Why Membership Is Declining at Regional Tire Dealer Associations

May 3, 2023

The new edition of my book, “Buy, Build, Fix, Sell: Mergers & Acquisitions for Tire & Service Dealers,” is out and available for sale at Amazon.com. Since it is uniquely written for the tire industry, I thought that I’d reach out to the regional tire dealer associations across the country to try and schedule some speaking engagements.

I was a little surprised to discover that the years since my last book tour have not been kind to regional tire dealer associations.

While the national Tire Industry Association (TIA) is “strong and consistent” according to Roy Littlefield IV, TIA’s vice president of government affairs, the same cannot be said for many regional tire dealer associations. Recently, some have merged with other auto-related groups, some are rethinking their purpose amid declining membership, several show little if any activity and some have simply shut down.

Historically, the regional tire dealer associations offered several benefits. First, they offered an opportunity for independent tire dealers to network, socialize and learn from each other over golf or beers. Second, they developed discount programs with uniform vendors, parts houses and even insurance companies as value-added benefits to their members. Third, they provided educational opportunities and training for members. And last, they marshaled resources to lobby in state legislatures for things that mattered to tire dealers.

Over time buying groups like ITDG, Tire Pros and Point S; franchise programs like Big O Tires; and tire manufacturer programs like Continental’s Gold Program and Kenda’s Traction program have in some cases, done better jobs of offering the first three benefits. Only lobbying, if it is within a regional association’s charter, remains as the last primary benefit that regionals aren’t facing competition against better capitalized entities motivated by profit. Most regional tire associations are organized as non-profit organizations and they are now competing with for-profit enterprises for the attention of tire dealers.

Most regional tire dealer associations have hired professional association managers or management groups that often run other industry associations. While many tire dealers are typically on the board of directors or in a rotating leadership role, the day-to-day grind of running the association is almost always outsourced. When that association manager wants to retire, the association is sometimes faced with an existential crisis. That’s when they look to merge with other groups.

Dick Nordness was the executive director for the Northwest Tire Dealer Association (NWTDA), which recently merged with the Northwest Auto Care Alliance, based in Tacoma, Wash. The merger was sparked by Nordness informing his board that he was looking to retire. Consolidation in the northwest saw NWTDA membership decline from 300 dues-paying members five years ago to 150 today. Although Les Schwab Tire Centers Inc. and Point S are members, both have their own annual trade shows and conferences that they prefer their managers attend. With a steady loss of membership, attendance at the NWTDA annual trade show became a break-even event, at best. Lately, COVID-19 prevented annual meetings from even happening. Now retired, Nordness is proud of a primary value-add for the group  — lobbying  — and cites keeping studded snow tires and scrap tire issues favorable to tire dealers as some of his accomplishments.

The combination last year of the North Carolina Tire Dealer Association (NCTDA) with the Independent Garage Owners of North Carolina was also initiated by the retirement of Reece Hester, longtime executive director of the NCTDA. The newly formed Auto Service & Tire Association (ASTA) has combined into the Southeast’s largest association serving the auto aftermarket. The group adds value by lobbying, having an annual convention and sponsoring regional meetings across the state, with a focus on tech training and establishing tech apprentice programs at community colleges.

Faring poorly when compared with those two groups was the recently disbanded North Central Tire Dealers & Suppliers Association (NCTDSA), covering North Dakota, South Dakota and Minnesota. According to Bonnie McLeary, who led the non-profit association for the last 20 years, the decline is attributable to “mergers happening and people closing businesses.” After COVID-19, the group geared up for an annual conference and reached out to its 150 members, but “no one signed up”. The show was canceled two weeks before the event date due to “lack of interest.”

McLeary notes that the group was stagnant and not attracting new members. For many years, “it was the same faces showing up at everything.” With “money running out,” there was never any talk about merging the group with another. McLeary noted that over time, NCTDSA meetings were “competing with training offered at supplier meetings, like the ones put on by American Tire Distributors, and even YouTube instruction.” The group never used any funds for lobbying. “We just were not relevant anymore,” concludes McLeary.

Close to shutting down is the Arkansas Tire Dealer Association. According to Executive Director Charlie Edens, the group had 350 member locations seven years ago and this has declined to under 100 today. At this point, there “are no dues-paying members left,” says Edens, who cites “a lack of interest among the next generation of tire dealers” in keeping the group going. With no networking meeting of any sort for the last five or six years, the opportunities for the group to show added value to members was limited.

The New York Tire Dealer Association’s Ernie Caramanico reports that the organization halted dues collection and has not had events for several years because of COVID-19. With a history that dates to 1921, the organization’s current membership stands at about 110 members, down from 250 back in the day. Caramanico cites consolidation in the market as the main reason for the decline. I asked if the group ever considered merging with the New Jersey Tire Dealer Association, but Caramanico was not aware of anybody active there and I can’t even find a website. New Jersey looks shut down to me. (However, the New England Tire & Service Association, which covers a larger area, remains vibrant and active.)

The South Carolina Tire Dealers and Retreaders Association (SCTDRA) is run by Leigh Wickersham, who notes the membership is down from over 100 “back in the day” to about 25 members today. Wickersham cites tire dealership consolidation and competition from suppliers as some reasons for the declines. The group does not have an annual conference, but half of the association’s budget is spent on hiring consultants  — they can’t afford a lobbyist  — to keep them apprised of pending legislative matters.

Determined to hang on, the Chesapeake Auto Business Association has transitioned over time from gas station members to tire dealers and now will accept any auto-related business. Down from 400 members at one point to about 70 today, the organization has no annual networking meeting or lobbying effort, but is planning local meetings to gather members, and is focused on helping with technician recruiting and training.

Perhaps the person who is best positioned to make sense of the challenges faced by regional tire dealer associations is Chris Barry, who is both president of the California Tire Dealers Association (CTDA) and vice president of sales for the Independent Tire Dealers Group LLC (ITDG).

Barry notes that the CTDA lets in anyone in the automotive aftermarket who wants to join and the organization stands at about 350 members today  — down about 10% over the last several years. Joining the CTDA is not an expensive proposition at $300 annually and for this, members have the benefits of networking meetings and regional education/training sessions. Thirty percent of the group’s budget is spent on lobbying in Sacramento, California’s capitol.

ITDG, like other tire dealer program groups, continues to grow. Organized as a for-profit buying group with actual investing shareholders, it has an annual cost of only $2,400 per member, offset against volume rebates. ITDG has grown steadily over the last 22 years to encompass more than 1,100 locations nationwide. Not only does ITDG add value as a buying group helping the small guy compete, but it has an annual three-day meeting in places like Cancun or the Dominican Republic, where after members arrive, the cost of the rooms, activities and food is all paid for by ITDG suppliers. At the annual meeting, ITDG members can choose from up to 20 educational sessions to attend and there are more opportunities to learn from each other at the bar, on the beach or in the “everything goes” shareholder’s meeting. ITDG also has a captive insurance company offering members workers compensation insurance, in addition to many of the other benefits and discounts its vendor partners offer.

COVID-19 has clearly hit the regional tire and auto associations hard, but their decline has been happening for quite some time now. The regional associations are dependent on their sponsors, who fund a great deal of the association’s budget, but one pet peeve of mine is that they have allowed the sponsors to hijack the speaking slots. The same old faces who “pay to play” get up and talk about their auto parts program or about their insurance program and there’s not much real education there.

There are ways regional tire dealer associations can still add value. I recommend they provide meaningful educational sessions and exciting networking events and that they fund a lobbying program so they can fight on behalf of their members for things that matter.

About the Author

Michael McGregor

Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/tire-and-service) and advises and assists multi-location tire dealers on mergers and acquisitions in the automotive aftermarket. For more information, contact him at [email protected].

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