OUR VIEW: Keeping the focus on the customer
It’s still too early in the game to know how the recent blockbuster merger announcements involving four of the largest tire makers are going to play out and what impact they will have on the industry as a whole, but the speculative buzz is deafening.
Everyone has an opinion (or two or three) on what these maneuvers could mean and how they might play out.
They also want to know how it might impact them and their competitors, who will win out in the end and whether there might be additional competitive combinations waiting to be announced. It’s an exciting, albeit worrisome, time in the tire business.
But there is a bottom line to how all this could play out.
Whether it’s American Tire Distributors Inc. (ATD) grappling with new major competitors as well as the loss of Goodyear as a supplier, or Michelin North America Inc. and TBC Corp. working on melding their wholesale operations, or Goodyear and Bridgestone Americas Inc. wrestling with their newly announced plans for a 50/50 wholesale joint venture, all of these entities will need to do one thing well when they are up and running: Satisfy their customers.
The success of these mega wholesalers will live and die on how well they deliver tires to and service their tire dealer/tire retailer customers.
While there is little question that relationships play a part in any company’s success, in today’s increasingly online and busy tire world, that’s only part of the equation.
First and foremost for any business owner/tire dealer is: Can I get the right products from my supplier, when I need them and at prices that will allow me to be competitive in the marketplace? A good relationship with a supplier helps, but it’s not mandatory for success.
Delivery service nationwide is one of ATD’s strengths, and if the company can continue that top-notch service, it likely can continue to excel as the nation’s largest tire wholesaler. The same holds true for the new wholesale entities — National Tire Wholesale (Michelin/TBC) and TireHub L.L.C. (Bridgestone/Goodyear) — as they look to establish themselves in the marketplace.
If all of these wholesalers provide the kind of service and pricing that dealers want, they should do well.
Smaller regional wholesalers might wonder how they will fare in the new pecking order. Our thinking is they will do just fine. They more than likely have close-knit relationships that their customers crave and a do-whatever-it-takes mentality that has helped them thrive over the years. The combination should serve them well.
As the mergers and shuffling take place in the industry, it’s crucial for all entities to focus keenly on the customer.
Those wholesalers that provide customers with fast and efficient service, offer tires at competitive prices and establish good communications are most likely to be standing tall when everything shakes out.
And if they also have a great relationship with their customers, that is even better.