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Down, Then Up Again: Dealership Rides COVID-19 Rollercoaster

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Down, Then Up Again: Dealership Rides COVID-19 Rollercoaster

This story is the latest in MTD’s exclusive series of articles about how the COVID-19 crisis is impacting independent tire dealers. Stay tuned to for more!

Larry Williams, CEO and president of University Tire & Auto Center Inc., a seven-location dealership based in Charlottesville, Va., says he had a “heck of a month going” in March until mid-month. Then the bottom dropped out.

“Our business is down 70%,” he told MTD during the first week in April.

As a result, Williams was forced to cut his retail stores’ hours. “We were 7 a.m. to 7 p.m. during the week. We’ve cut that back to 5:30 p.m.”

He also reduced his employees’ hours. “We’re trying to keep our salespeople and hourly people to around 40 hours a week.”

“Techs are flat rate,” he says. “They can work as much as they like. Most of them have been able to maintain their hours.”

By mid-April, according to Williams, business had improved by 25%.

He attributes the rebound to “stimulus and unemployment checks hitting. And people are starting to come out, even though (Virginia) is still in lock-down mode.

“The talk about getting the country reopened again is making people feel more positive.”

Trickle-down effect

Williams also operates Virginia Wholesale Tire Inc., which distributes tires to smaller independent dealers and local car lots.

“We’re fortunate that we aren’t near another big warehouse,” he says.

In mid-March, his wholesale business started to decline as cash-strapped customers stopped placing orders.

“We had to put some on cash-on-delivery. The few who are buying are only paying cash.”

Car dealersships were suffering, too. “They were way, way down. Most laid off their sales staff and they laid off service people.”

University Tire also services cars at two rental lots, including one at a local airport. “One of them, from what I understand, is off 96% in rentals,” Williams told MTD. “You drive by the airport right now and they have cars stacked everywhere.”

One of the dealership’s stores is located near the University of Charlottesville and relies heavily on student traffic. The university is shut down.

“Our West Main Street store,” which is near the shuttered school, “is hurting. It’s such a trickle-down effect.”

On the upside, Williams’ distribution center is well-stocked, so he isn’t worried about supply disruptions from tire manufacturers. And all of his inventory is paid for.

He also reports that his wholesale tire business is showing signs of life again as orders have started to pick up.

Marketing decisions

Due to the COVID-19 crisis, Williams has put his expansion plans on hold. That means abruptly putting the brakes on opening an eighth location. “I’m glad I didn’t pull the trigger on that,” he says.

He also has pulled back on advertising.

“Normally in a downturn, I advertise more, But with this virus, I’m a little apprehensive about advertising. The only thing we are advertising is that we’re open and that we are cleaning and sanitizing and that we are here for the public.

“You don’t want to come across like you’re trying to take advantage of the situation” by running specials or promotions, he adds.

However, a hiring freeze that he imposed last month might soon thaw. “We’re going to start (taking) applications soon. A lot of good people are going to be looking for jobs.”

Beyond compare

Williams, who has been in business for 25 years, says there is no way you can compare the economic impact of the COVID-19 crisis to the impact of past disasters like 9/11 or the Great Recession.

“September 11 was horrible but there was an end to it. It happened and it shocked everybody. But the country gradually came back.

“This is just ongoing,” he says. “And it looks like it will go at least through April and even into May and June. The economic impact could last well into the fall or even winter.”

Long-term, he believes, pent-up demand will uncork. “People still need to have their cars serviced. They will need tires sooner or later. It won’t be gangbusters. But it will pick up. And our wholesale (business) will pick up.

“Once we pull through this – hopefully in the next couple of months – I think independent tire dealers will do great.”

Other stories in this series:

MTD Series Looks at Impact of COVID-19 on Tire Dealers

Dealer Rolls Out ‘Safer at Home’ Service in Response to COVID-19

Shifting Strategy: COVID-19 Forces Dealer to Make Dramatic Staffing, Store Changes

COVID-19 Hits Home: Conrad’s Tire Takes Swift Action After Employee Tests Positive

‘Look at Where Every Dollar Is Going,’ Mountain View Tire VP Advises During COVID-19

Schnipke Brothers Find Bright Spots During COVID-19

Tire Pros Dealer Wonders How Long He Can Wait for PPP Loan

Steve Shannon Tire Expands Despite COVID-19

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