"The bad news is that $4/gallon gasoline will impact tire demand during the summer, so you, as dealers, must plan to adjust," says analyst Saul Ludwig in the June installment of the "Ludwig Report" in Modern Tire Dealer magazine.
"Look closely at your staffing levels and don’t count on any positive surprises in tire volume," he adds.
"On the other hand, service work can be your compensating business. As people buy fewer new cars, they will want to keep what they have in the best of shape. Those service customers will be your best target for premium tires.
"Don’t be timid in pointing out that buying the best is the lowest cost in the long run," Ludwig tells dealers.
Ludwig is a managing director with KeyBanc Capital Markets Inc. based in Cleveland, Ohio. Look for the full "Ludwig Report" in the June issue of Modern Tire Dealer magazine.
