What’s Up With Consumer Tire Prices?

Each month we ask members of our National Advisory Council (NAC) a question or questions on a current hot topic. This month we asked, “How have the tariffs on Chinese consumer tire imports affected pricing in your area?” Here are some of their responses.

1. The prices in our market on Chinese tires have now dropped. With every program we have gotten over the last month, the price has gone down. There is no bottom.
2. I have seen no impact. Prices are flat or decreasing. The Chinese market is soft, as there is excess capacity in Indonesia.
3. We are seeing at the front counter that the gap between offshore retail pricing vs. tires produced here in North America continues to close. Tariffs have helped make contiguously sourced tires more affordable. We believe it’s also helped, particularly in the Palmetto State, that a number of tire manufacturers are returning their production to North America with new tire plant construction.
4. I have not seen a significant change. The manufacturers with high tariffs are still selling at close to the same prices.
5. With the anticipation of the tariffs, many wholesale distributors stocked up and thus with the bulging inventories, prices have been aggressive.

Last month we asked our NAC members,” Are you a member of your state tire dealer association? If so, what benefits do you get out of your membership?” Here are some of their responses.

1. We are no longer active in our state association. I am not really sure if it even exists at this point.
2. I am a member of the New Jersey State Tire Dealers Association. We meet about four times per year. There are no benefits. It is social only.
3. Yes. I am a member of the Georgia Tire Dealers & Retreaders Association. Some benefits include dealers sharing best practices and discussing challenges in the marketplace. It is a valuable resource for independent dealers, such as offering human resource information and advice. Members meet monthly as well as at an annual getaway — usually at a beach location. Attendance is decent, but could be better.

What’s on your mind?

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

Here we’re looking at flood recovery and what it will mean short-, near- and long-term for the Midlands of South Carolina.

We anticipate providing fleet sales solutions for both public and private providers who will be making permanent repairs to roads and infrastructure well into 2016.

Also, health insurance renewals are upon us. Many insurance “co-ops” set up under Obamacare are failing across our region and the country. They just aren’t solvent due to lack of participation. Definition(s) of a “small group” and a “large group” continue to be legislatively modified. The only winners in the current healthcare model are the insurers. Consumers and small business, who these very laws were supposedly designed to help, continue to come out on the short end.

Tripp Lee, General Manager, Frasier Tire Service Inc., Sumter, S.C.

I’m still upset with Goodyear and Michelin trying to sell tires direct to consumers. In line with this goes how the tire manufacturers influenced the tire registration legislation.

Bill Ziegler, President, Ziegler Tire & Supply Co., Massillon, Ohio

It looks like the major manufacturers Bridgestone, Michelin, and Goodyear are moving toward controlling their tires from manufacturing to sellout. Bridgestone looks like they are leading the way with over 2,500 retail sites, TWW local wholesale sites, an online presence and manufacturer-direct shipping. Independent tire dealers are being pushed aside.

With tire distribution now being controlled by large, nationwide distributors, tire business excitement is almost non-existent.

Jeff Cohen, Co-owner, Traction Wholesale Center. Bensalem, Pa.