Retail Wholesale Distribution

45% of retailers say their tire units are down

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Continued pessimism. That is the best way to describe the results from the latest Modern Tire Dealer "State of the Industry Survey."

When compared against the results from the first nine months of 2011, virtually all dealer segments -- whether in units or dollars -- were down in 2012. The results were similar through the first six months.

Tire retailers were especially hit hard. For example, here are the tire unit sales performance results for independent tire dealers for the first nine months of this year, with the nine-month percentages from 2011 in parentheses.

"How were your tire sales in units for the first nine months of 2012?"

Direction    Retailers              Wholesalers

Up:              35.7% (46.4%)    44.9% (39.7%)   

Down:         45.0% (38.9%)    38.8% (35.8%)

Same:         19.3% (14.7%)    16.3% (24.5%)

As you can see, more wholesalers were up in 2012 vs. 2011, but more were down as well.

Nearly 42% of the retailers and close to 51% of the wholesalers expect their units sales to be up for the full year. Conversely, 38.9% of the retailers and one third of the wholesailers expect their unit sales to be down.

When asked "How did the bottom-line profitability of your company in the first nine months compare to the first nine months of 2011?" 39.3% of the retailers and 36% of the wholesalers responded positively. However, more than 47% of the retailers reported their profitability was down -- by an average of 15% -- while 54% of the wholesalers said their profitability was down.

"The glimmer of hope rests with the wholesaler segment showing signs of improvement versus their numbers in the first half," says MTD Publisher Greg Smith. "Although still not great, wholesalers are becoming more optimistic about both unit growth and dollar growth. Retailers, at this point, still have not seen improvement."

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