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May 10, 2004 02:00 AM

TB survey results at a glance

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    Each year, in conjunction with the publication of Tire Business' directory of private brand tire marketers, we survey those companies, asking several questions about issues impacting the industry.

    Based on survey responses, we gleaned the following top-of-mind concerns:

    * Tire pricing: Most marketers have experienced increases in tire prices over the past 12 months due, to a large part, to the continuing rise in raw materials and labor costs. Opinion was mixed on whether the price hikes are sticking, but many companies have been forced to pass on the increases to their customers. A number of firms expect price hikes to continue during 2004.

    American Tire Distributors Inc., for instance, noted that its ``pricing structure links directly to that of the manufacturers. If a manufacturer takes a price increase, we pass along the increase to our customers.''

    While classic tire marketer Vogue Tyre & Rubber Co. in Mount Prospect, Ill., has not increased prices in the past 12 months, it expects pricing spikes to continue, although it said tires are fetching ``commodity'' prices.

    * Brand positioning: A number of marketers-often the larger companies-see a distinct role in the marketplace for both flag (or manufacturers') brands and private label tires.

    A specific niche marketer, such as Foreign Tire Sales Inc., which handles several brands made by off-shore manufacturers, noted it vies for a ``premium position'' for its import products.

    Marketer of the Mohawk brand Friend Tire Co., a subsidiary of Yokohama Tire Corp., reported flag-brand sales are increasing, while ``the spread between major brands and private brands is getting smaller.''

    Treadways Corp. in East Norriton, Pa., said offering brand exclusivity ``has increased in value to the independent tire dealer, particularly wholesale.''

    * Dealer support: Most marketers offer several avenues of support for their dealer customers, ranging from brochures, billboards, newspaper ads, wearables, co-op advertising programs and point-of-sale material, to a marketer-operated Web site. Some companies-again, most often the larger ones-also have a Web site where dealers can do online ordering and, in some cases, track their orders via the Internet.

    * Profit margins: Results were mixed in 2003, with several companies reporting margins increased or decreased slightly or remained flat vs. 2003.

    President Tire Canada said a decrease in margins was due to a ``more competitive market.''

    * Other factors impacting private branders in North America: Treadways Corp. predicted ``as consolidation/elimination of brands occur, the surviving (firms) will strengthen their market position.''

    Universal Cooperatives Inc., the Eagan, Minn.-based farm co-op, said ``low-cost manufacturer house brands'' have affected the private label marketplace.

    Tirex International Inc. probably summed up what a number of marketers believe: ``Too much competition from China.'' Ironically, the Coral Gables, Fla.-based firm sells several import and private brands-manufactured in China.

    - Compiled by Sigmund J. Mikolajczyk

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    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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