However, implementing new systems created a positive experience for the company.
“Our service really, really came alive. We found a new way to track productivity,” he said, adding the new systems significantly helped his crew and they saw a nice uptick in profitability.
Looking to 2017, Mr. Parmenter said he is always optimistic.
“‘Knowing this business and watching it, if tire prices go back up, I think it'll be a good year,” he said.
Many of the company's competitors are not focusing on the New York State market, which has helped the business.
“There are a ton of opportunities out there to take a hold of,” Mr. Parmenter said.
Economic factors
Tire dealers said they are not expecting economic issues to affect their businesses negatively in 2017, with several predicting that, if anything, it will be positive.
Messrs. Benton, Mitsos and Parmenter said they believe that Donald Trump's presidency could lead to a strong year for the industry.
Mr. Mitsos called the local economy in Southern California “very strong,” adding, “we have low unemployment, appreciating home values and continued population growth. With a pro-economic administration about to take control of the country, I cannot help but think excellent times are ahead.”
He noted that the only things that may continue to impact Mountain View Tire negatively include further government intrusion and mandates by the state of California. Mr. Luppino, however, said that while there are issues impacting dealers at the state level, everyone has to deal with them, making them non-issues.
Mr. Parmenter suggested that truck emissions may see some relief under the new administration based on some of the cabinet members named to date, but only time will tell what happens.
As far as the general state of the economy goes, Mr. Parmenter said he does not let it take too much of a hold on the business.
“I don't let it affect us,” he added. “You hit a bump in the road and keep going.”
He said in his area, his company is normally the last to see any trends because “trucking in New York is here by necessity.”
One area he is keeping an eye on in the new year is the natural gas industry, which has been a source of growth for his company and is showing signs of ramping up even more.
Technology
Beyond changing economic conditions, technology has become a factor in how dealers are reaching their customers.
“Now more than ever we must provide a level of service experience that engages our communities, as well as provide a positive culture within our enterprises,” Desert Car Care's Mr. Leutz said. “Additionally, our ability to meet the consumer where they are at in terms of communicating through video, social media and live streaming is key.”
Beyond communication, Mr. Leutz said a significant factor for his back-shop operations and productivity has been using digital inspections, operating with the Bolt-On Technology tablet system. It creates an effective way to communicate inspections to clients, including photos of required service repairs and maintenance through text or email.
“We let our clients know in advance that they will be receiving a text or email of the inspection so they can make an informed decision,” he added.
Tire purchasing also is evolving. Online tire sales have emerged in the past couple of years and found their place in the market.
Mr. Luppino said while there are discussions about online tire sales, it is not something tire dealers can do anything about. However, he said he doesn't think it's had a significant impact on business.
Mr. Mitsos said he also has seen online tire sales impact his business, increasing month over month.
“When the (Goodyear) program first began 18 months ago, we were seeing three to five transactions per month,” he said. “We are now seeing 10-12 transaction per month.”
Emerging trends
Tomorrow's tire market will see continued size proliferation and an uptick in the replacement tire and repair market, as well as complementary business, like accessories, some dealers believe.
Mr. Luppino said at least 60 percent of tire sales at his company's stores are premium fitments. He credited the increase in premium sales to the strength of the economy.
Additionally, the larger rim sizes are “really proliferating, especially in crossover sizes,” he added.
This rings especially true for 17-inch sizes and above. Mr. Luppino said he finally sees that business coming back because of new car sales in the past four years. These vehicles are now coming into the shop for replacement tires.
Size proliferation can prove troublesome for some dealers, who find it more difficult to keep tires in stock that will allow them to serve their customers effectively.
“Size proliferation continues to be problematic in that it is getting more and more difficult to have the right tire at the right time for our customers,” Mr. Mitsos said.
Mr. Benton said he has seen more sizes, more SKUs and inventory turns on high-end products are slower. “(We) just need to find more ways to increase profitability for the dealer channel,” he added.
Tire sales is not the only sector of the business that has shifted. Beyond a significant increase in tire units, Mr. Luppino said his accessory business has grown as well.
“The interest level in that part of the business is higher than its been in years,” he added.
Mr. Leutz said that his business has seen an increase in TPMS faults and failures. He credits the boost to vehicles needing new systems because their original set has hit its average shelf life of about five to seven year
