Buckle your seats and get ready for a wild ride.

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