Editorial: 10 Things to Watch During the Second Half

As we enter the second half of the year, there are numerous tire industry developments that MTD is keeping an eye on. You’re probably watching them closely, as well. In the spirit of the MTD 100, our annual list of the largest independent tire dealerships in the United States, here are 10 things to monitor in the coming months, in no particular order: 

What’s next for American Tire Distributors Inc. (ATD)? What’s the next chapter in the ongoing ATD saga? Only ATD and its suppliers know. The nation’s biggest wholesale tire distributor emerged from bankruptcy, found a new owner and installed a new management team. But it recently lost several product lines and programs provided by Goodyear Tire & Rubber Co. and Michelin North America Inc. On June 2, Goodyear confirmed to MTD Managing Editor Joy Kopcha that ATD would no longer distribute its Mickey Thompson brand and that ATD would lose access to Goodyear’s Cooper Medallion and Mastercraft Century associate dealer programs. Two weeks later, Michelin informed customers that ATD would no longer be an authorized distributor of the Michelin, BFGoodrich and Uniroyal brands. Will more tire manufacturers follow suit? Your guess is as good as mine. I imagine ATD is working hard to shore up agreements with its other suppliers. (Editor's note: Just days after this editorial was written, ATD distributed this letter to its stakeholders.)

Upheaval at Monro. Following a disappointing fiscal fourth quarter, Monro Inc. announced that it would close 145 underperforming stores — a process that was continuing when I wrote this column. That figure represents a significant percentage of the company’s total number of locations. The closings are “expected to deliver meaningful improvement to profitability,” Monro President and CEO Peter Fitzsimmons said. Could your dealership benefit from access to a suddenly enriched labor pool in the event your neighborhood Monro store closes? It’s something to think about. 

The impact of tariffs. It’s been more than three months since President Donald Trump’s “Liberation Day” and the long-term impact of tariffs is still unknown. Three tire manufacturers publicly announced price hikes after tariffs were announced and I imagine many others have enacted increases without informing the public or MTD. Tariffs also are having an impact on the trucking industry. (See my June MTD editorial for more.) Are you paying elevated prices for imported tires? Do you expect to pay more in the future? What impact have tariffs had on your general operating costs? Like other sectors, the tire industry prefers stability. There’s a lot of instability right now. 

A new day for Dunlop. Now that the Dunlop brand is owned by Sumitomo Rubber Industries Ltd. (SRI), how will SRI’s Sumitomo Rubber North America Inc. subsidiary position Dunlop, which Goodyear finally jettisoned, not only within the general marketplace, but also within its own product portfolio? For a preview, check out my recent interview with SRNA President and CEO Darren Thomas. “For North America, SRI has purchased blue sky,” Thomas told me, adding that his company is “starting with a clean slate” as it pertains to Dunlop. Expect to hear more as SRNA communicates its plans.  

ADAS and AI. As vehicles become more complex, new scanners and diagnostic tools are entering the market, as is equipment used for advanced driver assistance system (ADAS) recalibrations. We’re also starting to see an influx of artificial intelligence-based tools and software that promise to make life inside your dealership easier. (More on that in the August issue of MTD.) These tools could create ways for you to develop new revenue streams, enhance your store’s operational efficiencies and more. We’ll keep you informed. 

Rounding out the top 10 — again, in no particular order — are continued consolidation in both the tire dealership and tire distribution channels as bigger companies buy smaller ones and private equity firms continue to pour capital into the market; continued introduction of more new products in the “high value-added” (i.e. large-diameter) passenger tire category; possible fluctuations in demand for plug-in electric vehicles as government incentives and mandates change and more consumers discover hybrids; less government intrusion in the overall automotive industry; and the unceasing supremacy of independent tire dealers when it comes to meeting the needs of customers. (Yes, we’re keeping an eye on you, too!) 

Comments? Questions? Email me at [email protected].