As we approach winter tire season, the top issues affecting tire dealers aren’t new. Recruitment, regulations and margins are all challenges of the past, present and future. If you’re a tire dealer, being informed about these issues can help you better manage your operations. Here are some of the top challenges currently facing tire dealers:
Recruiting and retaining talent
Employee recruitment continues to be a challenge for tire dealers, particularly fresh young talent. Cars are still of interest to many, but high schools are ushering students toward college and away from hands-on work. Lack of qualified applicants keeps tire dealers from hiring ideal applicants. And those who do get recruited end up leaving for a higher paying job.
Vehicle age keeps climbing
Today, the average age of passenger cars and light trucks on the road is 11.4 years combined. The number of vehicles in operation (VIO) is estimated to grow by 5% to 260 million by 2018. The changing ages of vehicles on the road will impact the type of repairs facing the aftermarket. According to Mark Seng, vice president, global aftermarket practice leader at HIS/Polk, there will be more do-it-for-me (DIFM) repairs for vehicles 6 to 11 years old, and more do-it-yourself (DIY) repairs and maintenance for vehicles older than 12 years. Four-cylinder engines providing consumers with desired power and fuel-efficiency are becoming more popular, lessening the demand for large vehicles, with the exception of large pickups.
Margin pressures
Sticking price as the value for tires continues to be a challenge for tire dealers as consumers seek out cheaper products. Internet pricing is killing margins for tire dealers, who have trouble selling tires at the average margin due to customers finding cheaper tires elsewhere. Maintaining responsibility and ethics in the manufacturing of quality tires at a reasonable price for consumers continues to be a priority for tire dealers.
Casing supply
Tough economic times have caused supply shortages for used casing distributors. More commercial fleets are running their tires longer to cut costs, causing shipment of used tires to developing countries to drop. This has also affected imports; there’s been a scarcity in casings being imported for certain truck sizes. Large retreaders, however, haven’t been affected by this supply decline since the casings are still suitable for retreading despite the tread being nearly gone.
By recognizing these trends early on and planning for the future, tire dealers can come up with innovative ways to stay in business.
