Wholesale Distribution

1Q wholesale report: much better than retail

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The average wholesale tire dealer fared better than his retail counterpart during the first three months of the year, according to Modern Tire Dealer's State-of-the Industry Survey. Compared to the same period in 2008, the numbers were improved.

(For a look at how retail tire dealers fared, check out "1Q retail report: It was bad," on www.moderntiredealer.com.)

Close to half (46%) of the respondents to the exclusive first-quarter 2009 survey reported unit sales were down -- by an average of 13%. Another 35% reported sales were up by an average of 15%.

When taking dollar sales into account, the outlook was slightly better: 43% reported sales were down by an average of 13%, while 45% said dollar sales were up by 13%. Unit and dollar sales were even for the rest of the dealers (19% and 12%, respectively).

All dealers being equal, the average wholesale dealer experienced a 0.7% decrease in unit sales and a 0.2% increase in dollar sales for the first quarter of 2009. Here's how those numbers compare to first-quarter survey results for the last two years.

Average 1Q results for wholesale tire dealers (compared to the previous year)

Sales              2009              2008              2007

Units:              Down 0.7%   Down 2.4%  Up 5.3%

Dollars:           Up 0.2%        Down 0.7%  Up 7.2%

When asked, "What do you project your full-year tire sales to be?" tire dealers were more optimistic than pessimistic. Some 43.4% projected unit sales will be up (by an average of 14%) compared to 2008, while 50.5% believe their dollar sales will be up (by an average of 13%).

In contrast, 35.4% projected unit sales will be down by an average of 12%, while 34.3% believe dollar sales will be down by an average of 11%. The remaining dealers projected no change in their respective unit and dollar sales.

When MTD asked wholesalers to compare their "bottom-line profitability" for the first three months of 2009 to the same time frame in 2008, overall results were similar: 39.6% said sales were up, 41.6% said sales were down, and 18.8% said sales were the same.

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