Fixed Ops Journal - April 2021 - F22

FIXED OPS JOURNAL

HANDS ON

ROLL WITH IT

In EV era, tire and wheel services may be key to profitability

W

e know tire and wheel
services are convenience
offerings that help keep
dealership service
customers from drifting away to
independent shops. But balancing and
rotating tires, fixing flats and selling
replacement tires traditionally yield
little to no fixed ops profit.
It doesn't have to be that way.
Tire and wheel services can - and
should - be profit centers at most
RICHARD
stores. But, as with most revenueboosting fixed ops strategies,
increasing profits from these services
rtruett@crain.com
takes investment in modern,
Fixed Ops Journal
automated equipment and a
commitment to establish processes
that service advisers and techs follow 100 percent of the time.
Here's one reason why fixed ops directors should give investing in a
state-of-the-art tire shop serious consideration: In the electric vehicle
era, selling a customer a set of new tires and a four-wheel alignment
may consistently be the highest-dollar repair ticket a shop writes other
than body work.
With each announcement of an automaker's lineup going full
electric, tire and wheel services, I believe, become even more
important because EVs require far less maintenance than internal
combustion vehicles.

TRUETT

Automated solutions
Want proof? Check the maintenance section in the owner's manual
of the Ford Mustang Mach-E. It's three pages (out of 438) that detail
items to check and inspect yearly, such as the vehicle's coolant level
and strength, hose clamps, suspension components, door weatherstrip
seals, body drain holes, hinges, latches and locks, etc. Realistically, how
many customers are going to upend their day and make service
appointments for that?
I spoke with a dealer in West Virginia who is working to shift his
store's tire and wheel business into the profit column. He's bought a
tread depth scanner and spent around $30,000 on an automated tirechanging machine - Hunter Engineering's Revolution. Since that unit
was installed last fall, throughput has improved, and no tire techs have
missed a day of work because of injury. The Revolution eases the
repetitive strain of lifting pickup or SUV tires that can weigh as much as
95 pounds each. It also lets the tire tech multitask.
Coats, made by Hennessy Industries, offers the APS 3000, a changer
that also offers some automation that reduces technician labor. You'll
spend around $15,000 for one of those. Coats makes a wheel balancer,
the 1600, with a touch screen designed for easy, mistake-free use by
inexperienced techs. " We have found a lot of dealerships are using lube

PAGE 22

techs to do tire services, " said Kyle Harris, Coats' product manager.

Embedded experts
Of course, tires themselves present the biggest challenge and
opportunity. The profit margin on tires is nowhere near the roughly 40
percent markup on factory replacement parts. But again, there are ways
to sell profitably.
Here's one: Cleveland's DealerTire has a unique program that
embeds a tire retail expert in the service drive to work directly with
customers, providing the same level of expertise found at Goodyear,
Firestone and other independents.
" We partner with dealers to find someone in their local market who is
rooted in tire retail, " Tim Hebron, DealerTire's vice president of sales
and field operations, told me. " We work with that dealer to put that
individual on the drive. What that does is it forces the dealer to really
focus on tires and other maintenance and light-repair items. It really
raises the game and the knowledge level for all service advisers, not just
the person selling in the lane on behalf of the dealer. "
The NADA Academy doesn't offer a specific course on tire and wheel
services - yet.
" I can see that being a valuable standalone, " says Camron Wilson,
vice president of education and training for the National Automobile
Dealers Association. " As we have been pushed by the pandemic to offer
online classes, I can see that being a really great condensed course. "
Fixed ops experts agree that most dealers are leaving money on the
table when it comes to tire and wheel services. In the EV era, every
dime of service department revenue is going to be crucial.
" Think about when a car needs tires, " says Harris. " It's right around
the three-year mark. That's when the car's factory warranty is also
expiring. At that moment, the customer is least loyal to the dealership
because work is no longer free. That's when you want to touch base
with customers, letting them know you sell tires, checking their tread
depth, telling them you will beat or match a competitive quote and
letting them know you are not just their warranty work provider, but
you are also their tire service center. That's how you capture that work
and retain that customer. " 

APRIL 2021

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4/2/21 3:51 PM



Fixed Ops Journal - April 2021

Table of Contents for the Digital Edition of Fixed Ops Journal - April 2021

Contents
Fixed Ops Journal - April 2021 - Intro
Fixed Ops Journal - April 2021 - F1
Fixed Ops Journal - April 2021 - F2
Fixed Ops Journal - April 2021 - Contents
Fixed Ops Journal - April 2021 - F4
Fixed Ops Journal - April 2021 - F5
Fixed Ops Journal - April 2021 - F6
Fixed Ops Journal - April 2021 - F7
Fixed Ops Journal - April 2021 - F8
Fixed Ops Journal - April 2021 - F9
Fixed Ops Journal - April 2021 - F10
Fixed Ops Journal - April 2021 - F11
Fixed Ops Journal - April 2021 - F12
Fixed Ops Journal - April 2021 - F13
Fixed Ops Journal - April 2021 - F14
Fixed Ops Journal - April 2021 - F15
Fixed Ops Journal - April 2021 - F16
Fixed Ops Journal - April 2021 - F17
Fixed Ops Journal - April 2021 - F18
Fixed Ops Journal - April 2021 - F19
Fixed Ops Journal - April 2021 - F20
Fixed Ops Journal - April 2021 - F21
Fixed Ops Journal - April 2021 - F22
Fixed Ops Journal - April 2021 - F23
Fixed Ops Journal - April 2021 - F24
Fixed Ops Journal - April 2021 - F25
Fixed Ops Journal - April 2021 - F26
Fixed Ops Journal - April 2021 - F27
Fixed Ops Journal - April 2021 - F28
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