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TPMS service = sales potential

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Many tire dealers probably haven't thought much about the growth potential for servicing tire pressure monitoring systems (TPMS), but a speaker at the recent International Tire Exhibition & Conference (ITEC) in Cleveland thinks this service segment will become the single largest percentage growth category for dealerships and auto repair shops over the next 10 years.

That doesn't mean servicing TPMS will offer the biggest dollar growth, Trevor Potter of Schrader Electronics Inc. said, but it will be a healthy segment to capitalize on some increased sales, nonetheless.

Driving this upward trend is the fact that the batteries used in early TPMS systems are nearing the end of their useful life, opening up an entirely new service opportunity.

The investments dealers make in tools and sensors needed to service these systems will pay off, Mr. Potter said, as the numbers of sensors failing grows more rapidly.

That was just one of the gems of information dealers heard in seminars during the three days of ITEC 2012, which is produced by Crain Communications Inc. and its publications Tire Business and Rubber &
Plastics News.

Here are some other tidbits:

c The healthcare law, commonly known as “Obamacare,” won't face a total repeal, no matter who wins the White House in November, predicted Martin Hauser, president of Akron-based SummaCare Inc. Most of what has happened in implementing the law in 2011 and scheduled for 2013 is here to stay, he said, adding the law remains a work in progress.

c Dealers had better get up to speed selling high-performance and ultra-high-performance tires or they could find themselves eventually going out of business, according to a participant on the High-Performance and Light Truck Tire Panel. For those dealers who market themselves as HP tire experts, there is significant profit potential, the panelists agreed.

c Don't expect U.S. tire shipments this year and beyond to match the levels recorded in 2007, the best year in the 2006-2011 period, said Dennis Byrne, professor emeritus of economics at the University of Akron. Part of this is due to the difficult world economy, but also that there are many technologically advanced countries in the world today. Tires are a technologically advanced product, he said, and every developing country will develop a tire industry.

Prices of tires are going up, he added, “but in terms of real growth, tire shipments don't match what they were five years ago.”

c About 60 percent of the growth in the world over the next 20 years will happen in Asia, said Dr. Enki Tan, executive chairman of Singapore-based Chinese tire maker GITI Tire Co. Ltd., in his Tire Society keynote address at ITEC. He expects China to produce about 16 million to 18 million cars annually over the next few years vs. 10 million to 11 million in the U.S. This will lead to higher demand for vehicle replacement parts in China.

More on these subjects and other ITEC seminars are in this issue of Tire Business and on our website at www.tirebusiness.com.
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