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Published on January 3, 2006

Dealers facing similar issues in '06



AKRON (Jan. 2, 2006) — Predicting the future is obviously an unscientific practice. That said, we're nonetheless going to crawl out on a limb and offer a forecast of what the new year might bring.

While we won't offer any money-back guarantees, knowing how rough and tumble the tire industry has been—and can be—it's a fair guess any number or all of the following could happen:

c Tire dealers will see a surge in tire imports, especially in the passenger and medium truck tire segments. China, already the No. 1 exporter of truck tires to the U.S., will continue its leadership position in that segment and will make further inroads on passenger and light truck tires.

Consumers already accustomed to buying foreign import products will have no trouble accepting these lines, as long as their trusted tire dealer recommends them and their quality is up to par with more well-known brands.

* The growth in the number of SKUs will continue to torment tire manufacturers, wholesalers and dealers alike. There seems to be no end in sight in terms of tire sizes, types and designations, let alone all the different brand names.

This increasing complexity will create both opportunity and headaches, particularly for wholesale distributors. That's why many of these firms will continue expanding their warehousing capacity and/or delivery fleets to keep their dealers stocked and happy.

* Tire makers will keep raising prices throughout the year to cover escalating costs—as long as dealers and other tire purveyors keep passing the increases on to their customers. As a result, tire companies, in general, will get healthier and dealers will have a good year.

* Dealers will begin seeing in their service bays increased numbers of vehicles fitted with tire pressure monitoring systems (TPMS). This will underscore the need for training, creating a surge in interest in the Tire Industry Association's TPMS training program for passenger and light truck tire technicians.

Savvy dealers will jump on the potential marketing benefits of their newly developed TPMS expertise, gaining additional respect from their customers.

* To succeed in the increasingly competitive retail tire and automotive service arena, more dealers will realize they have to differentiate themselves from the competition.

This might be through more personalized service, consumer-friendly store hours, expertise in certain areas, unique promotions, exclusive product lines, aligning themselves with events like motorsports or Hot Import Nights or whatever else makes sense in their local markets.

Whatever 2006 brings, we think tire dealers will adjust and do what it takes to retain their lead in the retail and commercial tire markets. That's been true almost since the development of the pneumatic tire.


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