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Sales Level Out: Tire Sales Remain Soft; Service Sales Fall

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Final May 2007 results for tire sales show a softening in retail demand, with unit sales up just 1.5% over the same month last year. Preliminary numbers for June show a continuing downward trend in consumer tire purchases, coinciding with the nationwide spike in gasoline prices.

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Click here for July 2007 charts

In the individual tire segments, broadline tire sales have now slipped, with sales in May and June of this year running below last year. Final May results showed broadline sales running at 99.5% to May 2006. HP/UHP tire sales are maintaining some growth, up over 1% year to date and nearly 1.2% vs. June 2006. LT/SUV tire sales flattened out in May and June but are still strong, up almost 3% ahead of last year.

Service Sales

On the service side, overall service sales (in dollars) continue to run ahead of last year and are up 2% overall. Both underhood and undercar service sales started off strong, up over 3% and 4%, respectively. Recent underhood sales, while still slightly ahead of the same month last year (up 1% vs. June 2006), have slowed and have been trending down each month.

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Dealer Comments

Dealer panel comments on issues facing tire dealers today:

• “Some UHP all-season tires are on national backorder.”

• “There are a lot of problems with aluminum wheels corroding. We need the manufacturers to correct this problem.”

• “New-car dealers are turning auto repair and tire sales business into a dog-eat-dog business.”

• “They stopped making economy-line tires, forcing people to buy higher-end tires.”

• “Fuel prices are just not going down.”

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