Throughout the pandemic, the aftermarket commercial sector kept humming along to support the nation's trucking industry, which was an essential cog in keeping supply lines filled and grocery shelves stocked.
As a result, the sector "enjoyed" double-digit growth of light and medium truck tire sales last year as supplies came back on stream and depleted wholesale stockpiles began to get replenished.
That unexpected run appears to have peaked.
According to the U.S. Tire Manufacturers Association's (USTMA) 2022 market forecast, aftermarket shipments of medium truck/bus tires should rise by just 1% (200,000 units) over 2021, while demand for light truck tires is expected to drop slightly, falling 0.3% (100,000 units).
By the numbers, the forecast shows shipments of light truck tires sliding to 38.5 million units and medium truck/bus tires edging up to 23.1 million units. By contrast, the forecast for original equipment shipments shows gains of 4.4% and 6.3% for the two categories, reflecting a rebound in new-vehicle production and sales.
The USTMA did not comment on the prospects for domestic manufacturing versus imports, but the data show imported tires — both those of the major U.S. tire makers' brands as well as those of off-shore producers and major private branders — make up the lion's share of both product categories.
The healthy shipment figures of 2021 are reflected in the business performance of most of the larger commercial dealerships throughout North America, according to data collected by Tire Business for this annual overview of the sector, first published in the April 11 edition.
Over half of the companies that submitted sales information reported double-digit revenue growth in the commercial sector last year. Only a handful reported lower sales, mostly related to the divestment/sale of portions of their business.
Southern Tire Mart, the continent's largest commercial dealership the past 10 years, strengthened that position with growth of nearly 23% to over $2 billion, generated through its 158 points of sale/service throughout its 20-plus state coverage area.
Southern Tire's sales don't include revenue of roughly $60 million generated by the Columbia, Miss.-based company's business venture with Pilot Co. to manage tire and vehicle maintenance operations at that company's Pilot Flying J Truck Care truck stops.
The companies' alliance, dubbed Southern Tire Mart at Pilot Flying J, was created to leverage the "strengths and conveniences" of Pilot and Flying J Travel Centers with the tire and maintenance expertise of Southern Tire Mart, the partners said at the venture's founding in January 2021.
Since then the venture has expanded to 46 sites from 35, with 22 more locations under construction. STM expects the business to generate $100 million in sales this year, according to Tom Duff, one of Southern Tire Mart's co-owners.
Mergers and acquisitions played a role — as it seems they do every year — in determining the industry ranking this past year, and will do so again next year.
Some of the deals worth noting:
CMC Tire acquired a BestDrive retread plant in Commerce City, Colo., from Continental Tire the Americas, complementing the ContiLifeCycle plant CMC has operated since 2015. Separately, Hurricane, Utah-based CMC expanded its network of sales/service locations to 14 with the opening of sites in recent months in Cheyenne, Wyo., and Loveland, Colo., enabling the company to service fleet customers throughout the western U.S. more effectively.
Conlan Tire acquired six BestDrive commercial service shops from Continental Tire, expanding the Mulberry, Fla.-based dealership's network to 25 locations in six states — Arkansas, Florida, Michigan, Ohio, Oklahoma and Texas. Like BestDrive, Conlan Tire is a ContiLifeCycle-licensed retreader. The deal added a retread plant in Grand Prairie, Texas. Conlan's other plants are in Romulus, Mich., and Mulberry. The deal helped Conlan double sales last year over 2020 to $124 million and a top 20 spot among the 50 largest commercial dealerships.
McCarthy Tire Service expanded thrice by acquisition, extending the Wilkes-Barre, Pa.-based dealership's market coverage to 75 commercial service locations and 10 retread plants in nine states along the Eastern Seaboard. The acquisitions will boost McCarthy Tire's annual sales by roughly $40 million to $50 million, based on available information. The dealership is already No. 5 among its peers, with commercial-related sales of $437 million. Its acquisitions were: Piedmont Truck Tires Inc., a Greensboro, N.C.-based dealership with 10 service outlets in North Carolina, South Carolina and Tennessee and a retread plant in North Carolina; LS Truck Tire Repair Inc., a Philadelphia-based dealership with five commercial servicing locations in the greater Philadelphia market, including two in New Jersey; and Tire Sales L.L.C., a Philadelphia-based business unit of TSS Group L.L.C., a mining and aggregates industry servicing company.
This story first appeared in the April 11, 2022, edition. Download it here.
Kal Tire expanded its already extensive commercial network across Canada with the early 2022 acquisition of 15 GCR Tires & Service stores, two retread plants and one off-the-road (OTR) tire repair shop in eastern Canada from Bridgestone Canada Inc. The deal will allow Kal Tire to expand its footprint to include locations in eastern Canada, thereby enhancing its ability to serve more consumer, commercial and mining customers throughout Canada, the companies said. The GCR stores and retread plants purchased by Kal Tire are located in Newfoundland, Nova Scotia, New Brunswick, Ontario and Quebec.
Wonderland Tire Co. of Grand Rapids, Mich., acquired Sumerel Tire Service Inc., the Newport Ky.-based retreader and developer of the AcuTread mold-cure retreading system. The acquisition included Sumerel Tire's commercial tire/retread plants in Bluffton, Ohio; Lebanon, Tenn.; and Newport, which boosted Wonderland's retreading capacity to over 137,000 units a year.
Pomp's Tire Service Inc. acquired Dale's Tire & Retreading Inc. of Rapid City, S.D., a deal that will add three points of sale and one Bandag system retread plant to Pomp's network. Founded in 1962 by Dale Rovere, Dale's Tire has two stores in Rapid City, S.D., and one in Scottsbluff, Neb. Pomp's has three of its own stores in South Dakota, but this will expand the dealership's territory to the western part of the state. The same applies to Nebraska, where Pomp's have five locations in eastern Nebraska. Scottsbluff is in the far western part of the state. Pomp's is considered the third largest commercial dealership in the U.S., with 2021 sales of $550 million. It also is among the five largest truck tire retreaders in the U.S., according to Tire Business research.
Purcell Tire & Rubber Co. acquired Callender Tire Inc., a retail and commercial tire dealership in Commerce City, Colo., and sold five retail stores in the Phoenix area in order to concentrate more on the commercial sector. Callender Tire was founded in 2000 by Tom and Anne Callender. Purcell Tire also is in the process of converting its retread production to the Michelin Retread System, a change associated with its decision in early 2021 to join the Michelin Commercial Service Network (MCSN). That decision followed by a few months its acquisition of Quality Tire, a Salt Lake City-based, Michelin-affiliated dealership with nine commercial outlets and three retread plants.
On the retreading side of the ledger, Goodyear Commercial Tire Systems continues as the largest truck tire retreader in North America, just ahead of Southern Tire Mart. Snider Fleet Solutions, Pomp's Tire and Best One Tire.
Love's Travel Stops, the Oklahoma City-based nationwide truck/travel stop operator that branched into retreading six years ago, has since opened six Oliver Rubber system plants and is ranked No. 6 in the U.S., according to Tire Business' assessment of the market.
Some other events of the past year worth noting:
Steven Shannon Tire & Auto Centers ventured into retreading, in partnership with Pre-Q Galgo Corp. as its tread rubber supplier, to support its growing truck-tire business.
The dealership built a 9,000-sq.-ft. facility near its Bloomsburg, Pa., headquarters to house the retread production. The facility is designed for daily capacity of 200 precure units.
Commercial tires have represented about 5% of the dealership's annual sales in recent years, but the company expects that to double to about 10% in the coming years.
Heintschel Truck Tire Center converted its retreading business to precure products and services provided by Pre-Q Galgo. Prior to this, Heintschel's retreading business was affiliated with Goodyear, including Goodyear's Unicircle precured process, which it adopted in 2009.
Seen from a systems supplier perspective, Bandag is the partner at 23 of the 60 largest truck tire retreaders in North America, ahead of Michelin Retread Systems (14 companies), Goodyear (nine), Marangoni (five) and ContiLifeCycle (four).
When asked about the sector's primary business issues, dealers by and large cited:
To deal with these, and other, issues, quite a few of the dealers who participated in this year's survey said they:
David Mickelson, president of Graham Tire Co., summed up a lot of his colleagues' comments, noting: "There continues to be ton of business available, but staffing (finding and/or keeping qualified employees) is a major issue for growth."
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