Acquisitions, Expansions Mark Year of Rapid Change for Top Commercial Tire Dealers
It’s been a year of rapid change for commercial tire dealers as they continue to invest in acquisitions and expansions in the face of intensified competition.
Over the last 12 months, dozens of commercial tire stores and retread shops switched owners, tariffs on Chinese tires helped boost retreading volumes, and tiremakers and truck stop chains continued to expand services for fleets.
In this fast-moving climate, the nation’s top independent commercial tire dealers took advantage of opportunities to grow their businesses.
Recent acquisitions include Pomp’s Tire Service Inc.’s purchase of Lincoln, Neb.-based Dillon Tire Inc., which went to market as Cross-Dillon Tire, in June 2019. The deal added five combination commercial-retail stores, three commercial outlets and two retread plants to Pomp’s footprint. Pomp’s also acquired a commercial-retail outlet in New Holstein, Wis. The Green Bay, Wis.-based dealership is No. 5 on Modern Tire Dealer’s Top 25 Independent Commercial Tire Dealers in the U.S. list.
Bauer Built Inc. purchased Allied Oil & Tire Co.’s tire business in April. The transaction gave Bauer Built seven new locations in five states, a retread plant, and a wheel-refinishing operation. Durand, Wis.-based Bauer Built holds the No. 7 spot.
So far in 2019, Bridgestone Americas Tire Operations LLC has sold more than 70 GCR Tires & Service stores and retread plants to independent dealers. A deal that gave McCarthy Tire Service Co. Inc. 13 GCR stores and three GCR retread plants was finalized in August 2019. The Wilkes-Barre, Pa. dealership holds the No. 6 spot.
Other deals include the sale of 10 GCR stores to Earl W. Colvard Inc. The Deland, Fla., based dealership, which goes to market as Boulevard Tire Center, is tied for No. 9. No. 11-ranked Parkhouse Tire Inc., based in Bell Gardens, Calif., bought four GCR stores and two retread plants. But the largest transaction involved the sale of 46 GCR stores and six retread plants to top-ranked Southern Tire Mart LLC of Columbia, Miss.
New retread plant
In Toledo, Ohio, Best-One Tire Group’s new retread plant has capacity for 40,000-plus medium truck tire retreads a year. The project was in its final phase of construction when MTD spoke with Pete Glesing, president of Best-One’s commercial sales and operations, in late August. The plant is set to begin producing retreads in early October.
No. 2-ranked Best-One has 18 retread plants, counting its newest in Toledo. “We’ve really focused on retreading because it’s one of the two things we make,” says Glesing.
Everything except the service the company provides and the retreads it produces “comes preassembled,” he explains. “The tires we sell are the same tires other dealers sell. But we manufacture retreads. We have investment in people and capital equipment, and we want to maximize that investment.”
The countervailing and antidumping tariffs on truck and bus tires from China, which were enacted on Feb. 15, 2019, as well as the U.S. duties on products from China in place since June 2018, have spurred sales of retreads. “The tariffs have given us additional opportunities with folks who were dead set on buying new product. We’re now providing them with retreads,” says Glesing.
Fleet and supplier partners
No. 13-ranked Tredroc Tire Services Inc. remodeled its retread plant in Wyoming, Mich. The $400,000 investment increased the plant’s capacity by 20% to 30%. Tredroc also combined two retread plants in Illinois to create a multiple shift “mega plant” in the Chicagoland area, according to CEO Larry Jeffries. The merged operations increased capacity and efficiencies.
“We have maintained our current strategic path of rightsizing and aligning to sustainable business,” says Jeffries. “We have also continued our focus on creating partnerships with the fleets we service and our suppliers. This has proven to ensure mutual success, as well as lasting relationships, through various challenges.”
The company worked with a core supplier, Falken Tire Corp., to develop and implement a comprehensive commercial sales training program. Other investments include a mobile press truck for industrial tires.
Fleet services evolve
Purcell Tire & Rubber Co. relocated and expanded its retread plant in Salt Lake City, Utah, in April. In addition, Purcell, which is tied for the No. 9 spot, moved operations in leased outlets into company-owned facilities.
“We have continued our quest of relocating locations out of leased properties and buying properties instead,” says Arin Stroud, who handles marketing for Purcell. The company moved its truck tire center in Yuma, Ariz., into a purchased property and expanded services and inventory there. Purcell also moved its Reno, Nev., location to a newly constructed building. Two more leased outlets will move into company-owned properties in 2020.
Purcell will convert two commercial stores to “blended” outlets offering retail and commercial tire sales and service in the first quarter of 2020. In addition, the company will remodel an outlet in Washington, Mo., by the end of 2019.
Stroud says Purcell’s fleet services continue to evolve. For example, the company instantly transmits images and reports of a tire’s condition on site to the fleet operator.
Before the fleet service technology was implemented, Purcell could not collect payment from a customer for an after-hours call at the time of service.
“Now we come out, perform the service, take payment, and generate a bill right there for the customer,” says Stroud.
A stronger value proposition
Callaghan Tire Inc. likewise put money into retreading and service capabilities. “We have invested in updating retreading equipment and facilities,” says CEO Don Mead.
“We are aggressively updating our rolling stock to provide more reliable service to our fleet customers. We have invested in expanding some niche segments of our business that are highly profitable.” Mead says the Bradenten, Fla.-based dealership is focused on strengthening its value proposition.
“We value the large, national fleet customers we serve and work to always ensure we are performing for them. Having said that, our biggest focus is on acquiring and retaining local and regional fleet customers.”
Art LeBlanc, vice president at Pete’s Tire Barns Inc., says the Orange, Mass.-based dealership is doing “quality service so our customers will not buy on price alone and risk losing the service they need.”
The No. 24-ranked dealership expanded its distribution center by 25,000 square feet and added two outlets, six service trucks, two off-the-road trucks and an industrial press truck.
No. 17-ranked Raben Tire Co. LLC of Evansville, Ind., is concentrating its efforts on two fronts. “The first is quality customer care to ensure we keep our core relationships aligned with our high level of customer service,” says Brad Raben, vice president of commercial sales. “The second is to focus training efforts around total cost of ownership to mitigate the ever-changing market and re-engage our customers in thought-provoking decisions driving bottom line profits.”
No. 4-ranked Les Schwab Tire Centers Inc. added eight outlets and remodeled 10 stores. The priority at Les Schwab is world-class customer service and a wide range of products backed with the company’s lifetime tire and mileage care warranty, according to Dale Thompson, chief marketing officer. “We work with our suppliers to ensure a fair price for the quality of the products we purchase, allowing us to offer our customers the best value possible.”
Black’s Tire Service Inc. is investing $2.6 million to add 65,000 square feet to its warehouse in Whiteville, N.C. The project is set for completion in April 2020. The company serves more than 4,000 wholesale customers from its Whiteville warehouse plus four other distribution centers. No. 20-ranked Black’s Tire also opened a commercial outlet in Myrtle Beach, S.C., in March 2019.
Tire makers and truck stops
Independent tire dealers continue to face competition from manufacturer-owned stores and truck stop chains.
Bridgestone says its GCR business now operates more than 90 stores in the U.S. and about 10 GCR stores in eastern Canada. (Michelin North America Inc. sold the last of its Tire Centers LLC stores in November 2018.) Scott Damon, president-commercial group, for Bridgestone Americas Tire Operations, says GCR continues to be a very important and strategic part of Bridgestone’s overall commercial tire distribution strategy.
“We have a strong growth pipeline in place for GCR. We are focused on meeting the emerging needs of fleet customers across our complete service network, which includes both GCR and the independent dealer channel.”
Damon says service is taking on greater importance with the shift to more fleet-driven, autonomous and electric vehicles. “Tires will be a valuable source of information that can be translated into insights that service providers can use to help fleets make more informed business decisions and refine their vehicle maintenance and service program to increase productivity and profitability.”
The BestDrive subsidiary of Continental Tire the Americas LLC added seven locations in the last 12 months for a total of 24 outlets and seven retread plants in 17 states. The retread plant in Grand Prairie, Texas, has a capacity of 336 tires per day. A plant with identical capacity is planned for Forest Park, Ga., where the company is adding 50,000 square feet to its facility there.
Paul Williams, executive vice president of commercial vehicle tires in the Americas region, says the retreading environment is positive and Continental is moving forward with plans to increase production at its precure tread plant in Mount Vernon, Ill. “We believe the demand for U.S. retread shipments will slowly trend upwards as inventory of imported tires declines.”
Goodyear Tire & Rubber Co. says the U.S. DOT’s Federal Motor Carrier Safety Administration hours-of-service rules and truck driver shortages are among the most significant impacts influencing its business. “Both are leading fleets to demand faster roadside service response times and improved services that support driver uptime,” says Barbara Hatala, Goodyear’s operations and non-wired communications manager.
Goodyear maintains customer-owned inventory for fleet customers, provides a two-hour roll-time for 24/7 emergency roadside service, and offers customized wheel end service programs. Preventive maintenance programs are available through Goodyear locations at Pilot Flying J Travel Centers.
Truck stop chains continue to invest in commercial tire offerings. Love’s Travel Stops & Country Stores Inc. has 366 Speedco and Love’s Truck Tire Care locations in the U.S. Over the last 12 months, Love’s has opened 13 Speedco outlets and 11 Love’s Truck Tire Care locations as well as its fifth retread plant.
In addition, Love’s partnered with Navistar to add Speedco and Love’s Truck Tire Care centers to Navistar’s International Truck service network. Eric Daniels, director of shop operations says Love’s sees opportunity to expand truck care services in the over-the-road market with a “natural progression” to fleet maintenance services.
TravelCenters of America LLC has 245 TA Truck Service Commercial Tire Network heavy truck maintenance facilities across the U.S. A scheduled mobile truck maintenance service called TA Truck Service TechOn-Site operates in the Chicago, Dallas, Indianapolis, Atlanta and Las Vegas markets.
The mobile fleet has more than 200 “bays on wheels” and provides the same repairs and services performed in TA Truck Service bays, according to Greg Frary, senior vice president of TA Truck Service. A network of over 600 “RoadSquad” service trucks and more than 1,700 third-party providers offers emergency roadside service managed from a national call center. The company also has a 32,000-square-foot retread plant in Ohio.
TravelCenters added a TA Truck Service shop this year and plans to open several more over the next 12 months. “We also intend to expand our TechOn-Site network by opening several new hubs in major markets,” says Frary. ■
To see MTD's Top 25 Independent Commercial Tire Dealers chart, click here.