What the Future Holds For Custom Wheel (and the Dealers Who Sell Them)
A long ago invention that somehow managed to change the world. A round object that’s so imbedded into our culture we have no idea how civilizations survived without it. But it’s no longer just a commodity that we use as a work tool.
It’s now a statement. A conversation piece. A coveted item that has customers saving sometimes months of their income just to have.
There’s chrome, alloy, steel. Some are one-piece, some two. Some even come gold plated.
This is the new wheel. This is the future, and the future’s already here. The original equipment people are ready. The aftermarket manufacturers are ready. But is the tire dealer ready for a wheel revolution that’s already begun?
"It surprises me that with all the good-looking OE wheels on new vehicles the aftermarket still does so well," said Roger Simmons, regional marketing manager for Mickey Thompson Tires and Wheels. "I guess it’s because everyone wants a distinctive, unique looking wheel for their vehicle."
Simmons’ point is a good one. Like the fins of the 1950s and the big engines of the 1970s, the wheel has become the hot personal vehicle item for the new millennium.
What started in the 1990s as a form of expression has developed into an art. A must-have purchase for some. A character-definer for others.
"Aftermarket wheels will continue to grow as a segment and will continue to get larger in size, particularly for SUV and light truck applications," Wheels America President Bob Stretch said.
The wheel market still hasn’t reached its full potential. Not even close. Only the tip of the iceberg has been scratched when it comes to design standards and applications.
And with design change comes purchasing changes for both the buyer and seller. Tires and wheels have always gone hand-in-hand, but dealers have to be ready to see market shifts.
"I see the market re-defining itself with domestic manufacturers designing and having product made overseas," said Fernando Anderson, the wheel division manager for SenDel Wheel. "Retailers and traditional independent wholesalers bypassing the domestic manufacturer and purchasing direct from overseas, and the consumer continuing to accept the marketing done in magazines or by e-commerce advertising to purchase styles that are new but only slightly modified from the year before."
Everyone knows how fractured the tire industry has become. Especially in light truck/SUV side of things. But does that necessarily translate over to the wheel end of things? Sure there are a lot of different designs of the chrome and steel. But multiple applications?
"Yes, I think it will become even more application specific," said Stretch of the wheel industry. "Mainly because manufacturers are designing suspension and brake systems that includes the wheel as an integral component in the systems.
"In addition, with OE suppliers using faster machining centers, there is greater efficiency in the manufacturing area, so the factory can be more stringent with specs."
The question then becomes, who dictates the changing of the market? One assumes the customer would have a say. But just as often, it’s the OE manufacturers that have just as big a stake.
"The trend from the OEs is for more proprietary bolt patterns and off sets, plus the trend to hub-centric wheels," said Simmons. "I guess they want the customer to come to them for aftermarket purchases, and they think that wheel-specific sizes will hinder the aftermarket companies from building these type of rims."
But let’s not get too far out of control here. There has to be a ceiling, a cut-off point when it comes to design trends. Sure, the sky’s the limit, but just how far away is the sky?
"There are limitations. Although the buzz is to promote 20-, 21- and even 22-inch wheels, they can only fit a certain number of vehicles," Anderson said. "I don’t believe the car/truck/SUV makers are going to keep that in mind when they design suspensions for new models to include changes that will help these larger applications.
"The volume will remain throughout the U.S., with 17- and 18-inch as the size leaders," he said.
We can talk and talk until our faces turn blue about what the OEs are doing, and about all the different styles and segments of wheels. Unfortunately, that won’t help the bottom line. A dealer has to go out and sell aftermarket wheels.
Like tires, wheels take up a lot of room. But unlike tires, wheels can’t be stacked on top of each other and shelved in the back. They need exposure to be sold. And quite honestly, if a dealer has to make a decision about which to showcase – tires or wheels – the tires are going to win more often than not.
Space is a critical issue with almost every dealer. Sometimes sales don’t equate to the cost of display space. So what is a dealer to do when options are scarce? Why not turn to the wheel manufacturers themselves? After all, they don’t make any money until the dealer can sell the wheels.
"We’ve gone to less part numbers by using 8- and 10-hole bolt circles," said Anderson. "Dealers should keep design styles with the best potential finish in mind. Why offer the same wheel style in three to four different finishes – chrome, polish, silver and machined? A dealer should choose the one more likely to sell.
"Keep in mind the 80/20 rule. More often than not, they are receiving 80% of their sales from 20% of their styles and inventory."
That’s probably the key piece of advice. Narrow the inventory. Survey your market and find out what’s hot and what’s not, and where your inventory lies against market requirements.
Just because a chrome two-piece, six-lug wheel is selling like hotcakes in another part of the country doesn’t mean you’ll have the same success in your area.
But there are other things that dealers and manufacturers can do to increase sales while keeping precious floor space dedicated to wheels to a minimum.
"Besides exposure through our national advertising program and our Web site, we also offer our dealers referrals through our 800 number which appears in our ads," said Mickey Thompson’s Simmons. "The customer dials directly to our dealers using the toll free number which appears in our ads."
On the Horizon
As with everything, there’s always something new coming on the horizon. After all, there are very few markets that stay profitable while remaining stagnant.
But really, what’s coming? The wheel will always be round. The wheel will always need a tire around it. So what’s to come? Exactly what you’d think – bigger sizes.
"We’ll see the continuation of larger rim diameters," said Simmons. "And possibly the use of high tech materials, such as ceramics, will be coming soon.
"But the trend will be toward larger size rims – 18-, 20- and 22-inch. I’m sure it drives the wheel makers crazy."
Bigger rims are also something that Stretch sees coming at Wheels America. "The next revolution will be simply larger sizes," he said. "Simply stated, the wheels will be chrome and muh larger."
And while new creativity in wheel design is on the horizon, so is a new way of doing things. Just like with everything else, consolidation could hit the wheel market, forcing a different way of doing business and marketing to the end-user.
"More companies are combining their efforts to manufacture and distribute together directly to the consumer," SenDel’s Anderson said. "Even though the public or industry may not know it, when they call different wheel marketers they may be dealing with the same wheel company."
Still, wheels are out there being sold right this very second. And which are flying out of the showroom? Simple, the ones the customers want the most. "The latest and greatest wheels are the ones that customers are actually buying, not just talking about," said Anderson. It doesn’t really matter where they’re from.
Why Not You?
The only question left is: why should a dealer bother with custom wheels? After hearing everything from needing additional space to design and size stratification to a changing future, it’s easy to ask why any dealer would want to tackle another complex product line.
Because it’s a very profitable add-on sale. It’s a classic, even necessary, product for a dealer competing for consumer dollars.
Now granted, the majority of your customers aren’t going to want to add-on such a major sale as four new wheels. But it will happen with certain kinds of customers.
Maybe a customer will come in to have work done, start looking at your racks and maybe decide to dip into the savings account. Or maybe a customer comes in for the express purpose of making a wheel purchase – of dropping upwards of two grand in your shop – provided you have the right stuff.
"The main benefit is the opportunity to make an add-on sale," Simmons said. "Very often the dealer has to sell the tire at a lower margin to compete and then hopes to make some additional profit from the add-on service or wheel sale."
And make no mistake, custom wheels are popular, and can raise anyone’s bottom line. And wheel sales, while primarily focused on younger customers, really know no age bounds. Older – 30 to 55 years olds – customers may well want to dress up their ride. Or have plunked down big bucks for their dream machine, and want that final addition.
Realistically however, a dealer should look into selling wheels to cut down on the likelihood that the customer will end up at a competing shop. It’s far easier to become the one-stop-shop for your customer base than it is to close down your business because profits are walking down the street.
"I think the tire dealer could take more advantage of what custom wheels can do to increase one-stop shopping for his or her company," Anderson points out.
Because it’s all about giving the customers what they want, and not giving them a reason to shop your competitors. After all, while competition may be friendly, business is all about winning the profit battles.