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June 14, 2013 02:00 AM

U.S. AutoForce still lightly treading the course

Miles Moore, Senior Washington Reporter
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    U.S. AutoForce photo
    Randy Groh, vice president of product marketing, U.S. AutoForce,

    COMBINED LOCKS, Wis.—The tire and auto parts market in 2013 is doing just about what Randy Groh, vice president of product marketing for U.S. AutoForce, expected it to do.

    However, Combined Locks-based U.S. AutoForce—auto parts wholesaler and owner of the Tire One marketing group—is outpacing the market, according to Mr. Groh.

    "We're definitely up this year," he said. "Even without considering our acquisitions, we're seeing gains in sales."

    The company has broadened its product offerings, which accounts at least in part for the stronger sales, Mr. Groh noted.

    "We've invested a fair amount in new inventory, especially into agricultural, commercial and specialty tires," he said. "A lot more of our emphasis in the past was in passenger cars and light trucks."

    U.S. AutoForce, a unit of U.S. Venture Inc., has been expansion-minded recently. During the past year, the company acquired the wholesale assets of five Midwestern tire dealerships—Foree Tire Distributors, Midstates Tire Distributors, Schiebout Tire, Shumaker Tire Inc. and Waukegan Tire.

    These acquisitions brought the company eight new warehouses and expanded its distribution territory into Colorado.

    Prior to this, the company acquired the Tire One retail marketing program in its 2011 purchase of the wholesale business of St. Cloud, Minn.-based Royal Tire Inc. and last year revamped the program to focus more on each dealer's individuality.

    The Tire One program under AutoForce has grown to more than 360 affiliated dealers throughout the program's five state marketing area.

    Judging from what U.S. AutoForce's suppliers tell the company, the replacement tire market is pretty much flat—with an overall trend toward a slight increase—and likely to stay that way, according to Mr. Groh.

    "Everybody has to fight for everything they get," he said. "It's easy to make money when you have explosive growth, but when things stay the same, it gets challenging."

    Tire One is an ongoing success story, but there are no plans for any new promotions or programs through Tire One this year, Mr. Groh said.

    "Within Tire One and other groups, we often try to get exclusive consumer promotions. We had some planned in the spring for some consumer brands, but when they saw how badly the market was performing, some suppliers decided to do national programs instead."

    To attract business, some suppliers are offering specials in certain product segments, particularly in performance and compact utility vehicle tires, Mr. Groh said.

    Recently, the aftermarket has started to skew toward parts for older vehicles, he added.

    "When the recession started, the new vehicle market dropped to 10 million units per year, from a peak of 16 to 17 million," he said. "We're starting to see the effects of that."

    However, that effect doesn't extend so much to tires, he said. "New cars are just as valid in the replacement market as older ones."

    Mr. Groh also is president of the Tire Industry Association (TIA). Meeting tire dealers at the Global Tire Expo in Las Vegas — as part of the Specialty Equipment Market Association's annual trade show there — and at state dealer conventions, he said, two issues have tended to dominate conversations.

    The first, he said, was the rapid growth of Chinese imports in the months after the Obama administration lifted its three years of raised tariffs on Chinese-made tires. The second was the question of tire age and what constitutes a safe tire life.

    At a recent international tire show in Italy, BIPAVER, the European retreading association, made a presentation about its thoughts and recommendations on tire life. Mr. Groh attended the presentation, and said he expects to see BIPAVER's report soon.

    _____________________________________________

    To contact this reporter: [email protected]; 202-662-7211.

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