When T. Beroth expanded his tire business to include high-performance tires, the dealership was selling a full range of tires.
Except he had one niche to fill-an entry-level ultra-high performance tire.
``That's why I took on the Linglong brand-because I was missing some of that business,'' said Mr. Beroth, co-owner of Mock/Beroth Tire & Automotive Group, which operates 13 stores in North Carolina. Linglong is the first Chinese tire brand his dealership has offered, although he also sells Korean-made Kumho tires.
Mr. Beroth, like other dealers, positions the low-cost Chinese brands as a ``value'' tire in their offerings because they can price it low and still make a good profit margin.
A low-cost tire isn't hard to sell, no matter where it comes from, according to some dealers, but price isn't the only factor that sells an unknown Chinese or Asian brand.
``Customers are influenced greatly by (how) our people represent what they're selling,'' said Dave Simas, COO of Northwest Tire Factory Group. ``Our people have confidence in the product.''
He noted that a regional survey of tire customers showed more than half of tire buyers don't know what tire brand they have on their vehicles.
Dealers can sell any brand of tire, he said, as long as they communicate confidence in the quality of the product and offer a warranty to allay any durability concerns.
``Most consumers put trust in the dealer's recommendation more than the name on the side of a tire,'' noted Dave Long, president of Reliable Tire Distributors' Spartan Tire brand. He said dealers can emphasize the quality and features of the product and tout it as ``an economical but high quality product.''
Mr. Simas, who recently visited China to tour some tire plants, said major Chinese manufacturers are working with modern equipment and technology and producing quality products. The low labor costs of the plants allow the Chinese to sell their products at very low prices.
He said his company positions its Chinese brand, Grand Tour, a step up from the low end in the good-better-best scenario. ``You make more profit with a `better' tire, which is what most people want to buy,'' Mr. Simas told Tire Business. And he noted that some Chinese tires look better than some of the other low-end tires, which makes it easier, from a visual standpoint, to place it as a mid-range tire.
``Sometimes when you put the cheap Chinese tire up against a cheap American tire, it looks better than the American brand. And there are so few adjustments (with the Chinese brand), it's easy for (dealers) to do a little juggling (in the lineup),'' Mr. Simas said.
``It's a quality product. You don't have to use it as a giveaway program,'' Mr. Long agreed.
Mr. Beroth said customers are attracted by the look of a tire, and some Chinese tires sport unique, eye-catching tread designs.
He and other dealers agreed that most consumers don't care where the tire comes from. ``We have some who wouldn't want anything from elsewhere (other than the U.S.). There are still some like that, but not like it was 20 years ago,'' Mr. Beroth said.
``I think the stigma is 90 percent gone-especially if they are saving a few bucks,'' Mr. Long added.
He said dealers should consider carrying Chinese brands because they allow the dealer to be competitive and have access to an entry-level price point product. And it enhances their profit margin.
However, Mr. Simas warned that dealers should know from whom they are buying as not all Chinese tires are quality products. ``With our size, we can be there and see the products being made and get a good comparison of products. There are some products that are marginal,'' he said. ``We make sure to check out who we're buying from. That can be a disadvantage for a small dealer. Hopefully their wholesaler checks it out. If they are not capable of screening, they may have problems.''
Yet, while the quality can be controlled, shipment reliability is another issue. Mr. Simas said shipments from his Chinese supplier can range from 60 days to six months.
Nonetheless, dealers can expect to see more Chinese brands in the future. Mr. Long predicted that over the next 36 months the U.S. tire market will experience a large increase in Chinese tires.
A related story is on page 1.