AKRON—Fuel prices and interest rates are up and stock prices are down. That makes many of the respondents to the latest Tire Business Fax/E-Poll anxious about business in the next few months. Two-thirds of the 34 respondents said business was off in April compared with a year ago. Most dealers reported sales drops in the 5- to 10-percent range, but Charles Balmas, owner of C&L Distributing in Monett, Mo., reported a sharp decline—39 percent in April.
C&L is a wholesale distributor to about 50 dealers in southern Missouri and northern Arkansas.
"It's a little strange this year," Mr. Balmas said. Sales for March and the first quarter were up, he said, but in April "business was off every place." Mr. Balmas predicted that business will continue to slow during the summer.
Michael Cook of Bergey's Inc. in Hatfield, Pa., said, "April was a very soft month." Bergey's April sales dropped 10 percent, he added, but May was much better.
"Something funny is going on," said Andy Moser of Moser Tire Service and Auto Parts in Kouts, Ind. "Business is not as brisk as we are used to."
Moser's April sales were slightly better than last year, but Mr. Moser predicted business will continue to slow down. "It's (the slowdown's) universal—tire dealers, auto dealers, service shops and general repair," he said.
Two-thirds of the respondents also said they expected a general business slowdown in May and throughout the summer. However, Ronald L. Krise of Krise's Tire and Auto Service Center in Troy, Pa., was more upbeat.
"So far this year, sales have been strong and better than last year's first quarter," he said. Krise's Tire sales were up in April and Mr. Krise rejected the notion of a slowdown this summer.
Tire Business also asked dealers if they have seen any evidence that tire makers and/or suppliers are discounting prices to stimulate sales. A quarter of the dealers reported discounting activity so far, and another 51.5 percent said they expect discounted prices later this summer.
Most of the major manufacturers have announced price increases this year, but many such increases have failed to stick in recent years.
"My Goodyear rep says his sales to dealers are down," said Joe Kovac of Kovac Automotive in Fort Lauderdale, Fla. "I expect of see major pricing specials to move units."
John Warder at Richlonn's Tire in Racine, Wis., hasn't seen any discounting so far. "If we see additional discounts or programs," he said, "(they) would probably be local in nature—tied to a local promotion."
Sherry Clay Marcoe of Jeff Clay and Sons Tires in Kissimmee, Fla., said, "All indications are we are receiving price increases from all major suppliers." And she doesn't believe there will be any discounting through the rest of the summer.
Brian Kelly of Pro Tire Service in Columbus, Ohio, doesn't believe manufacturers will need to discount prices to move units. Tire prices to consumers will continue to remain static because of dealers.
"Too many people will drop their price instead of selling the true value of the tire," he said. "When will it end?"