What are 2004's hot aftermarket items likely to be? Tire Business asked some industry pros what was on their radar screens.
Tires are getting bigger, in more ways than one.
Santa may be one of the last males in North America (never mind the North Pole) whose ride isn't on custom chrome wheels and 20-inch tires.
Demand for super-sized wheels and tires is driven by the entertainment media, sports stars and motorsports-from traditional racing to the motor world's version of extreme sports such as rock crawling and drifting.
The auto makers have taken note. By 2005, a leading tire maker predicts 35 percent of all cars and light trucks sold in North America will be fitted with 17-inch or larger tires, one large Midwest wholesaler said. In 2003, the ultra-high performance market grew about 18 percent. This year, UHP is projected to increase by 16.7 percent.
Consumers feeling the need to run distinctive wheel/tire packages will confront a dazzling array of boutique wheels. ``Anyone who's been to the SEMA (Specialty Equipment Market Association) show knows that the entire segment of custom wheel and tire options is such that you can take three or four days exploring the possibilities and not see half of it,'' said Paul Fiore, director of business development for the Tire Industry Association (TIA).
Variety may be the spice of life, but Mr. Fiore warns that the explosion in wheels will force managers to make tough decisions. ``Specialization has to be a serious consideration. The dealers will have to make decisions based on their core capabilities-whether they want to continue to invest in training and equipment or steer themselves and their advisers toward the `dirty parts,' as they used to say-things like alignments, brakes, suspension and things like that.''
But a ``dirty parts'' strategy could mean some clean green, pointed out Tim Seehusen of Hopkins Firestone in Hopkins, Minn. ``I can't stress enough that you have to have the right equipment to take care of these large tires and wheels,'' Mr. Seehusen said. ``We just purchased a new alignment rack that can align a vehicle when you put these 24- and 26-inch tires on. They still hit curbs, they still have problems.
``I hate to say it, but the aftermath is where (dealers) make their money. The alignments aren't $49.99 any more. If you've got customers with 23-inch wheels, they are willing to spend $139.99 for an alignment.''
Solving an alignment or balancing problem is something not every shop is prepared to do properly and consumers, Mr. Seehusen noted, ``can't have it done on the Internet.''
There are some ``gotchas'' on the path to big wheel nirvana. ``The biggest problem is the balancing issue,'' he said. ``Vibrations complaints can usually be attributed to the wheel.''
More than half the wheel balancing work Hopkins Firestone does is on wheels and tires bought elsewhere. Again, having the best tools is essential. ``If you charge the right amount for the balancing, the equipment will pay for itself,'' Mr. Seehusen said.
Though not nearly as prevalent today, there are still wheel makers who don't ensure the wheel is hubcentric, he said. ``Five years ago if it had the right bolt pattern and fit on the vehicle, people wanted to buy them. And some dealers would sell them.''
He stressed the importance of finding a supplier with a good track record. ``Make sure you can get a hold of your suppliers and it's not someone who's switching brands and styles every two months.''
Dealers need to keep in mind that if the wheel is damaged or stolen, they may be dealing with an insurance company and a replacement could be difficult or impossible to find. Mr. Seehusen said he's known suppliers so conscientious that they gave the consumer a set of new wheels when an original style wasn't available.
``And there's one very, very big thing,'' he added. ``By 2005, all vehicles will have air pressure sensors in the wheels. One problem we have is making sure that the wheel your customer wants adapts to the original air pressure sensors.''
Insurance packages for upscale wheels and tires can be another profitable plum.
``There are people out here now selling warranties like you get with your washer and dryer,'' he explained. Hopkins has been selling VMS Tire & Rim Protection.
Mr. Seehusen provided an example of how the product works and why it's attractive to both customer and retailer. On a set of four wheels and tires that cost from $3,604 to $4,800, the VMS insurance costs the customer $174.99.
That charge, a fraction of the total investment in high-style running gear, isn't a difficult ``sell'' since the warranty will either pay for repair of the tire or wheel or reimburse the customer if the tire or wheel cannot be repaired, he said.
The beauty of the insurance is that the shop doesn't have to pay for the warranty until the end of the month (the dealer's cost of the policy used in the example above is $100).
``You have no investment in your sale,'' Mr. Seehusen said. ``You get the money up front and then, when the customer has the problem they're directed to come back to you. The customer pays you for the new tire or wheel and they send the receipt to VMS for reimbursement.''
Other tire merchants have profited from supplying auto dealers and working with racers and sanctioning organizations. Ken Towery Auto Care Supercenters, an operation of 16 retail stores in and around the Louisville, Ky., area, is supplying a General Motors Corp. dealership with the Goodyear Eagle LS in size 275/55R20. It is one of the plus-size tires recently approved by the auto maker that can be installed without an adverse effect on the vehicle's warranty coverage.
Other manufacturers are gun shy. ``The Ford dealers have been real skeptical,'' said Dave Wilson, who runs Towery's wholesale division. ``They're scared to put anything on over and above the factory wheel and tires.''
Ken Towery Supercenters will team with Kumho Tire to sponsor some regional Sports Car Club of America (SCCA) races, Mr. Wilson said. Customers drive everything from Ford Focuses to Porsche 911s and Corvette ZO6s to Subaru Impreza WRXs. A performance enthusiast, Mr. Wilson said he's eager to check out a new Kumho DOT-approved performance tire that has one groove on the inside third of the tread.
The venerable strategy of ``race on Sunday, sell on Monday'' apparently works with tires too.
Mr. Wilson said he's eager to check out Kumho's new V710. Although DOT-legal, the V710's two grooves are a slick statement that the tire is intended for serious enthusiasts who use their cars for club racing, auto-crossing or high-speed driving courses. And with a 4/32-inch tread depth, the tire doesn't need to be shaved for competition.
Major league Mustang drag racing thrives in the area. Mr. Wilson said the Beach Bend, in Bowling Green, Ky., hosts the Fun Ford World Finals. They move considerable numbers of BFGoodrich G-Force drag radials in 275/40-17 or 295/50-15 sizes.
And last year they even sold 250 temporary spare tires to drag racers who use them on the front ``as it weighs nothing.''
Fair weather isn't the only driver of aftermarket sales, he adds. ``We've had more calls this year for snow tires. Here in Louisville, we don't usually have a big winter per se, but this year people are calling up asking for them by name-particularly the Bridgestone Blizzak. So someone's doing a good job of marketing.''
Snow tires aren't an issue for the seven Gatto's Tires & Auto Service stores in the Melbourne, Fla., area. Although Mike McHenry, manager of the Merritt Island shop, said Gatto's is considering ``getting into body kits or K&N air filters and some of the other things you can make a little bit of money doing,'' the focus remains service and general automotive repair.
``This area tends to be more retirees. There's generally an older crowd up here. They're big on preventive maintenance,'' he explained. ``They usually have some more discretionary income so they can go ahead and do preventive maintenance.''
Offering coupons on the dealership's Web site and special discounts to a local credit union has been helpful, and Mr. McHenry said he definitely sees potential in aftermarket tire pressure monitoring systems like the ones recently evaluated by the Consumers Union, publisher of Consumer Reports magazine.
With the Kennedy Space Center and two Air Force bases nearby, quite a few engineers and other tech-savvy consumers live in the area, he said.
Northwest Tire Inc. already is selling monitoring systems. ``We sell the RoadSnoop. You check the air pressure while driving,'' said Tony Vetter, head of the Bismarck, N.D., company.
Mr. Vetter said he decided on the Nokian Tyre P.L.C. product because he figured that since Nokian's former parent company Nokia Corp. is a wireless phone manufacturer, the safety device would be reliable. Northwest's eight retail stores sell the monitor for $199.95 with a tire purchase or $249 without.
One of the markets Northwest Tire courts is recreational vehicle owners who exhibit at motorhome shows and take part in organizations such as the Good Sam Club. ``The No. 1 thing is, you've got to service it properly,'' Mr. Vetter said. ``You've got to know, or learn, the business and understand how these retired people work.
``Surprisingly, you can sell quite a few tires. These people drive only 10,000 to 20,000 miles a year, but generally their income is high and they're not going to take the chances of a blowout, so they'll just go ahead and almost always replace it.''
(Mr. Vetter is convinced that all used tires, especially from motorhomes, should be cut and thrown away. ``They're already old, and we cannot afford the liability.'')
All of Northwest's retail stores can handle the big RVs. At some locations, ``we've sunk our hoist in the ground and that way you can drive the motorhome straight in,'' Mr. Vetter said.
``We can do exhaust, oil changes, wheel alignments. And it makes it real nice for the service men,'' he added.