Retail

Opinions are Split on Truck Tire Tariffs

Lori L. Mavrigian
Posted on October 27, 2015

Each month we ask members of our National Advisory Council (NAC) a question or questions on a current hot topic. This month we asked, “Do you think tariffs should be placed on low-cost truck tire imports from China?” Here are some of their responses.

  1. I’d assume it is common knowledge that most Chinese tire manufacturers, especially private ones, are highly leveraged. When a manufacturing business is highly leveraged, even a small disruption in the marketplace can become a severe financial blow. This small disruption also can trigger a host of unintended consequences. Should we as a country “nudge” a disruption in the new Chinese truck tire market by means of a countervailing tariff? My knee-jerk reaction is a strong, “Yes,” because this strategy — at least for the short-term — seems to have helped with the passenger tire market in this country and ultimately, I believe, a countervailing duty on low-cost truck tire imports from China may improve casing availability for the retreading segment.
  2. Yes. The current low-priced Chinese truck tires are destroying the retread industry in the U.S. I think the pricing could definitely cause tariffs to be enacted.
  3. No. I am against tariffs as ultimately the consumer is burdened with the additional tax. Additionally, as evidence of the past tariffs, how many American manufacturers benefited from them? The consumer lost and the United Steelworkers union won. Shame on the USW.
  4. Yes. They are undermining the market with these cheaper tires.

What’s on your mind?

We also asked our NAC what was on their mind. They responded with:

New car sales have been fantastic. I am curious to see when and how we will be impacted by the lack of tire replacement for a period of time and the service that is performed by dealers while under warranty. Additionally, what are the expectations for 2016 as we approach an election year? I know some dealers have steadfast opinions about election year business.

Jon Shields, Branch Manager, Carroll Tire. Marietta, Ga.

There are not enough service people in the market.

Tim Chapman, Service Manager, Tire Centers LLC, Birmingham, Ala.

Readers sound off on Michelin OnSite

MTD recently posted a news item on our website concerning Michelin North America Inc. launching Michelin OnSite, a service which enables consumers to purchase tires online, via mobile device or by phone, and have them installed and serviced at a time and place of their choice. The company reports it is a pilot program, rolled out in Raleigh-Durham, N.C. The mobile tire service helps address the growing “on-demand” needs of consumers, including their increasing desire for convenience, speed and simplicity in the tire-purchasing process, according to Michelin. Here are some responses to the item from our readers.

Like many independent dealers who over the years have sold, serviced and warranted the Michelin brand, this is the ultimate slap in the face. I will be one less AAD in my market that will sell and service the Michelin brand.

Chris Monroe, Owner, Monroe Tire & Service. Shelby, N.C.

Buy a van, equip it, insure it, send one or two guys out, install and balance tires, install a TPMS kit, dispose of the old tires, (and do other stuff we aren’t thinking of), all for $169.

And that’s a good deal for the independent tire dealer?

Larry Shepherd, President, Shepherd’s Tire Pros, Bradenton, Fla.

If it’s done properly, this could be a real game-changer for Michelin because it makes it super easy and convenient for the customer to buy tires.

It will be interesting to see how this pilot program evolves and the impact it has on tire dealers and independents.

Elon Block, Auto Repair Shop Consultant & Sales Trainer, SellMoreAutoService.com, Henderson, Md.

Go Tire creates mobile tire service vans which it calls a powerful tool for existing brick-and-mortar stores.
Go Tire creates mobile tire service vans which it calls a powerful tool for existing brick-and-mortar stores.
Go Tire supported the build of the van for Michelin, and this was done to let them raise the profile of mobile service. That said, our focus is to work with independents and help them add mobile to their business.

No one, including the big guys, has our tech or systems that help to make mobile service a tremendously viable service... and we certainly didn’t share any of that with Michelin.

The mobile model is even more powerful when added to an existing store.

Anybody who is willing to give me five or 10 minutes to discuss how mobile service can become a useful addition to your business, I am always available. Craig@gotire.com.

Craig Howes, CEO and President, Go Tire Inc., Alberta, Canada

I think it is just another ploy to take business away from the independent dealer and make more money for the tire manufacturer.

Jack Freeman, Owner, Freeman Tire Co. Inc., Cookeville, Tenn.

My question is, why isn’t this good for our industry? The distinct advantage of the independent tire dealer is we can be nimble, with fewer verticals to climb in our rapidly evolving industry. We are a mobile community now.

There was a company on the East Coast that was strictly a mobile adapter, not a reputable and already-established independent tire dealer looking to better serve its customers, and it failed because of it. This is a tough business to start from nowhere.

Many tire dealers already have service trucks built for ag and OTR tire service, why not passenger and LT tire service, especially if your company is seeing long wait times and you don’t have the option of expanding your building?

I see independent tire dealers of the future having both physical and mobile services available with the capability for consumers to purchase and schedule directly from a mobile phone. This is about more than Michelin selling direct to consumers. This should be about how an independent tire dealer can enhance the tire buying experience and close the path to purchase with its established local presence. The buying power has shifted to a generation that wants quick and simple -- such as ordering a pizza with just an emoji.

In Canada, Craig Howes and Go Tire have put together a very nice truck usable in all conditions. However, I do not see this as a standalone business model here as it is in Canada, but as a great supplement for the established tire dealer who is looking to open up bay time. How many of your fleet, HVAC and landscaping customers would appreciate more up-time? And at the same time it would give you an opportunity to take care of walk-ins.

Unfortunately, Michelin nailed it with their new direct-to-consumer website with its simple and clean design that brings the tires to the consumer’s door. Looking at it from a Michelin R&D perspective, I believe they think mobile is a good idea for retail outlets to expand into. There just hasn’t been much traction, they’re just nudging dealers into that market.

Also interesting to note, Michelin is not selling any BFGood-rich or Uniroyal brand tires on MichelinOnsite.com

Nicholas Gomez, Marketing, Weber Tires Inc., Sun Prairie, Wis.

WOW, stepping in front of OUR customers and taking the business away from the independent dealer. We have all the risk and exposure for $169.

We had a concierge service 15 years ago and it was expensive to operate and very time-consuming. It was great for the customer, not so great for the dealer.

We will see how this plays out.

Les McLea, President, McLea’s Tire & Automotive Service, Santa Rosa, Calif.

Chances are missed on tire registration

Dear Editor:

Concerning the “RMA says yes to mandatory tire registration. TIA says no” news item on your website: How can anyone expect the consumer to know anything about tire registration if they never receive the registration forms in the first place?

If a new vehicle is purchased, the consumer should be given a form, but this just doesn’t happen a good part of the time.

Then if the consumer buys replacement tires, the second chance for consumers to learn about registration is also missed because not all dealers provide the form.

Roger Marble, Design & Quality Engineer, RVTireSafety.com, Brimfield, Ohio

After 40 years as a design and quality engineer for a major tire company (one of the Big Three), Marble retired and now writes a blog (RVTireSafety.com) to help educate RV owners about the special needs of tires in RV applications.-Ed.

Related Topics: MIchelin North America Inc., Selling online, tariffs, Your Turn

Lori L. Mavrigian Managing Editor
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