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It’s a global economy

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It’s a global economy

We live in a global economy. It affects us all, both directly and indirectly. Close to 60% of the independent tire dealers in the United States are single-store owners, and they, too, are shaped by what happens overseas. They are not isolated because their market reach is only 10 miles from their front doors.

Here’s a good example. The 25% (at one time 35%) tariff on consumer tire imports from China ended last year, but it changed tire pricing in this country, perhaps forever. Consumers are holding off on their tire purchases — you’ve seen the shape of some of the tires that come in for replacement — and your sales are down as a result.

Whether you are a retailer, commercial dealer or wholesaler (or all three!), what happens in our industry somewhere in the world will tether itself to you in a six-degrees-of-Kevin-Bacon sort of way.

That is one reason Modern Tire Dealer covers events such as product introductions no matter where they are held. Sometimes we are there in person. Sometimes we receive a press release and follow up on it. Regardless, it is our job to get that information to you.

In the last eight months, I have, to paraphrase the opening of the old “Wide World of Sports” introduction, spanned the globe to bring you the constant variety of the tire industry. From Akron, Ohio, to Monaco, tire manufacturers are doing a lot to give you options. Here’s a recap.

Last November, I was in Las Vegas covering the Specialty Equipment Market Association, or SEMA, Show. The Big Three tire manufacturers were not there, but tire companies from China were out in full force. Is this a sign of things to come, with Chinese brands making significant inroads into our domestic market like the Korean manufacturers did in the 1990s? Maybe.

The next two stops were in Europe. My hosts were two smaller companies, known for their winter tires, trying to aggressively increase their market share in the U.S.

In Finland,  Nokian Tyres Inc. showed its North American dealers (including Matt Schneider, co-owner of Schneider Tire Outlet Inc. in Marne, Mich., pictured at left with Sgt. Matt Rogers, a police vehicle driving instructor in Lansing, Mich.) how it was raising the bar for the 2013-14 winter season. They tested the Hakkapeliitta R2, Hakkapeliitta R2 SUV and WR G3 at the Ivalo Testing Center some 200 miles north of the Arctic Circle.

The expansion of its Vsevolozhsk, Russia, plant will allow Nokian to keep fill rates high in the U.S. and Canada.

In Monaco, Emil Herbak, manager of Vredestein Tyres North America Inc., brought me to the Top Marques Monaco Show in Monte Carlo. He was excited about the new Ultrac Vorti R, an “ultimate performance” tire that will be available to his dealers in the fourth quarter.

The company’s “premium styling” marketing concept is designed to improve the cachet of its lineup, which includes the Wintrac xtreme S, a Vredestein winter tire that will not be available in the U.S. market before the 2014-15 season.

Shortly after returning from Monaco, I attended the grand opening of Goodyear Tire & Rubber Co.’s global headquarters in Akron. Chairman, CEO and President Rich Kramer and a cast of thousands were on hand for the dedication.

 I asked Kramer about the profitability of the company. He said Goodyear’s strengths include managing its factories and tire production so that the right tires get manufactured at the right time.

Putting the medical cost of its retirees in the hands of the United Steelworkers has helped reduce costs in the U.S. (medical costs are still a problem overseas, however). “We are always watching our costs, particularly in this environment.”

So there you have it, around the world, sort of, in 192 days. The trips were filled with new tires and tire strategies that could affect your bottom line in the future.    ■

If you have any questions or comments, please email me at bob.ulrich@bobit.com.

For more of Bob Ulrich's editorials, see:

Is profitability a bad word?

Policy control: Do you allow employees to bring guns to work?

Retailers on wholesalers


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