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Published on October 19, 2009

Stay sharp, AAA's on the scene (Oct. 12, 2009)

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Opinion

AKRON (Oct. 12, 2009) — For years tire dealers have heard the mantra: "You need to get into the service business to survive."

But recent events in the retail tire market are indicating a new trend: Non-traditional companies and organizations looking to diversify and compete by getting into the tire business.

One of the most unusual of these is the pending acquisition of Bob Sumerel Tire Co.'s 30-store retail tire unit by the AAA affiliate for Ohio, West Virginia, Kentucky, Virginia, Kansas, Indiana and Connecticut.

This apparently is the first time a regional AAA affiliate has delved into the tire business in such a measurable manner.

But it's not the first case where an AAA affiliate has entered the service business. In the Carolinas, a AAA affiliate has built a network of 26 auto service outlets, and supposedly other AAA clubs are doing the same.

In explaining the Sumerel purchase, AAA Allied Group Inc.'s CEO James Pease III said the dealership's "operations and culture align perfectly with AAA, affording us the opportunity to expand services, value and benefits to members."

AAA Allied said it plans to expand the chain, and even is considering adding AAA travel services to selected Bob Sumerel Tire locales where it makes sense.

For tire dealers, this interest in tires by non-traditional companies and entities has the potential, over time, to change the face of tire retailing as well as heighten competition. Already dealers are seeing thousands of new-car dealerships taking a serious interest in tire sales. Some franchised auto dealerships also are looking at adding independent garages within their service operations to attract customers with cars out of warranty, no matter the make.

And in the Cincinnati-based AAA affiliate, dealers now have a competitor with more than a million loyal members to whom AAA can market and communicate to regularly.

Independent tire dealers must not let their guard down as the retail tire industry churns.

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