As more automakers restart their production lines after a nearly two-month shutdown, Rich Elliott at Indy Tire Centers Inc. dba Best-One of Indy thinks there will be a silver lining for independent tire dealers. He expects tire suppliers to have plenty of capacity to serve the replacement market.
“I think the fact that OE is down and going to continue to be down is going to be helpful because they won’t be taking up large blocks of inventory,” says Elliott, president of the 10-store commercial and retail operation based in Indianapolis.
In April one truck tire maker was even promoting a deal, which Elliott says was a sign to him that they have supply to sell. “We’re going to take their offer to our customer base and see what we can do with it.”
But the tire dealer won’t be stocking up on inventory in its own warehouses. “We’re in cash preservation. We’ll sell it out and then order it.”
He says in the past, the business has learned how to manage its inventory during lean times, most recently during the Great Recession.
“We’ve pared down our inventory. When business is flowing you tend to make sure you have enough (inventory) so you never run out,” Elliott says. “When it’s flowing much more slowly, you find ways to cut back.”
The business at Best-One of Indy is an equal mix of consumer and commercial, and Elliott says over the course of the company’s 34 years that mix has helped it weather plenty of storms. He expects the commercial business will help support the retail side in the near term. In April retail was down 40 to 50% due to COVID-19. Much of Indiana's business economy reopened for business by mid-May, and on May 18 the company resumed normal business hours at all of its locations, too.
Commercial was strong before the pandemic, and benefitted from some national fleets who stocked up on tires in late March. “That gave us a nice shot in the arm.” But Elliott says it has since dropped off by about 12%. The company’s retread operation has also decreased by 12% since pre-pandemic.
“Nationally a lot of trucks are still rolling delivering goods and services. Locally, the shutdown has caused less trucks to roll.”
And even while the retail business is suffering, Elliott says there’s a bright side to the equation.
“I’m not a predictor of the future, but when they start letting people go back to work there’s going to be some pent-up demand.”
A PPP success story
The company has been able to preserve its entire staff, and on April 15 received its Paycheck Protection Program loan from the Small Business Administration. Elliott says the company received its full payment, equal to two-and-a-half-months of average payroll. “That loan will achieve its intended purpose of enabling us to keep all of our team members employed and working to support their families and the economy.”
Recognizing the heroes
One thing Best-One of Indy did throughout the month of April was encourage its communities to say thank you to its “front line superheroes.” For three straight weeks on the company’s Facebook page sought nominations of front-line workers. Best-One of Indy collected the names and photos of these workers (there was a different category of worker each week), and then the person in the photo with the most likes was awarded free oil changes for a year.
The first week the company honored first responders and law enforcement; the second week was designated for health care workers, and the third week of the promotion honors truck drivers, delivery drivers, grocers, farmers and restaurant workers.