"The market for new tires has a finite number of tires that can be sold each year," said new NCTDA President Mike Erickson, setting up his speech on competitive pressures faced by today's tire dealers.

"The market for new tires has a finite number of tires that can be sold each year," said new NCTDA President Mike Erickson, setting up his speech on competitive pressures faced by today's tire dealers.

Unlike the President of the United States, state tire dealer association presidents are elected for only one, in some cases two, years. Add to that the strong influence of a board of directors, and that doesn’t give them much time to make an impact.

Carroll Tire Co.’s Mike Erickson, the new president of the North Carolina Tire Dealers Association (NCTDA), must be keenly aware of this. So when he gave his acceptance speech at the 2017 NCTDA Expo & Trade Show in Raleigh, N.C., on March 3, he got right to the point about the state of the independent tire dealer. And he didn’t sugarcoat it.

“The independent business person who sells tires and/or services is in a competitive environment that is unprecedented,” he told attendees. “I believe we should refer to this environment as more like a survival environment.

“There are competitive pressures from all sides. From the top, it’s the large retail chains, the mass merchandisers and the car dealers. All these segments are growing. All of these segments have very deep pockets.

“Added to this is the consolidation of the independents by large regional chains. We have seen this recently in the Charlotte market with the sale of Griffin Brothers (to Express Oil Change LLC last August) and Clark Tire (to Monro Muffler Brake Inc. last August).

“Then there is the pressure from the bottom,” said Erickson. “This pressure results from the ease of entry into the tire business. Anyone can be in the tire business with virtually no capital investment. These individuals typically focus on price. Since they have little or no capital invested in their business, they are able to sell at a very low price. For the business person who actually has invest in their business, you are at a competitive disadvantage. The low end of the replacement channel is rampant with fitment misapplications.”

He wasn’t finished, listing these competitive pressures as well.

  • The impact of the technology change.
  • Rapidly changing requirements for servicing both automobiles and consumers.
  • The challenges of hiring, training and retaining service techs.
  • The change in consumer buying habits. “I don’t have to tell any of you that are in the business today that the consumer’s behavior today is very different from the consumer behavior from just a few years ago,” he said.

“As an association, our challenge for 2017 and going forward is to be an advocate and a relevant resource for those business persons that have a desire to compete in today’s competitive environment.”

Erickson’s speech wasn’t grim, just honest and straight forward. And from what I witnessed, it was well received. I think everyone was glad he will be a two-year president.

Part of Erickson’s official duties as president, according to the NCTDA,  is to “advise the board of any action necessary to be taken to increase the usefulness of the association to the membership.” I don't think that will be a problem.

Author

Bob Ulrich
Bob Ulrich

Editor, Retired

Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

View Bio

Editor Bob Ulrich has earned a reputation as an industry expert thanks to his insightful, in-depth articles and blogs on the tire industry. Before joining Modern Tire Dealer in 1985, Bob earned a B.A. in English literature from Ohio Northern University. Also, he graduated from the University of Akron School of Law with a J.D.

View Bio
0 Comments