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Rebound leaders: McCarthy Tire capitalizes on improving economy

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Rebound leaders: McCarthy Tire capitalizes on improving economy

In a segment of the industry that´s still struggling in many ways, McCarthy Tire Service Inc.´s business is up. The Wilkes-Barre, Pa.-based commercial tire dealership achieved sales of more than $90 million in 2003.

Coming off its best month ever in June, "we´re up considerably over where we were last year at this time," says John McCarthy Jr., McCarthy Tire´s president. The company also is working on three separate acquisitions. (McCarthy Tire is now the seventh largest commercial tire dealership in the United States with eight commercial-only locations, 13 commercial/retail locations and three retread shops, according to Modern Tire Dealer statistics.)

Commercial Tire Dealer recently caught up with McCarthy to find out why the dealership is doing well, the challenges it faces and what its plans are for the rest of the year.

CTD: You mentioned that 2003 started slowly for McCarthy Tire, but then picked up as the year went on. What happened to make your business improve?

McCarthy: During the second half of 2003, the economy began to improve, causing business to accelerate. We experienced particular improvement in OTR sales and service, as well as improvement in all other areas of products and services. We also were fortunate to add several substantial new accounts during this time period.

CTD: You added two former Merchant´s Inc. commercial outlets to your line-up last year, plus a Bandag plant, and are making plans to acquire three more dealerships. Describe your expansion philosophy. How do you integrate new acquisitions into your system?

McCarthy: All of our acquisitions are strategically located geographically and have business philosophies that are similar to our own. We have programs and people in place to handle new acquisitions as situations arise.

CTD: A number of indicators seem to point that the trucking industry is on the rebound. Are you seeing a comeback in your market?

McCarthy: The trucking industry is certainly rebounding. We see an increased demand at all of our locations; we´ve added 10 new service trucks to date this year alone. Presently, product availability is tight, but we are managing our inventory very closely.

CTD: Will the trucking industry be able to maintain its upward momentum or will demand flatten out?

McCarthy: If the economy stays strong, as all factors seem to indicate, the trucking industry will continue to improve.

CTD: From your perspective as a retreader, will retread sales fall off if new tire sales continue to grow?

McCarthy: Retreading declines somewhat as new tire (sales) increase. We constantly stress to our fleets the value of retreading to lower their cost per mile. There will continue to be good demand for quality retreading.

"Our goal for this year hasn´t changed from previous years," says McCarthy. "We strive to be not the biggest, but the best. Our controlled growth will continue along its present course."

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