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Editor's Notebook

Bits & Pieces: Notes, News & Notions from End-of-Year Desk Cleaning

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Annual purge of posties and chicken scratch uncovered a few items I though were worth sharing:

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Policy changes…the days of hardball haggling with the local car dealer are apparently over. Fixed pricing plays better on the Web, and with women and younger buyers. Plus, less negotiating means fewer sales managers – and lower costs. Like all sweeping changes, every dealer is going to have to get on board for this to work. With carmakers and dealers choking on inventories, we’ll see how this plays out.

Wondering out loud…can we finally put a fork in the notion that run-flats will rule the tire world? Michelin has cut R&D on its once-heralded PAX System, and consumers are getting wise (surprised?) to the significant cost difference for replacement run-flats. Other than a handful of upper end marquees, run-flats haven’t caught on with OEMs. Consumers haven’t clamored for them at retail. Nice idea that ran face-first into the technological superiority of today’s radials.

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Unless something changes…we may face an epic scrap tire crisis. A federal court’s interpretation of the Clean Air Act could effectively halt scrap tire use as TDF. Using scrap as a fuel alternative is the biggest reason U.S. tire piles plummeted over the past two decades. If the ruling sticks, said one expert, 90% of scrap tire processors would go out of business. More troubling, what will we do with all of those tires?

Turnaround detour…while medium truck tire dealers are hoping 2008 is a turnaround year, the housing crisis (oh, and it is a crisis) may force a growing number of fleets into bankruptcy. It’s not just building materials, the housing crunch has hurt sales of furniture, appliances and other household goods – products that sell heavily to new homeowners. Add to the picture anticipated escalations in fuel costs, and fleets are really behind the 8-ball.

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More gas pains…at this writing oil prices have hit the $100 per barrel mark, but market experts don’t expect that to last long. Predictions of $4 per gallon gas prices in 2008 appear to be coming true. This much is for sure: I’ll never pay less than $2.50 for a gallon of 87 octane ever again.

Green, green, green…everywhere you look some company is “going green.” The tire industry is hot on this, and a lot of dollars are being devoted to projects and programs to make manufacturers look more environmentally responsible. Some of these “initiatives” actually have to do with improving the product; others are, let’s say, more promotional in nature. Doesn’t matter. Green is the new pink, as the fashionistas say, and consumers are more attuned to planet-friendly products, services and service providers.

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Wondering out loud again…with mass merchants jumping into the vehicle customization biz with low-priced wheels, stereos, etc., and carmakers jazzing up their offerings, wonder how long specialty shops will last? SEMA says all is well with aftermarket shops, but they appear firmly between a rock and a very hard place. Might see some thinning in that segment.

Californication of the aftermarket…too much to explain here, but the battle against so-called “super warranties” – state-mandated extended warranties on vehicles, which started out west – could have a crippling effect on independent tire dealers and repair shops. These state regs would effectively drive consumers back to car dealers for all service work. This is a major issue, readers, and I suggest you get educated and active quickly. Kudos to ASA’s Ron Pyle for highlighting this issue in Vegas.

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Speaking of Right to Repair…one of my favorite mags is Canadian Technician. Editor Allan Janssen’s letter to his MP on the R2R issue in the November issue is one of the best pieces on the subject I have ever read. Catch it at www.canadiantechnician.ca. Then share it with your legsislators.

Won’t or can’t…hear comments from dealers about their ability/desire to charge fair rates for TPMS-related tire service. Silly argument to me. You’ve invested in specialty tools and training (haven’t you?), and deliver a required service. You have a right to be compensated. If your competition doesn’t want to charge, tough nuts for them. You run your shop, not your competition.
 
My bumper sticker concept…’The Internet is what happens when a lot of people with little true information decide they must share it with everyone.’

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Sure you have benefited from the recent additions to Tire Review: Business Barometer and Sales Intelligence. Real world, real-time sales data dealers have wanted for decades. Reports from readers about the new features thus far have been fabulous. Starting with this issue is another new monthly feature: Top Shop Profiles, bringing you more real-life info about how dealers have built successful, thriving businesses. We’re working on more, a lot more. Details to come!

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