Either way, small dealers know full well what is going on, and don’t need constant reminders.

The economy isn’t making life easy for any size dealer, but it represents another major hurdle for smaller independents that already find themselves fighting against big boxers, company-owned stores, mega-dealers, the Internet and their fellow independents. Frankly, to a small dealer, the economic downturn is probably more of a speed bump than a brick wall.

But the added pressure of an across-the-board sharp decline in tire sales doesn’t help, and is just one more reason to ask: Is there a future for the small independent?

Looking Back, Forward
The short answer is: Yes. The long answer takes a bit of doing, and survival – and growth – will depend on the dealer’s devotion to his or her customers, employees and the business.

Even in the pre-2008 days, smaller tire dealers were up against it. Sharp drops in tire sales over the last nine months have made the sledding even tougher.

Examining the ups and downs of the tire industry as a whole can give you some idea of what is really happening and how you can deal with the slump in tire sales.

Tire shipments declined by more than 9% in 2008 compared to 2007, according to the Rubber Manufacturers Association (RMA). Total tire shipments were below 300 million for the first time since 1997, when shipments were 290 million units. This was due to the downturn in the economy and the resultant decrease in consumer purchasing.

OE P-metric shipments were down 18.7% and LT-metric shipments were down 34.5% thanks to a huge fall-off in vehicle sales last year. Because of consumer demand for better fuel economy, there was a shift away from larger trucks and SUVs to smaller – often import – vehicles.

On the replacement tire front, P-metric shipments decreased 5%, while LT-metric shipments dropped 14%.

At mid-year 2009, we can get a fairly good feel for shipments for the entire year. The drop in shipments for 2009 is expected to be 7% below 2008. Total tire shipments are projected to decline to 261 million, a level last experienced in 1993, and approximately 60 million units fewer than the peak of 321 million in 2000, RMA says.

OE P-metric shipments are pegged to decrease 22% to 29 million units, while OE LT-metric shipments may decrease another 900,000 units.

While a decrease in OE shipments affects replacement tire sales over the long haul, independent tire dealers are, of course, more interested in the outlook for replacement tires. Replacement P-metric shipments are expected to drop by another 3.5% in 2009, while LT-metric shipments are picked to decrease by 8% vs. 2008.

What all these numbers mean is simple: Business is down. Consumers aren’t buying new vehicles and aren’t buying tires – at least not to the degree of past years, which places added pressure on smaller independents who don’t enjoy the volume or reach of larger retailers.

Sizing Up the Competition
The competition for the small independent tire dealer comes from a number of directions, including mega tire chain stores, tire manufacturer stores, big boxers like Sears, Walmart and Sam’s Club, automotive component and service suppliers such as Monro and, increasingly in today’s market, car dealers. And, of course, other independent tire dealers.

Sears claims to offer “thousands of tires at terrific savings,” and a lineup of known brands like Michelin, Bridgestone, Goodyear and Falken. It also provides complete car services and accessories. Open seven days a week, including nighttime hours, Sears will serve customers on a drive-in basis or by appointment.

Bridgestone Americas has its own Firestone Complete Auto Care stores and Goodyear has its owned Gemini locations, both of which offer a range of tire brands and vehicle services. The stores’ hours are long and they often offer specials that are supported by coupons and promotions, including e-mail specials.

GM car dealers have their own tire programs and service options. One location’s Web site brags, “Get the best price in town or we’ll refund the difference.” They offer service specials for GM cars that include a lube, oil and filter, four-tire rotation and 27-point vehicle check for $39.95, all part of the Goodwrench program. GM dealers sell 12 of the most popular brands of tires, and many offer a 30-day price guarantee on tires.

The Ford/Lincoln/Mercury group’s Web site promises, “We’ll beat your best price (on tires)…guaranteed!” Ford sells Goodyear, Michelin and Continental tires, along with eight other brands.

Many large tire chains, such as Discount Tire, sell tires and wheels online, as well as through their hundreds of locations. The company carries a huge selection of name and private brand tires, and its online service will even ship the tires to the customer for free, or send them directly to a qualified installer nearby. The company offers deals such as $50 off four wheels and $40 off four select tires, in addition to a “no money down, 24-month” payment program.

Monro Muffler & Brake (which also owns and operates Mr. Tire locations in some parts of the country) advertises “Monro Knows Tires!” The company carries Bridgestone, Firestone, Goodyear, Yokohama and Michelin tires. All locations offer Monro’s “One Easy Price” all-inclusive tire pricing and free installation. They offer the usual list of service jobs, including oil and filter, brakes and mufflers. The company has a 90-day, no interest, no payments program and will match prices before a purchase, plus 30 days after.

Members of Sam’s Club have a lot of options for purchasing tires. The brands sold include Michelin, Goodyear, Bridgestone, BFGoodrich and Dunlop. Club members enjoy special prices, and prospective customers can search the Sam’s Club Web site for tires by vehicle make, model or tire size. The clutter-free site also has sections on how to buy tires, when to buy tires, tire care and a tire glossary.

This is just a brief sampling of the competition. All of these competitors have attractive Web sites and many have e-commerce sales and shipping capability.

Within your particular market, you also probably face a couple of your brother independents, perhaps a repair shop that dabbles in tires, a nearby Walmart, and the omnipresent Tire Rack, which brings dozens of tire brands to computer screens everywhere.

Adapting for Success
The Tire Industry Association (TIA) believes both small independent tire dealers and the larger mega dealers have inherent strengths and weaknesses. As economic conditions and consumer tastes and demands are constantly changing, every tire dealer – regardless of size or ownership – must constantly evaluate not only their own operation, but the current and expected market conditions and consumer demands, then adjust accordingly.

The biggest advantage for small independents – those with one to three stores – is that they are small, and, therefore, more nimble than their larger counterparts. Big boxers, company-owned stores, mega-dealers and even larger independents are weighed down by internal bureaucracies, and cannot react quickly to market shifts. Whereas a small dealer can change ads/promotion tactics, sales and service specials, even employment levels in minutes, larger competition cannot react so quickly.

Because small companies are more capable of adapting to the shifting market, this will especially help them survive these turbulent times. It has been TIA’s observation that successful tire dealers of any size are well served by staying current with the latest tire training and certification, trends in the industry, and governmental regulations and actions.

In this changing economic and regulatory environment, small dealers in North America can also have access to discounts on training and a wide variety of business services available from TIA or their state, regional or provincial association. By pooling resources and sharing costs through association memberships, small dealers can remain competitive with the “big boys” when it comes to things like training, insurance, credit card programs and processing, and more.

When it comes to ways smaller independents can continue to thrive, TIA recommends:
• Keep inventories low to conserve cash
• Buy now if you can lock in low prices
• Don’t cut your advertising, marketing and PR budgets
• Invest in training
• Cut the small expenses like cleaning and landscaping costs
• Study current market and industry trends
• Listen to your customers

Another logical option for smaller dealers lies with the dozens of regional or national marketing groups, like American Car Care Centers, Tire Pros, ITDG, TAG and others, or any of the tire company-affiliated programs. These programs provide a wide range of opportunities, from group pricing on tires to special deals on shop equipment and tools to advertising and promotion support to specialized training to reduced costs on business insurance, uniforms, software, etc. – all designed to assist independent dealers.

Surviving and Thriving
To take advantage of the upturn in business hoped for in 2010, small tire dealers should begin to plan now. Think of all the different business segments that might have a need for tires and auto service. Get out of your comfort zone.

Check to see if you might be able to sell tires to local governments, small fleets or specialized operations like golf courses. See if you can bid on supplying tires to a private fleet of taxis or limousines. What about tires for school vehicles or universities in your area? Broaden your reach to garner a larger list of clients. You may want to check to see if you can perform automotive services for a waste hauling company, for example.

One of the quickest and most economical ways to grow your customer base is to offer your products and services online. Build a Web site. A tire can be shipped, a service can be provided and demos can be conducted via the Web. The large tire dealers, car dealers and big box stores are already doing exactly that.

Initiate an e-mail marketing program by creating a targeted list of customers and prospects, and build that list with referrals. With these e-mails, you can offer coupons, specials and create two-way dialogue with long-standing customers and new prospects alike.

The new so-called “social media” are particularly good ways to build customer contacts and sell products and services. There are free audiences available online, and many are already separated into niche segments.

Try opening a Facebook (facebook.com) or LinkedIn (linkedin.com) account. These  have access to a multitude of groups in every category. You can view how many folks have joined the group, join it yourself, send a message, and watch as these sales prospects start coming to you. A quick message of “who is interested in my product” can generate your first group of customers.

Consider setting up a Twitter account (twitter.com). Twitter is a free social networking and micro-blogging service that enables users to send updates, known as “tweets,” to large groups of people. Tweets are text-based posts of up to 140 characters in length – about 30 words – that are delivered to other users who have subscribed to them (known as “followers”).

Senders can restrict delivery to those in their circle of friends or, by default, allow anybody to access them. Users can send and receive tweets via the Twitter Web site, Short Message Service (SMS) or external applications. The Internet service is free, but using SMS may incur cell phone service provider fees.

You might also want to start your own blog. Blogging is the frequent, chronological publication of personal thoughts and opinions for other Internet users to read. The name, coined in the late 1990s, is derived from “Web logging.” There are millions of blogs on the Internet (Tire Review has one at tirereview.com/blog.html). In addition to offering thoughts and opinions, many bloggers also recommend products and services, companies or link to other sites on the Web. More and more, blogging is being used by large companies to help sell products and services.

The more connections you have now, the more connections you will have in the future. In-person contact is always best – you never know how a single connection with one person could grow. Join networking groups in your area, and participate in local events that have to do with your business.

Start handing out business cards and promoting your business everywhere you can. Keep a list of people you meet and follow up with them, asking them permission to add them to your e-mail database.

Relationships need to be nurtured. Make sure that if you have contacted someone once and they are still interested, you follow up through a brochure, a follow-up call or a newsletter – anything to explain your business and close them as a customer.

Other Strategies
Check competitive dealers that are about your size. One good resource for doing this is the Dunn & Bradstreet report. Compare how these companies serve their customers and you may just find a key element to your future success. Also, look up every tire dealer in the area – large or small. Visit a few that are known to be successful to see what they are doing to attract and retain customers.

Are you aware of underperforming parts of your business? Examples would be non-paying customers, non-performing employees, non-selling products and payment plans. Eliminate what isn’t working and what is pulling down your finances. Once you have made the cuts, you can use the money saved to invest in growing what is working and start cashing in.

Use any and every resource you have, such as Welcome Wagon coupons, word-of-mouth advertising, attending and exhibiting at trade shows or sponsoring local sports teams. Plan a rebranding or relaunch of your business to spark new interest and visibility now that it is freshly focused and ready to profit. Develop a publicity program aimed at local media.

One Dealer’s Experience
The experience of one small tire dealer shows the effects of the current economic downturn differ. Sometimes its based on geography, sometimes it’s just attitude.

Parrish-McIntyre Tire Co., just west of Akron in Medina, Ohio, is probably fairly typical of many small dealers. Parrish-McIntyre is a big Bridgestone dealer in the area but also sells other brands. The company was founded by Earl Feeney and Michael McIntyre in 1970 in Akron and has two stores – the Medina operation and one in Akron.

According to Medina store manager Gary Bell, the seven-employee store serves customers across multiple communities, each with its own level of competition. Like other small dealers, Parrish-McIntyre sells and installs passenger tires, shocks, batteries and wheels and its services include: mounting and computer balancing, standard and performance tires, alignments, oil filter and lube jobs, brakes, air conditioning and major engine repairs.

“Last year was our best year,” says Bell. “Our tire sales were equal to 2007, but our service business was up. Our business has leveled out some during the first half of 2009 but we believe it will be better in the second half.”

Parrish-McIntyre runs ads in local newspapers, using co-op funds from Michelin and Bridgestone. He said the company is a member of TIA and the Ohio Tire & Automotive Association and that those organizations are helpful to the business.

While Parrish-McIntyre faces down Walmart, Sam’s Club, and Goodyear- and Bridgestone-owned stores, Bell says other independents are his biggest competitors. Still, Parrish-McIntyre continues to thrive because it understands – and grows from – the value of relationships and top-shelf customer service.

There is an old saying about dancing with the girl that brought you to the ball. That sums up why there is still plenty of room for the small independent to thrive. They really understand the formula for success, and despite temptations otherwise, they stick to the “gal that brought them.”

More importantly, they can quickly and easily switch speeds when the song changes!