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March 16, 2023 03:19 PM

Wholesale distributor Exxpress Tire celebrates success

Don Detore
[email protected]
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    The members of the Exxpress Tire Delivery leadership team include (from left) Stephen Clave, managing director of wholesale operations; David Simons, president; and Paul Pittner, managing director of procurement and supply chain.
    Tire Business photos by Don Detore

    The members of the Exxpress Tire Delivery leadership team include (from left) Stephen Clave, managing director of wholesale operations; David Simons, president; and Paul Pittner, managing director of procurement and supply chain.

    PARADISE ISLAND, Bahamas — In an ever-changing tire industry, the message — and the optics — were very much the same.

    The 140 or so people who attended the recent Exxpress Tire Delivery dealer conference, held Feb. 22-26 at the expansive Atlantis resort on Paradise Island, were told that the challenging year that was 2022 — fraught with recessionary concerns, supply-chain hiccups, volatile pricing and weakening demand — could repeat itself in 2023.

    "2022 was a difficult year. I don't think I want to do it again," Stephen Clave, managing director of wholesale operations, told the group. "But here's the problem: I think we're going to do it again."

    That message though, was delivered by the same three men who have helped steer Buffalo, N.Y.-based Exxpress Tire, and its retail counterpart, Dunn Tire L.L.C., for a large portion of its time since each was founded.

    "It's all about continuity," said Exxpress Tire President David Simons, who will celebrate his 30th year with the company in May.

    "What (the industry longevity) tells (dealers) is we have a long-term relationship in this industry," Paul Pittner, managing director of procurement and supply chain, said. Pittner has been with the company 21 years, after a similar amount of time at Dunlop Tire Corp. prior to joining Dunn Tire.

    Tire Business photo by Don Detore

    Exxpress Tire President David Simons speaks during the company’s annual dealer conference, which was held Feb. 22-26 in the Bahamas.

    "We talk with (dealers) constantly about partnerships and not about transactional business. We're not the cheapest guy in town. We work hard for their business. I think the stability we have shows to them. They believe in us. They trust in us. And they should.

    "We have good experience from the other side of the table, and it matters now," Clave said.

    This year marks a milestone both for Dunn Tire and its wholesale sister, Exxpress Tire. Dunn Tire, with 26 retail locations in western and central New York and northern Pennsylvania, was founded 50 years ago, while Exxpress Tire began two decades later, in 1993.

    Thirty years later, Exxpress Tire now accounts for about 80% of unit volumes for the company.

    Simons, 12 days into his new job at the time of the founding of Exxpress Tire, said it began by delivering tires taken from the retail store inventory and transporting them in a Chevrolet S-10 pickup truck to a dozen stores in a three- to five-mile radius. It wasn't until 2005 that Exxpress picked up steam and really took off.

    "We've gone from that to five, good-sized warehouses that can stock a variety of products and depth of product to service these great dealers and car dealers," Simons said, noting the wholesale arm has 130 vehicles making deliveries daily.

    Exxpress Tire operates five warehouses, in Buffalo, Rochester and Syracuse, N.Y., and Erie and Pittsburgh, Pa., with 300,000 cumulative square feet of space.

    The wholesaler recently moved its operations in Syracuse to a larger facility, expanding capacity there to 62,500 square feet from 40,000 at the former facility. The greenfield project, a $5 million investment, is expandable to 120,000 square feet.

    According to Simons, Exxpress owns the largest wholesale market share between Erie, Pa., and the Vermont border, "even though we're competing against these billion-dollar companies."

    "The local connection, with 45 people in the sales force, inside and out, we think that's bigger than anybody else," Simons said. "That is a big investment, but it brings our sales force closer to the local customer who needs a connection to these brands, and that's their connection."

    Exxpress, like most other companies, posted strong sales post-pandemic. From 2020 to 2021, wholesale/retail sales were up 13%. That number fell to 7% from 2021-2022.

    Unit sales, however, declined in 2022, reflecting an industrywide trend. Simons said tire sales in New York state slid 4%, a tick more than the industry nationwide.

    Simons said he believes pent-up demand in 2021 prompted consumers to buy more, helping to create the shortfall that occurred last year. In addition, he said talk of recession, cost of fuel and more people working from home have softened demand.

    Still, he said, "with the prices so exaggerated, that really held sales dollars up," adding that service at Dunn Tire's locations increased, as consumers hang on to their cars.

    S&P Global Mobility research shows that the average age of cars on the road ticked up to 12.2 years last year versus 12.1 in 2021.

    One in four cars and trucks is at least 16 years old, the data show.

    Tire Business photo by Don Detore

    The event was held at Atlantis in the Bahamas.

    Simons thinks consumers have limited their discretionary spending.

    "There is definitely some recessionary pullback on, 'What do I need to spend my money on: groceries, gasoline or auto repair and tires?'

    "If your brakes don't work, or you need an oil change, ... there's some things you just have to do. Tires? If the weather isn't challenging you, you can sneak through," he said.

    "Some recessionary strain is weighing on tire sales right now, and that could get a whole lot worse the rest of the year, or maybe it won't. I don't know."

    Those who do buy, Pittner said, are sacrificing brand loyalty for value. He said demand for Tier 3 and Tier 4 products has nearly doubled on the wholesale side.

    "Manufacturers are panicking," Pittner said. "People are waiting to buy tires. There's no compelling reason to buy tires now. We're in a weird little spot."

    "The average ticket is up," Clave said. "That's how you offset value. Both (wholesale and retail sales) are going south. It's going to be a very challenging period for us as an industry."

    Pricing, he said, is one of the biggest challenges.

    "All (manufacturers) talk about brand equity, but they are cannibalizing pricing for volume," Clave said.

    "Which one is it? You got to pick one. If you're going to cannibalize pricing for volume, then make it clear. But that's not your message. Our message is brand equity. It makes no sense."

    As Exxpress Tire enters its fourth decade, Clave implored dealers to be resilient and be ready for change.

    "We've got to be adaptive," he said. "We have to. Our mindset has to change if we expect to flourish in these challenge conditions within the market. You've got to be open to change. It's coming. Whether you want to change or not, the market will move without you."

    Dealers, Clave said, must be open for innovation.

    "Be ready for the unexpected. Plan for the worst, hope for a better outcome. Be exacting. Be demanding on your business.

    "We have to be agile. There is no way around it."

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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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