Hoosier Racing Tire Corp. is discontinuing its Hoosier brand passenger and light truck tire line due to dwindling margins and a general contraction of tire lines within the industry.
Hoosier initially launched a Hoosier brand street tire in the early 1990s in a cooperative deal with Continental General Tire. At that time, CGT made the Hoosier Performance Radial line and handled its marketing as well.
In early 1998, Hoosier decided to take over distribution and marketing control of the brand. At that time it terminated the agreement with CGT and signed a 10-year supply deal with Kelly-Springfield Tire Co. for a full line of Hoosier brand premium passenger and light truck tires in 140 sizes.
But on Sept. 24 Lakeville-based Hoosier issued a statement saying it ``had to face facts'' that its Hoosier line wasn't achieving the market penetration it needed, and it was time to ``move on.'' The company said the decision would help it to grow stronger because it will now focus on its core business of manufacturing and selling race tires.
``Our company is still going to be strong,'' said Shanon Rush, sales manager for Hoosier Performance Tire, a unit of Hoosier Racing. ``Hoosier Racing Tire is still going full strength, and that's our main business any way.''
Hoosier Racing participates in the Automobile Racing Club of America series, the United States Auto Club, the Winston West series, the Grand Am Club series, two NASCAR series, drag racing and road racing, among others, according to Mr. Rush.
He declined to discuss how much in sales Hoosier would lose by exiting the performance tire market or how many units the firm has sold per year. He said he didn't know how many tire dealers would be impacted by the exit.
A decision on what will become of Hoosier Performance Tire also hasn't been made yet, he said.
However, the Hoosier Pro-Street DOT Radial tire line for street-rods will be unaffected by the decision to discontinue the Hoosier Performance Tire line, the company noted on its Web site, adding that the tires are designed for highway use and are not suitable for racing.
Goodyear, the manufacturer of Hoosier street tires, will assume control of the remaining inventory and will continue to honor the limited warranty. A Goodyear spokesman noted that the remaining inventory wasn't extensive and that the decision will have ``very minimal'' impact on the Akron tire maker because Hoosier's sales volume was so low.
Hoosier had tried to develop a different way to go to market, Mr. Rush explained, and it wasn't so much that race fans didn't want to buy the Hoosier brand as it was hard to convince dealers to come and do point-of-sale promotions at the race tracks. He said many dealers were so busy moving their existing tire lines out that it was hard for them to find time to develop a sales program for the Hoosier line.
``That's where we struggled the most: getting dealers to see the overall picture and investing their time in developing the market,'' Mr. Rush said. ``We did our best by trying to steer them with that, but it just didn't catch on.''
One tire retailer/wholesaler that has successfully sold Hoosier tires, Ben Tire Distributors Ltd. of Toledo, Ill., is disappointed over the news of Hoosier's exit, said Chuck McLuckey, Ben Tire president and chief operating officer.
``It was a good profit opportunity. We were making very good margins on that because it was exclusive,'' Mr. McLuckey said.
Ben Tire plans to move out all remaining Hoosier inventory by year-end before it decides on a brand to replace the line, Mr. McLuckey said. ``The fact it's disappearing means that the consumers who were buying it will go somewhere else, and we'll just have to find another product to fill their needs.''
Mr. McLuckey said Hoosier's decision shouldn't affect Ben Tire's sales too badly since the Hoosier brand was mainly a ``step-up option'' that the distributor's dealers offered in addition to other private labels. He said that if Ben Tire had any problems, it would be converting to another line its dealers who were offering Hoosier exclusively.
Asked if Hoosier might ever return to the replacement tire market in the future, Mr. Rush noted that Hoosier President Bob Newton wouldn't rule it out. ``With Bob Newton, you never say no, because he's such an entrepreneurial spirit that if he decides to try something different and the timing is right, he'll do it.'' he said. ``But at this point, there's no immediate future for that.''
Mr. Newton also isn't looking back and regretting his decision to drop the street tire lines, he added.
``He's not one to dwell on the past. When something is done, he puts it aside and moves on and finds a way to make his other businesses better. He doesn't cry over spilled milk. He focuses on what's ahead, not what's behind. He sees it as an opportunity, not necessarily anything bad.''