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Published on March 9, 2001

Winter tires grow as profit niche

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Opinion

AKRON (March 9, 2001)—Independent tire dealers looking for an additional profit niche may want to consider offering winter tires during the upcoming snow season, if they don´t already.


In decades past, some dealers gave up on this market segment because front-wheel-drive cars and all-season tires made true winter treads seem less necessary to the average motorist.


But today the situation appears to be reversing, with more vehicle owners—particularly those with high-powered rear-wheel-drive cars—wanting winter tires to make their vehicles safer and more manageable in wintry weather.


This year, thanks to unusually heavy snows which began early last fall, many dealers in snowbelt regions sold all the winter tires they had.


The most recent shipment and production data compiled by the Rubber Manufacturers Association also illustrate how winter tire sales are growing.


In 2000, shipments of mud and snow tires to the replacement market inched up 1.3 percent to 8.77 million units from the year before to stand at their highest level since 1980.


Moreover, many of today´s winter tires offer respectable profit margins since they´re not seen by consumers as a commodity.


Luxury vehicles such as Porsches, Mercedes, BMWs and Jaguars usually have wide, low-profile performance tires that otherwise make them difficult to handle on ice and snow.


Owners of these vehicles are quality-minded buyers who know what they want when it comes to tires and will pay for higher-end products. For that reason, such tires offer promising profit potential for dealers.


Dealers who did well selling winter tires this year were those who had them in hand and on display when the first snow fell.


Most also had aggressively promoted winter tires in various media. Many also offer wheels for customers who refuse to subject their expensive custom wheels to winter´s salt and grime. A few even store customers´ extra tires and wheels during off-seasons.


With many dealers looking for ways to increase profits, winter tires are a market niche that should not be overlooked.

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