TEQUESTA, Fla.—The website of the Independent Tire Dealers Group L.L.C. (ITDG) leads off with these words: “Teamwork is the key to our success.”
In its 21st year of business, Tequesta-based ITDG continues to live up to its motto, which is especially poignant after the group opted out of a business arrangement with the internationally active Point S organization after three years of trying to find common ground with Point S's portfolio of programs.
As of June 1, the buying group boasts 145 members, 97 of them shareholders, with more than 560 locations in 41 states.
Offering collective buying power to small dealerships, ITDG has strategic partnerships with 18 tire manufacturers and distributors, four equipment companies, 16 petroleum and auto parts distributors, five shop supply dis-tributors, nine wheel and wheel accessory suppliers, 10 marketing and advertising firms, three suppliers of miscellaneous office items (including uniforms), and the Car Care One credit card program, according to the ITDG website.
“We're lean and have decades of industry experience that have led to very low operational expense but very large profits for our members and owners,” the website states.
In 2014, those profits brought $7 million in volume bonuses and dividends to ITDG members and shareholders, said ITDG President and CEO Mike Cox in a Tire Business interview earlier this year. Over the past decade, he said, total disbursements exceeded $47 million.
The first half of 2015 has lived up to expectations, and there's every sign that ITDG will continue to grow in the year's second half, according to Mr. Cox and Ed Long, ITDG executive vice president of sales and marketing.
“Our near goal is to hit 100 shareholders, and that will happen by the end of the year,” Mr. Long told Tire Business in an interview for this section.
ITDG's major accomplishment so far this year, Messrs. Cox and Long said, is simply to continue on a strong business path—providing better discounts and more strategic partnerships for its members, and also attracting new members.
The only minor problem ITDG is facing, they acknowledged, is the prospect of antidumping and countervailing duties on Chinese passenger and light truck tires. Because of the uncertainty surrounding their supply, ITDG put an exclusive supply arrangement with Husky Tire Corp. for the Diamondback brand on hiatus at year-end.
Triangle Group, the brand's manufacturer, was hit with the highest duties categories—adding up to more than 100-percent penalty.
Even then, Chinese-sourced tires amount to less than 5 percent of the $200 million-plus in purchasing ITDG does every year, and the company has many strategic partners among tire makers and distributors that can take up the slack, they said.
Since then, Mr. Long said ITDG has struck a deal with Crown Tyre Industrial Co. Ltd. for the Gremax brand. The group has started importing the brand in passenger and SUV styles and sizes, he said, with light truck fitments due to start arriving in June.
As ITDG's territory has moved into the Northeast, the Rockies and other snowy areas, winter tires have increased steadily as a part of ITDG's business, Messrs. Cox and Long said, adding “time will tell” if that segment continues to increase.
ITDG's bottom line shows a steady trajectory of growth since 2003, and Messrs. Cox and Long predicted that 2015 will be the best year in the company's history.
“I don't have a crystal ball,” Mr. Long said, “but if things stay steady, we should have a repeat in 2016.”
Regarding the dissolving of a Point S franchising agreement ITDG signed in November 2011 with Point S Development, Mr. Long said the “anticipated synergies between the groups just didn't materialize,” and therefore both parties agreed to end the deal.
From the beginning ITDG had singled out Point S's proprietary tire brand program as a key element, but it turned out that program was a bit too Euro-centric and didn't offer enough SKUs suitable for the North American market, he said.
At the same time, one of Point S's core business principles is to get the Point S name into the retail arena. Mr. Long said a large percentage of ITDG's members were decidedly cool to this idea, since they felt they already had strong brand recognition in their respective markets.
With the ITDG agreement annulled, Tire Factory has joined the Point S group, (see story on page 1) and plans to rename the 200-plus Tire Factory locations in the coming 18 months.
To reach this reporter: [email protected] crain.com. Bruce Davis, Tire Business staff, contributed to this report.