Retail Wholesale Distribution

'Wholesale' problems in the first half

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Results from the latest Modern Tire Dealer State of the Industry survey have been tabulated, and the news is not -- there's no other way to say this -- positive.

Reality has hit both retail and wholesale dealers hard through the first six months, with only  44.1% of retailers and 34.5% of wholesalers reporting that their unit volume was up compared to the first half of 2011.

Here are the tire unit sales results, with the average increase or decrease in parentheses):

Direction    Retailers          Wholesalers

Up:               44.1% (13%)   34.5% (11%)   

Down:          42.5% (17%)   51.0% (9%)

Same:         13.4%               14.5%

Wholesalers were hit particularly hard. Last year, 52% reported that their unit sales were up for the first six months, while 40% reported they were down.

And when asked "How did the bottom-line profitability of your company in the first half compare to the first half of 2011?" only 26.4% of the wholesalers responded positively. Nearly 50% reported their profitability was down -- by an average of 9%.

Neither retailers or wholesalers predict business will get much better, either. Only 44% of retailers and 40.4% of wholesalers predict that their unit sales for the year will be up.

"It seems to me that some of this sluggishness is caused by the overall poor economy, but I also believe that many in the distribution channel are holding back orders until they know for certain what will happen when the tariffs are due to be lifted from Chinese passenger tires," says MTD Publisher Greg Smith.

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