Reasons to Believe: Two OTR Tire Dealerships Look Ahead
Sparks Tire Commercial Tire Inc. and Fountain Tire Ltd. are two very different OTR tire dealerships — most notably, in their number of locations and the geographies they cover.
Sparks, which is headquartered in Findlay, Ohio, has five locations in seven states within the Great Lakes and Midwest regions of the U.S. Fountain Tire, which is based in Edmonton, Alberta, has 160 locations across Canada.
Executives from both companies recently shared their take on what the OTR tire market will look like in 2021. One common denominator: end users will continue to place a premium on after-sale service.
'Best total cost'
“Most of our customers are projecting pretty well flat for 2021,” says John Sparks, president of Sparks Commercial Tire. “Some are looking at possible upticks. But the worst scenario I’ve heard is that it will be a flat year.
“I think a lot of challenges customers are facing are along the lines of unknown regulations and other things possibly coming out of Washington.
“I think one of the biggest challenges we will see in 2021 is the shipping container shortage. A lot of our vendors manufacture off-shore. Products may be available to ship, but they may not be able to get on the water as fast as they could have in the past.
“The majority of our customers are looking at the best total cost of ownership," says Sparks. "They are looking at the entire picture — not necessarily what’s the cheapest or which tire lasts the longest.
“We pride ourselves on total site service. It’s not just if you have a flat tire, we’ll come out, fix it and be on our merry way. We look at the total operation. We have thermal imaging available. We do three-dimensional GPS. We have our own drone set-up with Federal Aviation Administration-licensed drones. There are a lot of tools in the box to give our customers as much information as possible."
‘Expecting a strong year’
“Demand (at mine sites) has been slightly lower,” says Nelson Tonn, Fountain Tire’s vice president of sales and mine service. “But the majority are steady and are looking to grow in 2021.
“I think once COVID-19 vaccinations take place, we’ll see demand grow even more. Most commodity prices are healthy and most mines are excited to continue with their projects.
“Similarly, our construction clients are optimistic," he says. "They have work. Real estate in markets like Toronto, Ontario, and Edmonton are pretty hot right now, with low interest rates and things like that.
“It has been a slow start for quarries this year versus last year. However, we do expect companies to ramp up.
“Some customers in new markets are asking us to come to their sites for our reporting expertise. They weren’t necessarily receiving it from other providers, so that’s definitely something they are valuing in order to make the right forecasting and purchasing decisions and to maximize their tire investment.
“We provide reporting and data for every single one of our mine customers on a monthly basis — regular reports that are customized for them, as needed," notes Tonn.
“For most of our customers, data is very, very important. Even smaller companies, which may only have a couple of loaders in a quarry, are starting to value that information. As data starts to become more accessible, more customers are going to demand it.
“We’re expecting overall OTR tire demand to grow in 2021 and we’re expecting a strong year."