Modern Tire Dealer - January 2022 by EndeavorBusinessMedia-VehicleRepairGroup

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Rising costs, supply, consolidation and more How these issues will impact your business in 2022 Why you should raise your prices now How to be debt-free

TIRE INDUSTRY REBOUNDED IN 2021. BUT WILL THE RECOVERY BE SUSTAINABLE? MTD’s Facts Issue looks at the data

January 2022 | Vol. 103, No. 1 | $30 | www.moderntiredealer.com

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The Industry’s Leading Publication January 2022, Volume 103, Number 1

F E AT U R E S 40

Domestic tire shipments grew significantly during 2021, reflecting a market rebound. Turn to page 40 for more details.

Analyst John Healy explains how these factors will continue to impact you in 2022 — and for how long

DEPARTMENTS 4

Editorial A new year’s resolution that’s worth making Charge for the value you deliver — and start now

6 moderntiredealer.com News and navigation tools for MTD’s website

8 Industry News Discount Tire buys Tire Rack Online seller calls deal a ‘milestone’ in its history

20 Numbers That Count Relevant statistics from an industry in constant motion

22 Your Marketplace Ending on a high note Sell-out trends inched upward as 2021 drew to a close

74 Business Insight How to be debt-free in 2022 Don’t wait to pay down what you owe — for your own peace of mind

76 Mergers and Acquisitions Decoding the value of D2C Why direct-to-consumer businesses are fetching top dollar

79 Focus on Dealers Adjusting to curveballs Continuous tweaking helps Biscan hit seven figures in sales

80 TPMS Acura RLX (Except Hybrid) — 2016-2020

86 Products 90 Ad index

Rising costs, supply challenges, consolidation and more 56th Annual Facts Section

World sales leaders, sales margins, domestic tire shipments

42 Imports 44 Replacement market share 48 OE market share 50 Distribution 58 Tire sizes 60 Tire pricing 62 Commercial tire market 64 North American tire plant capacities

66 Automotive service 68 Top tire sales leaders — year in review

Modern Tire Dealer is a proud member of:

w w w . M o d e r n T i r e D e a l e r. c o m

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1/12/22 8:23 AM

Editorial

A new year’s resolution that’s worth making

CHARGE FOR THE VALUE YOU DELIVER — AND START NOW By

Mike Manges

ere’s a challenge to kick off the new year. Name a single “In reality, customers only price shop a few, selected products and services, like tires, brakes, oil and filters and alignments,” he says. consumer good that hasn’t gone up in price over the last “Recently, we were talking with a large-volume dealer whose several months. (Cue the “final Jeopardy” countdown prices were below what they should be. He knew it and had been song.) Can’t think of one? Same here. Just look at our industry. Tire manufacturers slow to react. The following month, he raised alignment, oil and announced 44 separate pricing actions during 2021. Several brake prices $10 each and dumped a sizable, additional profit in additional tire price hikes took place earlier this month. And the bank. And he didn’t lose a single customer.” those are the only ones that have been publicly announced. I’m Furthermore, Crawford argues that most customers won’t notice if you bump up your service rate. “I don’t believe the vast majority sure there have been more. of customers ever ask what the labor rate is. They only care about Inventory, equipment, personnel, rent, insurance, taxes — the what the end price to fix a problem is. They define value as the costs associated with running your business are not declining. What’s your plan to combat this? As I see it, tire dealers with total price, out the door.” the brightest futures realize that they need to adjust their pricing If someone calls and asks about your service rate, “it’s probably the competition shopping you.” to absorb the cost of inflation. Simply put, the moment you take possession of Crawford also says you don’t have to tires — or any product — at an increased enact a dramatic, one-time price hike. price, you must pass that increase onto “If raising prices or rates becomes your customers immediately. (MTD’s part of your ongoing routine, increases columnists have advised doing this can be smaller and (can happen) for years.) more often.” I recently had an opportunity to gain The end result, he adds, “is basically insight from Dave Crawford, who leads the same.” franchise operations for Tire DiscountIn addition, resist the urge to feel ers Inc., one of the country’s fastest like you’re taking advantage of loyal growing independent tire dealerships. customers by charging more for what He says the solution to dealing with “Do your homework to see what the market is you deliver, he advises. rising costs is simple — start charging charging, decide what the increase will be, make up “Dealers go in business to make a your mind and start charging more immediately,” what you’re worth. In other words, it’s says Tire Discounters Inc.’s Dave Crawford. profit, yet they are afraid of asking for a time to raise prices for your services. fair price, in many cases,” notes Crawford. “Everything goes up, so it’s important to run the numbers. Crawford, who has nearly 40 years of automotive aftermarket experience, says many tire dealers are undercharging for the services, One just can’t pay the bills and hope the checking account balance expertise and products they deliver. stays within a certain range. If you do, you will slowly squeeze your own profits. “Most small independent dealers are wearing many hats. They have to focus on day-to-day activities and seldom have time to “Do your homework to see what the market is charging, decide do things like shop the competition or scrub prices, like the large what the increase will be, make up your mind and start charging more immediately. And make sure your employees are aware of regional and national players do. “Our days are hectic. That makes it easy to get in a rut or comfort the increases and expectations to sell at new prices.” zone and not realize how much money we leave on the table.” New year’s resolutions aren’t always easy to keep. What sounds doable in January might not be as easy to maintain six months Does this sound familiar? Crawford says dealers frequently undercharge when it comes to down the road. tire and wheel installation packages, shop supplies (“if they charge Charging for the true value that you deliver, however, is one for this at all”), road hazard plans and “most services. And many resolution that’s worth making and keeping. You do a lot of things for other people. It’s time to do someunderestimate the cost of jobs when giving estimates for services thing for yourself. Both Dave Crawford and I urge you to go because they are hesitant to sell a big ticket.” for it in 2022. ■ The fear is that price hikes will alienate current customers and scare off potential ones. But this concern is overblown, according to Crawford. If you have any questions or comments, please email me at mmanges@10missions.com.

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MTD January 2022

1/6/22 6:39 PM

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ModernTireDealer.com DIGITAL RESOURCES FOR THE INDEPENDENT TIRE DEALER

Give MTD’s podcast a listen! MTD’s podcast, The Modern Tire Dealer Show, is available through Spotify, Google Podcasts and other platforms. Start downloading episodes today!

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eNewsletters Sign up now for Modern Tire Dealer eNewsletters. We’ll send you the latest news and most popular articles. Go to: www.moderntiredealer.com and scroll to The Modern Tire Dealer Newsletter is the Definitive Source for Tire Dealer Success.

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Two of the biggest, most well-known names in the tire industry have joined forces. Discount Tire, the largest brick-and-mortar independent tire dealership in the United States, has acquired Tire Rack, the industry’s largest online tire seller.

Discount Tire’s acquisition of Tire Rack captures attention Two important articles about Discount Tire’s recent acquisition of Tire Rack were the most-read stories on MTD’s website during the past month. Other major tire dealership acquisitions grabbed readers’ attention, with Percheron Capital/Big Brand Tire & Service, Sun Auto Tire & Service Inc. and Tire Discounters Inc. adding new properties. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Discount Tire acquires Tire Rack What’s next for Discount Tire and Tire Rack? Percheron/Big Brand Tire acquires American Tire Depot Sun Auto Tire to acquire Plaza Tire Discount Tire CEO: ‘Nothing is off the table’ Consumer tire technology — what’s next? Tire Discounters grows with 3 acquisitions Bridgestone plans 2022 consumer tire price hike BKT continues to invest in manufacturing capacity, growth Belle Tire enters Chicago market with two new stores

HOME OFFICE 3515 Massillon Rd., Suite 350 Uniontown, OH 44685 (330) 899-2200, fax (330) 899-2209 Website: www.moderntiredealer.com PUBLISHER Greg Smith gsmith@10missions.com (330) 899-2200, Ext. 2212 EDITORIAL Editor: Mike Manges, ext. 2213 mmanges@10missions.com Managing Editor: Ron Ledgard, ext. 2216 rledgard@10missions.com Senior Editor & Digital Projects Editor: Joy Kopcha, ext. 2215 jkopcha@10missions.com PRODUCTION Art Director: Zach Pate Graphic Designer: Audrey Mundstock Production Manager: Karen Runion, ext. 2210 krunion@10missions.com Production Artist: Lauren Coleman MARKETING STRATEGISTS Bob Marinez bmarinez@10missions.com (330) 899-2200, ext. 2217 Marianne Dyal mdyal@10missions.com (706) 344-1388 Dan Thornton dthornton@10missions.com (734) 676-9135 Sean Thornton sthornton@10missions.com (269) 499-0257 Kyle Shaw kshaw@10missions.com (651) 846-9490 Martha Severson mseverson@10missions.com (651) 846-9452 MTD READER ADVISORY BOARD Rick Benton, Black’s Tire Service Inc. Jessica Palanjian Rankin, Grand Prix Performance John McCarthy Jr., McCarthy Tire Service Co. Inc. Jamie Ward, Tire Discounters Inc. CUSTOMER/SUBSCRIPTION SERVICE (800) 260-0562 subscriptions@moderntiredealer.com

EXECUTIVE OFFICE 10 Missions Media 571 Snelling Ave. N. St. Paul, MN 55104 (651) 224-6207 CORPORATE OFFICERS President: Jay DeWitt Vice President: Chris Messer Vice President, Content & Events: Bryce Evans

Modern Tire Dealer (ISSN: 0026-8496) is published monthly by 10 Missions Media, LLC, 571 Snelling Ave N, St. Paul, MN 55104-1804. Copyright © 2021 by 10 Missions Media, LLC. All rights reserved. Modern Tire Dealer content may not be photocopied, reproduced, or redistributed without the consent of the publisher. Periodicals postage paid at St Paul, MN and additional mailing offices. POSTMASTERS Send address changes to: Modern Tire Dealer, 571 Snelling Ave N, St. Paul, MN 55104.

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MTD January 2022

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Industry News

Discount Tire buys Tire Rack ONLINE SELLER CALLS DEAL A ‘MILESTONE’ IN ITS HISTORY

Discount Tire, which has more than 1,100 locations across the United States, has acquired Tire Rack. Founded in 1979, Tire Rack has grown from a mail-order business to a top online operation, with well-known tire testing capabilities.

wo of the biggest names in the tire industry have joined forces. Discount Tire, which has more than 1,100 brick-and-mortar stores across the United States, has acquired Tire Rack, the industry’s oldest and largest online tire seller. Discount Tire says the acquisition shows its commitment “to provide the most inviting, easy and safe omnichannel, business-tobusiness (B2B) and fleet customer experiences in the world.” The transaction closed Dec. 31, 2021. Discount Tire CEO Dean Muglia will continue in his present role. Mike Joines, with 42 years leading Tire Rack, joins the combined organization, along with Matt Edmonds and Mark Veldman of Tire Rack’s executive team. (Joines is Tire Rack’s CEO.) Other members of Tire Rack’s executive team will continue in their roles. In addition, the Veldman family, the founders of Tire Rack, will have representation on the board of directors of Discount Tire. In a combined announcement, Discount Tire says it will continue to use the Tire Rack name and website, as well as the TR Wholesale Solutions name that tire dealers are familiar with. Tire Rack’s Mobile Installation business also will continue under its existing name. “We have for many years admired one another from afar, each pushing the industry forward to meet customers where they are most confident shopping for tires and wheels,” says Muglia. “We could not be more excited about adding Tire Rack’s operations and its excellent team led by Mike Joines, who I’ve come to know well.

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“This accelerates our omnichannel strategy (and) provides a broader distribution network and a platform to enhance our B2B and fleet capabilities. Quite simply, we are better together.” Joines has been with Tire Rack since its beginning and was tasked with running the company by its founder, his father-in-law, Peter Veldman. “We believe we can provide a greater impact through better service to customers that have chosen Tire Rack for their tire and wheel needs and provide better opportunities for our team members through this partnership,” he says. “Joining the Discount Tire family is an incredible milestone for our business, an opportunity for our team members and a testament to the hard work and legacy of Peter and Wilma Veldman. We’re thrilled to become a part of Discount Tire, a company that serves customers through an inviting, easy and safe experience, while also taking care of and valuing their team members.” As of Oct. 31, 2021, Tire Rack employed more than 950 people. Its headquarters will remain in South Bend, Ind. “We were attracted to Tire Rack for the vision they share with Discount Tire in transforming the omnichannel, B2B and fleet customer experiences,” says Michael Zuieback, executive chairman of the board of directors at Discount Tire. “We are excited to collaborate on enhancing the tools and technologies that will advance an entire industry.” Tire Rack is a pioneer when it comes to selling tires online. The company was founded in 1979 by Peter Veldman. At that time, Veldman was operating a service station in South Bend and a retail store, Veldman’s Service Center. By 1982, he was selling specialty tires to enthusiasts via mailorder catalogs. By 1990, Tire Rack turned its attention fully to the mail-order business and Veldman’s store closed. In 1995, Tire Rack added tire testing to its repertoire. In 2012, when Veldman was inducted into the Tire Industry Hall of Fame, he admitted he was initially skeptical that his mail-order idea would work for tires. But he saw a need for customers to easily find and acquire specialty tires. His gamble turned out to be spot-on. Tire Rack would become one of the first tire companies with an online presence. By 2014, “the Rack,” as it’s often called, counted 50 million visitors to its website each year. The company has 10 distribution centers in the U.S., with more than 2.8 million square feet of space. Enthusiasts who live in or near South Bend can have their tires installed on site. MTD January 2022

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Industry News

What’s next for Discount Tire and Tire Rack? EXPERTS SAY DEAL IS ‘BOLD’ AND ‘EARTH-SHATTERING’

iscount Tire’s acquisition of Tire Rack “is earth-shattering in terms of a couple of companies that pretty much focus (only) on tires, but do it in different ways,” says Michael McGregor, tire dealership mergers and acquisitions expert and a partner at Focus Investment Banking. “Discount Tire is location-based. Tire Rack is direct-to-consumer. And Tire Rack has a mobile installation element in its direct-to-consumer model, too.” John Healy, managing director and analyst at Northcoast Research Holdings LLC, says the Tire Rack acquisition “is rather bold for Discount Tire.” Professional hockey legend “Wayne Gretzky used to say, ‘You skate to where the puck is going to be, not where it’s at.’ And I think that’s what they are doing here.” Consumers are still primarily using the internet to research tire information and pricing, Healy says, “but I still think they want to (deal with) someone at the counter. Tire Rack is one of the major stops for (research) — if not the largest. “At some point, more consumers will purchase online and by having its retail outlets integrated with Tire Rack,” Discount Tire will become what Healy calls “the installer of choice for the largest online retailer. It’s a natural, symbiotic relationship, and it’s very smart. “If I were one of the other larger, regional tire chains, I would be thinking, ‘Should we do the same?’ ” McGregor sees “synergies” between Tire Rack and Discount Tire’s existing e-commerce arm. “Instead of having two separate organizations doing the same thing, chances are they will find a way to synergize the two.” Healy expects the two entities to remain separate. “I think eventually, if you’re the folks at Discount Tire, you figure out which one of your e-commerce platforms has the most traction, but that doesn’t mean you discontinue operating both of them.

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“I think there will be synergies running want to double-down? Discount Tire has both e-commerce platforms separately. some new thinking here.” We’ve seen this with online travel. A lot of So how will the deal impact other players the online travel websites are owned by one in the market? company, booking.com. I can imagine that “Smaller dealers need to be thinking would be a parallel to what can transpire about how they differentiate themselves here over the next few years.” and it probably comes down to full-service The deal also opens the door to other car care,” says McGregor. possibilities, says Dennis McCarron, partner “One advantage they have is that at Cardinal Brokers Inc. traditional (tire) dealers offer a broader “It’s unclear what Discount Tire’s intentions range of services than Discount Tire.” are yet, but they could expand to a similar There could be “some ripple effects” on model that American Tire Distributors and the supply side, too, says McCarron. But the TireHub have or continue to dominate the transaction “is not a firesale, where Tire Rack was struggling for many years or was failing. online sales category — or both. “You may also see Discount Tire It’s definitely a smart move on Discount Tire’s incorporate its line of tires into Tire Rack part to go from pure brick-and-mortar to or operate it as a separate entity for a bit adding a distribution channel.” and strategize.” McGregor says more transactions Discount Tire markets its own Arizionian involving direct-to-consumer models are private label line. not out of the question in 2022. “We will have to see what Discount Tire Direct-to-consumer companies “are just shows us. It does feel like a similar move valued a lot higher than traditional-model to TireHub, though.” (TireHub is jointly companies. It has to do with margins, at the owned by Bridgestone Americas Inc. and end of the day.” Goodyear Tire & Rubber Co.) Acquiring Tire Rack “is really a smart “It remains to be seen if Discount Tire will thing that Discount Tire is doing,” says Healy. get aggressive with (its) ‘preferred installer’ “A property like Tire Rack doesn’t come mainly or only being Discount Tire stores or around very often. Anytime a market leader if they leave Tire Rack’s current algorithm and another market leader get together, you need to pay attention.” and methodologies in place.” The transaction also “validates” the direct-to-consumer business model, says McGregor. And it could accelerate interest in mobile tire installation. “I think the folks at Discount Tire are very smartly seeing (opportunities) with” direct-to-consumer business models “that are not real estate-heavy,” says McGregor. “Not too long ago, Bridgestone invested in mobile tire operations. Who else wants to get on the bandwagon and how are they going to In this archived photo, Bruce Halle (left), the late founder of Discount Tire, meets Peter Veldman, do it? Maybe (mobile) will now the late founder of Tire Rack. Discount Tire finaltake off because other people will ized its acquisition of Tire Rack on Dec. 31, 2021. MTD January 2022

1/12/22 8:25 AM

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1/3/2022 9:21:16 AM

Industry News

Keter plans to speed up sales with Celerate line

Bites Nokian adds to capacity Nokian Tyres plc is increasing production capacity at its Finnish tire factory by about 30% by adding shifts, extending the production week to six days and hiring more personnel to build passenger car tires.

Ex-Fountain CEO dies Brian Hesje, the former CEO of Fountain Tire and chairman of the company’s board, died on Dec. 5. He was 75. He joined the company in 1984 and served as its CEO from 1992 to 2005. He then served as Fountain Tire’s chairman through 2014. His nephew, Brent Hesje, is the company’s current CEO.

Register for TIA OTR event The Tire Industry Association (TIA) has opened registration for its 67th Annual Off-the-Road (OTR) Tire Conference, which will take place Feb. 23-26, 2022, at the Hilton Sandestin Beach Golf Resort and Spa in Miramar, Fla. Last year’s TIA OTR Tire Conference was canceled due to COVID-19.

Sentury unveils dealer portal Sentury Tire USA’s dealers have access to a new online portal, Access 360, that provides live, visual updates on the progress of their orders. The portal gives dealers visibility into available SKUs. They also can download account statements, process returns and submit claims.

eter Tire USA plans to continue the forward momentum generated by its expanding NeoTerra line by launching a new line, Celerate, which will concentrate on high-diameter, high performance sizes. Manufactured at Keter Tire’s plant in Thailand, the Celerate line will eventually encompass more than 250 SKUs. (Celerate will be available in 140 SKUs when production starts during the middle of the first quarter of 2022.) The line was added “to support the demand for our products,” says Keter Tire CEO Rick Phillips. “We are really fortunate in the way our brand has grown and in how our business has taken off.” Keter Tire launched its NeoTerra line of passenger, light truck and medium truck tires in April 2021. The company is in the process of expanding NeoTerra’s size range. “We’re selling every tire we can ship.” NeoTerra “is kind of our broad line and Celerate has a different SKU mix,” says Phillips. “We’re going to come out with more high-end sizes” for Celerate, which will expand to include SUV “We have no intention of going direct to the consumer,” says Rick and CUV fitments. Keter Tire, whose United States office is based Phillips, CEO of Keter Tire USA. “Every tire we sell will go through in Franklin, Tenn., will start accepting orders for distributors and dealers.” Celerate next month. The company sells through “about 20 or so wholesale distributors” that have multiple locations and “are good logistically and can receive containers. We don’t have a domestic warehouse. We’re very lean and efficient. That’s our whole model. “Our target is to do business with the best distributors in each market — who have the best people, the best systems and who represent our brand well.” Phillips says Keter Tire has “good coverage” on the West Coast, in the southeastern U.S. and in the Gulf Coast region. “The middle of the country is what we’re working on right now.”

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MTD January 2022

1/12/22 8:27 AM

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Industry News

Bites Discount gets exclusive tire Discount Tire and America’s Tire are now selling an exclusive Cooper-branded light truck tire — the Cooper Discoverer HTP II. The tire also is available through Discount Tire Direct.

1-800EveryRim holds contest In celebration of 500,000 text messages sent to its RimText service, 1-800EveryRim OEM Wheels will give $1,000 to the winner of its recently announced texting contest. The company also will donate $1,000 in the winner’s name to a select charity.

SEMA’s Kersting to retire Specialty Equipment Market Association President and CEO Chris Kersting will retire at the end of January following a 30-plus year career with the association.

BKT names new U.S. leader

alkrishna Industries Ltd. (BKT) has appointed Doug Kershaw to lead its BKT USA subsidiary, replacing Minoo Mehta, who retired on Jan. 1 following a 46-year career in the tire industry. A 31-year veteran of the tire, rubber, composites and track industries, Kershaw joined BKT in 2018 and has served as BKT USA’s vice president. He has expanded the company’s distribution capabilities in the U.S., as well as its presence in the construction and mining tire segments. Kershaw has ambitious goals for BKT, including “strengthening and increasing the company’s awareness and positioning in the American market.” Mehta joined BKT in 2014. The company says he created “a customer-oriented team, which helped BKT expand its market share in the U.S. in both the agricultural and OTR sectors. Brand building has been a strong focus of BKT’s strategy and Mehta’s assignment.” He will continue to serve as an advisor and consultant. Arvind Poddar, BKT’s chairman and managing director, says that it is “thanks to (Mehta) that we now have strong partnerships with our channel partners Doug Kershaw has taken the and that we could see record growth. It was under lead at BKT USA, replacing Minoo’s guidance that the U.S. team achieved these Minoo Mehta, who has retired from the company. important results.”

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Industry News

Thomas replaces Smallwood in top spot at SRNA

Bites Nama Tires expands Nama Tires Inc. is expanding its manufacturing footprint in order to supply more tires to the North American market. The company says it expects to start production at a plant in Serbia next month and will ship its first container of tires from the factory to the U.S. later in the spring.

Love’s adds to Speedco Love’s Travel Stops has opened three new Speedco locations in Tennessee, Louisiana and Florida. The facilities operate around-the-clock and offer tire, lube and light mechanical services for trucks, as well as Department of Transportation truck inspections.

TBC honors top techs TBC Corp. recognized the 2021 ASE Master Technicians of the Year at each of its retail and franchise brands – NTB Tire & Service Centers, Big O Tires and Midas.

Hoosier gets updated logo Hoosier Racing Tire Corp. has updated its iconic purple logo as part of its “ambitious growth plan” for the future. Owned by Continental AG since 2016, Hoosier maintains its own production facilities and has the capacity to “produce rubber for additional entities.”

Ford sets EV sales record Ford Motor Co. says its electric vehicle sales in November grew more than three times faster than the overall electrified vehicle market. The company sold a record number of electric vehicles that month.

GRI invests in mixing plant Global Rubber Industries Pvt. Ltd. (GRI) is investing $25 million in its mixing plant as part of an overall effort to boost manufacturing capacity. Based in Sri Lanka, the plant will have six mixing lines, two of which are up and running.

Big O gives to teachers TBC Corp.’s Big O brand is partnering with DonorsChoose, which helps provide resources to teachers. To date, Big O has donated more than $63,000 to the group, supporting 222 projects in 209 schools.

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ichard Smallwood, president and CEO of Sumitomo Rubber North America Inc. (SRNA) — a Sumitomo Rubber Industries Ltd. (SRI) subsidiary — has retired. He was succeeded on Jan. 1 by Darren Thomas, who most recently served as SRNA’s senior vice president and chief operating officer. Smallwood served as president and CEO of SRNA for 16 years, according to a statement from the company. While president and CEO, he also served as an executive officer for SRI. He continues to serve on the board of Sumitomo Rubber USA LLC (SRUSA). His career with the company began in 2000, when he was hired as director of sales and marketing for Falken Tire Corp., which was later renamed SRNA. He was soon promoted to vice president of sales and marketing. Outside of SRNA, Smallwood serves on the board of directors of the U.S. Tire Manufacturers Association. “During Mr. Smallwood’s tenure at SRNA, he has overseen a major transformation of the tire brand, growing it from its small presence in North America to one that now embraces a U.S. factory; multiple racing championships, including domination in Formula Drift; and victories in numerous arenas of motorsports,” say SRNA officials. “In addition, SRNA has experienced tremendous The new year brings new growth under Mr. Smallwood’s leadership. The leadership to Sumitomo company has expanded its original equipment place- Rubber North America Inc. ments and fitments on leading vehicles across the Richard Smallwood, top, automotive spectrum; repositioned a sister brand in has retired. Darren Thomas is the company’s new Ohtsu tires; taken on the Dunlop motorcycle brand; president and CEO. built a new corporate headquarters in suburban Los Angeles; provided additional training and customer service programs for Falken retailer partners through Falken Academy; and launched dozens of new tire introductions for vehicles in every category. “The Falken brand has seen incredible success with its Azenis high-performance line (and) WildPeak light truck and off-road lines, as well as Ziex, WinterPeak and Sincera tire lines.” “Our company is filled with extremely talented and dedicated people, all working together to build our business and provide our customers with quality tires that give them lasting experiences,” says Smallwood. “It has been such an incredible honor to work here. Every day has been different — busy, for sure — and we have collectively achieved so many results. “I’m proud of what’s been accomplished during my time here and I know that SRNA is in great hands with Darren taking over, as he’s been a big part of the company’s tremendous growth and expansion, as well.” Thomas has worked with Smallwood since 1995. He has served in multiple sales and marketing roles at SRNA and is highly regarded for his “aggressive and analytical style,” according to SRNA officials. Smallwood has transitioned to chairman of the board for SRNA and also now serves as an advisor for SRI. Smallwood will continue to serve on the board of directors for SRUSA. MTD January 2022

1/12/22 8:29 AM

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Industry News

Bites Hankook names CEO Hyunbym Cho, current CEO of Hankook & Co., has also been named the company’s chairman. Cho, who joined Hankook in 1998 and has been instrumental in driving its growth, assumed the new role on Jan. 1. His predecessor as Hankook’s chairman, Yangrae Cho, will serve as the company’s honorary chairman.

New year brings more price hikes

he year has begun with another round of tire price increases. Bridgestone Americas Inc., Michelin North America Inc. Pirelli Tire North America Inc., Sumitomo Rubber North America Inc. and Toyo Tire U.S.A. Corp all are kicking off 2022 with price increases for passenger and light truck tires. (They follow Continental Tire the Americas LLC, which announced its latest hike earlier.) Toyo and Michelin also are raising the prices of their commercial tires. Michelin says both on- and off-road commercial tires and services are going up by a maximum of 16%. Toyo’s rates are going up 10%. With the exception of Toyo, the higher rates are effective this month. Toyo’s prices will increase on Feb 1.

Audi picks Bridgestone Bridgestone Americas Inc. will supply custom-engineered, ultra-low rolling resistance tires for Audi’s first, fully electric SUV, the Q4 e-tron. The tires contain Bridgestone’s ENLITEN Technology, which the tire manuafcturers says reduces rolling resistance by up to 30% and cuts weight by up to 20%. The Audi Q4 e-tron is currently available in the U.S.

Sun Auto Tire, Mavis Tire end 2021 with more acquisitions

Mohawk names sales VP Mohawk Rubber Sales has named Lance Meyer vice president of sales. A 29-year tire industry veteran, Meyer will be tasked with growing the company’s rapidly expanding sales department.

Omni scores style help Omni United is partnering with the Italian automotive design house, GFG Style, to design the company’s flagship Radar line. The first newly designed tire, an extreme off-road tire, is expected to be available during the third quarter of 2022.

Pirelli continues with Milan Pirelli & Cie SpA has extended its research partnership with Milan Polytechnic and Polytechnic Foundation in Italy for another three years.

Industry vet Jordan dies Joe Jordan, who worked for Toyo Tire U.S.A. Corp. and Yokohama Tire Corp. before starting his own tire dealership, San Diego, Calif.-based The Wheel Store, recently died. Jordan, who was 55 years old, also worked for Dealer Tire LLC from 2016 through 2018.

Mickey Thompson adds sizes Goodyear Tire & Rubber Co.’s Mickey Thompson Tires & Wheels unit is adding 15 sizes to the Mickey Thompson Baja Boss A/T line. New sizes will fit wheels ranging from 15 inches to 22 inches in diameter.

02_MTD_News-Numbers.indd 18

Sun Auto Tire & Service Inc. recently acquired Lincoln, Neb.-based T.O. Haas Tire Co., which has 25 retail locations throughout Nebraska, Kansas and Iowa.

everal tire dealerships closed 2021 by buying and selling businesses. Collectively, the biggest moves were made by Sun Auto Tire & Service Inc., which in November announced its biggest purchase yet — Plaza Tire Service Inc., a 70-store chain with outlets in Missouri, Arkansas, Illinois and Kentucky. And the Tucson, Ariz.-based company has added more locations in other markets where it has not enjoyed a presence before. Sun Auto Tire has acquired Delta World Tire, which is based in New Orleans, La., and has 17 stores in Louisiana and Mississippi. The acquisition marks Sun Auto Tire’s entry into those states. On the West Coast, Sun Auto Tire has added eight stores in northern California with the purchase of Bruce’s Tire & Auto Service. Back in the middle of the country, Sun Auto Tire has bought T.O. Haas Tire Co., a 25-store business with retail locations throughout Nebraska, Kansas and Iowa. In all, Sun Auto Tire added 180 locations and entered 12 new states during 2021. But others are making moves, too. Mavis Tire Express Services Corp. has acquired Tuffy Tire & Auto Service Centers, a business with both corporate-owned and franchise locations across the U.S. The addition of 165 Tuffy stores to the Mavis portfolio gives the chain more than 1,200 automotive locations throughout 35 states. For a full list of tire dealership acquisitions during 2021, see page 56 of our Facts Section. ■ MTD January 2022

1/10/22 3:30 PM

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1/3/2022 9:30:49 AM

NumbersThatCount

Relevant statistics from an industry in constant motion

640

250 MILLION

SOURCE: MTD RESEARCH

SOURCE: FACTRETRIEVER.COM/CAR-FACTS

Estimated number of truck tire retread plants in the United States.

The number of passenger car tires that are discarded each year.

75%

Approximate percent of cars that Rolls Royce has produced in its history that are still on the road. SOURCE: FACTRETRIEVER.COM/CAR-FACTS

2.89 MILLION The number of new electric cars that were registered in 2020. For the first time, Europe led with 1.4 million new registrations. China followed with 1.2 million registrations and the United States registered 295,000 new electric cars. SOURCE: IEA.ORG/REPORT

Washington D.C. has the worst traffic congestion in the United States, with commuters waiting 82 hours a year in traffic. SOURCE: FACTRETRIEVER.COM/CAR-FACTS

02_MTD_News-Numbers.indd 20

MTD January 2022

1/6/22 6:43 PM

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1/5/2022 8:35:46 AM

Yo u r M a r k e t p l a c e

Ending on a high note

SELL-OUT TRENDS INCHED UPWARD AS 2021 DREW TO A CLOSE By

John Healy

ur recent conversations with tire dealers leave us with the view that retail tire sell-out trends are climbing upward on a year-over-year basis compared to November of last year, with activity levels rising compared to what we saw in October 2021, where dealers experienced relatively flat sell-out trends. Specifically, 50% of the net number of respondents to our latest survey indicated that they saw positive demand on a year-overyear basis during the month of November, which compares to October’s levels of 45%. Contacts noted that volumes would have been higher, but inflationary pressures are causing vehicle owners to defer maintenance, including tire replacement, longer than they normally would. From a volume standpoint, we note that both the Midwest and Southeast are exhibiting positive sell-out trends, with the Southwest lagging behind compared to 2020 levels. We believe that demand trends continue to benefit from the continued rebound in driving, which continues what we have seen in recent months. Apple’s Mobility Trends Report, which we monitor, indicates that more people than normal are searching for driving directions.

COVID-19 AND DRIVING

COVID-19 continues to be an area of concern that we also track. In previous months, focus was on the delta variant of COVID-19, but macro themes on the

pandemic front have shifted to the omicron variant of the virus. Data thus far has shown that the effects of the new variant are minor for vaccinated individuals and we note that as of this writing, nearly 62% of Americans are now fully vaccinated. While infection rates have risen in recent weeks, our dealer contacts tell us they have not seen a slowdown in business activity because of this.

‘We continue to believe that the pricing environment in North America will remain rational.’ RATIONAL PRICING

We also note that several tire manufacturers have kicked off the new year with more price increases. However, when examining the tire retail landscape from a longer-term view, we continue to believe that the pricing environment in North America will remain rational and in-line with raw material costs. As was the case last year, we expect that tire manufacturers will continue to exhibit discipline in managing the trade-off between volume and price, with the goal of maximizing profit rather than market share. We also are pleased with the disciplined approach we have seen when it comes to

Snapshot of Dealers’ PLT Tire Volumes (Year-Over-Year Change) Sep-20

Oct-20

Nov-20

Sep-21

Oct-21

Nov-21

Average

Increase

57%

40%

45%

57%

45%

50%

41%

Flat

14%

30%

11%

14%

10%

17%

28%

Decline

29%

30%

44%

29%

45%

33%

31%

Total

100%

SOURCE: NORTHCOAST RESEARCH ESTIMATES

02_MTD_News-Numbers.indd 22

production and the fact that global inventory levels remain relatively lean and stable.

RAWS ARE STILL CLIMBING

Looking closely at raw material costs, the “basket” of raw materials that it takes to make a common replacement tire climbed 23% on a year-over-year basis during November 2021, the latest month for which we have data. This continues a trend that began at the start of 2021. Holding current spot prices flat would yield an estimated 22.5% year-over-year increase in input costs to build a tire. In assessing raw material price movements, we note that carbon black has experienced increases on a year-over-year basis for 11 months in a row, with a continued upward trajectory in year-over-year gains. Crude oil prices experienced extreme cost pressures right after the start of the pandemic, with average prices down nearly 40%, year-over-year, through the end of 2020. As noted in previous columns, 2021 was a different story. We note that November 2021 saw a 91.5% year-over-year jump in crude oil price. Synthetic rubber costs were up 26.9% on a year-over-year basis this past November, ending the trend of year-over-year increases of more than 30% seen from August 2021 through October 2021. We also note that on a sequential basis, the cost of synthetic rubber declined 1.8% from October 2021 — the first drop in this category since February 2021. Price pressures on reinforcement items like fabric and cord continue to track negatively, as in months past. And natural rubber prices dropped 6.6% on a year-over-year basis in November 2021, two months in a row of declines. ■ John Healy is a managing director and research analyst with Northcoast Research Holdings LLC, based in Cleveland, Ohio. Healy covers a variety of subsectors of the automotive industry.

MTD January 2022

1/12/22 8:32 AM

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Industry analysis

“In terms of how 2022 will shape up, solid demand levels are likely to persist on the replacement side for the first half of the year,” says John Healy, managing director and research analyst with Northcoast Research Holdings LLC.

Rising costs, supply challenges, consolidation and more ANALYST JOHN HEALY EXPLAINS HOW THESE FACTORS WILL CONTINUE TO IMPACT YOU IN 2022 — AND FOR HOW LONG By

Mike Manges

02_MTD_News-Numbers.indd 24

ire industry analyst John Healy called 2020 “the most unpredictable an d at t h e s am e t i m e, m o st surprising” year in memory. This past year also delivered its share of unexpected developments, from surprise acquisitions to supply chain, pricing and labor challenges. In this exclusive interview, Healy — who tracks the domestic tire industry for Northcoast Research Holdings LLC and also writes MTD’s monthly Your Marketplace column — discusses how the above factors and others will impact your business during 2022. He also talks about mergers and acquisitions, tariffs, product tiers and the impact of macro-economic factors, including inflation, on tire demand. MTD January 2022

1/12/22 8:33 AM

MTD: What are the three most critical things independent tire dealers should monitor and prepare for as 2022 begins? Can you prioritize and explain? Healy: From our seat, there are always pillars of the business that should be focus areas — those pillars being service, the customer and good product. But to answer your question in a more direct way, we would highlight three focus areas for dealers large or small — one, technician retention; two, access to product/inventory; and three, e-commerce initiatives. The consensus view among dealers we spoke with in 2021 has been that the technician shortage is the biggest pain point. While labor shortages seem to be occurring in almost every industry, the shortages facing tire and auto care centers seem significant. Over the last 12 months, we have regularly heard from dealers that finding techs and keeping staff is the most difficult and stressful part of the business. The days of hearing dealers wonder about where demand will come from appear to have been replaced with wondering whether they will have staff to meet the demand on a weekly basis. It does not appear uncommon these days for strong operators to have to close locations on weekends or operate with truncated hours due to a lack of available labor. Simply put, the industry needs techs to keep up with demand and any dealership that hopes to do more business in 2022 should have a plan to staff up and retain their talent. Outside of keeping and finding techs, making sure your access to product and inventory is well-established and in good order would be an area of prioritization. Tight industry inventories and elevated lead times to get product into the country and/or channel are not something that we think is going to be fixed in the short run. Given these sourcing complexities, as well as what appears to be a rising cost environment, we think keeping a good stockpile of product and flexibility in sourcing would be essential to meeting demand and likely making decent margins. While we are not in the forecasting business of commodities, there continues to be speculation that there could even be a shortage of natural rubber developing in 2022 or 2023 due to rising global demand and unique weather items that have impacted growing conditions. We think keeping a close eye on sourcing and inventory would be wise in 2022. Outside of these traditional operational items, we would encourage dealers to invest in e-commerce. We view the digitization of most industries as accelerated by a rate of five to 10 years as a by-product of the pandemic. We estimate that about 5% to 10% of the U.S. replacement tire market is being purchased via the web. That said, roughly 80% of tire buyers are (only) doing research on what to buy and what it should cost. At some point, we see this purchasing process as shifting to where the web is capturing a much greater share of wallet than the current 5% to 10% rate. While we think this will take many years for the shift in purchasing behavior to evolve, we do think waiting to have an online presence is an unwise decision. We think reaching customers via social media (and customers) having the ability to book appointments online and search for product and price w w w . M o d e r n T i r e D e a l e r. c o m

02_MTD_News-Numbers.indd 25

online are all (imperatives) for dealers who are looking to grow their business in 2022. MTD: Tire dealers tell us they would sell more tires if they could just get them. When can they expect to see relief as it pertains to current shipping and supply chain challenges? Healy: We don’t see it happening in 2022. The initial cause of supply chain pressure was a result of both demand and supply pressures caused by COVID-19. On the demand side, consumers spent more of their earnings/stimulus money on goods rather than services/experiences, causing an increased amount of shipping needs, given the interconnected global economy. On the supply side, there are a slew of factors that still are working themselves out, including labor shortages, limited unloading capacity at ports and limited warehouse space. These items have resulted in shipping costs that are in many cases five times what they were a year ago. Additionally, once product has arrived in the United States, transportation issues continue, given the ongoing trucker shortage, which has been a long-term and persistent issue. In terms of when issues will be resolved completely, this is likely a multi-year process, given the constraints at play. Demand remaining robust will continue to be a drag on shipping times, given the increased volume of goods without the expanded capacity to accommodate the increase in volumes

1/13/22 7:45 AM

Industry analysis being transacted. Investments into expanding capacity will be needed to provide a longer-term solution in terms of unloading product and increasing warehousing space at ports, while shorter-term labor dynamics can largely be resolved through more competitive pay. That said, costs passed onto customers will likely help demand moderate and loosen supply chain stress. Specifically, as it relates to tires, we see the semiconductor chip shortage, which has created complexities for the industry, being resolved. We n o t e t h at s e v e r a l v e h i c l e manu f a c tu re rs have re pu r p o s e d manufacturing capacity to the replacement market from original equipment as vehicle production has been idled. We see this reversing in 2022 and as such, fewer tires likely produced on the replacement side compared to 2021. While miles driven will ultimately dictate the demand side of things, we see this manufacturing realignment as creating a potential supply/demand imbalance that might not be cured until 2023. MTD: Merger and acquisition (M&A) activity continued unabated during 2021. How do you view the acquisition strategies of Sun Auto Tire & Service Inc., Percheron/Big Brand Tire & Service and Monro Inc.? Are they similar or different? Please explain. Healy : We view each of the three companies as being at various points in their acquisition strategies. In terms of Percheron, which has owned Big Brand for under two years, they have made multiple regional acquisitions in the West and Southwest, sticking with locations in their core geographies. On the other hand, we have seen Sun Auto Tire expand out of its regional focus in the Southwest, having acquired Hogan & Sons, a seven-store chain in Virginia; three separate acquisitions with stores located in Washington; and Plaza Tire Service, which operates 70 retail locations in Missouri, Illinois, Kentucky and Arkansas. Regarding Monro, they have had a much more established national brand, although their stronghold area has traditionally been the East Coast and Midwest. In recent years, Monro has

02_MTD_News-Numbers.indd 26

started to look westward and has acquired stores in a number of different markets. In 2021 alone, the company made three acquisitions in California and Iowa. Mountain View Tire & Service was the first acquisition of the year, bringing 30 more stores into the Monro family, and Mountain View stores continue to operate under that brand name, rather than switching to Monro’s Tire Choice format and name. In looking at expansion in the future, newly minted Monro CEO Michael Broderick sees the biggest opportunity in the Southwest, as the company has a limited presence there. If M&A activity is viewed to be too expensive in the region, Broderick anticipates building greenfield operations in such states as Arizona, Colorado and Texas. We expect each of these outfits to keep filling in the map and trying to build scale. From our perspective, we would expect each of these outfits to remain very active in 2022 and look to be bigger — both via organic growth initiatives, as well as continued M&A.

‘Any dealership that hopes to do more business in 2022 should have a plan to staff up.’ MTD: What are your thoughts on Discount Tire’s acquisition of Tire Rack? Healy: To be honest, we were very surprised to see this announcement. It made us do a double-take! Seeing an industry leader in e-commerce and an industry leader in installation/retail decide to put their businesses together makes us take notice. We have long admired both companies and view them as industry leaders, with strong reputations and operational teams. Given their success and market positions, it’s hard for us to be anything but positive about the potential benefits and likelihood of success from this partnership. As most aspects of commerce and daily life continue migrating online — in

addition to younger generations’ inherent preference for e-commerce solutions — it is hard to imagine that online tire sales will not take on increased importance among manufacturers, distributors and retailers in the years ahead We have long-held a view that e-commerce tire retailers like Tire Rack were best-served with creating installation partnerships in local markets, which has largely been the approach. In this scenario, tire chains would inst a l l pro duc ts and li kely rais e installation fees to recover lost margin dollars on the product — in essence, pivoting to a model of selling installation rather than the combo model of product and installation today. We view this move as in line with that view relating to integration of online and physical. However, we did not see this combination as obvious or likely. Given the reach of Discount Tire and its reputation, one could argue that this is a competitive game-changer for the long-term, as it relates to tire retailing. This will be one area of the market that we will be watching closely in 2022. MTD: Can we expect to see M&A activity continue in 2022 or will economic factors (inflation, interest rates, etc.) change things? Why or why not? Healy: From our perspective, 2021 was a dynamic year for M&A. We would say M&A and supply chain complexities are t he big gest de velopments in the industry for 2021. Big deals in manufacturing, wholesale/e-commerce and retail all took place. Cooper/ Goodyear, Tire Rack/Discount, Monro moving westward and Big Brand Tire’s (acquisition of ) American Tire Depot all were headline-makers. Will 2022 be a big year? Well, we feel that momentum is often key in making deals happen. Momentum in terms of activity and business conditions seems strong, so we would expect market dynamics relating to M&A activity to be only stronger in 2022. With a year of strong profits, the decision to get bigger and bolder may likely be easier. The tire world is changing. Operators of smaller, regional chains are going to be faced with the decision to invest in the future or perhaps more effectively MTD January 2022

1/10/22 3:36 PM

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1/3/2022 9:30:13 AM

Industry analysis

“We think consolidation among chains or regional dealerships and smaller operators will be the most active area of the market.”

monetize their work. This is not an easy decision to make. That said, with prices paid for deals rich and trends in the business healthy, it may make it easier for some of these entrepreneurs to say yes to a deal. Where will the activity likely reside? We think consolidation among chains or regional dealerships and smaller operators will be the most active area of the market. We see these businesses as having to make big decisions about long-term strategy and competition. These decisions are not easy to make and often are very expensive from an investment standpoint. We see this as pushing activity levels of deals higher in 2022. Additionally, with the potential for higher interest rates in the future, there could be some who rush or expedite their decision to sell/purchase as the cost of waiting could be expensive. From our view, while rising interest rates are often a muting element to valuations, we do think the initial phase of rising rates could push those on the sideline to move a bit quicker.

02_MTD_News-Numbers.indd 28

MTD: Most tire manufacturers reported robust third quarter results. What are you hearing from tire dealers? Are they experiencing the same and why? Healy: Largely, yes. When we look at spending in the auto care sector, we have seen spending up almost every month based on our sur vey work with independent tire dealers. While cycling the comps of 2020 was somewhat easy early in the year, it definitely was more difficult over the last three to six months, so this performance is to be applauded. In looking at trends for many businesses, what we have observed has been double-digit gains in revenue. Non-tire categories seem to have outpaced tires, but with both categories up for many. We note that our surveyed independent dealers saw industry units grow by 9%, on average — a strong number! From a profitability standpoint, we think the business was tougher than what one would expect on the revenue side of

things. We note that throughout 2021, prices for almost all goods and services increased and tires were no exception, as well as things like oil and hard parts. Additionally, managing labor issues — whether it was direct staffing or just wages for talent — seemed to be an area of stress for many operators. Given this, we think margins in the business were likely tough in 2021 for many. From our perspective, thinking through sourcing and trying to find the right mix of when to be open and how to staff is more challenging than ever. As we look to 2022, we are hopeful and hold a view that product price increases might not be as frequent as in 2021 — though increases potentially might be larger up-front. This item — coupled with hopefully a loosening market in terms of labor supply — will likely help make expense forecasting more manageable and predictable, thus alleviating some of the profit uncertainty for dealers. MTD: You mentioned a possible slowdown in pricing actions. Our readers MTD January 2022

1/10/22 3:36 PM

29_ZC RUBBER_0122.indd 29

1/3/2022 9:29:33 AM

Industry analysis have been hit with a near-unprecedented number of price increases over the last 12 months. More are scheduled for the new year. Are price increases sticking? Why or why not? Healy: Has there ever been a year that has seen more price hikes than 2021? Not in our monitoring of the industry. It will likely be a year that many don’t

forget for many reasons and the amount and size of price increases for all goods and services is one of them. On average, we think most tire manufacturers approached the market three to four times in 2021 with price hikes, with each of these hikes usually in the range of 5% to 8%. In total, these hikes, in many instances, caused the price of products to be around 20% higher

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than where they were in 2020. Were these hikes justified? We think largely, yes. While price hikes are unpleasant for dealers, the price of raw materials is up significantly, the cost of shipping is up and the broader supply dynamic is rather tight. In analyzing the manufacturers, we would also likely conclude that the industry going into COVID-19 was probably behind the curve on keeping up with pricing relative to product costs. Given these items, we understand the hikes. Additionally, when analyzing the margins of tire manufacturers, while always hard to isolate the absolute impact of unique items, we would describe margins as getting better and improving, but not outside of the range of historical levels. So, in essence, our view is that manufacturers need these hikes to keep making the product and earning an adequate margin. From our perspective, price hikes have stuck in 2021 and are likely to do so in 2022, as channel inventories seem lean and almost all industries are experiencing these cost pressures. Additionally, imported tires also are seeing bigger hikes due to the impact of tariffs enacted in early 2020. During 2022, we expect another round or two of hikes and believe that these hikes might be for bigger numbers. Our recent channel work suggests that in late-2021, a number of tier-one and tier-two manufacturers have approached the market for hikes, effective January 2022. These hikes seem to be closer to 10% to 12%, on average. We are hopeful that the hikes will be less frequent and likely more forwardlooking to make life for manufacturers, dealers and distributors easier in 2022. More often than not, tire prices will keep going up. We continue to hold the view that inflation will be higher than normal for longer and as such, the inputs to make a tire will continue to creep higher. With industry inventories very lean and labor costs likely to keep moving up, we see that only a change in demand would derail the movement toward more pricing. MTD: Will the window for continued price increases start to close during 2022 or should our readers expect to MTD January 2022

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Industry analysis see more price hikes? What is your reasoning, either way? Healy: It is hard for us to think the window of pricing will close for the industry unless manufacturers do something to close it themselves or unless there is a step backward in terms of economic activity or commerce-related restrictions created by the pandemic. Based on our monitoring of raw material costs, the average cost to build a tire is up approximately 24% in 2021 over 2020 levels and up 10% over 2019 levels. In holding current input costs constant into 2022, we would estimate that the average cost to build a tire will increase by approximately 9%, which is no small number. In sizing other cost items, primarily labor and transportation, these increases are significant, as well. We note average wage growth in 2021 of approximately 4% over 2020 levels and 7% over 2019 levels. Additionally, we note more than 2.3 million fewer Americans are currently

‘Costs passed onto customers will likely help demand moderate and loosen supply chain stress.’ in the labor force. Without a change in wages, it’s hard to keep talent. We also would describe tire building and tire installation jobs as tough jobs that require a lot of effort, grit and unique knowledge. Finding these employees is not easy. In looking at transportation, the cost increases there are staggering. We note increases of $7,500 or more per shipping container, on average, since the start of the pandemic to get shipments into the country, which is approximately four to five times the levels seen during 2019. Additionally, with gas prices up and trucking capacity limited, the cost to get products into the channel is even

larger. Outside of these cost items pushing prices higher, we note inventory levels in the industry seem very tight. We regularly hear from dealers and distributors that fill rates and supplyon-hand remain below historical levels. We view current production levels at manufacturers at near-normalized levels and we think that production needs to outpace demand for there to be actual growth in channel inventories. As such, we do not expect this phenomenon to abate or to normalize until the end of 2022 and possibly 2023. MTD: What impact have tariffs on consumer tire imports from South Korea, Taiwan, Thailand and Vietnam had on affected manufacturers? Thailand, for instance, was the biggest exporter of passenger and light truck tires to the U.S. in 2020. Do you see this changing long-term? Healy: Changes in import volumes are not something that we think will be

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Industry analysis altered much in 2022. With the tariffs being enacted in 2020 and realignments made in response, we think without geopolitical or environmental shifts, the moves we have seen will be largely without much change. We think the biggest shifts in the import market may manifest themselves in terms of shipping strategies and how

manufacturers strategize getting tires into the U.S. market. We have heard that this is a focus area of late, more than re-routing manufacturing. Whi le attending t he Sp e ci a lt y Equipment Market Association Show this past November, we did find it interesting that a number of India-based companies

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MTD: What opportunities have last year’s tariffs created for companies that have production in non-affected countries? Healy: From our perspective, the goal of a tariff is to protect domestic industries — and to alleviate any sort of trade imbalance. We see the tariffs in place currently as (being) no different. From a fundamental standpoint, we think share gains and a recovery in domestic industry profits are really the main outcomes of these tariffs. We estimate that pre-tariffs, 26% of the U.S. replacement market was being served out of southeast Asia. Since then, we have seen pricing gains in the industry and U.S. Tire Manufacturers Association members have grown their volumes by 22% — not a bad outcome, if you ask us. How will this develop in 2022? We look for U.S.- domiciled tire manufacturers to either be the beneficiaries of profit recovery or they will gain share as their products become more attractive from a price standpoint, on a relative basis.

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appear to be elevating their game, with eyes on getting bigger in the U.S. market. We think keeping an eye on India as an emerging market for replacement tire supply — in both passenger and light truck — is wise and could be an interesting development as we enter 2022.

Healy: I would agree that Goodyear’s acquisition of Cooper is among the biggest stories of the year. That said, I wish there was more for us to comment on as it relates to progress and integration. Said another way, not a lot has changed yet, in my opinion. When Goodyear made the announcement in February 2021, the expectation was that the deal would close at some point in the second half of 2021 and the synergies associated with bringing aspects of the two businesses together would yield Goodyear savings of $165 million, mostly associated with 1/3/22 10:57 AM

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Industry analysis the reduction in overlapping corporate functions and realizing operating efficiencies. Since then, the tire business — from a demand standpoint — has picked up a notch and raw material costs have escalated, while shipping issues have become widespread. Simply put, things have gotten more complicated. Goodyear closed on the acquisition of Cooper in June, admittedly a few months faster than we would have expected. Since then, though, it has been quiet on integration developments. However, Goodyear has provided the investment community with an updated view of Cooper synergy potential. The company now expects that it will achieve savings of closer to $250 million over the next few years as it incorporates some streamlining of sales and manufacturing efforts. As noted, we have not seen a lot of change from Cooper since its acquisition by Goodyear. We think the reason for it is that the

02_MTD_News-Numbers.indd 36

Cooper business is performing well, with the Cooper brand gaining share in the industry and Goodyear not wanting to fix what isn’t broken. We think Goodyear has elected to take a slow approach with integration and changing things at Cooper in order to not create more stress in its own processes, as well as in the processes of the dealer community.

‘We have not seen a lot of change from Cooper since its acquisition by Goodyear.’ We believe a big part of Goodyear acquiring Cooper is to reimage and position the company in the mid-tier market, with a good brand and strong product lineup. We do t hin k t hat as we move throughout 2022, we will see changes

in terms of sales efforts and channel emphasis. We would expect Goodyear to do some redrawing of the map in terms of product availability and likely introduce Cooper into its TireHub operations. We would look for changes in distribution and sales efforts as Goodyear moves through the year and potentially more long-term manufacturing/brand decisions to be items that play out in 2023. MTD: Do you think Goodyear will have room within its distribution base for Cooper dealers? Why or why not? Does this create opportunities for other tire suppliers? Healy: Our short answer is yes. We think Goodyear acquired Cooper because Cooper was doing things right, including having a brand in the mid-tier of the market that was gaining share and viewed highly by consumers and the dealer community. We believe a big part of Cooper’s success was tied to the strong

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Industry analysis relationships it had with local and regional dealers. From our perspective, many of these dealers have been share gainers in recent years as they have offered the consumer a good product and quality service at a reasonable price point. We see this winning formula as being timeless and believe that it will continue to be a winning combination long into the future. Given this, we see the Cooper network of dealers as being an incredibly valuable asset to Goodyear. We don’t see a lot of reasons why Goodyear would want to change what has worked so well in recent years. From a volume standpoint, Cooper has been a share winner more than a loser in recent years and this traction Cooper had in the market is a big part of the reason Goodyear spent $2.8 billion to acquire the company. Will there be some changes around the edges and in some markets? My guess is yes, but at a high level we see Goodyear keeping Cooper dealers in the fold. MTD: In your December MTD column, you wrote that more consumers are gravitating toward tier-one tires. Some dealers we have talked with disagree. What makes you say consumer preference is shifting back to tier-one? Healy: Over the last few years, we believe that tier-two and tier-three tires have largely gained share in the replacement tire market. Why have these products gained share? We would say this has been a function of their quality and value price point, as well as growth in distribution caused by changes at tier-one manufacturers. More recently, we have not seen as much share gained by tier-two and tierthree manufacturers. This is probably a function of progress made in years past and at some point, the runway getting shortened for these operators. Additionally, as we think about 2021 — a year in which product was scarcer and prices elevated — we think this has caused tier-one manufacturers who are often producing in-region to benefit from better fill rates. Will this dynamic continue in 2022? That’s hard to tell, but we think having products and getting them into the sales channel may be the most important elements to success in the year ahead.

02_MTD_News-Numbers.indd 38

‘Having products and getting them into the sales channel may be the most important elements to success.’ MTD: Much has been written about tire manufacturers’ emphasis on sustainability. Do you think this is moving the needle for them, in terms of sales? Does sustainability translate into sales for tire dealers at the store level? Why or why not? Healy: While sustainability goals are important from an image standpoint, it likely does not translate down to dealer sales and consumer selection of a certain brand in a meaningful way. Ultimately, consumers are going to select the tire that best fits their personal preference of price and performance, although upselling from a dealer may be able to change these preferences. We do not see dealers upselling certain brands due to their sustainability efforts, but rather for purely business reasons of generating better revenue/profits. MTD: The new and used car markets are experiencing super-heated pricing and inventory issues. What impact — if any — has this had on retail tire demand? Healy: While prices have been going up across the board, vehicle prices have seen some of the biggest gains, which has caused some consumers to delay a vehicle purchase. From a reference standpoint, a proxy we monitor for used car market values is provided by auction house Manheim. The Manheim Index, which measures the average price of vehicles in the wholesale market, is up roughly 30% compared to a year-ago. This step-up in car values and the cost to acquire vehicles has caused consumers to invest more in their current vehicles as they wait for vehicle prices to cool. Given this, replacement tire demand has been strong while vehicle prices remain at record levels. Although tire prices have gone up

“Tight industry inventories and elevated lead times to get product into the country and/or channel are not something that we think is going to be fixed in the short run,” says Healy.

dramatically over the last year, the absolute price change between investing in a new set of tires compared to a new/ used vehicle has widened. We believe that demand will slow once price pressures begin to ease. MTD: Now that the economy has entered an inflationary phase, what impact will this have on tire demand in 2022 — both long-term and short-term? Healy: Given the increase in vehicle prices, consumers are holding onto their cars longer as they delay the purchase of replacement vehicles. That said, tires have seen aggregate price increases of 25% to 35% since October of last year, which has had little effect on demand as these prices are passed along to consumers. While overall demand has remained relatively steady, there was some tradedown from consumers in terms of what tire tier they were buying early in this pricing surge. This trade-down began to subside as inflation became more widespread. In terms of how 2022 will shape up, solid demand levels are likely to persist on the replacement side for the first half of the year and may begin to moderate as new vehicle output increases. ■ MTD January 2022

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2022 MTD Facts Issue

FUTURE SHOCK? Tire industry rebounded in 2021. But will the recovery be sustainable?

here’s no doubt about it. The North American tire industry rebounded in a big way during 2021. The positive momentum that kicked into high gear during the summer of 2020 continued throughout last year. This was fueled by several macro-economic factors that resulted in accelerated economic activity in the United States. Other dynamics — such as widespread COVID-19 vaccinations, distribution of government stimulus money, an increase in miles driven and consumers’ inclination to maintain their current vehicles rather than buy new ones — also played roles. All of the above resulted in more demand for tires, both at the original equipment and replacement levels, and across all segments — though the consumer tire OE channel experienced a few hiccups due to vehicle production stoppages that were caused by supply chain issues. Despite some early fluctuations, tire manufacturers’ financials reflected the reenergized market as companies continued to jockey for position. (One tiremaker, Goodyear Tire & Rubber Co., even acquired another, Cooper Tire & Rubber Co., which resulted in a significant change to the landscape.) Independent tire dealerships also benefited as many continued to invest in their operations in the face of ongoing consolidation at both the retail and wholesale distributor levels.

MITIGATING FACTORS?

Are happy days here to stay? While demand for tires at the start of 2022 remains robust, several factors could impact long-term recovery as the year continues. Money will most likely not be as “free” in the coming year as it has been. The Federal Reserve recently announced that it could hike interest rates as many as three times during 2022. The first increase could happen as early as late-winter. It also remains to be seen if the supply chain problems that have plagued the tire industry can be tamed in the new year. In mid-December 2021, there were six container ships anchored outside the Port of Los Angeles — a far cry from the 42 ships that were at anchor there just three months prior. However, inland transportation will remain a challenge due to high freight rates and the severe shortage of truck drivers. And what happens if new car supply normalizes? Fewer customers may opt to hang onto what they are currently driving in favor of buying new wheels, taking them out of the replacement tire market for at least a few years.

03_MTD_Facts.indd 40

And finally, COVID-19 remains a wild card. At press time, 62% of Americans were fully vaccinated. However, new coronavirus variants continue to appear, renewing the possibility of lockdowns — something governments want to avoid.

World Leaders in New Tire Sales (Fiscal year 2021; in billions of U.S. dollars)

TIRE MANUFACTURER

2021

2020

Michelin Group

$25.9

$22.1

Bridgestone Corp.

$24.2

$23.2

Goodyear Tire & Rubber Co.

$13.9

$10.3

Continental AG

$13.6

$11.5

Sumitomo Rubber Industries Ltd.

$6.7

$6.3

Pirelli & Cie SpA

$6.2

$4.8

Hankook & Co.

$6.1

$5.4

Yokohama Rubber Co. Ltd.

$4.8

$4.3

Zhongce Rubber Group Co. Ltd.

$4.6

$3.8

Cheng Shin Rubber Ind. Co. Ltd.*

$3.8

$3.2

Toyo Tire & Rubber Co. Ltd.

$3.0

$2.8

Giti Tire Pte. Ltd.

$3.0

$2.4

* C H EN G S H I N D O ES B U S I N ES S A S M A X X I S I N T ER N AT I O N A L — U S A

Overall U.S. Replacement Tire Sales Total value of 2021 replacement tire market: $53.6 billion

SEGMENT

2021

2020

Passenger

$33.4

$25.6

Light truck

$8.1

$5.4

Commercial truck

$9.5

$6.7

OTR

$1.9

$1.7

ALL ESTIMATES IN THIS SECTION ARE THE RESULT OF MTD RESEARCH, UNLESS OTHERWISE NOTED.

$.714

$.595

MTD January 2022

1/13/22 7:50 AM

A LOOK AT MARGINS

Many independent tire dealers found it necessary to pass rising tire costs onto consumers during 2021. Some used this as an opportunity to build more margin into their product screens. The light truck tire segment saw the biggest average sales margin increase during 2021 — two whole points, year-overyear. Passenger tire sales margin increases were more modest. On the commercial side, average medium truck tire retail margins crept up slightly. But medium truck tire retread margins were flat versus 2020. Passenger wholesale is the only category tracked by MTD that experienced an average sales margin decrease. This drop could be attributable to the lag time in processing and passing tire manufacturer-driven price hikes through to retailers, elevated operational costs and the impact of consumer tire tariffs.

U.S. AVERAGE Tire SaleS Margins Segment

2021

2020

Passenger (retail)

29.0%

28.8%

Passenger (wholesale)

11.6%

12.6%

Light truck (retail)

26.2%

24.4%

Medium truck (retail)

16.0%

15.6%

Retread (medium truck)

17.5%

SHIPMENTS MADE BIG RECOVERY

It goes without saying that 2020 was a depressed year for passenger, light truck and medium truck tire shipments in the U.S. This past year was another story. MTD estimates that full-year 2021 replacement passenger tire shipments will top out at 222 million units, an increase of 9.5% versus 2020 levels. Contrast that with replacement passenger tire shipments in the U.S. during 2019, which totaled slightly more — 222.7 million units, to be exact. Original equipment passenger tire shipments will have increased by 3.5%, 2021 versus 2020, inching back up. Year-over-year gains were even more pronounced in the light truck tire segment during 2021, with full-year replacement light truck tire shipment projections totaling 38.1 million units, a 25% jump from 2020. Domestic replacement shipments in the light truck tire segment previously topped out at 32 million tires in 2019. Original equipment light truck tire shipments totaled 5.6 million units in 2021, according to MTD estimates. This equals the same number of light truck units shipped in that channel during 2018. Replacement medium truck tire shipments were expected to increase by 22% year-over-year. The last time replacement truck tire shipments exceded the 20-million mark was in 2018. And MTD estimates that domestic original equipment medium truck tire shipments will increase significantly versus 2020 levels. w w w . M o d e r n T i r e D e a l e r. c o m

03_MTD_Facts.indd 41

U.S. Passenger Tire Shipments

(in millions of units, rounded to nearest one-hundred-thousandth)

Year

Replacement

2021

222.0

37.5

2020

202.6

36.2

2019

222.7

45.1

2018

217.0

47.0

2017

209.3

46.0

2016

207.7

49.0

2015

205.9

49.0

2014

206.6

46.3

2013

201.6

44.0

2012

192.0

40.5

2011

196.5

36.0

U.S. Light Truck Tire Shipments

(in millions of units, rounded to nearest one-hundred-thousandth)

Year

Replacement

2021

38.1

5.6

2020

30.4

5.0

2019

32.0

5.9

2018

31.1

5.6

2017

30.8

5.4

2016

31.4

4.9

2015

29.0

4.6

2014

28.8

4.8

2013

28.3

4.4

2012

28.3

4.2

2011

28.6

4.1

U.S. Medium Truck Tire Shipments

(in millions of units, rounded to nearest one-hundred-thousandth)

Year

Replacement

2021

22.7

5.9

2020

18.5

4.5

2019

18.9

6.5

2018

21.0

6.2

2017

19.2

5.7

2016

18.4

5.3

2015

18.0

6.3

2014

17.3

5.8

2013

15.7

5.0

2012

16.0

5.3

2011

17.0

4.9

1/12/22 11:45 AM

Imports

Tariffs impacted import trends CHINA MADE UP SOME GROUND IN 2021

ith so much focus on tires stuck on cargo ships anchored in the Pacific Ocean, it’s understandable if people forgot there were other issues affecting the rubber arriving portside during 2021. But the data on tires imported into the U.S. is quick to steer the industry straight. The latest tariffs tacked onto the prices of passenger and light truck tires from South Korea, Taiwan, Thailand and Vietnam had a noticeable effect on MTD’s full-year estimates. As the economy continued to recover during the early part of 2021 and demand for tires surged, the aforementioned countries were shipping more tires to the U.S. Then they were hit with tariffs in June — and in each case, they shipped fewer units to the U.S. for the full year than they shipped to the U.S. during 2020. Among exporters to the U.S., Taiwan suffered the biggest blow, with a decrease of more than 50% in both the passenger and the larger consumer tire categories. Taiwan-based tire manufacturers and exporters are also paying the stiffest tariff penalties among the countries listed above — ranging from 20% to 101%, depending on the company. On the flip side, Vietnam’s tariff penalties totaled 6% to 7% and passenger tire imports from that country dropped less than 2%. Light truck tire imports from Vietnam more than compensated for the decrease. The fall-out from consumer tire tariffs created a void that some other exporting countries filled. For example, in the passenger tire category, Mexico, Indonesia, Canada, Japan and Chile each moved up one spot versus last year. Brazil joined the “top 10” in all three categories that MTD tracks — passenger, light truck and medium truck. China made up some ground in 2021, but not enough to crack the passenger and consumer “top 10.” For comparison purposes, China ended up exporting around 3.3 million passenger tire units to the U.S. during 2021, according to MTD research. Consumer tire shipments to the U.S. from China peaked at 60.5 million units during 2014. However, China shipped enough units to the U.S. in 2021 to retain a spot on the medium truck tire list. To the right are MTD’s full-year 2021 import shipment estimates, plus the previous year’s numbers.

03_MTD_Facts.indd 42

2021 U.S. Passenger Tire Imports

(in millions of units, rounded to nearest one-hundred-thousandth)

Country

2021

2020

% Change

Thailand

32.9

35.8

-8.3%

Mexico

21.0

13.8

+51.3%

Indonesia

14.9

12.2

+22.7%

South Korea

12.5

14.8

-15.6%

Canada

11.4

8.9

+27.3%

Vietnam

10.1

10.3

-1.4%

Japan

8.1

6.7

+20.9%

Chile

5.0

3.6

+37.5%

Taiwan

4.4

9.1

-51.5%

Brazil

3.9

2.2

+75.8%

2021 U.S. Consumer Tire Imports

(in millions of units, rounded to nearest one-hundred-thousandth)

Country

2021

2020

% CHANGE

Thailand

40.1

43.6

-7.9%

Mexico

24.1

15.9

+51.6%

Indonesia

17.2

14.0

+22.4%

Canada

16.0

12.9

+24.0%

South Korea

14.5

16.9

-13.8%

Vietnam

14.3

13.1

+9.1%

Japan

10.3

8.5

+20.5%

Chile

5.8

3.1

+87.0%

Brazil

5.0

3.1

+61.8%

Taiwan

4.8

10.1

-52.0%

2021 U.S. MEDIUM Truck Tire Imports

(in millions of units, rounded to nearest one-hundred-thousandth)

Country

2021

2020

% Change

Thailand

6.8

4.6

+47.1%

Vietnam

1.9

1.2

+56.8%

Japan

1.8

1.2

+42.7%

Canada

1.5

1.2

+21.4%

China

1.1

1.3

-16.0%

South Korea

0.9

+9.1%

India

0.5

0.3

+33.1%

Spain

0.3

0.2

+37.8%

Germany

0.3

0.2

+29.3%

Brazil

0.3

+1.4% MTD January 2022

1/13/22 7:52 AM

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Replacement tire market share

Less-expensive brands held THEIR ground ‘FLIGHT TO VALUE’ COULD CONTINUE IN NEW YEAR

he continuation of the COVID-19 pandemic didn’t stop drivers from hitting the road during 2021. The United States Federal Highway Administration estimates that U.S. travelers will have covered 2.6 trillion miles by the end of last year. However, the lingering impact of COVID-19 continues to play a role in consumer preference for replacement tires that occupy lower price points. Some tire dealers report that preference for tier-one products began to rebound near the end of 2021. But tier-two and tier-three brands are expected to hold their positions during the new year. This could be driven by a number of factors, including the shut-off of government stimulus money; continued uncertainty around COVID-19; the continued shortage of new cars; high used vehicles prices; customers’ desire to “squeeze more” out of their existing cars, trucks, CUVs and SUVs; and reduced buying power caused by inflation.

03_MTD_Facts.indd 44

2021 Replacement Passenger Tire Brand Market Shares

2021 Replacement Light Truck Tire Brand Market Shares

BRAND

2021 SHARE

BRAND

2021 SHARE

Goodyear

11.0%

Goodyear

9.5%

Michelin

9.0%

BFGoodrich

7.5%

Bridgestone

7.0%

Bridgestone

6.5%

Firestone

7.0%

Firestone

6.5%

Falken

5.0%

Michelin

6.5%

Continental

4.5%

Cooper

5.5%

BFGoodrich

4.0%

General

5.5%

Cooper

4.0%

Toyo

5.0%

Hankook

3.5%

Yokohama

3.5%

Yokohama

5.0%

General

3.0%

Falken

4.0%

Kumho

3.0%

Hankook

4.0%

Multi-Mile

2.5%

Hercules

3.0%

Nexen

2.5%

Kumho

2.5%

Toyo

2.5%

Multi-Mile

2.5%

GT Radial

2.0%

Continental

2.0%

Hercules

2.0%

Nexen

2.0%

Pirelli

2.0%

Pirelli

2.0%

Mastercraft

1.5%

GT Radial

1.5%

Nitto

1.5%

Kenda

1.5%

Primewell

1.5%

Maxxis

1.5%

Sailun

1.5%

Sailun

1.5%

Sentury

1.5%

Uniroyal

1.5%

Sumitomo

1.5%

Big O

1.0%

Uniroyal

1.5%

Kelly

1.0%

Big O

1.0%

Mastercraft

1.0%

Kenda

1.0%

Nitto

1.0%

Maxxis

1.0%

Sumitomo

1.0%

Others

8.5%

Others

8.0%

(based on an estimated 222 million units)

(based on an estimated 38.1 million units)

MTD January 2022

1/10/22 3:44 PM

45_AMERICAN TIRE DISTRIBUTORS_0122.indd 45

1/6/2022 8:34:06 AM

sumitomotire.com

A GREAT DRIVE, EVERY TIME

Three ways to find a dealer near you: • Scan the QR code • Visit sumitomotire.com/store-finder • Call (800) 238-6469

46-47_TBC CONSUMER TIRE_0122.indd 46

1/5/2022 1:24:47 PM

PASSENGER | SUV | CUV | LIGHT TRUCK | WINTER HTR Z5 Maximum Performance - Passenger ✔ Optimized tread rigidity ensures superior high-speed stability ✔ Advanced tread compound for confident wet grip and braking ✔ Wide circumferential grooves for outstanding hydroplaning resistance › Lifetime Replacement for Workmanship and Material Defects

HTR A/S P03 High-Performance All-Season Touring ✔ Responsive handling and control at high speeds ✔ 3D sipes provide more contact with road surface for improved grip ✔ Precision-engineered for superior wet traction and wear performance Up to 65,000-Mile* Limited Treadwear › 2-Year Roadside Assistance › 1-Year Road Hazard Protection › 30-Day Test Drive › Lifetime Replacement for Workmanship and Material Defects

HTR ENHANCE L LX2

HTR ENHANCE WX2

Premium Performance Touring

✔ Optimum ride comfort and handling agility ✔ Optimized tread design boosts ride stability and winter performance ✔ Durable construction for lasting performance and extended tire life Up to 90,000-Mile* Limited Treadwear › 2-Year Roadside Assistance › 1-Year Road Hazard Protection › 45-Day Test Drive › Lifetime Replacement for Workmanship and Material Defects

HTR ENHANCE CX2

✔ Precision-engineered for driving enthusiasts ✔ Penetrated lug grooves provide increased hydroplaning resistance ✔ Sipes and cross-designed grooves boost grip in snowy conditions 55,000-Mile Limited Treadwear › 2-Year Roadside Assistance › 1-Year Road Hazard Protection › 45-Day Test Drive › Lifetime Replacement for Workmanship and Material Defects

ENCOUNTER HT

Premium Touring SUV/CUV Performance

Highway All-Season SUV/LT

✔ Precision-engineered for driving enthusiasts ✔ Optimized tread design boosts ride stability and winter performance ✔ Durable construction for lasting performance and extended tire life

✔ Outstanding dry handling and surefooted wet-traction performance ✔ Optimized tread design for a comfortable, quiet ride ✔ Sturdy five-rib design and durable construction

65,000-Mile Limited Treadwear › 2-Year Roadside Assistance › 1-Year Road Hazard Protection › 45-Day Test Drive › Lifetime Replacement for Workmanship and Material Defects

60,000-Mile Limited Treadwear › 2-Year Roadside Assistance › 1-Year Road Hazard Protection › 30-Day Test Drive › Lifetime Replacement for Workmanship and Material Defects

ENCOUNTER AT

ICE EDGE

All-Terrain SUV/LT

Studdable Winter Passenger/SUV

✔ All-season, all-terrain performance in any weather ✔ Rated for reliable winter driving in heavy snow ✔ Rugged, durable construction for on- and off-road

✔ Excellent traction on snow, ice and slush-covered roads ✔ Studdable for stable handling and comfort ✔ Rated for reliable winter driving in heavy snow

60,000-Mile Limited Treadwear › 2-Year Roadside Assistance › 1-Year Road Hazard Protection › 30-Day Test Drive › Lifetime Replacement for Workmanship and Material Defects

› Lifetime Replacement for Workmanship and Material Defects

*Limited Treadwear Warranty based on tire speed rating.

46-47_TBC CONSUMER TIRE_0122.indd 47

1/5/2022 1:25:29 PM

OE tire market share

New car market took a hit in 2021 SEMICONDUCTOR SHORTAGE HURT SUPPLY

he much-discussed semiconductor shortage took a big bite out of vehicle producers’ output during 2021. General Motors, Ford Motor Co. and other original equipment manufacturers temporarily shut down production earlier in the year. An estimated 830,000 units of production were lost in North America during the third quarter of 2021 alone, according to auto industry intelligence provider LMC Automotive. This made it difficult for car dealerships to get their hands on vehicles. IHS Markit predicts that U.S. light vehicle sales will total 15.1 million units for all of 2021. By contrast, around 14.5 million light vehicles were sold in the U.S. in 2020 and 17 million were sold in 2019. Looking ahead, IHS Markit expects “the pace of sales to quicken in the second half of the year.”

2021 North American OE Consumer Tire Market Share Brand Totals

(based on 43.1 million consumer tire units) Goodyear.............................................22.6% Michelin................................................18.7% Continental............................................14.5% Bridgestone..........................................13.3% Hankook.................................................7.5% Pirelli......................................................3.8% Firestone................................................3.7% Falken....................................................3.4% General..................................................2.4% Kumho....................................................2.3% Yokohama..................................................2.0% BFGoodrich...............................................1.8% Nexen.....................................................1.5% Toyo........................................................1.2% Dunlop...................................................1.0% Others....................................................0.3%

03_MTD_Facts.indd 48

2021 North American OE Consumer Tire Market Share BMW

Mercedes-Benz

Pirelli..............................34% Continental..................26% Bridgestone...................25% Dunlop............................7% Michelin..........................5% Hankook..........................2% Yokohama........................1%

Continental....................32%

Ford

Dunlop.............................4%

Goodyear......................24% Michelin.........................24% Continental.....................20% Hankook.........................10% Pirelli.................................9% General.............................7% BFGoodrich......................3% Bridgestone.....................2% Toyo..................................1%

General Motors

Goodyear......................36% Michelin........................22% Bridgestone.................14% Firestone........................12% Continental.......................6% Hankook...........................6% General.............................2% Pirelli................................2%

Honda

Goodyear........................25% Michelin........................25% Bridgestone...................17% Continental.....................17% Hankook..........................9% Yokohama......................4% Firestone..........................3%

Hyundai/Kia

Hankook.........................40% Kumho.............................30% Nexen............................21% Continental.....................9%

Pirelli.............................25% Bridgestone...................14% Michelin.........................11% Goodyear..........................7% Cooper............................5% Yokohama.........................2%

Nissan Continental....................29% Michelin........................28% Goodyear........................16% Falken...............................8% Bridgestone....................6% Toyo...................................5% BFGoodrich......................3% Hankook..........................2% Dunlop............................1% General.............................1% Kumho.............................1%

STELLANTIS Goodyear.......................35% Michelin........................14% Bridgestone...................13%

Subaru Bridgestone...................56% Continental.....................27% Goodyear........................8% Falken...............................6% Yokohama........................3%

Tesla Continental....................40% Michelin.........................25% Goodyear........................20% Pirelli.............................10% Hankook...........................5%

Toyota Bridgestone..................25% Michelin........................25% Goodyear........................12% Continental......................6% Dunlop............................6% Hankook.......................6% BFGoodrich......................5% Toyo...................................5% Yokohama.........................4% Firestone........................3% Falken...............................2% General.............................1%

Volkswagen

General...........................3%

Continental.....................46% Kumho.............................14% Goodyear.......................13% Hankook.........................11% Falken.............................9% Bridgestone....................5% Nexen...............................2%

Nexen..............................3%

Volvo

Firestone.........................7% Yokohama.......................6% Continental......................5% Falken...............................4% BFGoodrich....................3%

Pirelli...............................3% Hankook.........................2% Kumho.............................2%

Pirelli...............................50% Continental....................30% Michelin........................20% MTD January 2022

1/10/22 3:45 PM

EXPERIENCE THE PERFORMANCE From insane on-track grip to monstrous off-road traction, get the performance you deserve with GT Radial tires.

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49_GITI TIRE_0122.indd 49

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Distribution

Channel guide

DEALERS LEAD THE PACK, BUT MASS MERCHANDISERS ARE GAINING

Channel

2021

2020 2019

Independent tire dealers

66.0%

65.5%

63.0%

Auto dealerships

9.0%

9.5%

Mass merchandisers

9.0%

8.0%

10.5%

Warehouse clubs

8.0%

8.5%

Tire company-owned stores

6.0%

Miscellaneous outlets

2.0%

3.0%

2.5%

STATUS QUO NO MORE?

“Status quo” described the wholesale distribution channel during 2021. But some growth is expected in the company-owned channel during the new year. TireHub LLC, the joint venture between Goodyear Tire & Rubber Co. and Bridgestone Americas Inc., recently announced that it will add distribution centers in Tucson, Ariz., and Beltsville, Md., in early-2022. The company opened a warehouse in McAllen, Texas, and relocated a distribution center in Memphis, Tenn., last month. As of October 2021, American Tire Distributors Inc. had 130 warehouses, including 24 in Canada. More consolidation within the independent wholesale-distributor channel also is possible.

U.S. Consumer Wholesale Market Share By Channel

Among warehouse clubs in the U.S., Sam’s Club added the most locations, jumping from 557 outlets at the end of 2020 to 600 at the end of 2021. BJ’s Wholesale Club also added locations, finishing the year with 229 outlets. And Costco Wholesale Corp. added four locations.

Warehouse Clubs in the U.S. Warehouse club

2021

2020 2019

Sam’s Club

600

557

599

Costco Wholesale Corp.

558

554

546

BJ’s Warehouse Club Inc.

229

219

A LOOK AT THE REST

Looking at tire manufacturer-owned store networks, Goodyear Tire & Rubber Co. grew its footprint during 2021. At year-end, there were 570 Goodyear company-owned outlets, 13 more than what MTD reported at this time last year. Bridgestone Americas Inc. opened 28 stores in 16 states during the first half of the 2021 and announced plans to open nearly 30 more stores during the second half. However, due to rationalization, Bridgestone’s company-owned store footprint remained the same as it was when 2021 began.

Other Top Tire Retailers in the U.S. Retailer

Locations

Walmart Auto Care Centers

2,580

Bridgestone Retail Operations1

2,200

Mavis Tire Express Services Corp.2

1,200-plus

Discount Tire

1,100-plus

Pep Boys — Manny, Moe & Jack

927

Monro

861

Ford Quick Lane Tire & Auto Centers

795

TBC Corp.3

629

2021

2020 2019

Independent wholesale/distributors

80.0%

79.0%

8.0%

Goodyear Tire & Rubber Co.4

570

12.0%

13.0%

Les Schwab Tire Centers Inc.5

444

Tire company-owned outlets Miscellaneous outlets

03_MTD_Facts.indd 50

Channel

BRIDGESTONE: FIRESTONE COMPLETE AUTO CARE, TIRES PLUS, HIBDON TIRES PLUS AND WHEEL WORKS LOCATIONS, 2MAVIS GAINED NEW OWNERS DURING THE FIRST QUARTER OF 2021 TBC: TIRE KINGDOM AND NTB TIRE & SERVICE CENTERS LOCATIONS, 4GOODYEAR: GOODYEAR AUTO SERVICE AND JUST TIRES LOCATIONS, 5LES SCHWAB INCLUDES ONLY COMPANY-OWNED STORES

U.S. Consumer Tire Retail Market Share By Channel

UP-CLOSE: THE CLUB SCENE

ndependent tire dealers remained the dominant consumer tire retail channel in 2021 and even gained some share as customers continued to turn to them for expert advice and service. At the same time, mass merchandisers regained ground, driven largely by the reactivation of Walmart Auto Care Centers following a long, COVID-19-related shutdown during 2020. Warehouse clubs’ share remained relatively flat. Tire companyowned stores, as a whole, neither gained nor lost share last year. Auto dealerships and miscellaneous outlets lost share during 2021.

MTD January 2022

1/12/22 11:48 AM

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Distribution

Where are dealers located?

THE SOUTH ATLANTIC REGION HAS THE MOST TIRE STORES

ccording to MTD research, there are roughly 29,000 i n d e p e n d e nt tire dealerships in the United States. What region of the country has the most independent tire dealership locations? Once again, the South Atlantic region, which makes 21% of the total, followed by the East North Central region (14%), the Pacific and West South Central areas (tied at 13% each) and others. The New England region has the smallest number of dealership locations as a percentage of the total.

Independent Tire Dealer Locations By Region and State

West North Central

(Based on 29,000 total)

New England

Massachusetts.................................. 39% Connecticut........................................ 22% New Hampshire................................. 15% Maine.................................................. 13% Vermont............................................... ..6% Rhode Island.........................................5%

Middle Atlantic

Pennsylvania...................................... 42% New York............................................ 37% New Jersey........................................ 21%

East North Central

14%

Ohio..................................................... 30% Illinois.................................................. 24% Michigan............................................. 19% Indiana................................................ 15% Wisconsin........................................... 12%

03_MTD_Facts.indd 52

10%

Missouri.............................................. 29% Minnesota........................................... 21% Iowa..................................................... 17% Kansas................................................. 15% Nebraska............................................. 10% North Dakota...................................... ..4% South Dakota.........................................4%

South Atlantic

21%

Florida...................................................30% North Carolina.....................................19% Georgia.................................................18% Virginia................................................. 13% South Carolina.................................... ..9% Maryland............................................. ..6% West Virginia.........................................3% Delaware................................................1% Washington, D.C...................................1%

East South Central

Tennessee............................................34% Alabama...............................................28% Kentucky.............................................. 21% Mississippi...........................................17%

West South Central

13%

Mountain

Pacific

13%

Texas..................................................... 66% Louisiana.............................................. 13% Oklahoma............................................. 11% Arkansas.............................................. 10%

Colorado............................................... 24% Arizona................................................. 23% Utah...................................................... 14% Idaho..................................................... 10% Nevada................................................. ..9% New Mexico........................................ ..9% Montana............................................... ..7% Wyoming.............................................. ..4%

California.............................................. 75% Washington......................................... 13% Oregon.................................................. 10% Alaska................................................... ..1% Hawaii................................................... ..1% NUMBERS ARE BASED ON TIRE DEALERSHIPS’ SELF-DISCLOSURES AND ADDITIONAL MTD RESEARCH.

MTD January 2022

1/12/22 11:50 AM

53_K&M TIRE_0122.indd 53

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Distribution

Brand battlefield

THE LABELS THAT TIRE DEALERS SELL MOST

ach year, the MTD 100, which is published in July, lists the 100 biggest independent tire store chains in the United States. Rankings are based on number of outlets. The MTD 100 also lists tire brands that dealerships sell. Here are the most-mentioned brands on the 2021 MTD 100, plus a look at which brands gained ground, dropped or stayed the same versus 2020.

Brands Listed in the 2021 MTD 100 2021 RANKING

BRAND

DEALERSHIPS/ LOCATIONS

2020 RANKING

Michelin

81/6,673

Bridgestone

78/5,816

BFGoodrich

75/6,192

Continental

72/5,706

Firestone

71/5,362

Goodyear

70/5,927

General

62/5,768

Uniroyal

61/3,908

Yokohama

57/5,626

Cooper

51/4,816

Hankook

51/5,916

Toyo

43/3,710

Dunlop

38/5,062

Falken

35/3,502

Pirelli

35/4,618

Kelly

32/3,133

Kumho

29/3,754

Nitto

27/2,701

Nexen

26/2,898

Nokian

20/2,594

Comparing the above chart to its predecessor, which appeared in MTD’s 2021 Facts Issue, the Falken brand moved from the 16th spot to the 14th position. The Bridgestone, Toyo, Pirelli and Nitto brands each moved up one spot. On the flipside, the Kelly brand dropped from the 14th position to the 16th spot. The BFGoodrich, Goodyear, Uniroyal, Dunlop and Nexen brands dropped one spot each, 2021 versus 2020.

03_MTD_Facts.indd 54

Brands that maintained the same ranking 2021 versus 2020 include Michelin, Continental, Firestone, General, Cooper, Hankook, Kumho and Nokian.

BRAND PRODUCT HIGHLIGHTS

Here’s a list of consumer tire products and/or sizes that were added across brands during 2021, according to MTD records. Brands are listed in order, based on how they appear in the MTD 100 chart: Michelin: Forty-four sizes were added to the Michelin Pilot Sport All-Season 4 and 41 sizes were added to the Michelin X-Ice Snow tire. New sizes also were added to the Michelin CrossClimate 2. Bridgestone: A number of Bridgestone brand products were added, including the Bridgestone Potenza Sport, which Bridgestone Americas Inc. bills as its flagship summer tire; the Bridgestone Potenza RE980AS+; and the Bridgestone Alenza AS Ultra. BFGoodrich: Michelin North America Inc. added the BFGoodrich Advantage Control and the BFGoodrich Trail-Terrain T/A. Continental: Continental Tire the Americas LLC introduced the Continental ExtremeContact Force ultra-high performance summer tire. Goodyear: Three Goodyear Wrangler light truck tires were rolled out during 2021. General: Continental Tire the Americas LLC made its first foray into the all-weather segment with the launch of the General AltiMax 365AW. Cooper: Goodyear Tire & Rubber Co.’s Cooper brand added three tires, including the Cooper Discoverer Rugged Trek for SUVs and light trucks. Hankook: The new Hankook Dynapro XT signaled Hankook Tire North America’s entry into the rugged-terrain light truck tire segment. The Hankook Dynapro AT2 Xtreme also was launched in 2021. Falken: Sumitomo Rubber North America Inc. refreshed its Falken brand winter tire offering with the addition of the Falken Eurowinter HS01 and the Falken Eurowinter HS01 SUV tire. Pirelli: The Scorpion line received two new tires, including the Pirelli Scorpion AS Plus 3, a touring, all-season tire, and the Pirelli Scorpion ATR. Pirelli also unveiled the P7 AS Plus 3, another touring, all-season tire. Kumho: The Kumho Ecsta V730 high performance tire was introduced near the start of 2021. Nitto: The Nitto Recon Grappler A/T, an all-terrain light truck tire, was introduced in 2021. It will be available in 60-plus sizes. Nexen: Nexen Tire America Inc. launched the Nexen N/Fera Sport R, an extreme ultra-high performance tire, and the Nexen Roadian HTX2 for light trucks and SUVs. Nexen also unveiled a new grand touring tire, the N Priz S. Nokian: The Nokian Hakkapeliitta line grew with the introduction of the Hakkapeliitta 10 for passenger cars and the Hakkapeliitta 10 SUV for SUVs and CUVs. Also new was the Nokian One all-season passenger tire, available in more than 70 sizes. MTD January 2022

1/10/22 3:53 PM

55_MAXXIS TIRE_0122.indd 55

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Distribution

The big just gOt bigger

ergers and acquisitions (M&A) continued at a breakneck pace during 2021, with several players shifting into high gear. Up until Discount Tire’s recent acquisition of Tire Rack, the largest tire dealership transaction — from a store count perspective — occurred when a group of investors, led by Boston-based private equity company BayPine LP, acquired Mavis Tire Express Services Corp., which has more than 1,000 stores. Big Brand Tire & Service Inc./Percheron Capital accelerated its growth during the fourth quarter of the year, adding 137 locations. This included nearly 110 American Tire Depot stores in California. Sun Auto Tire & Service Inc., which received a new majority investor, Los Angeles, Calif.-based private equity firm Leonard Green & Partners in September, also had a busy year. Monro Inc. bought longtime independent Rancho Cucamonga, Calif.-based Mountain View Tire & Service Inc., during the first quarter. It also picked up more locations in California. M&A activities weren’t confined to private equity companies. Wonderland Tire acquired Sumerel Tire Service Inc. Black’s Tire Service Inc. picked up four Mason Tire & Auto Service stores. Heartland Tire Inc. acquired Graham Tire East. Best-One of Indy, which is based in Indianapolis, Ind., added five locations. Telle Tire & Auto Service Inc. completed two single-store acquisitions. Associated Tire Stores Inc. sold nine Plains Tire Co. outlets to Les Schwab Tire Centers Inc. Kal Tire, Steve Shannon Tire Co., Sullivan Tire Co. Inc. and Tire Discounters Inc. also acquired locations during 2021. On the wholesale distributor side, U.S. AutoForce LLC acquired Treadmaxx Tire Distributors. This added 14 locations to U.S. AutoForce’s rapidly growing footprint. Experts predict that tire dealership M&A activity will continue throughout 2022.

03_MTD_Facts.indd 56

BUYER

ACQUIRED

# OF OUTLETS

LOCATION(S)

Best-One of Indy

R&T Tire & Auto

Indiana

Gibson’s Tire Pros

Left Lane Capital

Alabama

Leeds West Groups

MFA Oil Co.

Oklahoma

Monro Inc.

Mountain View Tire & Service Inc. 30

Southern California

Robert Bernard Group

Carl Patry and the Patry Group 3 (Point S)

Quebec

Wonderland Tire

Sumerel Tire Service Inc.

3 (all retread plants)

Ohio, Kentucky and Tennessee

BayPine LP/TSG Consumer Partners 2Q LP/David and Stephen Sorbaro

Mavis Tire Express Services Corp.

1,000-plus

Alabama, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, Pennsylvania, South Carolina, Texas, Wisconsin

Steve Shannon Tire Co.

Trombley Tire & Auto

New York

Sullivan Tire Co. Inc.

Direct Tire & Auto Service

Massachusetts

Sun Tire Auto & Service Inc. *

Goodguys Tires & Auto Repair

California

Telle Tire & Auto Service Inc.

JBC Tire Complete Auto Care

Missouri

Best-One of Indy

Riley Park Tire

Indiana

Best-One of Indy

Robinson Tire & Auto Service

Lafayette, Ind.

Big O Tires

(Private owner)

Pleasant Grove, Utah

Black’s Tire Service Inc.

Mason Tire & Auto Service

South Carolina

Northern Rock Inc.

Carver Tire Pros

Georgia

Heartland Tire Inc.

Graham Tire East

Iowa and Minnesota

Bridgestone Americas Inc.

15 stores, two retread plants and one OTR tire repair shop

New Brunswick, Newfoundland, Nova Scotia, Ontario and Quebec

Kal Tire

Les Schwab Tire Centers Inc.

Plains Tire Co.

Wyoming

Sun Auto Tire & Service Inc.

McSpadden’s Tire & Automotive Inc.

Austin, Texas

U.S. AutoForce LLC

Treadmaxx Tire Distributors

Alabama, Florida, Georgia, North Carolina, Ohio, South Carolina and Texas

Best-One of Indy

Best-One Tire & Auto Care

Richmond, Ind.

Big Brand Tire & Service Inc./ Percheron Capital

American Tire Depot

107

California

Big Brand Tire & Service Inc./ Percheron Capital

Integrity Tire

California

Big Brand Tire & Service Inc./ Percheron Capital

Purcell Tire & Rubber Co. (retail outlets only)

9 (all retail locations)

Arizona

Big Brand Tire & Service Inc./ Percheron Capital

Tire World Auto Repair

Colorado Springs, Colo.

Tire Rack

Entire company, including 10 physical locations

Colorado, Connecticut, Delaware, Georgia, Indiana, Louisiana, Minnesota, Nevada and Washington.

Discount Tire

Leeds West Groups

Linda Murchison

Firestone, Colo.

Mavis Tire Express Services Corp.

Tuffy Tire & Auto Service Centers

165

Alabama, Florida, Illinois, Indiana, Iowa, Michigan, Nebraska, North Carolina, North Dakota, Ohio, South Carolina, Texas, Virginia, Wisconsin

Monro Inc.

Agoura Tire Pros

Southern California

Monro Inc.

Bud’s Tire Pros

Southern California

Monro Inc.

Calabasas Car Care Tire Pros

Southern California

Sun Auto Tire & Service Inc.

Bruce’s Tire & Auto Service

Northern California

Sun Auto Tire & Service Inc.

Delta World Tire

Louisiana and Mississippi

Sun Auto Tire & Service Inc.

Gaynors Automotive

Vancouver, Oregon and Washington

Sun Auto Tire & Service Inc.

Greg’s Japanese Auto

Seattle, Wash.

Sun Auto Tire & Service Inc.

Hogan & Sons

Virginia

Sun Auto Tire & Service Inc.

Jeff’s Auto Repair

Seattle, Wash.

Sun Auto Tire & Service Inc.

Martin Tire Co.

New Mexico and Texas

Sun Auto Tire & Service Inc.

Plaza Tire Service Inc.

Arkansas, Illinois, Kentucky and Missouri

Sun Auto Tire & Service Inc.

T.O. Haas Tire Co.

Nebraska, Kansas and Iowa

Telle Tire & Auto Service Inc.

Zisser Tire & Auto

St. Louis, Mo.

Tire Discounters Inc.

Bulldog Tire

Georgia

*GB Auto Service Inc. rebranded itself as Sun Auto Tire & Service Inc. in June 2021.

PRIVATE EQUITY SUPERCHARGED M&A ACTIVITIES

MTD January 2022

1/10/22 3:57 PM

57_NOKIAN TYRES_0122.indd 57

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Tire sizes

High-diameter EQUALS high demand 17-INCH SIZES CONTINUE TO DOMINATE REPLACEMENT MARKET

POPULARITY CONTEST

Currently, 225/65R17 is the most popular replacement passenger tire size, while 17-inch sizes continue to comprise 50% of the “top 10.” Four sizes — 275/55R20, 235/60R18, 265/70R17 and 225/60R17 — have joined the list, while two sizes — 225/60R16 and 235/65R17 — have moved out of the set.

Most Popular Replacement Most Popular Domestic Passenger Tire Sizes OE Passenger/LT Tire Sizes *SOURCE: USTMA

igh-diameter tires continue to gain traction, both at the original equipment and replacement levels. Looking at available sizes by rim diameter, one new 17-inch size, one new 18-inch size and one new 21-inch size were added in the P-metric segment during the past 12 months. The total number of P-metric sizes that are now available equals 373, up from 370 last year.

Available Passenger Car Sizes by Rim Diameter

*SOURCE: USTMA

Rank

Size

OE P-Metric/Metric (current)

225/65R17

Size

205/55R16

225/65R17

4.5%

215/55R17

235/45R18

4.3%

215/60R16

275/55R20

4.0%

195/65R15

235/60R18

3.8%

225/50R17

235/65R18

3.8%

% of total

OE Light Truck (current)

12-inch: 1

13-inch: 14

14-inch: 26

15-inch: 55

275/55R20

16-inch: 61

17-inch: 62

18-inch: 66

19-inch: 30

235/60R18

Size

% of total

20-inch: 34

21-inch: 4

22-inch: 10

23-inch: 2

265/70R17

LT275/70R18

16.1%

24-inch: 7

26-inch:1

*SOURCE: TIRE & RIM ASSOCIATION

225/60R17

LT235/65R16

12.5%

LT245/75R17

11.6%

LT275/65R20

11.5%

LT275/65R18

9.5%

More sizes were added in the LT metric category during 2021. These include one new 15-inch size, one new 16-inch size, one new 17-inch size, two new 18-inch sizes, one new 19-inch size, two new 22-inch sizes and one new 24-inch size. The total number of LT metric sizes now equals 185, up from 176 last year.

Three sizes — LT245/75R17, LT265/75R16 and 35x12.5R20 — have joined the list of the 10 most popular light truck tire sizes.

Available LT Metric Sizes by Rim Diameter

CATEGORY

AVERAGE #

Product knowledge of counterpeople

30%

Service bays per outlet

Reputation

23%

Technicians per outlet

Other

15%

NAMES STILL MEAN SOMETHING

Though only 36% of survey respondents listed “brand name” as the main reason they do business with their present suppliers, the brands of auto parts themselves still hold major sway. When asked to comment on the importance of auto parts brand names, 14% of survey respondents said brand names are “extremely important” to them, while 46% said they are “very important.”

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BREAKDOWN OF BAYS AND TECHS

Here’s a breakdown of the average number of service bays that respondents operate per location and the average number of auto service technicians they employ at each outlet:

Approximately 35% of independent tire dealers who responded to MTD’s Tire Dealer Automotive Service Study say at least half of their technicians are ASE-certified, while 19% report that 90% to 100% of their technicians have earned ASE certification. The study also looks at technician compensation, an increasing concern as many tire dealers struggle to find and retain skilled help. Nearly 50% of respondents — 47%, to be exact — told MTD they pay techs by the hour, while 12% pay commission-only. Thirtyfour percent pay both salary and commission. Seven percent of respondents only pay by salary. MTD January 2022

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SCAN TO WATCH

TRAINING VIDEOS

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1/3/2022 10:22:30 AM

World tire sales leaders — year in review

The stories behind the numbers THE WORLD’S BIGGEST TIRE MANUFACTURERS PUSHED FORWARD IN 2021

ire manufacturers — including the world’s largest — rode the wave of the industry’s rebound in 2021. Many moved ahead with planned investments, acquisitions and other critical initiatives, growing their overall sales in the process. Here’s a recap.

MICHELIN GROUP GLOBAL TIRE SALES 2021: $25.9 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 30%

In January, Potosi, Mo.-based Purcell Tire & Rubber Co., one of the largest commercial tire dealerships and medium truck and OTR tire retreaders in the United States, joined the Michelin Commercial Service Network and began using the Michelin and Oliver retreading systems. In April, Michelin Group announced its “Michelin in Motion” initiative, which calls for 20% to 30% of the company’s total sales to come from “non-tire businesses” — including flexible composites, medical devices, 3D printing, hydrogen fuel and what Michelin calls “services and solutions” — by the year 2030. When elaborating on “Michelin in Motion,” Alexis Garcin, chairman and president of the company’s Michelin North America Inc. subsidiary, told MTD that tire dealers will remain “at the center of our strategy.” Continuing its focus on future mobility, Michelin brought its first tire specifically designed for electric vehicles, the Michelin Pilot Sport EV, to the North American market during 2021. Until then, the tire had been sold in China. Michelin reported better-than-expected revenue during the third quarter.

BRIDGESTONE CORP. GLOBAL TIRE SALES 2021: $24.2 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 28.5%

The company’s Bridgestone Americas Inc. subsidiary invested heavily in controlled distribution, its commercial tire business and future mobility capabilities during 2021. Bridgestone added 28 company-owned

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outlets throughout 16 states during the first six months of the year and launched a mobile tire installation service, Firestone Direct, for its company-owned stores. Bridgestone also invested in Kodiak Robotics, a U.S.-based autonomous trucking company, and acquired Otraco International Pty. Ltd., an Australia-based OTR tire solutions provider. Other moves included the acquisition of Azuga Holdings Inc., a firm that provides telematics and GPS tracking, for $391 million and securement of a 10% share in Wrench, a mobile vehicle services supplier. Bridgestone also sold 15 GCR Tires & Service locations in eastern Canada to Kal Tire. And the company sold its Firestone Building Products unit for $3.4 billion in a move designed to augment the company’s tire and mobility solutions businesses. Rounding out 2021, Bridgestone reported a 168% year-over-year jump in total operating profit during the third quarter.

GOODYEAR TIRE & RUBBER CO. GLOBAL TIRE SALES 2021: $13.9 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 33.5%

In February, Goodyear Tire & Rubber Co. announced that it would acquire rival Cooper Tire & Rubber Co. for $2.5 billion in a deal that was expected to close during the second half of 2021. Cooper shareholders approved the acquisition in April and it was finalized in June. Integration activities are still underway. Goodyear continued its future mobility investments by forming a partnership with Plus, an autonomous truck technology provider, and investing in another autonomous truck technology company, Gatik. TireHub LLC, the joint venture that Goodyear and Bridgestone Americas Inc. own, added locations, but lost its CEO.

CONTINENTAL AG GLOBAL TIRE SALES 2021: $13.6 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 15%

Continental AG’s Continental Tire the Americas LLC business launched a number

of consumer products, including its first entry into the growing all-weather segment. It also invested in its Continental Gold Dealer Network, whose members achieved significant revenue gains. On the commercial tire side, ramping up production at the firm’s $1.4 billion commercial truck tire plant in Clinton, Miss., was a priority. Continental grew its commercial tire distribution by forming a partnership with Boss Truck Shops, which has nearly 50 locations in 23 states. And Continental expanded its General brand OTR tire offering. Continental’s BestDrive LLC chain made a strategic divestiture by selling five locations and one retread plant to independent BestDrive network member Conlan Tire LLC. At the global level, Continental announced that it would split its Tires and ContiTech units at the start of 2022. They had been grouped together within the firm’s Rubber Technologies division.

SUMITOMO RUBBER INDUSTRIES LTD. GLOBAL TIRE SALES 2021: $6.7 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 9%

In August, Sumitomo Rubber Industries Ltd. raised its full-year financial projections, noting that its sales volume continued to recover, “making a particularly strong comeback” in both North America and Europe. In North America, subsidiary Sumitomo Rubber North America Inc. (SRNA) continued to grow its Falken brand sales. At SRNA’s dealer meeting in September, company officials revealed that the firm’s growth “has outpaced the industry in 17 of the past 18 months.” SRNA continued to aggressively push its Falken Fanatic dealer program, which has grown from 3,000 members in 2018 to 10,000. The company also invested heavily in its plant near Buffalo, N.Y., during 2021, with the goal of ramping up passenger and light truck tire production by 8% and medium truck and bus tire production by 25% during the fourth quarter of 2021. More capacity increases are planned. MTD January 2022

1/12/22 12:05 PM

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World tire sales leaders — year in review Longtime SRNA president and CEO Richard Smallwood retired at the end of December. He was succeeded by Darren Thomas, who has moved into the president and CEO roles.

PIRELLI & CIE SPA GLOBAL TIRE SALES 2021: $6.2 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 4%

Earlier in 2021, Pietro Berardi, then-CEO of Pirelli & Cie SpA subsidiary Pirelli Tire North America Inc. (PTNA), told MTD that pursuing original equipment fitments on more light trucks, SUVs and CUVs in the United States and Canada would be a renewed priority for the company Along those lines, Pirelli continued to expand its signature Scorpion line during 2021, including developing a tire exclusively for Ford Motor Co. in North America. Pirelli also continued to invest in electric vehicle tire development. In North America, the company rolled out a “click-to-buy” e-commerce platform and approved a $36 million investment at its Guanajuato, Mexico, plant to boost the factory’s annual capacity to 7.2 million units. The plant’s output is dedicated to North America, as well as the local market. In October, Pirelli named a new CEO of PTNA, Claudio Zanardo.

HANKOOK & CO. GLOBAL TIRE SALES 2021: $6.1 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 7.5%

In February, Hankook & Co. subsidiary Hankook Tire North America announced that it will invest $1 billion in its Clarksville, Tenn., passenger and light truck tire plant to boost production there by up to five million units for an overall annual capacity of 10 million tires. Hankook took a hit mid-year when the United States Department of Commerce (DOC) assigned anti-dumping rates of 27.05% on all consumer tires that the company exports to the U.S. This didn’t stop Hankook from continuing to pick up original equipment fitments with Audi, BMW and Volkswagen, nor did it impede the company’s new product launches, particularly in North America. Hankook also invested in Mobiltech, an artificial intelligence technology startup. The company reported a 3% year-overyear, global revenue loss during the third

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quarter. But Hankook increased its sales and volume in North America.

YOKOHAMA RUBBER CO. LTD. GLOBAL TIRE SALES 2021: $4.8 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 8.5%

Yokohama Rubber Co. Ltd. invested heavily in its North American commercial tire business during 2021. Yokohama Tire Corp. (YTC) introduced several new medium truck tires and the company’s Yokohama Off-Highway Tires America Inc. (YOHTA) unit rolled out a new commercial truck tire line under the Galaxy brand name. YTC opened a 430,000-square-foot distribution center near Dallas, Texas, that houses and ships Yokohama brand passenger and light truck tires. And on the manufacturing side, Yokohama announced an investment of $171 million that will boost production at a YOHTA plant in India. Yokohama enjoyed record OTR, ag and industrial tire sales on a global basis during the first nine months of 2021. This was driven in large part by increases in North American replacement tire sales. YTC President Jeff Barna also added the role of CEO to his duties during 2021.

ZHONGCE RUBBER GROUP CO. LTD. GLOBAL TIRE SALES 2021: $4.6 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: N/A

Targeting a 15% increase in export growth during 2021, Zhongce Rubber Group Co. Ltd. (ZC Rubber) launched its Flagship Series line — which includes the company’s Arisun, Westlake, Goodride and Tazano brands — and announced that all four would be available globally later in the year. Zhongce officials also revealed that the China-based manufacturer is eyeing the possibility of building a new plant in North America, Europe or the Middle East. In November, the company opened a technical center in Hanover, Germany, that will support its existing tech center in China and will focus on developing tires for original equipment fitments.

CHENG SHIN RUBBER IND. CO. LTD. GLOBAL TIRE SALES 2021: $3.8 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 2.5%

Anti-dumping duties were levied against Cheng Shin Rubber Ind. Co. Ltd. during

2021. However, the company, which does business in the United States as Maxxis International — USA, won a reprieve in February 2021 when the U.S. DOC agreed to jettison its original rate of 52.42%. Cheng Shin was part of a group of Tawain-based tire manufacturers that proposed a settlement with the DOC in January 2021. The firms promised to not sell their products in the U.S. until the DOC could set a reference price for those tires. The other companies in the group were Federal Corp., Kenda Rubber Industrial Co. Ltd. and Nankang Rubber Tire Corp. Ltd. All were hit with anti-dumping duties later in the year.

TOYO TIRE & RUBBER CO. LTD. GLOBAL TIRE SALES 2021: $3 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 7.5%

Toyo Tire & Rubber Co. Ltd. reshuffled a number of personnel at its home office in Japan. And longtime Toyo Tires U.S.A. Corp. President and CEO Roy Bromfield retired in July. The company continued to invest in its consumer tire plant in White, Ga., while leveraging supply from its plants in other parts of the world to maintain fill rates in the U.S. During the Specialty Equipment Market Association Show, Toyo previewed a new addition to its Celsius all-weather line, which will be available in the U.S. in March 2022. Toyo wound down the year by posting a 71.3% year-over-year operating income increase for the third quarter.

GITI TIRE PTE. LTD. GLOBAL TIRE SALES 2021: $3 BILLION TOTAL U.S. CONSUMER TIRE MARKET SHARE: 3.5%

Giti Tire Pte. Ltd.’s North American subsidiary, Giti Tire (USA) Ltd., expanded its product menu and customer base during 2021. OK Tire, which has more than 300 locations across Canada, added the company’s GT Radial brand passenger and light truck tires to its product screen early in the year. Giti also rolled out two new commercial tire lines under the GT Radial label, Cross Regional and Cross Urban. And in response to rising freight rates, the company announced that it would increase freight surcharges of up to $10,000 per container “for some destinations.” ■ MTD January 2022

1/12/22 12:06 PM

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1/5/2022 1:26:22 PM

“Having been selected as MTD’s Tire Dealer of the Year Award recipients was truly an honor for us. The distinction is a direct reflection of Southern Tire Mart and Southern Tire Mart at Pilot Flying J. Putting the needs of new and loyal customers first is what our employees do best and it’s that dedication and commitment to doing the right thing every day that makes us who we are.” – Jim and Tommy Duff, owners, Southern Tire Mart

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1/5/2022 10:06:01 AM

WE WANT TO HEAR FROM YOU!

Nominate a candidate for MTD’s 2022 Tire Dealer of the Year Award Established in 1993, Modern Tire Dealer’s Tire Dealer of the Year Award is the oldest, most prestigious honor of its kind. Each year, Tire Dealer of the Year Award candidates are evaluated in five categories: California dreaming or new reality? Fuel efficiency ruling could have big impact On the fast track RNR Tire Express builds steam How to sell brake service

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Do you know an independent tire dealer who excels in these areas? Nominate him or her today! DEADLINE FOR ENTRIES IS MAY 27, 2022. To nominate, go to: www.moderntiredealer.com/awards For more information, contact MTD Editor Mike Manges at mmanges@10missions.com

DON’T MISS YOUR CHANCE TO RECOGNIZE AN OUTSTANDING TIRE DEALER! 72-73_DEALER OF THE YEAR_0122.indd 73

1/5/2022 10:06:11 AM

Business Insight

How to be debt-free in 2022 DON’T WAIT TO PAY DOWN WHAT YOU OWE — FOR YOUR OWN PEACE OF MIND By

Dennis McCarron

t’s been a crazy two years. Here in the United States, most independent tire dealerships survived the lows of the pandemic and lockdowns. And many that survived had an increase in sales One of the most common themes in the conversations I had with tire dealers across the nation in 2021 was “banking your profits.” It can be very tempting during a difficult period to come out financially on the plus side and think, “I’ve worked especially hard, so I deserve to reward myself.” Yet here I am going to advise you to hold off. If your business holds any significant debt — other than maybe your original loan — I strongly suggest you use last year’s windfall to pay down debt. And if you’re using credit to purchase tires and parts and not paying it off every month, you really need to start putting money into servicing your company’s debt. The main reasons I urge this are related to your mental health and to help you get through any rough patches in business that are likely to hit in the next 12 months. Financial stress from owning a business is one of the main causes of health problems in small business owners. No one else understands the weight of having to make payroll every week. Not many understand the pressure of signing a loan for close to or more than $1 million. That stress affects the way you think, your personal relationships, your sleep and more. Bottom line? It’s unhealthy. From the financial side, it’s very likely interest rates are going to start going up in 2022.

04_MTD_Columns.indd 74

Now is the time to reduce debt — not a year from now. Here’s why. The worst-case scenario is that you’re on credit for inventory and not paying the bill on time. This usually means you have an additional loan or access to credit to help get through “the slow months.” Most banks will consider you tapped out at this point as far as extending more credit, so the people willing to give you credit will do so at very painful rates. An additional problem is that if inventory is on credit where interest is paid, the owner is likely not including the interest in the cost, so expenses

Now is the time to reduce debt — not a year from now. are creeping upward and net profit is dwindling. In this case, some drastic measures need to take place, as this is unsustainable. A whole lot of change needs to happen quickly. You won’t have access to anyone else’s money, so you typically must create it yourself. Raise prices, sell off inventory for cash, skinny down all non-essential expenses and take a big personal paycheck hit. The next-to-best case scenario is that you have some debt — typically related to leasing equipment, a recent remodel or any other major expense that doesn’t occur commonly — or you have some old debt related to getting your business up and running. I strongly recommend that you take some of your windfall from 2021 and pay a portion off or eliminate that debt completely. It will feel good.

But how much should you pay? Make sure you pay down at least enough to make a bank look at you as a safe bet to lend money. One of the first financial items a bank will look at is your “current ratio.” Your current ratio is how much in current assets — items that can turn to cash in 12 months, like inventory — you have against your current liabilities, which are items of debt that are to be paid in a 12-month period. You should have $2 in current assets to every $1 in current liability. This tells a bank you have the ability to create an excellent stream of cash and are not tied down with a lot of short-term debt. This information is available on you r b a l anc e she e t . If you ne e d help understanding this more, your accountant can assist. And believe it or not, YouTube is a great resource for educational content. Just make sure the content provider knows what he or she is talking about before you decide to act on any of their advice. What you don’t want to do is to pay down so much debt that you are again cash-strapped and must get another loan. If you are in this scenario, make sure there is about two to three months of cash in your bank. The rest can go towards paying down debt. The best-case scenario is that you have no debt — not even a mortgage. Congratulations! You have reached tire dealership nirvana! Hand out some performance-based bonuses to the people in your shop, give some merit raises where due and go ahead and buy that “little” reward you deserve. ■ Dennis McCarron is a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive

MTD January 2022

1/13/22 10:55 AM

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1/3/2022 9:46:54 AM

Mergers and Acquisitions

Decoding the value of D2C WHY DIRECT-TO-CONSUMER BUSINESSES ARE FETCHING TOP DOLLAR By

Michael McGregor

tuff rolls downhill. I use this phrase when explaining to clients how analyzing the values of larger public and private companies in the marketplace can give them a relative sense for how their smaller business might be valued. But increasingly, we all need to be looking at how the impact of new entrants or new combinations may change valuations in the future. When we get a new client looking to exit their business, we try to give them our sense for the value of their business so we are aligned with their expectations. The way we do this is by looking at the publicly traded companies in their space and then finding recent, comparable sales. We look at the public companies that are doing what the client does, but on a much larger scale. For example, with auto parts manufacturing clients, we look at 40 public companies, such as Borg Warner, Lear Corp. Tenneco and Dana Corp. We look at low and high EBITDA multiples, but in particular, we focus on the mean and median midpoints, which are hovering now at around eight times to 10 times EBITDA. For tire and service retail clients, we start with Monro Inc., which is the most visible publicly traded company in this space. As of this writing, it traded at 15.3 times EBITDA. That’s a pretty good upper end for all smaller retail tire dealers to be measuring their lower value against. Now besides Monro, there’s not much else to compare against, except for what we know of in our own transactions or hear in the market. We assume that some of these recent big deals — like when Mavis Tire, with more than 1,000 stores, traded hands to a new private equity buyer — were either in that same range, but possibly higher. We heard that when Driven Brands last traded hands a few years back, it might have been at a 12 times EBITDA multiple, so I tend to still use that as the low end for the large companies. Anyway, for large companies in tire retail and service, let’s say the range is 12 times to 15 times-plus EBITDA and more. For automotive e-commerce clients, we look at 50 public companies, like 1-800-Flowers.com, Amazon, eBay, CarParts. com, Parts ID and others. These 50 companies have mean and median values of 27 times to 34 times EBITDA. All of this helps owners understand where they may fit in the value range. If you are a $12 million auto exhaust manufacturer, you’re going to trade for about a three times to five times EBITDA

04_MTD_Columns.indd 76

multiple because the median public companies are only eight times to 10 times EBITDA. If you are a six-store chain of tire stores, you’re going to trade for maybe five times to seven times, depending on the appetite of the buyers and your level of profitability, among other things. And if you are an automotive e-commerce company with $60 million revenue and a good brand, you might be looking at a nine times to 10 times EBITDA or a higher, double-digit multiple. Now paying attention to how public and large private companies’ valuations change over time will also let you know what the trend is within your category of business. For example, in May 2016, Monro was trading at the same multiple it is today — 15 times EBITDA. Knowing this signals that valuations overall have remained steady and strong for retail tire dealers. Had they been 12 times EBITDA in 2016, one would say valuations have been growing. But how do you read the tea leaves about future valuations? Look at what else the information above is telling us. Oldeconomy auto parts manufacturers with capital intensive, internal combustion engine-focused (ICE), two-step and three-step distribution businesses are valued pretty low. Tire and auto service retailers that install some of these parts — but control the customer experience in their physical stores — are valued much better. But virtual, internet-based companies that sell direct to the consumer are valued the highest. It’s like looking at the past, the present and the future right there. And that’s how new business models can be valued much higher than older public companies in the same industry. The market is predicting that things are going in a particular direction. That’s why Tesla is seemingly worth more than all of the Detroit auto companies combined. That’s why Warby Parker, the online eyewear company, trades at 10 times revenue – not EBITDA. With sales of $500 million, Warby Parker is worth $5 billion. And that’s why Allbirds, the online shoe company, trades at nine times revenue. Allbirds is worth $2 billion on sales of $260 million. While Tesla is obviously about the shift from ICE to electric vehicles, it’s also partly about selling direct to the consumer (D2C). The market is saying brands that operate as retailers — controlling both the customer experience and the customer relationship — trade at much higher values than other companies. But more than that, these companies have the right sort of positive customer experiences that build brand reputations, MTD January 2022

1/13/22 10:55 AM

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Mergers and Acquisitions drive customer loyalty and retention, reduce operating or Low-profit tire wholesale businesses sell for net asset value. marketing expenses over time and will eventually result Sell your assets to a competitor. (This is likely a non-taxable in higher margins. The market also is expecting that these event.) Pay off your debt; lease any distribution centers you brands will eventually capture a higher share of a customer’s own at fair market rent since you’re likely below market and lifetime purchases and become more dominant channels than can live off that rent; and invest the proceeds in a diversified existing competitors. portfolio in the stock market. The S&P 500 Index has averaged 10.7% compounded My colleague, Giorgio Andonian, picked up on this trend in recent transactions he led for us in the auto parts and annual returns for the last 30 years, through good and bad accessories businesses. years. If after you sell everything off, you have $2.5 million, Neither of the clients involved in these deals actually that will be worth $ 7 million in 10 years if you don’t touch manufacture their products, which are mostly produced it. If you have $5 million, that will be worth $13.8 million overseas, although they are very involved with product design in 10 years. You are much better off liquidating those assets and development. and earning a higher return elsewhere. In both cases, every product was sold directly to the consumer For retail tire dealers, Discount Tire is showing the way through the client’s website or call centers, with our client’s forward with its recent acquisition of Tire Rack. brand on them. Both Discount Tire and Tire Rack engender great customer Common denominators are that both clients dominate loyalty. Customers love them. their niches with high brand awareness, both had great profit I was in Southern California visiting my cousin, a former and EBITDA margins, both controlled 100% of the customer’s judge who is now a practicing attorney again, when the Tire buying experience and both fetched Rack deal was announced. It turns very high valuations at closing. out, my cousin has always shopped D 2 C bu s i n e s s m o d e l s a re at Tire Rack. And now he lives in consistently valued higher than one of the 24 metro regions that D2C business models are traditional, unbranded, two-step Tire Rack’s mobile installation consistently valued higher than or three-step distribution models. service operates in. According to private equity He loves the information the traditional, unbranded, two-step Tire Rack website provides and buyers, the “margin profile” is or three-step distribution models higher in D2C. (By the way, “margin their multi-brand assortment, now profile” is a new term going around coupled with the convenience of that means the same thing as “profit margins.” It’s just an having someone come to his house and install those tires attempt by people who invest other people’s money for a living in his driveway. to make what they do seem more scientific and sophisticated.) With its 1,100-plus-and-growing retail store footprint and These D2C companies cut out distributors and wholesalers now with the acquisition of Tire Rack, Discount Tire is the and sell directly to consumers, mostly online. Increasingly, largest omnichannel tire retailer out there. you’re seeing these companies become omnichannel retailers. The main responsibility of publicly traded tire companies like For example, Warby Parker and Tesla have physical stores Goodyear Tire & Rubber Co., Michelin Group and Bridgestone and showrooms, in addition to their online presence. Corp. is to enhance the stock value for their shareholders. So what does this D2C valuation trend mean for people They are looking at the valuations of some of these D2C businesses and are learning from them. It should be no in the tire business? Well, commercial tire dealers need to resolve the issue of surprise that Goodyear has spent a lot of resources on its who controls the customer. online presence since 2015. Commercial tire dealers have a direct impact on their national Bridgestone — with its Firestone Direct mobile tire account customers’ experiences, but with these arrangements, the installation program and its recent 10% minority investment tire manufacturers set the prices and determine the margins. I in Wrench, the mobile auto service company — certainly believe the recipe for improved profitability for many commercial points to a D2C future in which Bridgestone controls more tire dealers needs to start with sorting this out. of the customer experience, much like Tire Rack does today. For tire wholesalers, not all tire brands are going to go Bridgestone’s margins should improve and if this also enhances direct to the consumer. customer loyalty, the company’s stock price should improve. If you’ve been around the tire business for any period of Keep adding value to your customers with faster deliveries, fuller assortments and support programs and seek out profittime, you’ve seen these mobile installation businesses come able niches. and go. I’d like to take a moment here and speak directly to the I’ve always been a skeptic — until now. I think they’re marginally profitable tire wholesalers reading this with net going to stick. ■ EBITDA margins consistently below 2% or thereabouts. If you’re in this position, it’s time to get out. Your customers Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/automotive/tire-and-service). He advises and are not rewarding you with superior profits and your pricing is assists multi-location tire dealers on mergers and acquisitions. For more messing up the market for everyone else. Here’s what I suggest information, contact him at michael.mcgregor@focusbankers.com. you do.

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MTD January 2022

1/12/22 12:18 PM

Focus on Dealers

Adjusting to curveballs CONTINUOUS TWEAKING HELPS BISCAN HIT SEVEN FIGURES IN SALES By

Ron Ledgard

tarting a business at any time is not easy. But try getting your start right before the beginning of a pandemic. Philip Biscan took ownership of Van’s Tire Pros of Alliance in late-2018. Biscan worked at the singlelocation dealership — which is based in Alliance, Ohio — after high school as a tire technician. He moved on to some different roles in the automotive repair business, but through the years kept in touch with owner Kirk Wineman. One day, “out of the blue,” Wineman, who had been diagnosed with cancer, texted Biscan and asked if he wanted to buy the store. At first, Biscan passed. But a few months later, he called back and told Wineman, “Let’s figure this out.” Wineman passed away at age 55. Soon after, Biscan, then 31 years old, became the dealership’s new owner. At the time, the company had one employee. “I ran it as a tire shop for six months. Then I added a mechanic and started doing small undercar stuff and alignments.” In three years, the business has grown to include seven service bays, 11 employees and sales in excess of $1 million per year. And the struggle to keep and add staff has not been an issue for Biscan like it has for other tire dealers. “I, fortunately, don’t really have a problem with that right now. With our reputation in the area, we actually have (people who) want to come work for us.” The COVID-19 pandemic, which hit in March 2020, caused some initial concern, says Biscan. “I didn’t know what was going on” at first, he admits. “When the state of Ohio shut down, I chose to shut down for two weeks — waiting to see what was going (to happen) and planning for the future.” Ohio declared tire dealerships to be essential businesses. With people’s need to maintain their cars and government stimulus money in their pockets, business picked up quickly. “People who had neglected their cars finally had the money to put toward repairs, so I saw a pretty good influx of business then. And it has been a steady increase since.” Biscan credits some of his sales growth to having added auto repair service, which now makes up 40% of his dealership’s total revenue. He has made some other adjustments, as well. “After COVID-19, we quit working Saturdays and went to Monday through Friday, eight to five. And that was to help with not stressing our employees out and having them work extra time to keep the crew we have. “We also added four cars as a loaner program for the convenience of our customers. We have been getting good feedback on that.” w w w . M o d e r n T i r e D e a l e r. c o m

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Philip Biscan bought his first tire dealership, Van Tire Pros of Alliance (Ohio), in 2018 at age 31.

Biscan says his dealership has no problem finding or keeping employees. “With our reputation in the area, we actually have (people who) want to come work for us.”

The dealership also carries more inventory and has diversified the number of tire brands that it carries — due in large part to supply chain challenges. “We went from basically stocking $25,000 to stocking over $45,000 worth of inventory,” says Biscan. In the short term, Biscan wants to “refocus and refine” what he does. The plan is to add other locations within the next five years or so.

1/10/22 4:15 PM

TPMS

Acura RLX (Except Hybrid) 2016-2020

NOTE: When a tire pressure sensor is replaced or tires are rotated, the sensor ID must be memorized by the tire pressure monitoring system (TPMS) control unit. See TPMS RESET PROCEDURES.

TPMS SYSTEM DESCRIPTION — COMPONENTS

TPMS Control Unit The TPMS control unit sends signals to the initiators and receives signals from the tire pressure sensor to verify pressure sensor IDs every time the vehicle is turned to the ON mode. It also receives signals from the transmitters for tire pressure, tire temperature and the sensor battery condition and it continuously monitors and controls the system. Tire Pressure Sensor A tire pressure sensor is an integrated unit made up of each tire valve stem, a pressure sensor and a transmitter. Tire pressure sensors are attached to the inside of each wheel around the valve stem. The sensor transmits internal tire information using a radio frequency (RF) band wave signal one time per 60 seconds to the TPMS control unit. Each tire pressure sensor has its own tire pressure sensor ID to prevent jamming by similar systems on other vehicles.

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Initiators The initiators are mounted on the top of each wheel well. When the vehicle is turned to the ON mode, the initiators send a low frequency (LF) band wave signal to the tire pressure sensors, switching them from sleep mode to normal function mode. When the vehicle is turned to the OFF (LOCK) mode, the sensors switch from normal function mode back to sleep mode to extend their battery life. Wheel The TPMS will not work unless TPMS-type wheels are installed on the vehicle. The original equipment wheels have a “TPMS” mark on them and are counterweighted by adding material to counterbalance the weight of the tire pressure sensor.

TPMS SYSTEM DESCRIPTION — OVERVIEW

The TPMS continuously monitors all four tire pressure sensors and the system function whenever the vehicle is turned to the ON mode. If it detects low pressure in a tire, it alerts the driver by turning on the low tire pressure/TPMS indicator and the appropriate tire indicator. If it detects a problem in the system, it turns on the low tire pressure/TPMS indicator and

starts blinking. The system consists of the following components: (See Figure 1): • Keyless access/TPMS control unit; • Tire pressure sensors, and; • Initiators

TIRE PRESSURE MONITOR WARNING INDICATORS

Multi-Information Display The multi-information display (MID) provides the odometer/trip meter, outside air temperature, average fuel efficiency, available cruising range, instant fuel economy, elapsed time, TPMS, gear position, oil life, seat belt reminder, average speed and the status of the keyless access system. In addition, the diagnostic system displays the communication errors and diagnostic trouble codes (DTCs). Troubleshooting Here’s how to troubleshoot the TPMS system indicator. The system has seven indicators. (See Figure 2 on page 82): • • • • •

The low tire pressure indicator (A); The message indicator (B); The TPMS indicator (C); The right-front (RF) tire indicator (D); The left-front (LF) tire indicator (E); MTD January 2022

1/6/22 7:46 PM

TPMS Tire Pressure Changing by Temperature Tire pressures increase slightly as the temperature in the tires rise during driving. Pressures can also increase or decrease slightly with changes in outside air temperature. A temperature change of about 18 degrees F (10 degrees C) changes tire pressure by about 1.5 pounds per square inch (psi). If the temperature drops, tire pres-

REDI-Sensor TPMS: Introducing the next generation of fast, easy, and reliable.

Figure 1: System Diagram (Keyless Access/TPMS Control Unit): The system consists of the following components: keyless access/TPMS control unit, tire pressure sensors and initiators.

• Multi-Application sensor • No added sensor programming or cloning • Reduces SKUs • Covering 150 million vehicles with 4 sensors

• The right-rear (RR) tire indicator (F); • The left-rear (LR) tire indicator (G).

The TPMS Indicator • If a problem in the system is detected, the TPMS indicator comes on, as well as the message indicator, and the low tire pressure indicator comes on after blinking for about 75 seconds. • If low tire pressure and a problem in the system are detected, the TPMS indicator comes on, as well as the message indicator, and the low tire pressure indicator comes on after blinking for about 75 seconds. • If the system is OK, the low tire pressure indicator should come on when you turn the vehicle to the ON mode, and then goes off two seconds later. If it does not, there is a problem with the system.

Get the full story: REDI-Sensor.com REDI-Sensor – A Trademark of the Continental Corporation

The Low Tire Pressure Indicator If the system detects low tire pressure in any of the four tires, the low tire pressure indicator and the appropriate tire indicator(s) come on, as well as the message indicator. If the TPMS control unit detects a problem in the system during an indication of low tire pressure, it will turn off the tire indicator(s), store the DTC(s) and turn on the TPMS indicator and the low tire pressure indicator after blinking.

sure could decrease enough to turn on the low tire pressure indicator and tire indicator(s), but later, the tire temperature could increase enough to turn the indicator off. To resolve a complaint of such intermittent indications, confirm and clear the stored. Then explain to the client how temperature changes can affect the system.

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TPMS

TBE200

INDEPTH TIRE SERVICE

LASER TBE200 INTELLIGENT MEASUREMENTS TIRE TREAD DEPTH MEASUREMENT

BRAKE DISC WEAR MEASUREMENT 0.1MM LASER ACCURACY TOUCHSCREEN DISPLAY

Figure 3: Breaking Tire Bead Loose: Break the bead loose from the wheel with a commercially available tire changer. Figure 2: Multi-Information Display: The system has seven indicators: low tire pressure indicator (A), message indicator (B), TPMS indicator, right-front (RF) tire indicator (D), left-front (LF) tire indicator (E), right-rear (RR) tire indicator (F) and left-rear (LR) tire indicator (G).

be at least 10 feet (3 meters) away from other vehicles that have sensors; • When replacing the keyless access/ TPMS control unit, use the Honda & Acura Diagnostic System (HDS) to memorize sensor IDs.

Problems That Are Not System Faults • Tire sealant: Fluid sealant used to repair a punctured tire can damage the tire pressure sensor mounted on each wheel. It can prevent the system from detecting the correct tire pressure, which sets a DTC 11, 13, 15 or 17, even though the system is normal. • Cold weather: When the weather is extremely cold, about minus-4 degrees F (minus-20 degrees C) or colder, the output of the lithium battery in each tire pressure sensor may drop far enough that the TPMS control unit sets a DTC for low battery voltage (31, 33, 35 or 37), even though the system is normal. • Non-TPMS-type wheels, including spare tire: Vehicles equipped with TPMS must use wheels made for the system. Every TPMS type wheel has an exclusive mark. Do not use any other type of wheel. When a flat tire is replaced with the spare tire, the TPMS indicator comes on (DTC 32, 34, 36 or 38) because the system is no longer receiving the signal from the flat tire’s transmitter. This is not a problem with the spare tire.

NOTE: After the sensor IDs are memorized, reduce the pressure in all four tires to less than the appropriate specification and check to see that the four-tire indicators come on. Note that:

TPMS RESET PROCEDURES

Tire Pressure Sensor Registration Memorizing the Tire Pressure Sensor ID: Phone: (855) 288-3587 • USSUPPORT@AUTEL.COM

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Note that: • To ensure the TPMS control unit memorizes the correct sensor ID, the vehicle with the new tire pressure sensor must

• When replacing the keyless access/TPMS control unit, use the HDS to memorize sensor IDs; • After the sensor IDs are memorized, reduce the pressure in all four tires to less than the appropriate specification and check to see that the four-tire indicators come on. Tire pressure sensor ID All four sensor IDs must be memorized to the TPMS control unit whenever you do any of these actions: • Replace the keyless access/TPMS control unit; • Replace the tire pressure sensor, and; • Substitute a known-good wheel with a tire pressure sensor. Memorizing a tire pressure sensor ID automatically After rotating the tires or replacing a tire pressure sensor, drive the vehicle for at least 40 seconds at a speed of 15 mph (24 km/h) or more and all the sensor IDs are memorized automatically. Memorize a tire pressure sensor ID with the HDS MTD January 2022

1/12/22 12:21 PM

Information fo in ProDema import vehicle information so

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PRESS RELEASE

ORIGINAL EQUIPMENT FIT FORM & FUNCTION

RUBBER >

INTERCHANGEABLE VALVE STEMS

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OE QUALITY SENSORS UPDATES POWERED BY

ITS600

DIAGNOSTICS & SERVICE

• 5.5” Touchscreen Tablet with Android 9.0 OS • Optical Scanner Identifies VIN / MMY

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SOLUTION POWERFUL SCAN TOOLS DIAGNOSTICS

TS508

TPMS SERVICE TOOL

• 4 MX-Sensor Programming Methods • Exclusive TPMS Status Screen

SCAN TO WATCH

TRAINING VIDEOS

YOUTUBE

1/3/2022 10:22:46 AM

TPMS The HDS can memorize the sensor ID of a new tire pressure sensor or a previously memorized sensor ID. 1. Turn the vehicle to the OFF (LOCK) mode; 2. Connect the HDS to the data link connector (DLC) located under the driver’s side of the dashboard; 3. Turn the vehicle to the ON mode; 4. Make sure the HDS communicates with the vehicle and the TPMS control unit; 5. Memorize the tire pressure sensor ID by following the screen prompts on the HDS, and; 6. Turn the vehicle to the OFF (LOCK) mode. Demounting/Mounting Procedures CAUTION: The tire should be demounted from the wheel using the tire changer manufacturer’s instructions. Use the following information to avoid damage during the process.

TIRE PRESSURE SENSOR REMOVAL AND INSTALLATION

Removal NOTE: Each tire pressure sensor contains a lithium anode battery that is not removable. The complete tire pressure sensor should be disposed of according to local battery disposal guidelines. Improper battery disposal can be harmful to the environment. 1. Vehicle — lift 2. Remove wheel with the faulty tire pressure sensor 3. Tire pressure sensor — remove • Remove the tire valve stem cap and the valve stem core to deflate the tire; • Remove any balance weights. NOTE: Note these items to avoid damaging the tire pressure sensor: • Do the outside of the wheel first; • Position the wheel so the valve stem is 90 degrees from the bead breaker; • Do not position the bead breaker of the tire changer too close to the rim; • Break the bead loose from the wheel with a commercially available tire changer (A). (See Figure 3 on page 82) • Position the wheel so that the tire machine (A) and the tire iron (B) are next to the valve stem(C) and will move away from it when the machine starts; • Remove the tire from the wheel. NOTE: Check the nut and the washer. If they are deteriorated or damaged, replace them with new ones during reassembly. Remove the valve stem nut (A) and the washer (B); remove the tire pressure sensor with the valve stem (C); and remove and discard the valve stem grommet (A). The valve stem grommet might stay in the wheel. Make sure you remove it. And always use a new valve stem grommet whenever the tire pressure sensor has been removed from the wheel or when replacing the tire.

INSTALLATION

Tire Pressure Sensor — Install NOTE: Use only wheels that have a “TPMS” stamp (A) on the inside or outside of the wheels. (See Figure 4):

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MTD January 2022

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TPMS 1. Before installing the tire pressure sensor, clean the mating surfaces; 2. Install the tire pressure sensor (A) NOTE: Install the sensor so that the sensor housing surface (D) is below the protrusion (E) of the wheel. This prevents the sensor housing from being caught on the bead during installation. Be sure to always mount the tire pressure sensor with the feet (F) in the downward position toward the wheel; 3. Install the washer (B) and the valve stem nut (C); 4. Tighten the valve stem nut to the specified torque while holding the tire pressure sensor: • Do not use air or electric impact tools to tighten the valve stem nut. • Do not twist the tire pressure sensor to adjust its position with the wheel, as this will damage or deform the valve stem grommet.

5. Lube the tire bead sparingly with a paste-type tire mounting lubricant and position the wheel so that the tire machine (A) is next to the valve stem (B) and will move away from it when the machine starts; 6. Install the tire onto the wheel and make sure the tire bead is seated on both sides of the rim evenly; 7. With a dry air source, inflate the tire to 43.5 psi to seat the tire bead to the rim;

8. Adjust the tire pressure; 9. Install the valve stem cap, and; 10. Check and adjust the wheel balance. ■ Information for this column comes from the tire pressure monitoring systems data in ProDemand, Mitchell 1’s auto repair information software for domestic and import vehicles. Headquartered in San Diego, Mitchell 1 has provided quality repair information solutions to the automotive industry since 1918. For more information, visit www.mitchell1.com.

In the market? Choose the TPMS tool that works with virtually every sensor. Figure 4: Tire Pressure Sensor: Install the tire pressure sensor (A). Be sure to note to install the pressure sensor so that the sensor housing surface (D) is below the protrusion (E) of the wheel. This prevents the sensor housing from being caught on the bead during installation.

TORQUE SPECIFICATIONS Component

Ft.-lbs.

(N.m)

Wheel nut

(127)

Get the ability to perform TPMS service with virtually any OE or aftermarket TPMS sensor along with best-in-class vehicle coverage. Don’t settle for a TPMS tool that locks you into one brand of aftermarket sensor. Choose the enhanced features of the Autodiagnos™ TPMS D Tool or the efficient Autodiagnos™ TPMS SE Tool, and get Continental’s OE TPMS systems experience. Learn more: www.AutodiagnosTPMS.com

INCH LBS. (N.m) Component *Tire Pressure Sensor Nut

Ft.-lbs.

(N.m)

(4)

*Do not use air or electric impact tools to tighten a valve stem nut. Tightening the nut beyond the specified torque can damage the nut. Make sure that there is no space between the sensor and the wheel.

Autodiagnos TPMS SE Tool Full-featured TPMS service. Autodiagnos TPMS – A Trademark of the Continental Corporation

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Autodiagnos TPMS D Tool Diagnostics, TPMS service and tire service in one unit.

1/3/22 3:00 PM

1/12/22 12:25 PM

Products Sentury unveils GroundSpeed line Sentury Tire USA is bringing its full line of GroundSpeed consumer tires to the market, ranging from mud-terrain and all-terrain light truck products to passenger car, CUV and SUV tires. Among others, the line includes the GroundSpeed Voyager HP, an ultra-high performance tire that fits rims ranging from 17 inches to 20 inches, as well as an all-season touring tire, the Voyager GT, which combines durability, high mileage and wet road grip for a quiet, comfortable ride. The Voyager MT tire offers optimal off-road traction. SENTURY TIRE USA www.groundspeedtires.com

Schaeffler bundles components Schaeffler Automotive Aftermarket is bundling all components needed to repair timing drive systems into kits. The company says its portfolio of engine timing products covers more than 95% of all U.S. Asian and European vehicles on the road in Canada and the U.S. The kits are available in chain drive and belt drive versions. They contain chains/belts, tensioners, gears and gearsets, guide rails, fasteners and VCT components. All kits also contain the company’s Chain Protect additive, developed in conjunction with Liqui Moly. SCHAEFFLER AUTOMOTIVE AFTERMARKET www.schaeffler.us

Autel integrates registration Autel’s new MaxiTPMS ITS600 tablet offers Department of Transportation (DOT) tire registration via an integrated CIMS E-Tire registration feature. Autel partnered with CIMS to enable ITS600 users to complete tire identification number (TIN) registration for customers directly from the tablet. A CIMS subscription is required. A technician taps the Tire DOT app, selects “tire register,” selects the tire manufacturer from a drop-down list, inputs the TIN for each tire, enters customer contact info and then taps “submit.” The app also lets technicians perform additional safety inspections on installed tires, including determining tire age and recall status. AUTEL www.autel.com

We Know the Tire Business Retail

Commercial

Wholesale

Call or email for a confidential discussion.

704-369-5900

Michael McGregor | FOCUS Managing Director

michael.mcgregor@focusbankers.com

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MTD January 2022

1/13/22 8:12 AM

FUELING FUTURES

TOGETHER

Driving Tomorrow’s Workforce of Technicians

40 SCHOLARSHIPS

TO FUTURE TECHNICIANS

WD-40® Brand, Advance Auto Parts and TechForce are teaming up to support future technicians. For more information on how to support future technicians, SCAN HERE.

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1/3/2022 9:50:54 AM

Products

Milestar Patagonia M/T gets refresh Tireco Inc.’s updated Milestar Patagonia M/T-02 integrates new internal technologies and finite adjustments for a stronger, tougher and more pliable product. And Tireco officials say those tougher characteristics do not detract from the tire’s smooth, quiet ride. The M/T-02 will be available in 32 sizes, including the brand’s tallest option, 42X14.5R20LT. Other popular sizes include LT285/70R17 and 37X12.5R17LT. The tire’s new tread features cross-directional siping to improve strength and resilience, with a more stable footprint, while reducing the risk of chunking. The tire also contains Milestar’s MileTech three-ply sidewall. TIRECO INC. www.milestartires.com

T I R E S

H/T

A /T

R/T

M/T

On-road, off-road and everywhere in-between. PRINX CHENGSHAN TIRE NORTH AMERICA, INC 310.205.8355 | info@prinx.us.com

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Pirelli rolls out P7 AS Plus The new Pirelli P7 AS Plus from Pirelli Tire North America Inc. is an all-season touring tire that targets sedans and coupes. It’s designed for drivers looking for extra mileage, comfort and all-season capabilities. The tire is available in 31 sizes and was developed “to meet the needs of North American drivers” who are looking for enhanced all-season performance, as well as extra mileage and a comfortable driving experience, according to Pirelli officials. It features a new tread pattern, as well as new construction and new compounding. The tire completes Pirelli’s Plus 3 Generation family, which covers more than 70% of the top sizes in the 18-inch and larger range, with speed ratings of H, V or higher. PIRELLI TIRE NORTH AMERICA INC. www.pirelli.com

Nexen updates Roadian HTX2 Nexen Tire America Inc.’s Roadian HTX2 highway-terrain tire is designed to offer the next generation of trucks and SUVs long-lasting highway mileage. The tire provides durability and all-weather driving performance with its 3-Peak Mountain Snowflake certification. It comes with two sidewall design options and is available for wheel sizes ranging from 16 inches to 22 inches in diameter. The tire’s 51-size lineup includes speed ratings of R, S, T and H. The Roadian HTX2 comes with a 70,000-mile tread warranty for P-metric sizes and a 50,000-mile tread warranty for LT metric sizes. Road hazard protection covers the first 3/32-inches of tread. NEXEN TIRE AMERICA INC. www.nexentireusa.com MTD January 2022

1/6/22 7:47 PM

ATD introduces Hercules UTV tire American Tire Distributors Inc. (ATD) is partnering with TIS Wheels to create the first UTV tire under the Hercules brand — the TIS UT1. The tire is designed to help consumers drive off-road in a variety of settings, from sand and silt to loose rocks, gravel and dirt. Its tread pattern is specifically designed for UTVs and side-by-sides and eight-ply construction provides stability in both recreational and work applications. The tire comes in six sizes, ranging from 28 inches to 35 inches and fitting 14-inch and 15-inch wheel diameters. AMERICAN TIRE DISTRIBUTORS INC. www.herculestire.com

More Baja Boss A/T sizes available Goodyear Tire & Rubber Co.’s Mickey Thompson Tires & Wheels division has added a number of sizes to its Baja Boss A/T light truck tire line. They include sizes LT265/75R16, LT285/75R16, LT265/65R17, LT265/70R17, LT285/70R17 and LT265/60R18, as well as LT285/60R20, LT285/65R20 and several others. There are options at 34- and 35-inches for lifted pickups that have 20- and 22-inch wheels. The Baja Boss A/T features Mickey Thompson’s PowerPly XD 3-ply construction for durability and a silica-reinforced tread compound for grip. GOODYEAR TIRE & RUBBER CO. www.mickeythompsontires.com

MANUFACTURING HIGH-QUALITY PRECURED TREADS AND RETREADING MATERIALS SINCE 1952

Continental expands brake line The ATE Disc Brake Pad line has been expanded to cover more than 95% of European vehicles. In all, there are 293-part numbers that apply to more than 104 million vehicles on the road in the U.S. and Canada. Key applications for both semi-metallic and ceramic formulations include popular models from Alfa Romeo, Audi, BMW, Jaguar, Land Rover, Mercedes-Benz, MINI, Porsche, Range Rover, Renault, Saab, Volkswagen and Volvo. ATE Disc Brake Pads are formulated to original equipment friction specifications and are built and tested to meet or exceed OE manufacturers’ quality standards. CONTINENTAL COMMERCIAL VEHICLES & AFTERMARKET www.ate-brakes.com

We provide world-class retread solutions to independent retreaders throughout the United States and Canada that includes over 70 different precured tread designs, commercial & OTR extruder strips, cushion, repair materials, and technical support.

Pre-Q Galgo Corporation 4329 Bronze Way Dallas, TX. 75237 Ph # 214 330 7300 - Fax # 214 331 2222 E- mail: info@pre-q.com www.pre-q.com

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1/13/22 10:56 AM

Ad Index WHEN YOU CONTACT ONE OF OUR ADVERTISERS PLEASE BE SURE TO MENTION YOU SAW THEIR AD IN MODERN TIRE DEALER ADVERTISER

PAGE

WEBSITE

1-800EveryRim OEM Wheels

www.everyrim.com/MTD

31 Incorporated

www.31inc.com

Aftermarket Auto Parts Alliance Inc.

www.aftermarketjackpot.com

American Omni Trading

www.thunderertireusa.com

American Tire Distributors

www.atd-us.com

Apollo Vredestein Tires Inc.

www.vredestein.com

Apollo Vredestein Tires Inc.

www.apollotrucktires.com

Atturo Tires

www.atturo.com

AUTEL

67, 82, 83

www.autel.com

BendPak Inc. Ranger Products

www.mybendpak.com

BKT USA Inc.

www.bkt-tires.com

Blackburn OEM Wheel Solutions

www.blackburnswheelfinder.com

Continental Corporation

www.ate-na.com

Continental Corporation

www.autodiagnostpms.com

Continental Corporation

www.redi-sensor.com

Continental Tire

www.continentaltire.com

Cosmo Tires

www.cosmotires.com

Deestone

www.deestone.com

Falken Tires

www.falkenspiff.com

FOCUS Investment Banking LLC

www.focusbankers.com

Fury Tires

www.furytires.com

Gaither Tool Company Inc.

www.gaithertool.com

GRI Tires

www.gritires.com

GT Radial

www.gtradial.com

Hunter Engineering Company

www.hunter.com/tire-changers

Independent Tire Dealers Group

www.itdgusa.com

K & M Tire Inc.

www.mastercrafttires.com

Katapult

www.katapult.com

Kenda Tires USA

IBC

www.kendatractionrewards.com

Linglong Americas Inc.

www.linglongtire.com

Maxxis Tires

www.maxxis.com

Nitto Tire U.S.A. Inc.

OBC

www.nittotire.com

Nokian Tyres Inc.

www.nokiantyres.com

Pirelli Tire LLC

www.us.pirelli.com

Pre-Q Galgo Corporation

www.pre-q.com

Prinx Tire North America Inc.

www.prinxtire.com

Sailun Tire Americas

www.gosailun.com

Schrader TPMS Solutions

www.schradertpms.com

Sentury Tire

www.groundspeedtires.com

Sumitomo Tires

46-47, 71

www.sumitomotire.com

TechForce Foundation

www.techforce.org

Tireco Inc.

www.milestartires.com

Toyo Tires

www.toyotires.com/allweather

TR Wholesale Solutions

www.trwholesalesolutions.com

Transamerica Tire Company Ltd.

IFC

www.transamericatire.com

Trelleborg Wheel Systems Americas Inc.

www.treelleborg.com/wheels/us

Yokohama Off-Highway Tires America Inc.

www.yokohama-oht.com

ZC Rubber America Inc.

www.arisuntires.com

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MTD January 2022

1/6/22 7:47 PM

TRACTION SPEAKS LOUDER THAN WORDS.

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Modern Tire Dealer - January 2022

Articles inside

Products

Industry News

Business Insight

moderntiredealer.com

Mergers and Acquisitions

Numbers That Count