Where to Next?: Part III: Performance Trends at the Dealer Level - Tire Review Magazine

Where to Next?: Part III: Performance Trends at the Dealer Level

The last two months have provided much insight into the UHP tires being produced and the subtle swing toward lightweight forged wheels at the OE level. Now, at the conclusion of our three-part series on the future of the UHP tire and custom wheel industry, it’s time to hear from the people on the front lines that sell and install the products.

From my own viewpoint, I see diminished demand across the board from lower income consumers who have traditionally bought custom wheels and UHP tires with their tax refunds. The attitude of ‘anything goes no matter the cost’ isn’t there this year – last year’s leftover bills are eating the budget up. There are still those who will spend the dough no matter what, but fewer than in the past.

For instance, I have been discussing a 17-inch package for an older Civic Si with a potential customer for over a year. We have discussed many options, but when it came down to needing new tires for the car, he balked at the upgrade and instead replaced the OE tires.

I’m seeing an increase in non-traditional buyers who have the cash or good credit to buy. For example, during a recent promotion, we displayed a parking lot full of custom wheels in conjunction with heavy advertising. I expected to get a lot of 18- to 25-year-olds interested in upgrading to 17-, 20- or 22-inch fitments. Instead, what we got were older, affluent consumers who came in just for tires on late model vehicles, but seeing the huge display, became interested in upgrading the look to newer vehicle standards.

One man in his 40s stopped by to get a price on 18-inch tires for an F150 with stock rims. After discussing the fact that many newer trucks ride on 20s, I showed him that the 20-inch tires were actually much less expensive than the 18-inch ones that he originally came in to purchase. The difference in the tire cost gave me more playing room on the wheel price to step up to chrome wheels.

During the same event, another man with a Lexus LS420 saw a three-piece Asanti and fell in love with it. I was in the parking lot within minutes displaying the wheels against the stock tire with the sun catching every angle of the wheel. The approach I used was that the wheel is custom built to the specific vehicle and that the chance of seeing another is very rare, let alone that specific style on another LS420.

With a $6,800 price tag, I’ll be working with him for the next several months to close this deal, but the fact that the opportunity is there gives testament that we should be looking for sales in places that just a few years ago, we probably would never have considered.

As I thought about the number of 40-plus-year-olds back in the aftermarket, I realized I’m seeing the resurgence of the Generation X crowd that spawned this industry in the mid to late 1980s with restyled mini trucks. Being in this group myself, I see many of my friends spending money on not only performance upgrades for their vehicle, but vacationing more often, owning RVs and boats, and getting to do things that they couldn’t do with smaller children.

To get other perspectives on this, I called a few colleagues in different areas of the country to find out what they see for the future. David Lee, owner of Hot Wheelz of Mobile, Ala., told me during tax refund season, he’s selling a lot of 24-inch wheels, since the reduced price for the wheel and the tire has made it possible for someone who wanted to buy 22s to jump to 24s for very little extra money.

As for what happens after tax refund season, he thinks the people who want the 22-inch and above sizes are going to take advantage of the glut in inventory and the cheaper price for the tires. His business caters to this clientele, so he expects to keep moving these sizes. As for the age of his customer, Lee agrees we are seeing a trend toward buyers in their 30s, instead of the traditional 18 to 25 demographic.

Dean Pellegrino, owner of California Tire and inventor of the Tru Align mounting plate for alignment systems, had this to add: “I think you will see the size stabilize around 20 inches. The wheel industry, as well as OEMs, want something new and flashy. Coloring the wheel is a perfect solution. I think we’ll see mutable color wheels, color matching to the car and color with attitude (flat black as an example). Materials may change to lighten the wheel. Carbon fiber may start to come into the mainstream when they figure out how to lower the cost of production.”

When asked what type of vehicles are being restyled, Pellegrino said, “When new cars do not sell, then old cars get updated. If you’re going to keep your car a few more years to ride out the economy, you paint it, change wheels, add electronics and personalize it so it feels newer. To the Baby Boomers, the old cars bring you back to the ‘good old days.’ I think you will see more and more of the older stuff.”

I agree with this wholeheartedly. As I write this column, I’m working on a $4,600 package for a 1962 Corvette, a 1970 ‘Cuda with 17-inch Foose Nitrous IIs, a mini-tubed 1957 Bel Air and a 1963 Corvette body draped over a C-6 chassis and suspension. As the younger enthusiast is struggling to survive, the mature enthusiast and Baby Boomers are making up the difference not in volume, but with higher priced packages. As we have seen from the various markets, we may have to change our marketing to attract a non-traditional buyer.

“The ‘Fast and the Furious’ era drivers are now older and have better paying jobs. This means more money to spend on their cars,” said Josh Marvin, retail aftermarket specialist with Ohio-based Terry’s Tire Town. “The generation that used to drive Civics is now driving high-end cars like Audi, Acura, BMW and Lexus. The wheels they’re buying for these cars are much more expensive then the ones they had on their Civic.

“A popular trend is paint matching or contrasting colors on wheels to the color of the car. These customers actually do care what tires they are getting on the wheel and tire package,” he continued. “A more performance-oriented and usually name brand tire is desired instead of the cheapest one they can find.”

Another growing trend is full size diesel trucks. “These trucks are a fairly sizeable investment and the guys driving them are willing to put money into them. The wheels that are going on these trucks are usually black and machined wheels, with off-road style tires. All-terrain tires and mud tires are coming in larger bead diameters and larger overall diameters,” he said.

“It’s still snowing here in Ohio, but we have started to get customers coming in to see what is new for 2009,” Marvin said. “A few of the manufacturers we stock have toned down on the larger diameter wheels, 24 inches being the largest diameter they offer this year.  After last year’s sales and the new larger diameter tire sizes released, I do not anticipate this trend going away. The 26- and 28-inch tire pricing has dropped dramatically, so I only see the sales increasing on these.”

And there you have it. I hope this helps you to prepare better for the start of 2009, and be poised for success the rest of the year as well.

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