3 things to ignore in 2012
Every year, industry experts try to predict what will become the hottest items on the market, or what the latest advancements will be. I think the proper word is “futurecasting.”
No industry is immune. Toys, fashion, stocks — you name it, and the pundits will come out in full force at the beginning of the year. Here’s one I’ve already heard: Retailers will be able to target smartphones with consumer-specific advertising as potential customers walk by their stores!
That probably doesn’t affect stand-alone tire outlets because consumers don’t have much opportunity to casually walk by them. But what if one day, you can send tailor-made ads to car owners as they drive by your store?
“Hey, Bob, your 2010 Ford Focus will need tires soon, and we happen to have plenty of size P195/60TR15 tires in stock! Swing back around and buy them now, or set up an appointment! And say ‘hi’ to your wife, Tris, for us!”
I’m going to do a little futurecasting myself, but not in the usual way. Here are three things that, as tire dealers, you will not have to pay much attention to in 2012. Maybe one day they will become hot items or trends, but not this year.
1. Run-flat tires. You might think their time has finally arrived, with talk of vehicle manufacturers wanting to get rid of spare tires, but you would be wrong.
Run-flats have not made much of a dent in the aftermarket because they tend to ride rougher and are more expensive than standard tires.
New run-flat technology is targeting ride comfort (don’t tell that to BMW owners with their original equipment run-flats). At a “Drive and Learn” event last year, Bridgestone Americas Tire Operations LLC let me drive on the new Potenza RE960AS Pole Position RFT with the left front tire at 0 psi, right after the non-run-flat 960AS. Both rode comfortably at low speeds.
Expense remains a big issue. Safety, on the other hand, is not as much of a factor. The durability of a standard tire and the popularity of in-vehicle safety, security and communications services such as OnStar make run-flats less necessary.
At the very least, thanks to wholesale distributors you don’t have to stock run-flats, even if you promote yourself as a BMW repair expert.
2. Electric vehicles. The best-selling electric vehicle in the U.S. last year was the Nissan Leaf. Nissan dealers sold 9,600 Leafs, compared to 7,600 for the next-best selling electric vehicle, the Chevy Volt. (The Volt may have sold a few more vehicles if not for the bad publicity surrounding alleged post-crash battery fires.)
That’s not a lot of vehicles, and they are still under warranty. According to R.L. Polk & Co., electric and the more popular hybrid vehicles combined represent less than 1% of the domestic vehicles in operation.
A friend of mine at a local General Motors dealership told me the technicians have to tie themselves to a pole when working on electric vehicles in case they are shocked and thrown from the electrical source.
Even with federal tax credits, electric vehicle prices fall into the $28,000 to $32,000 range, not inexpensive, but not cost prohibitive if you want 100% zero emissions. If you want a 220-volt instead of a 110-volt charger, however, you will have to pay more.
Nissan North America Inc., in collaboration with Sumitomo Corp., is bringing a low-cost DC quick charger for electric cars to the U.S. market early this year. The starting price of the DC quick charger is $9,900.
Accenture Inc. forecasts 1.5 million electric vehicles will be in operation by the end of 2014. The new Ford Focus Electric will add to the numbers, but let’s face it, few EVs will be coming into your service bays in 2012.
That doesn’t mean you shouldn’t be prepared to service one if it comes in. Just have that pole ready.
3. Sept. 26, 2012. That is the date the three-year-old tariffs added to passenger and light truck tire imports from China back in 2009 are scheduled to end. I’m not saying you should ignore the tariffs, which are at 29%. I’m saying you should ignore the cutoff date, because I think they will be continued at that rate for another year.
It is my understanding that President Barack Obama has the right to extend the tariffs for one year. With the presidential election less than six weeks after the tariffs are set to expire, and the United Steelworkers expected to ask for the extension, he will want to show his “support” for such a rabid group of voters.
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