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August 02, 2021 10:30 AM

Short supply tightens light truck tire market

Joe Scalzo
[email protected]
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    The light truck tire market features an array of sizes, styles and brands, but there is one tire in particular that's been flying off the shelves this summer: The one that's in stock.

    "Because supply is so limited, people are like, 'What've you got? Sure, I'll take that,'" said Wyatt Pugh, vice president of Lakeway Tire & Service in Jasper, Texas. "I say that laughingly, but right now, some people aren't even scared to pay freight.

    "I've been doing this for 21 years, and there are a ton of people who have been doing this a lot longer than me, but I've never seen it like this. And I don't see the end in sight for a long time."

    Thanks to the reopening economy and an influx of government stimulus money — which includes unemployment tax refunds and early child tax credit payments — consumers are flush with money to spend.

    But supply chain disruptions have hurt just about every industry, including tires.

    Tire dealerships aren't quite at Henry Ford/Model T levels — "... any color you want as long as it's black ..." — but they're not far off.

    Nick Fox

    "At the beginning of the pandemic, stock issues weren't necessarily an issue for us," said Nick Fox, co-owner of Point S J&J Tire & Auto Service and Point S Capital City Tire & Auto Service in Helena, Mont. "But we really started to see it this year. Even though a lot of factories have opened back up, they're so far behind on filling back orders, it's hard to get stock."

    Light truck tire sales make up about 50% of sales at J&J, which offers Goodyear, Hankook, Nokian and Toyo, among other brands.

    Mr. Fox said they're able to find options in just about every size, but it might not be a brand they're pushing this year or it might come with shrinking margins.

    They've also relied more on wholesalers than in years past, "but I know there are wholesalers running into problems where the tires are supposed to show up and they don't."

    For the most part, Mr. Fox said, customers are willing to substitute brands and styles.

    But some customers are more particular, and they're willing to wait. And wait. And wait.

    "That's the crazy part," Mr. Fox said. "People are understanding, but I don't think they quite understand the notion that we don't know when the tires will show up. And that's when the frustration happens. They'll call and ask, and I'll be like, 'Hey, I ordered the tires. I'll check again for you, but I still have no idea. They're on order.'"

    Light truck sales make up about 65-75% of Lakeway's business — "This is a big pickup area, yes-sir," he said — and Mr. Pugh sells tires from "all over the spectrum," from mud grips to all-terrain to more standard highway tires. Lakeway also stocks a lot of brands, including Michelin, Goodyear and Continental.

    While Mr. Pugh prefers to sell tires he's familiar with, he's had to be more flexible in recent months.

    "I've ordered tires that just popped up on our radar and it might be totally out of character to stock that tire, but we'll buy it," he said. "We buy it and sell it within a week.

    "This (shortage) is happening everywhere. I've got a good friend who runs a supply business for water treatment, where you have PVC pipes and all that. He can't get glue. I have a Milwaukee half-inch impact wrench, but I can't find batteries. From chicken wings to baby diapers to PVC pipes, it's everywhere."

    Alpio Barbara

    Alpio Barbara, owner of Redwood General Tire Pros in Redwood City, Calif., said the current shortage isn't the worst he's seen — "It's not like when we had a real big shortage a few years back," he said — but part of that is due to him being an independent dealer.

    "Our customer base is not like everyone else, where you might come in for Bridgestone or Pirelli," he said. "We sell you through a Triangle sale. Michelin is always at the top, but it might be Bridgestone or Triangle at the other sides. Or Continental vs. Hankook."

    Light truck tire sales make up about 35% of his sales and he outfits a lot of blue-collar workers in the Bay area, like plumbers or electricians in trucks and vans.

    "Money is not a problem (for consumers), but the people who wanted inexpensive tires before, they're always going to stay with inexpensive tires," he said. "Same for the ones who wanted expensive tires."

    Heck, for some vehicles, selling expensive tires isn't worth it, Mr. Fox said.

    "We sell a lot of import tires, Asian tires because the drivers could care less," he said. "It's like, why put on a real good tire when the drivers are going to jump the curb and knock the tire out of alignment anyway?"

    Of course, tire dealers aren't just dealing with supply shortages. They're dealing with worker shortages, too.

    The federal unemployment boost is set to run out in September — about half the states in the U.S. have already ended the $300 benefit — and, like a lot of businesses, tire dealerships are struggling to find and retain quality workers.

    "It's a strange time to be in the business," said Mr. Fox, who finally took a much-needed vacation in mid-July. "We're having record month after record month, but we're short-staffed. We're trying to find people to get back to work and take care of our customers, and it's tough to balance everything.

    "We're doing the best we can, but I know at a lot of places, there's a sign out front that says, 'Please be patient.'"

    Related Article
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