AKRON (Oct. 19, 2001)—Ford Motor Co.'s recall and ongoing replacement of 13 million Firestone tires earlier this year, while devastating to the company's balance sheet and reputation, has had at least one positive side benefit.
The recall, made for what Ford called safety reasons, has resulted in thousands of current and potential customers making their way into Quality Care centers at Ford dealerships around the country to get their tires changed.
Bill Holzheuer, tire product manager of Ford's customer service division, suggested that getting consumers into the stores via the recall couldn't hurt in terms of getting them to return in the future.
“With the Firestone tire replacement program, ensuring the safety and trust of our customers is Ford's No. 1 priority,” he said. “We hope that (vehicle) owners are satisfied with the service provided during the replacement program and that they think of their dealership as the right place to purchase tires in the future.”
Ford dealers say that while they aren't necessarily selling more tires yet in the wake of the recall, they agree with the idea that if consumers are going to Quality Care centers for tire-related issues now, they're likely to return in the future.
“Some I imagine will come back in the future,” said Bob Arnold, service manager at Seminole Ford in Sanford, Fla. “That's what the whole (recall) is about.”
Bill Vann, owner of Albion Ford in Albion, Mich., said the addition of tires to the Quality Care service program three years ago has been a plus in general, but the recent recall also has further enhanced tire sales.
“The recall has taught customers they can go to Ford dealers to buy tires,” he said. “The recall has taught Ford dealers how to sell tires in high volume.”
Steve DaTillo, parts and service manager at John Nolan Ford in Cincinnati, said business has increased somewhat, but not dramatically in terms of tire sales.
In the wake of the recall, Ford Quality Care centers may be able to capitalize on the fact that many people get their vehicles repaired at the place where they buy tires. According to General Motors Corp., an estimated 75 percent of consumers have their cars serviced at the same place they purchase tires. The company also has found that by the third year of ownership, 59 percent of car buyers are going to shops other than their auto dealerships for service. So it's easy to see why car dealers would want to foray into the world of tire selling.
Ford, as part of its 3-year-old Around the Wheel program, is selling tires through 80 percent of its dealerships, or approximately 4,000 outlets. Mr. Holzheuer said that in 2001, Ford, Lincoln and Mercury dealers will replace in the neighborhood of 8 million tires.
Ford began selling tires in 1999, moving 1.3 million units that year and 2.2 million in 2000, a Ford spokeswoman said. In 2002 (with plans for the replacements of recalled Firestone tires to be completed by year-end 2001), Ford expects its dealers will retail between 2 million and 3 million tires, Mr. Holzheuer said.
He did not say if Ford is benefiting in any way from the recall, regardless of how many new customers it may be bringing into its dealerships. He also emphasized that Around the Wheel is not merely about tires, but includes servicing of brakes, shocks and struts. Tires, he said, merely support the program. “Our dealers are in the business of servicing customers, not just selling tires.”
Ford's Quality Care centers sell Goodyear, Continental, General, Pirelli, Michelin, BFGoodrich and Uniroyal brand tires. Conspicuous in its absence from that list is Firestone. Shortly after Ford's recall of the Firestone Wilderness AT tires, Bridgestone/Firestone Inc. severed ties with Ford, for whom it was an original equipment supplier, ending nearly a century-old relationship. Mr. Holzheuer said that prior to that, Firestone products were available at Ford dealerships but “unfortunately, due to the actions of this spring and summer, they are no longer in our lineup.”
Ross Kogel, executive vice president of the Tire Association of North America, believes the day is coming when tire sales at car dealerships are the norm. Most auto makers, if not already involved, are at least “visiting the idea” of selling tires. “Anybody entering the market is going to increase the level of competition,” he said. “From an association standpoint, we are preparing dealers for this kind of change in the market.”
That said, Mr. Kogel also noted that at this point auto dealers selling tires haven't put much of a dent put in the market. Quoting TANA figures, he said car dealers account for just 1.5 percent of replacement tire sales.
Nonetheless, Mr. Kogel believes tire dealers must stay proactive and prepare for a time when car dealerships' service centers become major players in the replacement tire business. With Ford and GM already selling millions of tires, other manufacturers are likely to follow.
“The bottom line, at least from TANA's perspective, is to make sure members have the information they need to compete,” Mr. Kogel said. “Clearly this is a market shift in the past five years.”
Bill MacLear, merchandizing manager for GM Parts, told Tire Business earlier this year that Ford's Around the Wheel program served as a model for GM's recently introduced “On-a-Roll” program. Early results from that venture no doubt will spur other auto makers to follow suit.
On-a-Roll, which began the year as a pilot program, already has 1,150 Goodwrench dealers participating. GM hopes it will sell 900,000 tires in its first full year of operation with a minimum of 1,800 dealers, Mr. MacLear said. On-a-Roll pilot sites saw increases of between 83 and 170 percent in repair order growth, Mr. MacLear said. The program offers Continental/General, Goodyear, Bridgestone/Firestone, Michelin, Uniroyal and BFGoodrich brands.