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January 08, 2020 06:39 PM

Sales competition, specialization in independent dealer shops' future

Kathy McCarron
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    LAS VEGAS — Tire sales, once considered an afterthought for car dealerships and general auto repair shops, are becoming a lucrative means of attracting vehicle service customers, according to Jim Lang, an independent consultant and marketing analyst in the automotive aftermarket industry.

    "I think (car) dealers have taken a more aggressive role in the sale of tires," Mr. Lang told Tire Business.

    "I see more and more people getting into tires as an extension of their business simply for the point of appealing to a wider audience of consumers," he said.

    • This story appears in the Jan. 6 print edition of Tire Business.

    "Tires are becoming an important entrée that (car) dealers use to gain access to greater repair at the consumer level," he added.

    Car dealerships' quick-service bays have been promoting their oil changes and tire checks.

    "Some of their concept is if you can get the person's oil change business and their tire business, you can pretty much get everything in between," he said.

    "Because tires are one of the most expensive and certainly the first expensive repair or replacement that most people do on their vehicle. So if you can get them to come back to the dealer for that, then you can get their repair business in the future.

    "In particular, when they are selling used vehicles," he added, "they want to get the person to come back to the quick-service bay and they're using tires as a means of getting the people back there."

    Dealers are trying to encourage owners of all makes and models to visit their bays and they will sell any brand of tire.

    "So people are seeing tires as a way of attracting a whole new group of consumers," he said. "Years ago dealers didn't pay much attention to tires, but now they see it as a way of gaining consumer loyalty."One roadblock for independent tire dealerships' competing with car dealerships is the extended hours car dealerships offer. Many are open seven days a week and usually open 10 to 12 hours a day, so they become more convenient, he said.

    James Lang

    Another factor impacting the attractiveness of tire sales is the changing repair "sweet spot" due to extended intervals for parts replacement.

    "What's happening now is OE parts tend to last longer, so you may not see that (new vehicle owner) after three or four years. You might not see that person until the sixth or seventh year," he said, "so tires give you access to that person in a shorter period of time. … You're going to see that guy for a set of tires before you see him for a set of brakes.

    "So I think that aspect is getting more people into the tire business as an extension of their business simply so that they have a shot at the consumer with a newer vehicle."

    The advent of Advanced Driver Assistance Systems (ADAS) is another trend that will impact tire dealerships and independent repair shops, according to Mr. Lang, which may force businesses to specialize in certain types of vehicles.

    He said many vehicle brands require specific equipment/tools and instructions to calibrate ADAS systems — and that can present a challenge to independent aftermarket shops.

    Mr. Lang predicted that most aftermarket repair shops will eventually specialize, whether it's in certain types of vehicles, imports, front-end jobs, etc., thereby reducing the amount and expense of technician training, equipment and tools that would be required to service all vehicle models.

    "So I think specialization is something you're going to see in addition to consolidation. Those two factors at the repair shop level – more specialized and fewer in number," Mr. Lang said.

    "I think the day of the small general shop are getting limited because of the tooling requirements, education and technical equipment. ... Cars are really getting complex, extremely complex."

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    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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