Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/630954
MTD January 2016 Industry analysis Mitchell: Te lower oil prices are a win-win for all parties; however, consumers are reaping the bulk of the benefts at the pumps as tire prices have been fairly sticky. MTD: What's the forecast for tire wholesalers? Mitchell: Tire wholesalers expect the market to grow 1% to 3% in 2016, and that we will see more consolidation in this segment of the industry. MTD: Do you foresee any shifs among the Tier 2 and Tier 3 manufacturers? Mitchell: We expect the mix to shif up to Tier 1 and Tier 2 brands at the expense of the Tier 3 players. We anticipate there will be some consolidation in the Tier 3 bucket, especially in China and other parts of southeast Asia. We expect the mix at retail to shif up to Tier 1 and Tier 2 brands at the expense of the Tier 3 players, as the combination of the improving labor market, low gas prices, and product innovation should cause some consumers to trade up. We anticipate there will be some consolidation in the Tier 3 bucket, especially in China and other parts of southeast Asia as margins in these regions are pressured from supply outpacing demand in the wake of new tarifs on passenger and light truck tires in the U.S. MTD: W ho would you label a "manufacturer to watch" in 2016? Mitchell: Falken Tire Corp. is defnitely the manufacturer to watch in 2016 and 2017. With the Goodyear/Sumitomo Rubber global business alliance dissolved, we anticipate Falken will be much more aggressive in the market, especially as it relates to product innovation and dealer relationships. MTD: Goodyear started off 2015 with a bang with its announcement it would start selling tires on goodyear.com. Other manufacturers are following their lead. How much of a game changer is this, and what can independent tire dealers do? Mitchell: Honestly, more noise has been made on this topic than it deserves. At the end of the day, less than 5% of all tire transactions are completely made online without the consumer calling or visiting a store while researching the available options. More importantly, the manufacturers will always need channel partners to mount and balance the tires, and those are very important elements of the value proposition that dealers should be able to monetize. Te proft diference between a well-run dealer and an average dealer lies in how well the tire portion of the sales mix and in- ventory portfolio are managed. Quik-Link: 800-687-1557 ext. 11110 20