AKRON (May 25, 2009)—Tire dealers concerned about what the future might bring as the recession drags on should take note.
While sales may be down, especially in tires, there are many reasons to be optimistic.
A recent study by Lang Marketing Resource Inc. explains why. It found that as the number of service bays in the U.S. is dropping, the population of vehicles on U.S. roadways is rising.
This isn't just by a small percentage. The research firm estimated there are 30 percent more cars and light trucks for each service bay compared with 10 years ago.
Lang describes this ratio as “near-crisis level,” due to the growing sophistication of vehicles in operation and the rapidly increasing age of vehicles.
Add in the recently announced decisions by General Motors Corp. and Chrysler L.L.C. to eliminate more than 3,000 auto dealerships over the next few years and it's easy to see why the marketing firm sees things as so dire.
But what's gloom and doom for one group is opportunity for another.
Tire dealerships and other independent shops seem to be in a perfect position to capture this growing demand for tire sales and vehicle service.
But dealers can't take this potential business for granted. They should expect to see intense competition not only from within their own ranks but from others in the automotive field.
At the recent gathering of its Retail Group in Orlando, Fla., TBC Corp. executives spoke about how the bad economy and competitors' problems have created the “perfect storm” in which to operate.
They cited the thousands of car dealerships closing, the corresponding reduction in service bays and the availability of highly qualified automotive service technicians.
And they mentioned how consumers have become better informed and more value conscious, and how higher gas prices and the rising age of vehicles, for example, are working in TBC's favor.
There are “incredible opportunities” in the U.S. consumer aftermarket to “steal share,” TBC's CEO said.
Likewise, auto dealerships impacted by the downturn of GM and Chrysler aren't likely to stand still.
One local car dealership in the Akron area, for example, has opened its own tire store as a way of capturing its used car customers and keeping them in house.
Even in this tough and on-going recession, opportunities are there for those who grab them.