The commercial tire market was down this year, but the country’s biggest commercial tire dealers are trying to work their way out of the slump as they move into 2024.
“We feel that everyone’s business is down right now, compared to the boom we all experienced in 2021 and 2022,” says John McCarthy Jr., president of Wilkes-Barre, Pa.-based McCarthy Tire Service Co. Inc.
McCarthy feels that 2023 was a “return to normal.”
He believes that fleet customers are spending less and being more cautious with their money.
Unusually high inventory levels also have been a challenge for commercial truck tire dealers this year.
To adjust, McCarthy says his company reduced its purchases and cleaned up brand offerings, and offered price support and concessions.
Brian Chase, executive vice president of Frederick, Md.-based Rice Tire Co., is also figuring out how to combat high inventory levels.Near the end of 2022, “containers started coming in all at once that had been backed up for the past few months or year,” he says.
“The biggest struggle is that we are working through (our) inventory at the old price, when newer inventory is coming in at a new price. So we’ve held back a little bit of money from last year.
“Whenever there are inventory increases, we adjust it up and we actually held some money back to put against inventory in this scenario, which we knew was probably going to happen.”
Rice Tire also is working with suppliers “to see where they can help us on the price, so we can stay more competitive and move inventory.”
Another trend has been the proliferation of brands and products, including tires at lower price points.
“Everyone has more frequent products coming in,” says John Ziegler Jr., vice president of Ziegler Tire & Supply Co., which is headquartered in Massillon, Ohio. “Fleets have more options.”
Chase says more fleets than ever before are buying less-expensive tires.
“In the last few months, fleets have been buying just what they need, as opposed to buying a running a full fleet program,” says Chase.
“They’re kind of buying last-minute and sometimes buying on the cheaper or lower-priced side as opposed to paying for tires that cost more.”
“Our customers are just trying to control what they can control and a lot of that comes down to what they buy,” says Chase.
“We’ve had to buckle down and figure out how to get new customers through the door if we want to continue to grow.”
“There's been a huge influx of change from (both) units and sales,” says Ziegler.
“Our units are up, but our sales have leveled off or are down because there's been that migration to tier- three and tier-four purchases.”
Ziegler believes manufacturers will have to be “more aggressive” with their pricing to “recapture that tier-one and tier-two business.”
Officials from Deland, Fla.-based Boulevard Tire Center, told MTD that they are focusing on over-stock items within their inventory to keep levels even.
Black’s Tire Service Inc., based in Whiteville, N.C., is “trying to trim stock levels with the high cost of inventory,” as well, says Rick Benton, the dealership’s president.
Benton says tier-three and tier-four tire prices are at an “all-time low” right now, which is making more customers flock toward those products.
Investing in commercial
The country’s largest commercial tire dealers continue to invest in their operations.
Service Truck Tire Centers Inc. (STTC), which is based in Bethlehem, Pa., made a handful of investments this year.
STTC opened a new location in Wall, N.J., which is strategically placed between two of its other New Jersey locations.
Walter Dealtrey, CEO and president, says the company added more accounts payable automation at its locations to make the “back-office more efficient.”
He also says the company relocated and combined the White Marsh and Aberdeen, Md., locations to a “single, better building.”
STTC’s investment never slowed down, “even during the COVID-19 years,” according to Dealtrey.
Commercial dealers are investing in their road service capabilities, as well.
McCarthy Tire invested in 139 new service vehicles this year, bringing its total number of service trucks up to 833.
Green Bay, Wis.-based Pomp’s Tire Service Inc. acquired St. Cloud, Minn.-based Royal Tire Inc. in April 2023.
The acquisition gave Pomp's Tire Service 17 more points of sale, plus three retread shops, and expanded its footprint in Minnesota and North Dakota. (Royal Tire held the 22nd spot on MTD’s 2022 Top 25 Commercial Tire Dealer list.)
This acquisition moves Pomp’s Tire Service up to the number three spot on our Top 25 Commercial List.
Around 220 employees from Royal Tire joined Pomp’s Tire Service’s team . Paul Wochinske, president of Pomp’s Tire Service, told MTD that his company planned to operate all facilities that Royal had as Pomp's Tire Service locations.
Short-term plans for Royal Tire include continuing “to grow our tire and retread sales and service opportunities for our customers,” says Wochinske.
The country’s largest commercial tire dealership, Columbia, Miss.-based Southern Tire Mart LLC, has made numerous acquisitions this year. (Southern Tire Mart has held the number one spot on MTD’s Top 25 Commercial Tire Dealers list since 2011.)
Not all of Southern Tire Mart’s acquisitions were commercial truck tire-specific. In April, the company acquired wholesale-distributor Friend Tire Co. from Yokohama Tire Corp.
This transaction gave Southern Tire Mart nine additional distribution centers, located in Albuquerque, N.M.; Memphis, Tenn.; Belton, Texas; Davenport, Fla.; Monett, Mo.; St. Charles, Mo.; Shreveport, La.; Oklahoma City, Okla.; and Salt Lake City, Utah. (Prior to that, Southern Tire Mart had three warehouses: one in Laurel, Miss.; one in Birmingham, Ala.; and another in Dallas, Texas).
Southern Tire Mart also expanded its presence in California by acquiring Country Tire & Wheel and Tulare Firestone, dba TF Tire & Service.
The Country Tire & Wheel purchase gave Southern Tire four more locations and the Tulare Firestone deal gave the company nine locations, including a wholesale operation in Tulare, Calif.
A retread plant that TF Tire and Country Tire owned also was picked up by Southern Tire Mart.
Kevin Haddox, who manages Southern Tire Mart's business west of the Mississippi, says that Country Tire “was more of a commercial dealership” and “Tulare was an ag tire dealer that also did commercial and retail.”
Southern Tire Mart also acquired Heintschel Truck Tire Center of Texarkana, Texas, during the first quarter of 2023.
Heintschel was founded in 1973 and had been both a Pre-Q Galgo and Marangoni retreader.McCarthy Tire also made some acquisitions in 2023.
McCarthy Tire kicked off 2023 with the purchase of Truck Fleet Repair, a single-location dealership in Norfolk, Va. This acquisition has enabled McCarthy Tire to take a more comprehensive commercial service approach in the Norfolk, Va. market, according to McCarthy Tire officials.
McCarthy Tire also acquired Roli Retreads Inc., a single-location operation in Farmingdale, N.Y. The deal included a retread plant that McCarthy Tire planned to transition to the Bandag format.
More recently, McCarthy acquired another single-location dealership, Dice’s Tire Service in Carlisle, Pa. The acquisition included a Bandag retread plant that brought McCarthy Tires retread plant total to 14.
MTD's annual chart on page xxxx which lists the 25 largest independent commercial tire dealerships in the U.S.