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The Survey Says: Inaugural OTR Tire Dealer Study Results Are In

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erground mining tire sales, and 23.8% of grader tire sales.
Some of them reported 100% of sales in a certain category were of a single construction – bias. All scraper tires sold were bias for 19% of respondents, all loader tires were bias for 22%, all underground tires were of this construction for 54% of dealers participating in the study, and 29% said all the grader tires they sold were bias.
All haulage tires were radial for 12% of the respondents, while 16% said they sold only bias haul truck tires.

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‘Availability’ Tops Supplier Problems

Dealers were asked to pinpoint specific problems they had experienced with their OTR tire suppliers over the last year. Product availability was the biggest problem for OTR dealers, reported by 40% of respondents. Fill rate (21.1%), territory protection (14.7%), product quality (6.3%), buying terms (6.3%), line coverage (4.2%), purchase price (4.2%) and product innovation (3.2%) were the other problems noted by dealers.
Almost 40% of the respondents said they sold three brands of OTR tires, while the average number of brands a dealer carried was 2.7. Only 5% reported they sold five or more brands. And which brands were they?
Survey respondents were given three spaces in which to write the brand names they used. Of the total mentions, Firestone (16.7%), General (15.6%), Michelin (14.8%), Bridgestone (13%) and Goodyear (10.7%) took the largest pieces of the pie, collectively accounting for 70% of the total brand mentions. The brands mentioned totals do not reflect market share.

Inventories On The Increase

Half of the dealers who participated in the study said their inventories had stayed the same over the past year, but 40% said they’d experienced an increase. Only 10% said their inventories were smaller than they were a year ago.
The average number of units a typical OTR dealer held in inventory was 118, and the average net worth of a dealer’s stock was $374,000. Dealers who sold over $2 million annually in OTR tires alone averaged 264 units in stock, worth approximately $1.5 million. Meanwhile, those selling under $2 million a year in OTR tires averaged 76 units valued at $126,000.
More than half of the respondents said they operate out of a single location. A fifth of the dealers surveyed said they owned from five to as many as 40 locations. The average number of locations owned by the typical OTR tire dealer was 3.4.

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Per Employee Sales

A lack of personnel was one of the most commonly cited obstacles facing OTR tire dealers. “Finding good help and keeping it” means something to OTR dealers, 50% of which have three or fewer service employees. More than a third of the respondents said they had two to three service employees, and 15% had only one OTR service employee. Nearly 18% surveyed stated they had 16 or more employees for service alone.
The average number of sales employees for an OTR tire dealer was 4.4. In terms of sales per employee (considering all dealer employees), 9.1% claimed sales/employee exceeding $1 million per year. An even 50% said their average sales/employee ranged from $150,000 to $1 million per year.

Bigger Sales, Bigger Trucks

Practically 60% of dealers have at least one mini-OTR truck (15,000 lbs. or less), and over half have at least one medium duty (15,000-26,000 lbs.) service truck. The average dealer has nine trucks of any kind, including vans and pickups, and most trucks are an average of just over five years old.
About 40% of respondents said they had at least one large OTR truck, which was classified as weighing more than 26,000 lbs. Mini-OTR trucks made up the largest segment of the average truck fleet, with medium and large OTR trucks taking almost equal portions of the remainder. It came as no surprise that dealers with greater OTR sales tended to have larger service trucks.

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In Their Own Words

Dealers were encouraged to share their thoughts about the obstacles and opportunities they see in the coming five years. Over 200 verbatim comments were collected, with most citing “finding and training qualified service people” as their biggest concern, followed by ®manufacturers are becoming competitors® and ®importation of cheap small OTR tires which replace retreads® as the next most common concerns.
One dealer suggested a “week-long hands-on OTR session with service training” as a way dealers could improve their service level. Some maintained that since their market isn’t growing very fast, they have to concentrate on providing customers with the best service possible – better than the competition’s, at least.®′

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